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HomeMy WebLinkAboutMILLIMAN, INC - 2006 II~SURANCE 1:1-01 ON FILE WORK MAY NOT PROCEED CLERK OF COUNCIL DATE: 1- /f- C>' THIS AGREEMENT, made and entered into this I' a:. day of January, 2006 by and between Milliman, Inc., a Washington corporation (hereinafter "Consultant"), and the City of Santa Ana, a charter city and municipal corporation organized and existing under the Constitution and laws of the State of California (hereinafter "City"). f} I \ ! \ (~ I r~ I lOr~\ N-2006-004 CONSULT ANT AGREEMENT RECITALS A. The City desires to retain a consultant having special skill and knowledge in the field of actuarial studies to provide an actuarial study of a proposed enhanced PARS retirement plan for executive management employees. B. Consultant represents that Consultant is able and willing to provide such services to the City. C. In undertaking the performance of this Agreement, Consultant represents that it is knowledgeable in its field and that any services performed by Consultant under this Agreement will be performed in compliance with such standards as may reasonably be expected from a professional consulting firm in the field. NOW THEREFORE, in consideration of the mutual and respective promises, and subject to the terms and conditions hereinafter set forth, the parties agree as follows: 1. SCOPE OF SERVICES Consultant shall perform an actuarial study regarding the adoption of a PARS Retirement Enhancement Plan for the City's non-safety Executive Management employees, as set forth in Exhibit A, attached hereto and incorporated by reference. 2. DELIVERY OF WORK PRODUCT Consultant shall deliver to City all work product resulting from the services provided. Said work product shall be submitted in a hard copy and produced in a form compatible with City's computer system, as agreed between the Project Manager and Consultant. Consultant shall retain all rights, title and interest in and to all technical or internal designs, methods, ideas, concepts, know-how, techniques, generic documents and templates that have been previously developed by Consultant or developed during the course of the provision of the Services provided such generic documents or templates do not contain any City Confidential Information or proprietary data. Rights and ownership by Consultant of original technical designs, methods, ideas, concepts, know-how and techniques shall not extend to or include all or any part of the City's proprietary data or Confidential Information. To the extent that Consultant may include in its study, pre-existing proprietary information or other materials owned by Consultant, Consultant agrees that City shall be deemed to have a fully paid license to make copies of Consultant's materials, which materials may be shared with PARS to implement the retirement plan which is the subject of this Agreement. 3. COMPENSA nON a. City agrees to pay, and Consultant agrees to accept as total payment for its services, the rates and charges identified in Exhibit A. The total sum to be expended under this Agreement shall not exceed $7,250 during the term of this Agreement. b. Payment by City shall be made within thirty (30) days following PARS advice to pay the invoice, which will be given after PARS has reviewed and accepted the document prepared by Consultant. Payment need not be made for work which fails to meet the standards of performance set forth in the Recitals which may reasonably be expected by City. 4. TERM This Agreement shall commence on the date first written above and upon delivery of the document which is the subject of this Agreement, unless terminated earlier in accordance with Section 12, below. The term of this Agreement may be extended upon a writing executed by the Executive Director of Personnel Services and the City Attorney. 5. INDEPENDENT CONTRACTOR Consultant shall, during the entire term of this Agreement, be construed to be an independent contractor and not an employee of the City. This Agreement is not intended nor shall it be construed to create an employer-employee relationship, a joint venture relationship, or to allow the City to exercise discretion or control over the professional manner in which Consultant performs the services which are the subject matter of this Agreement; however, the services to be provided by Consultant shall be provided in a manner consistent with all applicable standards and regulations governing such services. Consultant shall pay all salaries and wages, employer's social security taxes, unemployment insurance and similar taxes relating to employees and shall be responsible for all applicable withholding taxes. 6. INSURANCE Prior to undertaking performance of work under this Agreement, Consultant shall maintain and shall require its subcontractors, if any, to obtain and maintain insurance as described below: a. Worker's Compensation Insurance. In accordance with the provisions of Section 3300 of the Labor Code, Consultant, if Consultant has any employees, is required to be insured against liability for worker's compensation or to undertake self-insurance. Prior to commencing the performance of the work under this Agreement, Consultant agrees to obtain and maintain any employer's liability insurance with limits not less than $1,000,000 per accident. b. Professional liability (errors and omissions) insurance, with a combined single limit of not less than $5,000,000 per claim. 2 c. The following requirements apply to the insurance to be provided by Consultant pursuant to this section: (i). Consultant shall maintain all insurance required above in full force and effect for the entire period covered by this Agreement. (ii). Certificates of insurance shall be furnished to the City upon execution of this Agreement and shall be approved in form by the City Attorney. (iii). Certificates and policies shall state that the policies shall not be canceled or reduced in coverage or changed in any other material aspect without thirty (30) days prior written notice to the City. d. If Consultant fails or refuses to produce or maintain the insurance required by this section or fails or refuses to furnish the City with required proof that insurance has been procured and is in force and paid for, the City shall have the right, at the City's election, to forthwith terminate this Agreement. Such termination shall not effect Consultant's right to be paid for its time and materials expended prior to notification of termination. Consultant waives the right to receive compensation and agrees to indemnify the City for any work performed prior to approval of insurance by the City. 7. INDEMNIFICATION Consultant agrees to and shall indemnify and hold harmless the City, its officers, agents, employees, consultants, special counsel, and representatives from and against any liability for third party claims or actions of any nature to the extent such claim or action results or arises from the negligent performance of Consultant pursuant to this Agreement. City shall promptly notify Consultant of any such indemnified claim and Consultant shall defend City with counsel reasonably acceptable to City, which consent shall not be unreasonably be withheld. 8. CONFIDENTIALITY If Consultant receives from the City information which due to the nature of such information is reasonably understood to be confidential and/or proprietary, Consultant agrees that it shall not use or disclose such information except in the performance of this Agreement, and further agrees to exercise the same degree of care it uses to protect its own information of like importance, but in no event less than reasonable care. "Confidential Information" shall include all nonpublic information. Confidential information includes not only written information, but also information transferred orally, visually, electronically, or by other means. Confidential information disclosed to either party by any subsidiary and/or agent of the other party is covered by this Agreement. The foregoing obligations of non-use and nondisclosure shall not apply to any information that (a) has been disclosed in publicly available sources; (b) is, through no fault of the Consultant disclosed in a publicly available source; (c) is in rightful possession of the Consultant without an obligation of confidentiality; (d) is required to be disclosed by operation of law; or (e) is independently developed by the Consultant without reference to information disclosed by the City. 3 9. CONFLICT OF INTEREST CLAUSE Consultant covenants that it presently has no interests and shall not have interests, direct or indirect, which would conflict in any manner with performance of services specified under this Agreement. 10. NOTICE Any notice, tender, demand, delivery, or other communication pursuant to this Agreement shall be in writing and shall be deemed to be properly given if delivered in person or mailed by first class or certified mail, postage prepaid, or sent by telefacsimile or other telegraphic communication in the manner provided in this Section, to the following persons: To City: Clerk ofthe City Council City of Santa Ana 20 Civic Center Plaza (M-30) P.O. Box 1988 Santa Ana, CA 92702-1988 telefacsimile (714) 647-6956 With courtesy copies to: Personnel Services Agency, Risk Manager City of Santa Ana 20 Civic Center Plaza (M-28) P.O. Box 1988 Santa Ana, California 92702 telefacsimile (714) 647-5311 Attn: Jeff Stevens and City Attorney City of Santa Ana 20 Civic Center Plaza (M-29) P.O. Box 1988 Santa Ana, California 92702 telefacsimile (714) 647-6515 To Consultant: Milliman, Inc. Mr. Robert Dezube 1921 Gallows Road, Suite 900 Vienna, Virginia 22182 A party may change its address by giving notice in writing to the other party. Thereafter, communication shall be addressed and transmitted to the new address. If sent by mail, communication shall be effective or deemed to have been given three (3) days after it has been deposited in the United States mail, duly registered or certified, with postage prepaid, and addressed as set forth above. If sent by telefacsimile, communication shall be effective or 4 deemed to have been given twenty-four (24) hours after the time set forth on the transmission report issued by the transmitting facsimile machine, addressed as set forth above. For purposes of calculating these time frames, weekends, federal, state, County or City holidays shall be excluded. 11. EXCLUSIVITY AND AMENDMENT This Agreement represents the complete and exclusive statement between the City and Consultant, and supersedes any and all other agreements, oral or written, between the parties. In the event of a conflict between the terms of this Agreement and any attachments hereto, the terms of this Agreement shall prevail. This Agreement may not be modified except by written instrument signed by the City and by an authorized representative of Consultant. The parties agree that any terms or conditions of any purchase order or other instrument that are inconsistent with, or in addition to, the terms and conditions hereof, shall not bind or obligate Consultant nor the City. Each party to this Agreement acknowledges that no representations, inducements, promises or agreements, orally or otherwise, have been made by any party, or anyone acting on behalf of any party, which are not embodied herein. 12. ASSIGNMENT Inasmuch as this Agreement is intended to secure the specialized services of Consultant, Consultant may not assign, transfer, delegate, or subcontract any interest herein without the prior written consent of the City and any such assignment, transfer, delegation or subcontract without the City's prior written consent shall be considered null and void. Nothing in this Agreement shall be construed to limit the City's ability to have any of the services which are the subject to this Agreement performed by City personnel or by other consultants retained by City. 13. TERMINATION This Agreement may be terminated by the City upon thirty (30) days written notice of termination. In such event, Consultant shall be entitled to receive and the City shall pay Consultant compensation for all services performed by Consultant prior to receipt of such notice of termination, subject to the following conditions: a. As a condition of such payment, the Executive Director may require Consultant to deliver to the City all work product completed as of such date, and in such case such work product shall be the property of the City unless prohibited by law, and Consultant consents to the City's use thereof for such purposes as the City deems appropriate. b. Payment need not be made for work which fails to meet the standard of performance specified in the Recitals of this Agreement. 14. DISCRIMINATION Consultant shall not discriminate because of race, color, creed, religion, sex, marital status, sexual orientation, age, national origin, ancestry, or disability, as defined and prohibited 5 by applicable law, in the recruitment, selection, training, utilization, promotion, termination or other employment related activities. Consultant affirms that it is an equal opportunity employer and shall comply with all applicable federal, state and local laws and regulations. 15. DISPUTES (a). Consultant and City agree to mediate any dispute or claim arising between them out of this Agreement, or any resulting transaction, before resorting to arbitration or court action. Mediation fees, if any, shall be divided equally among the parties involved. If, for any dispute or claim to which this paragraph applies, any party commences an action without first attempting to resolve the matter through mediation, or refuses to mediate after a request has been made, then that party shall not be entitled to recover attorney fees, even if they would otherwise be available to the party in any such action. (b). Arbitration of Disputes. In the event any controversy or claim arising out of this contract or a breach thereof cannot be resolved through mediation, as set forth in section 15(a), such dispute shall be settled by final and binding arbitration in accordance with the rules of the American Arbitration Association. The arbitration shall take place before a panel of three arbitrators. Within 30 days of the commencement of the arbitration, each party shall designate in writing a single neutral and independent arbitrator. The two arbitrators designated by the parties shall then select a third arbitrator. The arbitrators shall have a background in either insurance, actuarial science or law. The arbitrators shall have the authority to permit limited discovery, including depositions, prior to the arbitration hearing, and such discovery shall be conducted consistent with the Federal Rules of Civil Procedure. The arbitrators shall have no power or authority to award punitive or exemplary damages. Any arbitration shall be confidential, and except as required by law, neither party may disclose the content or results of any arbitration hereunder without the prior written consent of the other parties, except that disclosure is permitted to a party's auditors and legal advisors. 17. JURISDICTION - VENUE This Agreement has been executed and delivered in the State of California and the validity, interpretation, performance, and enforcement of any of the clauses ofthis Agreement shall be determined and governed by the laws of the State of California. Both parties further agree that Orange County, California, shall be the venue for any action or proceeding that may be brought or arise out of, in connection with or by reason of this Agreement. 18. PROFESSIONAL LICENSES Consultant shall, throughout the term of this Agreement, maintain all necessary licenses, permits, approvals, waivers, and exemptions necessary for the provision of the services hereunder and required by the laws and regulations of the United States, the State of California, the City of Santa Ana and all other governmental agencies. Consultant shall notify the City immediately and in writing of its inability to obtain or maintain such permits, licenses, approvals, waivers, and exemptions. Said inability shall be cause for termination of this Agreement. 6 19. MISCELLANEOUS PROVISIONS a. Each undersigned represents and warrants that its signature hereinbelow has the power, authority and right to bind their respective parties to each of the terms of this Agreement, and shall indemnify City fully, including reasonable costs and attorney's fees, for any injuries or damages to City in the event that such authority or power is not, in fact, held by the signatory or is withdrawn. b. All Exhibits referenced herein and attached hereto shall be incorporated as if fully set forth in the body of this Agreement. IN WITNESS WHEREOF, the parties hereto have executed this Agreement the date and year first above written. ATTEST: '~ l-~. PATRICIA E. HEALY Clerk of the Council CITY OF SANTA ANA DAVT(J.fll2, City Manager - APPROVED AS TO FORM: JOSEPH W. FLETCHER City Attorney By: Laura Sheedy Assistant City Attorney RECOMMENDED FOR APPROVAL: CONSULTANT (Na~ S~-FSA (Title) Principal and Consulting Actuary Tax ID# 91-0675641 7 EXHIBIT A SCOPE OF SERVICES Consultant shall provide an actuarial study, as set forth in Attachment I hereto, for a proposed PARS Retirement Enhancement Plan for non-safety Executive Management employees of the City of Santa Ana. Said study will be delivered to and reviewed by PARS prior to acceptance by City. The valuation shall comply with the requirements of California Government Code Section 7505. The following assumptions will be utilized for the study: Actuarial Assumptions n. Entry Age: o. Deferred Annuity: January I, 2006 7% 3.25% Utilize CalPERS table. 2.00% Compounded Annually Utilize CalPERS table Utilize CalPERS table Develop appropriate criteria Develop appropriate criteria Develop appropriate criteria Utilize only the 40 I (a)(l7) limits None are assumed All current participants are assumed to elect single life annuity Age at hire with City There are no deferred benefits a. Valuation Date: b. Investment Return: c. Inflation: d. Salary Increases: e. Cost of Living Adjustment: f. Pre-Retirement Mortality: g. Post-Retirement Mortality: h. Withdrawal: 1. Retirement: J. Disability: k. Maximum Benefits and Salary: 1. Expenses: m. Form of Payment: Actuarial Methods Funding Method: Entry Age Normal with a 20-year amortization ofthe unfunded actuarial liability. 8 A'YIt..llM^H Ql08hl fiRM . Milliman 1921 Gallows Road,Suite900 Vienna, VA 22182-3995 Tel +1703.917-0143 Fax + I 703-&27-9266 www.milliman.com Consu".."t8 and ,ACluuios January 4, 2006 Mr. Kevin Murphy Senior Vice President Public Agency Retirement Services 5141 California Avenue, Suite 150 Irvine, CA 92617-3069 Re: January 1, 2006 Actuarial Valuation for the City of Santa Ana Retirement Enhancement Plan Dear Kevin: We are prepared to do the January 1, 2006 actuarial valuation for the City of Santa Ana Retirement Enhancement Plan for a fixed fee of $7,250. The work product will be our standard letter report. Our fee quote is based on your original November 1, 2005 email and attachment, and successive email clarifications through December 29, 2005, subject to the following modifications and interpretations. 1. Non-safety executive management employees ot the City on or after January 1, 2006 are eligible for the supplemental retirement plan. 2. Two scenarios will be considered in regards to benefit service: (a) Benefit service will include all service with the City and CalPERS credited service with other CalPERS covered agencies according to the following schedule based on years of service in a covered classification for the City after January 1, 2006: Years of Service 3 4 5 or more Percent of Other CalPERS Service 60% 80% 100% (b) Benefit service will include all service with the City and, upon completion of 3 years of service in a covered classification for the City after January 1, 2006, all CaiPERS credited service with other CalPERS covered agencies. 3. Employees who are age 55, have three years of City service in a classification covered by the plan after January 1, 2006, and concurrently retire from CalPERS are eligible to retire under the plan. OFFICES IN PRINCIPAL CITlES WORLDWIOE A TTACH1-'!ENT I . e Mr. Kevin Murphy January 4, 2006 Page 3 We will need to receive a signed copy of the Consulting Services Agreement as modified by the City of Santa Ana. We look forward to working with you. Sincerely, Milliman, Inc. R~Ub~Fr: Consulting Actuary cc: Dennis Yu ASDlLUST/PHA177 M:\PAS\Santa Aoa\Santa Ana Proposal #2.doc OFFICES IN PR1NC1PAL CITIES WORLDWIDE ACORD". CERTIFICATE OF LIABILITY INSURANCE I DATE (MMllJlJfYY) 2/2106 THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POliCIES BELOW. PRODUCER PARKER, SMITH & FEEK, INC. 22331121h Avenue N.E. Bellevue. Washington 98004 Phone: 425-709-3600 Fax: 425-709-7460 INSURERS AFFORDING COVERAGE INSURER Ie PACIFIC INDEMNITY INSURANCE COMPANY A++XV INSUReo MILLIMAN, INC. 1301 5th Avenue, Suite 3800 Seattle, WashIngton 98101-2506 INSUAER 8 INSURER c: INSURER 0: INSURER E: COVERAGES THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FORTHE POUCY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER OOCUMENTWITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS. EXCLUSIONS AND CONDJTJONS OF SUCH POLICIES. AGGREGATE LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. INSR TYPE OF INSURANCE pOLICY NUMBER POLl~~~FFECn~le POl]~ f~PIRAnaN LIMITS LTR DATE MMfODNY DATE MMlDOIYY} GENERAL LIABILITY EACH OCCURRENCE S ..::.= COMMERCiAl GENERAL lIABILllY FIRE DAMAGE (Any 0fI9 lira) S I CLAtMS MADE D OCCUR MEO EXP (Anyone pel5oo) S PERSONAL&ADV INJURY S GENERAL AGGREGATE S GEN'L AGGREGATE LIMIT APPLIES PER: PRODUCTS-COMP/OP AGG S I' n.PRO- n POLICY JEeT LOC .M[OMOBILE LIABIUTY COMBINED SINGLE LIMIT S - ANY AUTO (Eaeccldenl) - ALL OWNED AUTOS BODILY INJURY (Per person) S - SCHEDULED AUTOS f- HIRED AUTOS BODILY INJURY S NON-OWNED AUTOS IPeraccldenll f-- PROPERTY DMtAGE S (PeralXident) RRGELlABIUTY AUTO ONLY - EA ACCIDENT S ANY AUTO OTHER THAN EAACG . AUTOONLV: AGG S EXCESS LIABILITY EACH OCCURRENCE $ b OCCUR D CLAIMS MADE AGGREGATE . S R ~EDUCTIBLe $ RETENTION S S WORKERS COMPENSATION AND I,WGSTATU-,I 10TH- EMPLOYERS' UABIUTY X TORY LIMITS ER A 71719457 6/3012005 613012006 E.L EACH ACCIDENT S 1.000,000 E.L DISEASE - EACH EMPLOYee S 1.000,000 E.L DISEASE- POLICY LIMIT S 1,000,000 OTHER S S S DESCRIPTION OF OPERATIONSlLOCATIONSlVEHIClESlEXCLUSIONS ADDED BY ENDORSEMENT/SPECIAL PROVISIONS Contract No. N~20D6.DO.q. ,~ '() "Zi'vl ~(-"- (CJ/ -.--------,.-,-.--.. .. .- :. CERTIFICATE HOLDER I I ADD/TIONALlNSURmtIN$mERJ.entk:, ,\. i:,' CANCELLATION .10 days fDr nDflwpayment of premium SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF, THE ISSUING INSURER WILL CITY OF SANTA ANA ENDEAVOR TO MAIL~ DAYS WRfITEN NOTICE TO THE CERTIFICATE HOLDER NAMED TO THE LEFT, BUT FAILURE TO DO SO SHALL IMPOSE NO 20 Civic Center Plaza, M-24 OBU~~;ION OR LIABILITY OF ANY KIND U~NTHE INSURER,ITS AGENTS Santa Ana, CA 92701 <6iillE RESENTATIVES. AUT~OR1Z"\R""R.SENTATlVE ~ ~ iJ ( T 7"~d-r1), c;; .,'/ , JI ~ n 'A ACORD 25-S (7/97) MILLlMAN\CERT05(MD9) @ACORDCORPORATION1966 CERT #30B Professional Consultants Insurance Company, Inc. P.O. Box 1750 Burlington, VT 05402-1750 Tel: (802) 860-1958 Fax: (802) 863-2198 CERTIFICATE OF INSURANCE Certificate Holder: City of Santa Ana Attn: Rosa Flores 20 Civic Center Plaza, M-24 Santa Ana, CA 92701 Certificate No. 205-124 Insured: Milliman, Inc. per Schedule B to Policy No. PO 205 I Period: July I, 2005 to July I, 2006 12:01 a.m. standard time at assured's address Form: Claims Made Tvoe of Coverage: Professional Liability/Errors and Omissions Limits: Not less than US $5,000,000 per claim Excess of : US$ 1,000,000 Self Insured Retention Subject to the terms, conditions, exclusions and limitations ofthe Policy and self-insurance by the Assured. Notice of Cancellation: 30 days subject to the terms ofthe policy. This document is furnished as a matter of information only. The issuance of this document does not make the person or organization to whom it is issued an additional Assured, nor does it modifY in any manner the contract of insurance between the Assured and the Underwriters. Any amendment, change or extension of such contract can only be affected by specific endorsement attached thereto. Issued at Burlington, Vermont -,') \) ":''011 By: ~:?"/ ! -/.)/,:LJ;L!:7-- Date: 1 '\ .,1, ',..