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HomeMy WebLinkAboutBUCK CONSULTANTS, LLC 3-2012INSURANCE ON FILE WORK MAY PROCEED UNTIL INSURANCE EXPIRES N-2012-076 ? ? s a ? .(3 CLERK OF COUNCI DATE, ,?,???? ZUt2 ?: ? MS 1 AGREEMENT FOR PROVISION OF ACTURiAL SERVICES ?iL?l1?A THIS AGREEMENT, made and entered into this 1" day of June, 2012 by and between Buck Consultants, LLC, a limited liability company (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"). RECITALS A. The City desires to retain a consultant having special skill and knowledge in the field of actuarial studies to provide an actuarial analysis of the City's retiree health insurance plans. 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 fine in the field. NOW TIIEREFOI2E, 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 provide actuarial services to perform an analysis of the City's cun'ent liability for its retiree health insurance plans, which comply wkth Governmental Accounting Standards Board (GASH) Number 43 and 45 reporting requirements, as set forth in Consultant's Proposal dated May 10, 2012, attached hereto as Exhibit A and incorporated by reference- 2. REYRESEN'I'ATlVES For purposes of implementing this Agreement, the representative of City shall be the Executive Director of the Finance and Management Services Agency, or his designated representative, and the representative of the Consultant shall be Mike Schionniug or his designated representative. Except as may be otherwise stated herein, such representatives shall have the authority to act nn behalf of their respective parties in carrying out the terms of this Agreement. DELIVERY OF WORK PRODUCT -OWNERSHIP Consultant wan'ants and represents that it has the absolute right to enter into and perform this Agreement and will perform its obligations hereunder in accordance with standards and practices prevailing in the industry. Consultant's contribution to the Project, including works to be produced by Consultant hereunder, will not infringe or misappropriate the proprietary or personal rights of any third person or party. Consultant shall deliver to City any work product which results from the services provided. Said work product shall be submitted in hard copy and produced in a form compatible with City's information systems, as agreed between the Project Manager and Consultant. In regard to all material produced as a deliverable under this Agreement, including but not limited to records, papers, drawings, specifications, programs, systems and other materials prepared by Consultant, Consultant agrees, for itself and its affected officers, employees, agents, contractors, and volunteer workers, that (a) other such material shall be the property of the City, and may not be copyrighted without prior review from the City, and (b) the authors of all such material, whether copyrighted or not, award to the City, and to its officers, agents and employees acting within the scope of their official duties, as a condition of payment to the Consultant, aroyalty-free, nonexclusive, irrevocable license throughout the world for governmental purposes to disclose, publish, translate, reproduce, and use such materials. COM-PENSATION 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 he expended under' this Agreement shall not exceed $20,000.00 during the term of this Agreement. b. Payment by City shall he made within thirty (30) days following receipt of proper invoice evidencing work performed, subject to City accounting procedures. 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. 5. TERM This Agreement shall commence on the date first written above and terminate on December 31, 20] 2, unless terminated earlier in accordance with Section 14, below. G. INDEPENDENT CON'T'RACTOR 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 perfornis 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. TNSUI2ANCE Prior to undertaking performance of work under this Agreement, Consultant shall maintain and shall require its subcontractors, if any, to obtain anti maintain insurance as described below: Professional liability (errors and omissions) insurance, with a combined single limit of not less than $1,000,000 per claim. S. INDENINII'ICATION Consultant agrees to and shall indexrtnify and hold harmless fhe City, its officers, agents, employees, consultants, special counsel, and representatives from liability for personal injury, damages, just compensation, restitution, judicial or equitable relief arising out of claims for personal injury, including health, and claims for property damage, which may arise from the negligence, recklessness or willful misconduct of the Consultant or its contractors, subcontractors, agents, employees, or other persons acting on their behalf which relates to the services described in section 1 of Chis Agreement. The Consultant fitrther agrees to indemnify, hold harmless, and pay all costs for the defense of the City, including fees and costs for special counsel to be selected by the City, regarding any action by a third party asserting that personal injury, damages, just compensation, restitution, judicial or equitable relief due to personal or property rights arises by reason of the terms of, or effects arising from this Agreement City may make all reasonable decisions with respect to its representation in any legal proceeding. 9. 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 noC 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 Cite 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. 10. 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 render this Agreement. 1 L 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 facsimile or other telegraphic communication in the manner provided in this Section, to the following persons: To City: Clerk of the City Council City of Santa Ana 20 Civic Center i'laca (M-30) P.O. Box 1988 Santa Ana, CA 92702-1988 fax (714) 647-6956 With courtesy copy to: Finance and Management Services Agency -Accounting llivision City of Santa Ana 20 Civic Center Plaza (M-17) P.O. Box 1988 Santa Ana, California 92702 fax (714) G47-5414 To Consultant: Buck Consultants, LLC Mr. Milce Schionning 1455 Frazee Road, Suite 805 San Diego, California 92 1 0 8-43 20 fax (619) 297-5220 A party may change its address by giving notice in writing to the other party. Thereafter, any 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 lJnited States mail, duly registered or certified, with postage prepaid, and addressed as set forth above. If sent by facsimile, communication shall be effective or 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. 12. 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. 13. 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. 14. 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. However, any use of unfinished work product shall be at City's sole risk, b. Payment need not be made for work which fails to meet the standard of performance specified in the Recitals of this Agreement. 15. 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 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. 16. 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 of this Agreement shall be determined and governed by the laws of the State of California. Both parties fin-ther agree that Orange County, California, shall be the vcmie for any action or proceeding that may be brought or arise out of, in connection with or by reason of this Agreement. 17. 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 her inability to obtain or maintain such permits, licenses, approvals, waivers, and exemptions. Said inability shall be cause for termination of this Agreement. 18. MISCELLANEOUS PROVISIONS a. F,ach undersigned represents and warrants that its signature hereinbelow has the power, authority and tight to bind their respective parties to each of the terms of this Agreement, and shall indenirtify City fiilly, including reasonable costs and attorney's tees, for auy injuries or damages to City in the evenC that such authority or power is not, in fact, held by the signatory or is withdrawn. b- Captions and headings in this Agreement, including the title oFthis Agreement, are for convenience only and are not to be considered in construing this Agreement- c- All Exhibits referenced herein and attached hereto shall be incorporated as if fiilly set forth in the body of this Agreement- /// /// /// Signatures on next page iN WITNESS WHEREOF, the parties hereto have executed this Agreement the date and year first above written. ATTEST; ?Y?G? z? ? ? ??Gy MARIA D. HUIZAR Clerk of the Council CITY OP' SANTA ANA PAUL M. WALTERS City Manager APPROVED AS TO FORM: SOMA R. CARVALHO City Attorney La . a. a St? - Assistant City Attorney RIiCOMMENDED FOR APPROVAL: FRAIVC15C0 GUTIERRE Executive Director -FMS BUCK CONSUi,TANTS, LLC ?- ?? C L SCIIIONNING ?-- Principal Tax ID # 6 ??,1????:????"????L???????.?.?V?.; A Xerox Company May 10, 2012 Ms. Bich D. Ta Accounting Manager Finance and Management Services City of Santa Ana 20 Civic Center Plaza (M-17) Santa Ana, CA 92702 RE. GASB 45 -Other Post Employment Benefit (OPEB) Actuarial Study Dear Ms. Ta: Buck Consultants, LLC (Buck) is pleased to provide you with this proposal for providing valuations of the retiree health plans of the City of Santa Ana (the City), which are compliant with GASB 43 and 45. This letter describes our understanding of the objective, our approach, the data needed, the consulting fees, and timeline for performing this analysis. It is our understanding that the objective of this project is to develop an actuarial analysis of the current liability for the City's retiree health insurance plans. This will include an assessment of the current liability for the existing retirees and the expected future liability for the current active employees. The valuation reports will provide the information and exhibits necessary to comply with GASB 43 and 45 reporting requirements. Various fimding strategies, expected cash flows, implicit rate subsidy liabilities, and amortization schedules will be presented with the valuation reports. Our actuarial team for the City is led by Mike Schionning from our San Diego office. He is a Fellow of the Society of Actuaries and Member of the American Academy of Actuaries and has more than 30 years of actuarial experience. Mike can be reached at (619) 725-1710. Our San Diego office actuaries specialize in health and welfare actuarial practice and the valuation of other post employment benefits (OPEB). All services will be performed within the time period specified. Mike Schionning, Principal, is authorized as supervising actuary to represent the proposer, Buck Consultants at the address and phone number given in the footer of this transmittal page. Buck's website is at www.buckconsultants.con>. You may a-mail Mike with any additional questions at michael.schionning a buckconsultants.com. 1455 Frazee Road, Suite 805 San Diego. CA 92108-4320 619.725.1700 619.297.5220 fax Ms. Bich D. Ta May 10, 2012 Page 2 Firm Qualifications and Exnerience Buck Consultants was founded in 1916 primarily as a consultant to large public retirement systems. From these beginnings, Buck Consultants has come to occupy a dominant position as an actuarial consulting firm in the govermmental and not-for-profit arena. In fact, we are one of the few (inns with a staff specializing in the public and not-for-profit sectors. We are able to offer public sector clients significant expertise on issues relating to benefits, compensation, and human resource management. Buck Consultants currently provides consulting services to a number of states, municipalities, and quasi-governmental entities. Buck has four California offices located in San Diego, Los Angeles, San Francisco and Santa Ana as well as over 5,000 professionals who serve over 3,000 clients and their employee benefit programs in all 50 states and throughout the world. We believe that the depth and breadth of these local resources will give the District easy access to the technical support it needs. Buck Consultants is a subsidiary of Xerox, a Fortune 500 company with over 130,000 employees worldwide. Buck is licensed to do business in California. Buck has not been party to any lawsuits in the last 10 years concerning issues that would materially impact our ability to provide the requested scope of services. Buck is proud to say that we have never lost a client based on service issues. As always when new regulatory requirements are being formulated, our Research Department provided us with its analysis. We are committed to strict adherence to the schedule and budget for this project. Report Format This section provides a brief description of the information needed to develop the analysis. It is the same as the data provided for the previous valuation. • Census data for the current Active and Retired employees. This information should include an employee ID number, the date of birth and the sex of the individual, the date of hire, bargaining unit, the date of retirement (for retirees), marital status at retirement and the date of birth of the covered spouse, if any. In addition, the census data should indicate the plan the retiree has chosen and any retiree contribution amount that may be required under the program • Benefit description of the medical plans that are offered ?UC?CL?Q ll ?.:7?..?4 t?11 i I_. J Ms. Bich D. Ta May 10, 2012 Page 3 • Confirmation of the eligibility rules for retiree coverage (for example, age 50 plus 1 O years of service) • Confirmation of the contribution formula and current contribution amounts for retirees/spouses • Current rates by medical plan and rate tier for active and retired employees; historical rate increases for the prior two or three years • If rates are blended between active and retired employees, any claims experience reports that show the relative cost difference between the two groups Buck will use its valuation software to develop the liability for current retirees, active employees who currently meet the eligibility requirements for retiree medical, and active employees who do not yet meet the eligibility requirements for retiree medical coverage. We will then develop a formal report that will show the following information: • Present value of the total liability for the City under varying health cost trend scenarios • Unfunded accrued actuarial liability (the UAAL) for over and under age 65 • Annual required contribution (ARC) under varied amortization schedules • Cash flow projections for the life of the current active and retiree population • Analysis of various funding strategies and their funding cost impact • A complete description of the assumptions that underlie the valuation • A glossary of common terminology used in retiree medical valuations Once the valuation report is complete we will submit a draft report to you for review. We will discuss the reports with you and incorporate your comments into the final reports. The expected time needed to complete each valuation is four to six weeks after receiving the census data described above. Total All-Inclusive Maximum Price This section outlines the expected cost for this project. As a consulting firm, we charge fees for our services on a time and expense basis so that our clients are assured of receiving maximum value. Buck will perform this project on a time and expense basis, with a limit on our fees to a guaranteed amount. We will charge only for the amount of work actually performed. Ms. Bich D. Ta May L O, 2012 Page 4 The total cost is expected to range from $15,000 to $18,000, with a not to exceed cost of $18,000. This includes two face-to-face meetings; the first to discuss the project and any changes in the City benefit plans since the prior valuation and the second to present the final reports and discuss the findings of the reports. The expected time needed to complete this project is four to six weeks after receiving the census data described above. If you have any questions, please feel free to contact me at (619) 725-1710. Sincerely, ??- ?5? ? Mtcnaet w. Jchionnmg, r.?.A., M.A.A. A. Principal and Consulting Actuary bUCkCt:?1"?S?i "?z? '?1 ,a A?'C?/?O CERTIFICATE OF LIABILITY INSURANCE DATE(MM/DD/YYYY) Ds/?9/zD,2 THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVj=RAGE AFSORp?T D ??y POLICIES BELOW. THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE 'ISSUING''INSURER(S)THORIZED REPRESENTATIVE OR PRODUCER, AND THE CERTIFICATE HOLDER. IMPORTANT: If the certificate holder is an ADDITIONAL INSURED, the policy(ies) must be endor4@d: If SUBROGATION IS WAIVE, subject to the terms and conditions of the policy, certain policies may require an endorsement. A statement on this certificate does not confeF'nghts to the certificate holder in lieu of such endorsement(s). PRODUCER CONTACT NAME: AOn RISk SErVI CeS NOrtheaSL, IDC. C8421 953-5390 C8661 283-]122 a PJG N i New York NY Office i p. EXq: C No : ( 1.99 Water Street ` ` -? E-MAIL r 1 T ' T}( ? New York NY 10038-3551 USA S DRESS: ` , ` ^ u ? , / ? W - ?? INSURER(S) AFFORDING COVERAGE NAIC # INSUREU % rC????r.?t INSURER A: CharLlS SpeCl al ty In SU ran Ce COmpdny 26883 \ XBrO% RUST ne55 SerVi ces, LLC. dba L /)_w??\CZ\ J uter 5ervi ces f?I/t nf'filiated Com INSURER B: p l 2f{z$ N. Haskell AVe. INSURER C: Dal'1 as TX 75204 USA INSURER O: INSURER E: INSURER F: COVERAGES CERTIFICATE NUMBER: 570046379622 REVISION NUMBER: TkiIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BV THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. Limits shown are as requested ILTR TYPE OF INSURANCE NSR WVO POLICY NUMBER MM/DD/YYYY MM/DD/VVVV LIMITS GENERAL LIABILITY EACH OCCURRENCE DAMA E T R NTED COMMERCIAL GENERAL LIABILITY PREMISES Ea occurrence CLAIMS-MADE ? OCCUR MED EXP (Any one person) PERSONAL & ADV INJURY GENERAL AGGREGATE GFN'L AGGREGATE LIMIT APPLIES PER: PRODUCTS -COMP/OP AGG PRO POLICY LOC AUTOMOBILE LIgBILITY COMBINED SINGLE LIMIT Itla ANV AUTO BODILY INJURY (Par parson) ALL OWNED SCHEDULED BODILY INJURY (Par accitlent) AUTOS AUTOS PROPERTY DAMAGE HIRED AUTOS NON-OWNED AUTOS - l / I v Y -LJ P y T ? J i ? ) ! \ p V 1?1? Par accitlent _ ?_ . _ UMBRELLA LIAB OCCUR EACH OCCURRENCE E%CESS LIAB CLAIMS-MADE AGGREGATE DED RETENTION ?.I L:S d1 tilii. _?l?- WORKERS COMPENSATION AND ? l _i 1 C i l /1 I l0 [ ? WC STATU- OTH- EMPLOYERS' LIABILITY I ? - ? I y TORY LIMITS R Y/N ANY PROPRIETOR /PARTNER / E%ECUTIVE EL EACH ACCIDENT ? 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