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HomeMy WebLinkAboutC2006-300 - 7/25/2006 - NA ACTUARIAL SERVICES AGREEMENT Workers' Compensation & General Liabilities This Agreement for securing professional actuarial services is entered into by and between the City of Corpus Christi ("City"), a home rule city under the laws of the State of Texas, and Mercer Oliver Wyman ("Consultant"). This Agreement becomes effective upon signing by the Director of Human Resources or her designee. The City seeks the services of Consultant to perform an actuarial analysis of the City's self-insurance activities within the workers' compensation and general liability funds; and The Consultant will prepare and issue a wTitten report which documents its findings and recommendations: In consideration of the stated mutual covenants, undertakings and considerations the parties agree as follows: Sectio n 1. Contract Administrator The City's contract administrator ("Contract Administrator") for this Contract is the Director of Human Resources. Cynthia Garcia, or her designee. The Contract Administrator is responsible for all phases of the City" s performance and operations under this Contract, including authorizations for payment. All notices or communications regarding this Contract shall be directed to the Contract Administrator pursuant to Section 17 below. Section 2. Basic Services to be Performed ConsultaI1l shall clearly and precisely identify data tu be provided by City under the terms ofthis Agreement. Upon succe~;sful receipt of all such required data, Consultant shall perform the following services a. Estimate outstanding losses, including allocated loss adjustment expenses, for fiscal year end July 31, 2006, and provide a long-range forecast for fiscal year ending July 31, 2007, July 31, 2008 and July 3 I, 2009. The outstanding losses are the cost of unpaid claims, including case reserves, the development of known claims. and incurred but not reported claims. Allocated loss adjustment expenses are the direct settlement expenses for specific claims, primarily legal expenses. Consultant will provide the projected percentage of outstanding losses paid by year to provide detail for the present value calculations. Outstanding losses will be provided as expected. and at 60%, 70%, 80% and 90% confidence levels. Confidence levels reflect the degree of statistical confidence the provider holds that funds will be sufficient to meet losses. For example, a 90~o confidence level means that in nine years out of ten, there will be sufficient funds. 2006-300 07/25106 \Vyman. MerCl'r (HiYl'r .......- b. Project the financial position as of July 31, 2006, July 31, 2007, July 31, 2008 and July 31, 2009. The financial position is a comparison of estimated outstanding losses with fimds earmarked to meet the self-insurance activity. The projection of the financial position shall consider: current funding, budgeted revenue to fiscal year-end, anticipated interest income, budgeted expenses pald to fiscal year-end and projected losses paid to fiscal year-end. c. Project future losses and allocated loss adjustment expenses for fiscal years 2006-2007, 2007-2008 and 2008-2009, separately by fiscal year. The future losses are the accrual value of losses with accident dates in 2006-2007 to 2008-2009, regardless of report or payment date. The future losses shall be sho\VTI on a full value basis (not discounted for investment earnings) and present value basis (discounted for investment earnings). The future losses shall be shown as expected. and at 60%, 70%. 80% and 90% confidence levels. d. Consultant will recommend an overall funding level for fiscal years 2006-2007 to 2008- 2009. separately by fiscal year. The recommended funding reflects projected future losses, anticipated investment income. the financial position of the City's self-insurance activity and a reasonable provision for contingencies. If the self-insurance activity within the liability fund shows a positive fund balance. Consultant will outline a prudent plan to release the equit). If the self-insurance activity within the liability fund shows a deficit, Consultant will outline a long-term strategy (three to five years) to reduce the shortfall. e. Consultant will perfurm a cash flow analysis to project claims disbursements during the fiscal years 2006-2007 through 2008-2009. separately by fiscal year. The claims disbursement is the cash value of losses with payment dates during 2006-2007 through 2008- 2009. regardless of report of accident date. f. Consultant will discllss any observations that ('onsultant may have, including a review of daim frequency and claim severity patterns for the past five fiscal years. Significant differences from pre. iOllS actuarial studies that Consultant has conducted, if any, will be identified and explained. g. Consultant will proVide a statement affirming the conclusions in the actuarial study are consistent with the G.\SB Statement No.1 0 Items "a" through ""e" above shall be updated based on actual claims experience for the time period August 1,2006 through January 31,2007. Section 3. ReDortinl!: The Consultant shall perform services required herein and provide its conclusions and recommendations in a draft report within fourteen (14) calendar days after (1) authorization of the City to commence, unless an extension is granted in writing by the City, and (2) upon acknowledged receipt by the consultant of complete and satisfactory statistical data. The draft report shall be consistent with GASB Statement No. 10. The conclusions and recommendations 2 shall be clear, concise and easily understood by non-actuaries. The report shall include charts, graphs and other documentation sufficient to support all conclusions and recommendations. The consultant shall be available for discussion or presentations regarding the draft report's conclusions and recommendations after submission of the draft report at the City's convenience. Based on any neVv facts ascertained, the consultant shall revise the draft report and issue a final written report no later than twenty-one (21) days after authorization by the City to commence, unless an extension is granted in writing by the City. Section 4. Price and Payment Terms A total price for services performed as required in Sections 1, 2, 3, and 4 will not exceed Twenty-four Thousand Dollars ($24,000.00). The Consultant will submit an invoice to the City which itemizes the services performed. Within thirty (30) days of the City's acceptance of the draft report, the City will pay the Consultant fifty percent (50%) of the fee. Within thirty (30) days of the City's acceptance of the final report, the City will pay the Consultant the lesser of the remaining fifty percent (50%) of the fee, or the balance of the amount due on the itemized statements Section 5. Term of Ae:reement This Agreement commences upon execution by the Director of Human Resources, or her designee and continues f(lf a period of twelve (12) months thereafter. Section 6. Termination of Al!reement The City may, at any time, with or without cause, terminate this Agreement immediately upon written notice to the Consultant. Upon termination of this Agreement, all finished or unfinished documents, data, studies. ,)r reports prepared by the Consultant, at the option of the City, will be delivered 10 the Cil) and hecome the property of the City. Section 7. Fiscal Year and ADDroDriations All parties recogmze that the continuation of any agreement after July 31, the close of any fiscal year of the City', \\i1l be subject to appropriations and budget approval providing for covering such Agreement as an expenditure in the budget. The City shall not be obligated to perform under this Agreement if the City Council declines to appropriate funds sufficient to pay Consultant. Similarly. in that event Consultant shall have no obligation to continue performance under this Agreement Section 8. Assitmabilitv The Consultant will not assign, transfer, or delegate any of its obligations or duties in this Agreement to any other person without the prior written consent of the City. The performance of this Agreement by Consultant is the essence of this Agreement and City's right to withhold 3 ~.....",.,. consent to such assignment will be within the sole discretion of the City on any grounds whatsoever. Section 9. Independent Contractor Consultant will perform all professional services as an independent contractor and will furnish such services in its own manner and method, and under no circumstances or conditions will an agent, servant, or employee of the Consultant be considered an employee of the City. Any agent, servant and employee of the Consultant assigned to perform services under this Agreement shall be competent, capable, qualified and duly licensed under the laws of the State of Texas to perform their services Section 10. Subcontractors Consultant may use subcontractors In connection with the work performed under this Agreement. When using subcontractors, however, Consultant must obtain written approval from the City. In using subcontractors. Consultant agrees to be responsible for all their acts and omissions to the same extent as if the subcontractor and its employees were employees of the Consultant. All requirements set forth as part of this Agreement will be applicable to all subcontractors and their employees to the same extent as if the Consultant and its employees had performed the serVices. Section 11. Applicable Law This Agreement is subject to all Federal laws and laws of the State of Texas including those laws related to Equal Opportunity and to Persons with Disabilities. fhe place or perfnrmance under this Agreement will be in Corpus Christi, Nueces County, fexas Yenue for any legal action will he to the appropriate Court in Nueces County, Texas. Section 12. Authorin Consultant and the City each represent that the individual signing on its behalf has the power and authority to enter into thl s Agreement. and that this Agreement constitutes a valid and binding obligation of each party. Section 13. Waiver No waiver of any breach of any term. or condition of the Agreement, will be construed to waive allY subsequent breach of the same. Section 14. Disclosure of Interests Consultant further agrees. in compliance with City of Corpus Christi Ordinance No. 17112, to 4 ....... -- complete. as part of this Agreement, the Disclosure of Interest form provided to Consultant, a copy of which is attached as Exhibit 1 Section 15. Insurance Consultant shall procure and maintain the insurance coverages required under this Agreement that are outlined in Exhibit 2, which is attached to and incorporated in this Agreement by reference Section 16. Indemnification CONSULTANT SHALL FULLY INDEMNIFY, SAVE, AND HOLD HARMLESS THE CITY AND THE CITY'S OFFICERS, EMPLOYEES, REPRESENTATIVES, AND AGENTS AGAINST ANY AND ALL DAMAGES, LOSSES, JUDGMENTS, CLAIMS OR OTHER MONETARY LOSSES RECOVERED FROM THE CITY ON ACCOUNT OF PERSONAL INJURIES INCLUDING, WITHOUT LIMITATION, WORKERS' COMPENSATION, DEATH CLAIMS, PROPERTY LOSS OR DAMAGE OF ANY KIND, OR ANY OTHER KIND OF DAMAGES WHICH ARE ATTRIBUTABLE TO CONSUL T ANT'S NEGLIGENCE OR WILLFUL ACTS OR OMISSIONS (AS DETERMINED BY FINAL JUDGMENT OF A COURT OF COMPETENT JURISDICTION WHICH IS NO LONGER SUBJECT TO APPEAL OR FURTHER REVIEW) WHILE IN PERFORMANCE OF THIS CONTRACT AND INCLUDING ALL EXPENSES OF LITIGATION, COlJRT COSTS, AND ATTORNEYS' FEES INCURRED B\' THE CITY IN CONNECTION WITH DEFENDING ITSELF IN ANY ACTIONS RESULTING IN SUCH MONETARY LOSSES. TO THE EXTENT NOT PROHIBITED BY THE STATUTES OF THE STATE OF TEXAS AND THE TEXAS CONSTITUTION, THE CITY SHALL FULLY INDEMNIFY, SAVE, AND HOLD HARlVILESS THE CONSULTANT AND ITS OFFICERS, EMPLOYEES, REPRESENTATIVES, AND AGENTS AGAINST ANY AND ALL DAMAGES, LOSSES, JUDGEMENTS, CLAIMS OR OTHER MONETARY LOSSES RECOVERED FROM THE CONSULTANT ON ACCOUNT OF PERSONAL INJURIES INCLUDING, \VITHOUT LIMITATION, WORKERS' COMPENSATION, DEATH CLAIMS. PROPERTY LOSS OR DAMAGE OF ANY KIND, OR ANY OTHER KIND OF DAMAGES WHICH ARE ATTRIBUTABLE TO THE CITY'S GROSS NEGLIGENCE OR WILLFUL ACTS OR OMISSIONS (AS DETERMINED BY FINAL JUDGEMENT OF A COURT OF COMPETENT JURISDICTION WHICH IS NO LONGER SUBJECT TO APPEAL OR FURTHER REVIEW) WHILE RECEIVING SERVICES UNDER THIS CONTRACT AND INCLUDING ALL EXPENSES OF LITIGATION, COURT COSTS, AND ATTORNEYS' FEES INCURRED BY THE CONSUL TANT IN CONNECTION WITH DEFENDING ITSELF IN ANY ACTIONS RESULTING IN SUCH MONETARY LOSSES. 5 ~tion 17. Notice All notices, demands, requests, or replies provided for or permitted under this Agreement by either party must be in writing and must be delivered by one of the following methods, unless another section of this Agreement dictates a particular method, in which case the particular method language controls (l) by personal delivery; (2) by deposit with the United States Postal Service as certified or registered mail, return receipt requested, postage prepaid; (3) by prepaid telegram; (4) by deposit with an overnight express delivery service, for which service has been prepaid; or (5) by fax transmission. Notice deposited with the United States Postal Service in the manner described above will be deemed effective two (2) business days after deposit with the United States Postal SeD ice. Notice by telegram or overnight express delivery service will be deemed effective one (1) business day after transmission to the telegraph company or overnight express carrier. Notice b\ fax transmission will be deemed effective upon transmission, with proof of receipt All such communications must only be made to the following: IF TO CITY: City of Corpus Christi Cynthia Garcia Director, Human Resources P.O. Box 9277 Corpus Christi, Texas 78469-9277 PHONE: (361) 826-3315 FAX: (361) 880-3697 IF TO CONSULTANT: Mercer Oliver Wyman Consulting Attn: Ted Zubulake, FCAS, MAAA 1166 Avenue of the Americas, 19th floor New York, New York 10036-2708 PHONE: (212) 345-3559 FAX: (212) 345-2382 Either party may change the address to which notice is sent by using a method set out above. Consultant shall notify tht, City of an address change within thirty (30) days after the address is changed. Section 18. Severability In the event that anyone or more of the provisions of this Agreement shall, for any reason, be held imalid. illegal. or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect any other provision of this Agreement. Section 19. Headine:s The headings used in this Agreement are for convenience only and are not to be construed as part of this Agreement Section 20. Amendment No modification or amendment of this Agreement shall be binding unless it is in the form of a written document referring to this Agreement and signed by authorized representatives of the City and Consultant. 6 .......' -.., EXECUTED IN DUPLICATE, each of which will be considered an original, this 1L day Of_~__ _ 2006. CITY OF CORPUS CHRISTI (...-/ Cyn a Garcia, Director, Human Resources or her designee APPROVED AS TO FORM this A { of 3lA ''1 . 2006 BY:~/ ~_.._,.__...~_. -..---..--- ..._. ..--'.....---'.- Doyle Curtis Senior Assistant City Attorney CONSUL T ANT: Mercer Oliver Wyman ~. Name: ')~ot~ 'j. Title: ~ 11~~~ I ; By: Date: 7 ~.,-...... EXHIBIT 1 CITY OF CORPUS CHRISTI DISCLOSURE OF INTERESTS City of Corpus Christi Ordinance 171) 2 as amended, requires all persons or Proposers seeking to do business with the City to provide the following information. Every question must be answered. :;=::t:o::~.not!~{~S1; h~:. ,: s" revem" e fm definitions. ADDRESS: 2il~ ~b lj_.~~ _ PROPOSER IS: 1 Corporation K! 4 Associati'ln ( 2. Partnership ( ) 5. Other ( Sole Owner ( ) DISCLOSURE QUESTIONS If additional space is necessary, please use the reverse side of this page or attach a separate sheet. I. State the names of each "employee" of the City of Corpus Christi having an "ownership interest" constituting 3% or more of the ownership in the above named "Proposer." Name: ~_\~ Job Title and ity Department (if known) N~ 2. State the names of each "official" of the City of Corpus Christi having an "ownership interest" constituting 3% or more of the ownership in the above named "Proposer." N. ame: ...1', ^ - ~~ ~. ~t\- . ~ ~-: 3. State the names (If each "board member" of the City of Corpus Christi having an "ownership interest" constituting 3% or more of the ownership in the above named "Proposer." Name: a\~ Bo"d co~o,~o, Committee 4. State the names of each employee or officer of a "consultant" for the City of Corpus Christi who worked on any matter related to the subject of this contract and has an "ownership interest" constituting 3% or more of the ownership in the above named "Proposer." - -_\'l-k- -- consultant~_ 8 CERTIFICATE [ certify that all information provided is true and correct as of the date of this statement, that I have not knowingly withheld disclosure of any information requested; and that supplemental statements will be promptlv submitted to the City of Corpus Christi, Texas as changes occur. rl . ~ 12 Certifying " . . p.rson_~~ S1~ Lmlt__ Title I (t efol Signature of (j ~/;1 Certifying person:L~-/t-r- C/ ( \ DEFINITIONS Date: 1 I D~ a. "Board member." A member of any board, commission, or committee appointed by the City Council of the City of Corpus Christi, Texas. b. "Employee." Any person employed by the City of Corpus Christi, Texas either on a full or part- time basis. but not as an independent contractor. c. "Proposer." Any entit) operated for economic gain. whether professional, industrial or commercial, and whether established to produce or deal with a product or service, including but not limited to. entities uperated in the form of sole proprietorship, as a self-employed person, partnership, corporation. joint stocl-. company, joint venture. receivership or trust, entities which for purposes of taxation are trl'ated as non-profit organizations. d. "OffiCIal." The Mayor. members of the City CounciL City Manager, Deputy City Manager, Assistant City Managers. Department and Division Heads. and Municipal Court Judges of the City of Corpus Christi, Texas. e. "Ownership interest." Legal or equitable interest, whether actually or constructively held. In a Proposer. including when such interest is held through an agent, trust, estate, or holding entity. "Constructively held" refers to holdings or control established through voting trusts, proxies, or special terms of venture or partnership agreements." f. "Consultant." Any person or Proposer. such as engineers and architects, hired by the City of Corpus Christi for the purpose of professional consultation and recommendation. 9 .... ";;;p Exhibit 2 Required Insurance Provisions 1) Before activities can begin under this Contract, Consultant shall deliver a Certificate of Insurance as proof of the required coverages to the Contract Administrator. Additionally, the Certificate shall state that the Contract Administrator shall be given at least thirty (30) days notice of cancellation, material change in the coverages, or intent not to renew any of the policies by certified mail. The City must be names as an Additional Insured under Consultant's commercial general liability insurance for its vicarious liability arising from Consultant's provision of services hereunder Required types of insurance and coverage amounts are listed beloVo a) Commercial general liability with a combined single limit of coverage of $2,000,000 per occurrence and aggregate; b) Errors and omissions (professional liability) insurance with a minimum limit coverage of $2,000,000 per claim and aggregate. Such insurance shall cover Consultant's officers, directors, and employees: and, c) Workers' compensation insurance covering all of Consultant's officers and employees who, at any time. perform any work relating to this Contract in City offices. 2) All lI1surance shall be maintained with insurers which are acceptable to the Contract Administrator. If the insurance company elects to use the standard ACORD form, the cancellation clause located on the bottom right of the ACORD form shall be amended by adding the vvorking "materially changed or" between "be" and "cancelled," deleting the words "endeavor to". and deleting the wording after "left" 3) Consultant shall provide workers' compensation coverage through a licensed insurance company or through self-insurance obtained in accordance with Texas law. 4) Consultant shall ensun: that any and all sub-contractors performing services under this contract meet the insurance requirements of this Contract. 10 ...."..-