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
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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
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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
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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
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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.
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~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.
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EXECUTED IN DUPLICATE, each of which will be considered an original, this 1L
day Of_~__ _ 2006.
CITY OF CORPUS CHRISTI
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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:
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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\-
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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."
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consultant~_
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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.
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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.
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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.
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