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Home My WebLink AboutC2006-349 - 8/29/2006 - Approved ACTUARIAL SERVICES AGREEMENT Health Benefits rhis Agreement fur secunng 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 lexas, and Mercer Oliver Wyman Actuarial Consulting. Inc. ("Consultant"). This Agreement hecomes eft\:ctive upon signing by the Director of Human Resources or her designee. Ihe City seeks the services of Consultant to perform an actuarial analYSIS of the City's sdf-insurance activities within the emplo~ ee benelits lund~ and Ihe ConsultanT will prepare and issue a \\ritten report which documents its tindings and recommendations. In consideration 01 the stated mutual covenants. undertakings and considerations the parties agree as follo\l/s. Seetion 1. Contract Administrator !he Cit~ ~ contract admil1Istrator ("Contract Administrator") for this Agreement is the Director \)f Human Resources. Cynthia Garcia. or her designee. The Contract Administrator is responsible lor all phases of Ihe City's performance and operations under this Agreement, including duthl)rizatlOns tor payme11l All notices or communications regarding this Agreement shal1 be dlra:ted to the Contract Administrator pursuant to Section 18. below. Section 2. Basic Services to be Performed ST.NDARDHEALTH PLAN EVALUATION rhe Consultant shall provide professional actuarial services for the Health Insurance Program. the actuarIal anal) sis \\ill be a cost projection for each of the City's four self-funded healthcare plans (CitIcare. Citicare Basic. Citicare-Fire. and Public Safety Citicare including any Retirees in each plan) covering the pwjected tiscal years 8/0U06 to 07/31/07. 8/U07 to 7/31/08, 8/1/08 to ~J11 109 Additionally. an update of said projections shall be performed based on January 31, 2007. data J"he analysis \\ ill include active employees. retirees and COBRA participants. The analysis wdl also include the 1'0110\\ ing: Pro.ll~Cl costs 10 the current contributions and funding rates to determine their likely adeLjuacy throughout the forthcoming fiscal years for all four plans: Recommended plan design changes. Proposed premlUm changes for participants. both active and retiree; 4. Comments about current industry practices along with appropriate recommendations for improvements In the City's plan design structure: 2006-349 08/29/06 M2006-270 Page 1 of 7 Mercer Oliver W,vrnan Evaluation of each plan companng projected cost to projected revenues, including any contributions to reserves; 6. Review of stop-loss insurance coverage to determine if retention levels for specific stop-loss and attachment point for aggregate stop-loss are reasonable based on industry standards; and. Affirm GASB Statement Number 10 compliance. Provide a statement affirming the conclUSlOns in the actuary study are consistent with GASB Statement Number 10. GASH 45 SERVICES In addition to the data requested above. the Consultant shall provide an actuarial valuation following GASB 45 standards to include the following services in relation to health insurance premiums (current employee/retiree blended premiums verses resulting premiums if the retirees were placed in their own respective pools). The actuarial present value of total projected benefits; 2. Actuarial accrued liability; 3. Actuarial value of assets: 4. The unfunded actuarial accrued liability; 5. Normal cost: 6. Annual required contribution of the City as a level dollar amount and as a level percentage of covered payroll; 7. Net OPEB obligation (for employer disclosure under GASB statement 45 if necessary); 8. Prepare the necessary material for the Comprehensive Annual Financial Report to comply with GASB OPEB reporting and disclosure requirements; 9. Prepare the annual gain/loss analysis to determine reasons for changes in the unfunded actuarial accrued liability: 10. Determine the implicit rate subsidy, if any. and the impact it would have on the OPEB l1ability~ and 11. As appropriate. provide recommendations on managing the OPEB liability. SecfioD 3. Reoortioe: The Consultant shall perform services required herein and provide its conclusions and recommendations in a draH report within fourteen (14) calendar days after (1) authorization of Page 2 of7 the City to commence. unless an extension is granted in \\-Titing by the City; and, (2) upon acknowledged receipt by Consultant of complete and satisfactory statistical data. The draft report shall be consistent with GASB Statement No.1 O. The conclusions and recommendations shall be clear, concise and easily understood by non-actuaries. The report shall include charts, graphs and other documentatlOn suffiCIent to support all conclusions and recommendations. The consultant -;hall be aVaIlable. at the City's convenience, for discussion or presentations regarding the draft report's conclusions and recommendations after submission of the draft report. Based on any new facts ascertained. the consultant shall revise the draft report and issue a final written report no later than twenty-one 21) day s after authorization by the City to commence, unless an extension is granted m writmg by the City Section 4. Price and Payment Terms i\ total price for services performed as required in Sections 1, 2, and 3 will not exceed Thirty T"usand Dollars ($30,000.00). 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 Seaion 5. Term of A2:reement Ihis Agreement commences upon execution by the Director of Human Resources, or her designee and continues for a period of twelve (12) months. Section 6. Termination of A2:reement ['he 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, or reports prepared by the Consultant, at the option of the City, will be delivered to the City and become the property of the City. Section 7. Fiscal Year and Appropriations All parties recognize that the continuation of any Agreement after July 31, the close of any fiscal :vear of the City, will 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 Setltion 8. Assienabilitv rhe Consultant will not assign, transfer, or delegate any of its obligations or duties under this Agreement to any other person without the prior written consent of the City. The performance of Page 301'7 this Agreement by Consultant is the essence of this Agreement and City's right to withhold consent to such assignment will be within the sole discretion of the City. Seelio. 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. Settio. 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 I n 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. Seelio. 11. Applicable Law Consultant agrees to abide with all Federal and Texas law, including those laws related to Equal Opportunity and to Persom with Disabilities. fhe place of performance under this Agreement will be in Corpus Christi, Nueces County, lexas. Venue for any legal action will be in the appropriate Court in Nueces County, Texas. Seelio. 12. Authoritv CODsultant and the City each represent that the individual signing on its behalf has the power and authority to enter into this Agreement. and that this Agreement constitutes a valid and binding obligation of each party Se.ioD 13. Waiver No waiver of any breach or any term. or condition of the Agreement, will be construed to waive any subsequent breach of the same. Se4fiOD 14. Disclosure of Interests CODsultant further agrees, In compliance with City of Corpus Christi Ordinance No. 17112, to com.plete, as part of this Agreement. the Disclosure of Interest form provided to Consultant. A Page 4 of7 copy of the Disclosure of Interest is attached as Exhibit 1. Secfion 1 S. Insurance CODSultant shall procure and maintain the insurance coverage required under this Agreement as Set forth in the attached Exhibit 2. 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 PEIlSONAL INJURIES INCLUDING, WITHOUT LIMITATION, WORKERS' COMPENSATION, DEATH CLAIMS, PROPERTY LOSS OR DAMAGE OF ANY KIND, OR ANY OTHER KIND OF DAMA(;ES WHICH ARE ATTRIBUTABLE TO CONSULTANT'S NEGLIGENCE OR WILLFUL ACTS OR OMISSIONS (AS DETERMINED BY FINAL JUD(;MENT OF A COURT OF COMPETENT JUIUSDICTION WHICH IS NO LONGER SUBJECT TO APPEAL OR FURTHER REVIEW) WHILE IN PERFORMANCE OF THIS AGREEMENT AND INCLUDING ALL EXPENSES OF LITIGATION, COURT COSTS, AND ATTORNEYS' FEES INCURRED BY THE CITY IN CONNECTION WITH DEFENDING ITSELF IN ANY ;\CTIONS RESliLTING IN SUCH MONETARY LOSSES. TO THE EXTENT NOT PROHIBITED BY THE STATUTES OF THE STATE OF TEXAS AND THE TEXAS CONSTITUTION, THE CITY SHALL INDEMNIFY, SAVE, AND HOLD HARMLESS THE CONSULTANT AND ITS OFFICERS, EMPLOYEES, REPRESENTATIVES, AND AGENTS AGAINST ANY AND ALL DAMAGES, LOSSES, JUDGEMENTS, CLAIMS OR OTHER MONETARY LOSSES RECOVERED FROM THE CONSVLTANT ON ACCOUNT OF PERSONAL INJURIES INCLUDING, WITHOUT LIMIT A TION, WORKERS' COMPENSATION, DEA TH CLAIMS, PROPERTY LOSS OR DAMAGE OF ANY KIND, OR ANY OTHER KIND OF DAMAGES WHICH ARE A TTRIBUT ABLE 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 AGREEMENT AND INCLUDING ALL EXPENSES OF LITIGATION, COURT COSTS, AND ATTORNEYS' FEES INCURRED BY THE CONSULTANT IN CONNECTION WITH DEFENDING ITSELF IN A~V ACTIONS RESULTING IN SUCH MONET ARV LOSSES. Section 17. Notice ,\11 notices. demands, requests, or replies provided for or permitted under this Agreement by l'ither part} must be in wnting and must be delivered by one of the following methods: (l) by personal delivery: (2) by deposit with the United States Postal Service as certified or registered Page 5 of7 mail, return receipt requested, postage prepaid; (~) by prepaid telegram; (4) by deposit with an (lvermght express deliven service, for which service has been prepaid; or (5) by fax transmission. Notice deposited with the llnited States Postal Service in the manner described above will be deemed effective two (2) business days after deposit with the United States Postal Service. 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 by fax transmission will be deemed effective upon transmission, with proof of receipt. All such l'ommumcatlons must only be made to the following: IF TO CITY: IF TO CONSULTANT: City of Corpus Christi ('ynthia Garcia Director. Human Resource, P.O. Box 9277 Corpus Christi. Texas 78469-9277 PHONE: (361) 880-3315 FAX: (361) 88()-36q7 Mercer Oliver Wyman Actuarial Consulting, Inc. Attn: Glenn Giese, FSA, MAAA ..J.II East Wisconsin Avenue, Suite 1600 Milwaukee, Wisconsin 53202-4419 PHONE: (414) 223-7989 FAX: (414) 223-3244 Either party may change the address to vvhich notice is sent by using a method set out above. Consultant shall notify the City of an address change within thirty (30) days after the address is changed Se.ion 18. Severabilih [n the event that anyone ur more of the provisions of this Agreement shall. for any reason, be held Invalid, illegal, or unenforceable in any respect. such Invalidity, illegality, or unenforceability shall not a tfect any other provision of this Agreement. Sellion 19. Headin2s. The headings used in this Agreement are for convenience only and are not to be construed as part of this Agreement. SetliOD 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. Page 6 of7 EXECU lED IN Dl iPLlCAIT, each of \\hich will be considered an original, this 1'l t, day of ~_~~_~: ..-( 2006. CITY OF CORPUS CHRISTI Ant!rr: ~ ...p:.'~~.:GO '':):Ai',~ Gem :..- ~ \' 3i:.Cr~~r.r.\f,y Approved to as to Form thi-J..q day Of~ 2006 flY:~ Doyle Curtis Senior Assistant Cit\ Attorney ('\ \, ", I .-):"1 c ." I ~~,lJv w ,. ~Ul !'fUrtIL. -" ~.. ..--if L:>iJ () 'r n ceu~\,;ll '.,. ......L....u....._ A ------...-.. - .~.. . -.... . .......-- SEC~H ARV --(r."--- CONSll L TANT: Mercer Oliver Wyman Actuarial Consulting, Inc. By: ,-. ( --t '-. Name: '..~.1(~~._,..,--~ C'..::J..t.... litle: L-tv.-..:. ..~~~_. \ Date: _.~l.~;_' ~L: Page 7 01'7