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HomeMy WebLinkAboutC2009-387 - 9/24/2009 - NAJ. Glaytan-Hall, FSA, EA,,IVIAAA ' Principal IY! ~ ~~ ~ 1\ _.___......i MARSH MERCER KROLL ~,_ GUY CARPENTER OLIVER WYMAN September 23, 2009. Ms. Constance P. Sanchez, CPA, CPM Deputy Director of Financial Services City of Corpus Christi 1201 Leopard Street Corpus Christi,. TX 78401-2825 1.000 Main Street, Suite 2906 Houston, TX 77002 71 3 276 2220 Fax 713 276 2119 clay.hali@mercer.com www.mercer.cam SuibjeG#; Engagement Letter Agreement -City of Corpus Christi Dear Constance: We are delighted to have the opportunity to continue to work with the City of Corpus Christi .~ ,~ ,~ ~, (`you or Client ). The ptarpose of this (titter of engagement { Agreement) is to set forth the terms governing the services provided #o you. ("Services") by Mercer`s. operating companies, Mercer (tJS) Inc., Mercer Investment Consulting, Inc. and/or Mercer Health & Benefits LLC (in each case, saltily with respect to the services it provides to you, ("Mercer" or "we)). Statement of V11ork Each statement of work. {"SOW") attached hereto must Specify at a minimtam: {1) our respective responsibilities with respect to the Services; {2) the information and data we will need in order to perform the Services;`(3) any time constraints on the performance of the Services; and {4) the compensation we will receive for performing the Services. Ta the extent a SOW has"been delivered to and accepted by you prior to the execution of this Agreement, such SOW shah be subject to the terms of this. Agreement. For purposes of this Agreement, the term "Agreement" shall include any SOWS. Terms and Conditions. Governing. Engagement Our performance of the Services (whether provided pursuant#o a written SOW or not) are subject to -the foiiowng terms: 1. Payment Terms: A. We will perform the Services in consideration of your payment of our compensation.. Our compensation for the Services, such as professional' fees, commissions or other amounts payable to us ("Compensation") and payment terms will be set forth in the applicable SOW or as otherwise agreed, In addition to our Compensation, we will 2009-387 09/24/09 Consulting. Outsourcing, Investments. Mercer MERCER MARSH MERCER KROLL F GUY CARPENTER OLIVER WYMAN also bill :monthly- for our reasonable expenses which have been previously approved by the City Director of Financial Services. You will be responsible far any sales, value added taxes or similar taxes related to the performance or receipt of the Services, including those taxes assessed by authorities subsequent to payment for the Services. B, Invoices are due and payable within thirty {30) days of the-date of the invoice. If any invoice is not timely paid, we may exercise our right to claim interest for late payment as permitted by applicable law. If any invoice remains unpaid for longerthan ninety {9Q}days from the date of the invoice, we may eithe suspend the provision of the Services until payment is received, or terminate this Agreement andlor any SOW with immediate effect.. C. If we become involved {whether or not as a party) in a dispute (including audits or investigations} between you and a third party'(including agovernmental entity),_or if we are asked to preserve records relating to the Services or this Agreement, including where Mercer is requested to preserve documents, electronically stored information, back-up tapes or other media beyond its standard recycling: or retention protocol, beyond the scope of Services described 'in :the applicable SOW, these additional services will be documented in a SOW. ff no SUW or other agreement is reached on these additional services, you agree to pay us at our then current standard rates for all our time spent, and will. reimburse us for all reasonable expenses incurred by us, in connection with :such dispute or such documentation preservation. request. We will .reimburse such payments in the event and to the extent such dispute is' finally de#ermined by a court to have resulted primarily from our negligence, conduct in bad. faith or fraud. 2. Instructions; Provision of Information and Assistance: You will provide .all necessary and reasonably requested information:,. direction and cooperation to enable us to provide the Services., and any direction (whether verbal or written) shall be effective if contained expressly'n the applicable S4W or if received (whether verbally or in writing) from a person Known. to us or reasonably believed by us to be authorized to act on your behalf. Yau agree that we shall use all. information and data supplied by you or on your behalf withoutindependently verifying the accuracy, completeness or timeliness of it. We will not be responsible for any delays orlabi ity arising from missing,. delayed, incomplete, inaccurate or outdated information and data, or if you do not provide adequate accessto your employees, agents or other representatives necessary for us to perform the Services. We will be entitled to charge MERCER MARSH MERCER KROLL GUY CARPENTER OLIVER WYMAN you in respect of any additional work carried out as a result; provided that we have obtained your prior approval to perform such additional work.. 3. Confidential Information; [}ata: A. Each of us is likely to disclose information ("Disclosing Party"} to the other ("Receiving. Party") from time totime. inthe course of the provision of the Services, which is marked or designated as confidential or proprietary at or prior o disclosure or which would appear to a reasonably prudent person to be confidential and/or proprietary in nature {"Confidential Information"}. The Receiving Party will not disclose such Confidential Informationto any person o#her than in connection with the provision of the Services or as otherwise. provided for in this Agreement. This restriction does not apply to information that {} the Receiving Party must disclose by law or legal process, (ii) is either already in:-the public domain. ac enters the public domain through no fault of the Receiving Party, {iii} is available to the Receiving Party from a third party who, to the Receiving Party's knowledge, is not under any non-disclosure obligation to the ©isclosing Party, or (iv) is independently developed by or for the Receiving Party without reference to arty Confidential Information of the Disclosing Party.. B. Notwithstanding Section 3(A), you agree that we will be entitled #o disclose information, including Confidential Information, relating to the Services or you to regulators having jurisdiction over our business. You also agree that, notwithstanding any ether provision in this Agreement, we may include the ideatities of those persons who are identified by you as contact persons for you and information about the terms of this Agreement,: the Services and the Compensation in our internal client management, financial and conflict checking. databases. C. Our respective obligations under Section 3{A} shall survive for a period of five {5} years from the date of termination of this Agreement orfor such longer period as is required by law, except that any trade secrets disclosed #o the Receiving Party shall be maintained in confidence in perpetuity or un#il such time as they are no longer reasonably considered to be trade secrets by the Disclosing Party. MERCER [ ~ MARSH MERCER KROLL ~_ GUY CARPENTER OI.IYERWYMAN D. Notwithstanding anything to the contrary in: this Agreement, but subject to the terms and conditions of Section 3, we-.may (i) retain copies of Confidential Information that is required to be retained' by law or regulation, (ii) retain copies of our work. product that contain Confidential In€ormation for archival purposes or to defend our work product and: {iii) in accordance with legal, disaster recovery and records retention requirements, store such copies and derivative works in an archival format (e.g. tape backups), which may not be re#urned or des#royed. We may retain your information in paper or imaged format and we may destroy paper copies if we retain digital images thereof. 4. personalllnformation: Each of us and our respective Affiliates (as defined below) will comply with our respective obligations arising. from data protection and privacy laws in effect from time to time to the extent applicable to this Agreement and the: Services. This includes, without limitation, (i} the obligation, if any, of you or your Affiliates, to obtain any required consent{s) in respect of the transfer of information to us by you or any third party relating to an identified or identifiable individual that is subject to applicable data protection., privacy or other similar Paws ("Personal information"), (ii) any obligation with respect o the creation or collection of additional Personal Information by us, and (iii) any obligation with respect to the use, disclosure and transfer by us of Personal Information as necessary to perform the Services or as expressly permitted under this Agreement. Subject to Section 3(C), any use ar processing by us of Personal Information supplied by or on your behalf in connection with the Services shall be done solely an your behalf. We shall handle such Personal lnforrnation in accordance with your reasonable instructions as may be provided. firam time to time in the applicable SOW or as reasonably necessary for the purpose of providing the Services and shall not handle such: Personal Information. in a manner inconsistent with the terms of this Agreement We also confirm that we have taken appropriate technical and organizational measures intended to prevent the unauthorized or unlawful processing of Personal Information and the accidental lass or destruction of, or damage to, Personal Information. For purposes of this Agreement, "Affiliates" means, with respect to either party, any entity directly or indirectly controlling, .con#rolled by or under common control with such party. ECEC '€ ; MARSN MERCER KR~1LL !__ GUY CARPENTER oLIVER WYMAN 5. Ownership and Use of Work; Intellectual Property: A. All materials prepared by us specifically and exclusively for you pursuant to this Agreement (the "Workn) shall be awned exclusively by you. Notwithstanding anything to the contrary set forth in this Agreement, we will retain all copyright, patent-and other intellectual property rights In the methodologies, methods of analysis, ideas, concepts, know-haw, models, tools, techniques, skills, knowledge and experience owned ar possessed by us before the :commencement of, or developed or acquired by us;during or after, fihe performance of the Services, including without limitation, all systems, software, specifications, documentation and other materials created, owned or licensed and used by us or our Affiliates orsubcontractors in`the course- of providing the Services (the "Intellectual Property"), and we shall not be restricted in any waywifih respect thereto. To the extent any Work incorporates any Intellectual Property, we hereby grant you anon-exclusive, non-transferable right to use such Intellectual Property solely for purposes of utilizing the Wark internally in accordance with the terms of this Agreement. B. Unless we provide our prier wrifiten .consent,. you will not .use, in a manner other than as mutually contemplated when we were firstretained by you to perform the applicable Services, or disclose to any third party, other than your attorneys, accountants or financial advisors with a need to know or as required bylaw, any Work. ar Intellectual Property ar other material supplied by us under this Agreement, and you. shall be responsible for, and` we shall have no liability with respect to, modifications made by any person other than us to the Work, Intellectual Property or other work product provided to you by us. 6. Dispute Resolution: A. Before commencing any action ar proceeding wi#h respect to any dispute between us arising. out of or relating to this Agreement; the parties shall first attempt to settle the dispute through consultation and negotiation in good faith and in a spirit of mutual cooperation. If the dispute is not resolved within five (5) business days, either of us may elect to escalate the resolution of such dispute by submitting the dispute in writing to senior executives from each of us who will promptly meet and confer in an effort. to resolve the dispute.. Each party will identify such senior executive by notice to the other party, and each party may change its senior executive at any time thereafter by notice. Any mutually agreed decisions of the senior executives will be final and binding on both parties. MERCE( MARSN MERCER KROLL GUY CARAENTER OLIYER VJYMAN B. Any dispute that is not resolved within six {6) months of the date of the initial demand for negotiation by one of the parties may then be submitted to a court of competent jurisdiction. Nothing in this Section 6 will prevent either of us from resorting to judicial proceedings at any time if interim relief from a court is necessary to .prevent serious and irreparable injury or damage to that party or to others. C. EXCEPT TO THE EXTENT PROHIBITED UNDER APPLICABLE LAW, ANY CLAIM, ACTION OR PROCEEDING AGAINST A PARTY OR ANY OF ITS. AFFILIATES WILL BE BARRED UNLESS THE OTHER PARTY CNITIATES THE DLSPUTE RESOLUTION :PROCEDURES SET FORTH IN THIS SECTION 6 WITHIN FIVE YEARS'OF FIRST DISCOVERING THE ACT, ERROR OR OMISSION THAT IS THE BASIS F'OR SUCH CLAIM. 7. Limifatian of Liability: A. The aggregate liability of Mercer our Affiliates and any officer, director or employee of ours and our Affiliates {"Mercer Parties") to you, your Affiliates,. your officers, directors or employees or those of your Affiliates and any third party (including any benefit plan, its fiduciaries or any plan sponsor) for any and ail Losses arising out of ar relating to the provision of Services by any of the Mercer Parties shall not exceed the greater of one times the Compensation`forthc Services giving rise to such- Loss and $100,000. Mercer shall have no liability-for the acts or omissions of any third party (other than our subcontractors). B. In no event shall either party or its Affiliates be liable in connection with this Agreement or the Services-for -:any loss of profit or incidental, consequential, special, indirect, punitive ar similar damages.'The provisions of this Section 7 shall apply to the fullest extent permitted by law. Nothing In this Section 7 limiting the liability of a party shall apply to any liability that. has been finally determined by a court to have been caused by the fraud of such party. C. For purposes of`tkiis Agreement "Loss" means damages, claims, liabilities, losses, awards, judgments,. penalties, interest, costs. and expenses, including reasonable attorneys' fees, whether arising in tart, contract or otherwise. For the. avoidance of doubt, multiple claims arising out of or based upon the same act, error or omission, or series of continuous, interrelated or repeated acts, errors or omissions shall be considered a single. Loss. D. Each of-the parties acknowledges that the Compensation far the Services to be provided under this Agreement and the applicable SOW reflects the allocation of risk set forth in this Section 7. MERCER ___ , MARSH MERCER KROLL 3 MA~t GUY CARPENTER OLIVER WYMAN 8. Unforeseen Events: Neither party shall be liable-far delays or failures'in performance of :obligations under this Agreement,. other than failure to make payments hereunder when due, resulting from events beyond its reasonable control., including without limitation"acts of God," fire, flood, riots., new laws which prevenfi the carrying out of the Services, the results of terrorist activity, failures of third party ..suppliers, and electronic and other power failures. 9. Duration and Termination of this Agreement: This Agreement will continue until terminated as provided in this Section, except as provided otherwise in a SOW. This Agreement and any SOW may be terminated (i} by either party upon thirty (30} days' prior written notice to the. other party, (ii}°by either party upon material breach by the other parry, which-breach is not cured within'thirty (30) days after receipt of written notice thereof, or (iii} immediately t}y us for non-payment of invoices by you as provided under Section 1. After the termination of this Agreement, Sections 3, 4, 5, 6, 7, 9 and 10 will survive in full force and effect. Any termination of this Agreement shall not relieve you or your Affiliates of their ob'[igations to pay for Services rendered and expenses incurred by us or our Affiliates up to and including the effective date of such termination, and such termination may require you to pay termination fees to the extent provided in a 'SOW. Notwithstanding the foregoing, to the extent that the parties agree that Mercer shall: continue to provide Services after the effective date. of termination of this Agreement or any SOW, the terms and .conditions of this Agreement and the applicable SOW shall survive until such Services are completed or the parties agree that the Services shall no longer.be provided. MERCER MARSM MERGER KROLL GUY CARPENTER OUVER WYMAN 1 U. Additional Terms. A. Perms Incorporated by Reference -The terms set forth in a SOW shall be deemed incorporated by reference into this Agreement for purposes of that SOVU. B. Notices -Any notice that is to be given by one party fo the other under this Agreement will be-given in writing and delivered to, Glay Hall, with a copy to the Legal Department, Mercer, 1.166 Avenue of the Americas, New Yark, New York 10036 if to Mercer or Constance Sanchez if to Client, or any other address_specified by notice subsequently by one party to the other. A notice will be effective upon. receipt. C. No Third Party Beneficiaries -Neither this Agreement nor the. provision of the Services is intended to confer-any right or benefit on anythird party, other than the Affiliates of each .party that execute a SOW, and, in such event, safely as set forth in .such SOW and this Agreement: D. No Publicity -You agree not to refer to us ar attribute any information to us in the ;press, for advertising or .promotional purposes, or `for the purpose of in#orming or influencing any other party, including the investment community, without our prior written consent; which may not be unreasonably withheld; provided, however, that you may disclose to your City Council that we prepared any Work and you may disclose. such information and the Work to,an internal employee. committee that. has. been formed to consider GASB issues. We agree. not to refer to you in the press or for promotional purposes without your prior written consent. E. Waiver-The failure by either party to insist upon strict performance of any provision of-this Agreement shaA `in noway constitute a waiver of rights under this Agreement, at law ar in equity. F. Warranties of Mercer -Except as expressly set forth in this Agreement, we expressly disclaim any warranty, express or implied, including but not limited to any implied warranty of merchantability and fitness for a particular purpose. G. Entire Agreement, Amendment, Assignment, Subcontracting -This Agreement (including any SOW and any schedules or exhibits attached hereunder) merges and supersedes ail prior or contemporaneous understandings, agreements; negotiations and. discussions, whether oral. or written, between the parties concerning. the Services and constitutes the entire agreement between the parties with regard to the Services, The parties have not relied upon any promises, representations, warranties, agreements, covenants or undertakings, other than those expressly set forth in this Agreement. Except with-respect to a change in_address for notices, this Agreement shall not be amended except by a written document executed by both of MERCER j MARSH MERCER KROLL MN~C GUY CARPENTER OLIVER WYMAN us. In the .event of any inconsistency between the terms of a SOW and those in the Agreement, the provisions contained in this Agreemen# shall prevail ..unless the SOW specifically amends a term contained herein. Neither of us may assign this Agreement without the' prior written consent of the other, except that we may assign this Agreement to an Affiliate with reasonable prior written notice to you. We may subcontract with any of our Affiliates upon reasonable prior written notice to you, and we may subcontract with third parties with your prior written consent, which consent shall not. be unreasonably withheld, conditioned or delayed... H. Governing Law-and Jurisdiction,-Unless otherwise provided: in a SOW, this Agreement and all SOWs issued hereunder will be,govemed by, and interpreted in accordance with, the law of the State of Texas and will be subject to the exclusive jurisdiction of the courts.. loco#ed in fhe State-of Texas. 1. Severabiity - It is the intent of the parties that the provisions of this Agreement shall be=enforced to the fullest extent permitted by applicable law. To the extent that the terms set forth in this Agreement orany word, phrase, clause or sentence is found to be illegal or unenforceable for any reason, such word, phrase, clause or sentence shall be modified deleted or interpreted in such a manner so as to afford the .party for whose benefit it was intended the fullest benefit commensurate with making this Agreement as modified, enforceable and the balance of this Agreement shall not be affected thereby, the balance-being construed as severable and independent. J. Advice on Legal Matters - We are not engaged in the practice of law and the Services provided hereunder, which may include commenting on legal issues or .drafting documents, do rtot constitute and are not a substitute for legal advice. Accordingly, we recommend that you secure the advice of competent legal counsel with respect to any legal matters related to the Services or otherwise. MERCER MARSH MER£ER KROLL ' GUY CARPENTER OLIVER WYMAN K. Counterparts-This Agreement may be executed and delivered (including by facsimile or a scanned F'DF version) in one or more counterparts, each of which when executed shall be deemed an original, but a!I of which taken together shall constitute one and the same agreement. L. lnsurance - We will maintain insurance in compliance with the .attached Exhibit A. 1f you have any questions about these;<terms and conditions, please do not hesifia#e to sail me. If not, 'please'indicate your agreement to the terms of this Agreement by signing the enclosed copy of-this Agreement and SOW, ifi applicable:, .and returning it to us. Mercer (US) lnc. Mercer Investment Consulting, lnc. Mercer Heatth & Benefiits LLC, in each case,. solely in connection with the Services it provides pursuant to a SOW MercE By: Name:: Title: Principal ACCEPTED AND AGREED City of Gor us Christi / ~%~r~~rw By: Name: _ ~ Vl ~ ~ ~ . F a t~ ~ G~/ (Please Print) Title: C (~~/ ~ G r~ C1l ~c r Approved as to form: ~ °~ ' `~ ~- Lisa Aguilar Assistant Ci omey For City Attorney Date: Septernber23,,,2009 Date: _ ,~ d _ QTT~T. Annr~woa cwAPm . cmr sFCr~TA~ ERCE ' MARSH MERCER KROtL (_' GUY CARPENTER OLIVER WYMAN EXHIBIT A INSURANCE REQUIREMENTS I. CONSULTANT'S LIABILITY l`NSURANCE A. Consultant must not commence work under this agreement until all insurance required herein has been obtained. The Consultant must not' allow any subcontractor to commence work until' ail similar insurance required of the subcontractor has been obtained. Consultant must furnish to the City's Risk Manager twa (2) copies of Certificates of Insurance, showing the following coverage. The City must be included as an additional insured €or the General liability policy with respect to the City's vicarious liability arising from Consultant's provision of services hereunder and a Waiver of subrogation is required on the WC policy arising from. Consultants services. TYPE C}F INSURANCE INSURANCE Ct'~VERAGE 30~fJay written notice of cancellation is Bodily Injury and Property Damage re aired on alt certificates Per occurrence . a re ate COMMERCIAL GENERAL LIABILITY including: $1,000,000-per occurrence 1. Broad Form... $2,000,000 aggregate 2. Premises -Operations. 3. Products/ Completed Operations Hazard 4. Contractual Liability 5. fndependent Contractor 6. Personallnjury PROFESSIONAL LIABtLITY including: .$1;000,000 per claim and aggregate Coverage provided must cover officers, directors and employees 1. ERRORS AND OIVIMISIONS Applicable:-when on City of Corpus Christi . .property. WORKERS' COMPENSATION WHfCH COMPLIES WITH THE TEXAS WORKERS' COMPENSATION ACT AND PARAGRAPH II OF THIS 1=XH1Bi7 EMPLOYERS' LIABILITY 500,000/500;000/500,000 each occurrence IVIERCER MARSH MERCER KROLL /NIf~C GUY CARPENTER OLIVER WYMAN ll. ADDITIONAL F~EQUIREMENTS A. Consultant must obtain workers' compensation coverage through a licensed insurance carnpany obtained in accordance with Texas law. The contract for coverage must be written on a policy with. endorsements. approved by the Texas Department of Insurance. The coverage provided must be in amounts sufficient to assure that all workers' compensation obligations incurred. by the. Consultant will be .promptly met. B. Certificate. of Insurance: The City of Corpus Christi must be included as an additional insured on the General liability coverage with respect to the- .City's vicarious. liability arising from Consultant's provision of services hereunder and a waiver of subrogation in favor of the City is required.-for WC policy.. The-Warne of the project must be'listed under "Description of Operations" At a minimum, Consultant will provide a 30~day written notice of cancellation or material. change for each of the policies :required herein C. If the Certificate of Insurance does not show an its- face the existence of the coverage required by items 1.B {1 }-(6), an authorized' representative of the insurance company must include a letter specifically stating whether items. 1.8 {1)-{6) are included or excluded. MERCER MARSH MERCER KROLL _____, GUY CARPENTER OLIVER WYMAN Statement of Work (~'SOW'~} The objective of this Statement of Work ("SaW") is to confirm the scope of our work and the compensation for this project. This SOW is subject to the terms and conditions contained in the attached engagement letter dated September 23, 2009:. All capitalized terms not defined in #his SOW shall have the meanings ascribed-to them in our existing engagemen# letter. 1. Project Name and Overview: Name: GASB 45 valuation as of August 1, 2009 Overview: The project will give the City of Corpus Christi the. GASB 45 pos#retirement medical Habilties as of August 1, 2009 and the GASB 45 Annual Required Contribution (ARC) for the fiscal year August 1; 2009 -July 31, 2010, assuming the City has not established a funding arrangement that qualifies as a plan asset under GASB 45 for offsetting plan liabilities. 2. Description of Mercer responsibilities/project scope: Upon receiving approval to begin this project, Mercer will provide a data request to the City in order to collect the information needed in order to perform the GASB 45 valuation. Mercer would then produce a GASB 45 Postretii-ement Benefit Valuation Report as of August 1, 2009, containing substantially the same type of information included in .our GASB 45 Postretirement Benefit Valuation Report as of August 1, 2007, which was produced in November 200?. Alf liabilities and cost calculations would be shown separately for Citicare, Pallce, Fire and in total. These calculations would be made using the Projected Unit Credit Cost Method (PUC) using a level percentage of pay amortization method,. as chosen by the City of Corpus Christi for the August 1, 2007 GASB 45 valuation. Any additional scenarios are beyond the scope of this project, and would need to be quoted in a separate. Statement of Work (SOW). 3. Description of City of Corpus Christi-responsibilities: The City will provide Mercer with employee census data, plane provisions, retiree contribution schedules and other information as requested by Mercer. In addition, the City will review and approve all actuarial assumptions used. in the valuation. MERCER ~~~ MARSH MERCER KROLL GUY CARPENTER. OLIVER WYMAN 4. Estimated period of Time over which work wil'1 be performed: We will commit to provide you with the results of our calculations. within two months after reconciling all data received by the. City of Corpus Christi in order to complete the valuation. 5. Not to exceed::#ees: Our compensation.-for the Services will be professional fees not to exceed $25,000. These fees do not include the cost of any onsite meetings to review the- results, In addition to our professional .fees, we also bill for travel and other expenses related to the Services requested. Invoices-will be paid within thirty (30) days of receipt by the City of .Director of Financial Services of the completed GASB 45 Postretirement .Benefit Valuation Report(s). We appreciate your business and lank forward to working with you on this project. Please let us know if this accurately describes the project;,that you would like for us-to complete or if you fiave any changes. If you do nat have any changes,. then please acknowledge your agreement: to these project terms contained herein by signing below:. Mere By: Name: Title: ACCEPTED AND AGREED City of Corpus Christi ~ Name: h ~ ~ . FSGo~oG/ {Please~Pr Title: ~i I ' 7 M ~^r Approved as to Corm: ~ 3 I ° ~ Lisa Aguilar Assistant City ttorney For City Attorney Date: September 23, 2009 Date:~~~/d Principal