HomeMy WebLinkAboutPR 15637: GALLAGHER BENEFIT SERVICES CONTRACTCity of Port Arthur
Memorandum
To: Steve Fitzgibbons, City Manager
From: Rebecca Underhill, Assistant City Mana d istration
Date: November 19, 2009
Re: PR 15637
On September 22, 2009, the City Council adopted resolutiori 09-418 which authorized a contract
with Gallagher Benefit Services for actuarial services related to the Retiree Health Insurance Plan.
This contract, as originally presented to the Council required some minor changes that aze redlined
in the amended version presented today.
The contract provides for GBS to perform our 2009 actuarial study, as well as review the actuarial
impact of prospective plan amendments. The estimated cost of this contract remains $15,000.
P.R.15637
ru: 11/19/09
RESOLUTION NO.
A RESOLUTION AMENDING A CONSULTING
CONTRACT WITH GALLAGHER BENEFIT SERVICES,
INC. FOR ACTUARIAL SERVICES RELATED TO THE
CITY'S OTHER POST EMPLOYMENT BENEFIT
(OPEB), RETIREE HEALTH INSURANCE PLAN
WHEREAS, on September 22, 2009, the City Council adopted Resolution 09-418
authorizing a contract with Gallagher Benefit Services for actuarial services related to the City's
Retiree Health Insurance Plan; and
WHEREAS, there are certain minor changes that aze needed to be made to the contract as
presented and approved; and
WHEREAS, the Acting City Attorney has reviewed the contract modifications and has
found them to be acceptable.
. NOW THEREFORE BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF
PORT ARTHUR:
THAT the City Manager of the City of Port Arthur is hereby authorized and directed to
execute on behalf of the City of Port Arthur a consulting contract between the City and Gallagher
Benefit Services, Inc. to assist in City's Other Post Employment Benefit.(OPEB); and
THAT a copy of said contract is attached hereto and made a part hereof as Exhibit "A' ;
and,
THAT a copy of the caption of this resolution be spread upon the Minutes of the City
Council.
-READ, ADOPTED, AND APPROVED, this day of December, 2009 A.D., at
a Regular Meeting of the City Council of the City of Port Arthur, Texas by the following vote:
AYES: Mayor: _
Council members:
NOES:
Mayor
ATTEST:
Terri Hanks, City Secretary °
AS TO FORM:
Valecia Tizeno,
APPROVED FOR ADMINISTRATION:
Step en itzgibbons, City Manager
Rebecca Underhill, Assistant City Manager -Administration
APPROVED AS TO AVAILABILITY OF FUNDS:
~1
Deborah Echols, Finance Director
EXHIBIT "A"
STATE OF TEXAS
COUNTY OF JEFFERSON
PROFESSIONAL SERVICES CONTRACT
This instrument is a contract between Gallagher Benefit Services Inc 3600 American Blvd. W.
Suite 500 Bloomington, MN 55431 telephone number 952-356-0706; whose primary business is
to perform actuazial services and provide employee benefits analysis. hereinafter denoted. as
"Professional", and the City of Port Arthur, hereinafter denoted as "City".
SCOPE OF SERVICES/PRICE:
This contract authorizes Professional to perform professional services as described in Exhibit "A-
1". The compensation for the Professional shall not exceed the estimated costs $15,000
TERM:
The maximum term of this agreement shall be the lesser of (a) three months after receiving all
required data to perform the professional services, (b) when the project described in Exhibit "A-1"
is completed or (c) when the professional is terminated under the "Termination of Professional"
clause.
PROGRESS REPORTS:
The professional shall provide progress reports specifically related to the impact that the optional
plans designs/provisions have on GASB 45 liabilities and annual costs as reasonably requested by
the City's Representative.
PERSONNEL OF PROFESSIONAL: _ - -
DESIGNATION OF OWNER (CITY'S) REPRESENTATIVE AND DUTIES THEREOF:
a. The City Manager or his designee shall act as City's Representative.
b. The City's Representative shall use his best efforts to provide City
records for Professional's usage on this project.
STANDARDS OF PERFORMANCE:
a. The Professional shall perform all services under this Agreement in
accordance with the standazds of the profession specializing in the scope
of services as described in Exhibit "A-1".
b. Codes and Standazds
{-l-} Professional agrees the services it provides as an experienced
and qualified provider will reflect the professional standards,
procedures, and performances common in the industry.
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SCHEDULE:
T'he Professional shall not proceed with the project or any stage thereof until written notice
to proceed is provided by the City's representative. The project schedule will commence as
detailed in Exhibit "A-1".
INSURANCE:
A. -The Professional shall procure and maintain insurance in the amounts listed
below for protection from claims under Worker's Compensation, claims for
damages because of bodily injury, including personal injury, and from claims or
damages because of injury to or destruction of property including loss of use
resulting therefrom.- The Professional shall provide a copy of the insurance
certificate to the City.
Coverage
Limit of Liability
Worker's Compensation
Employer's Liability
Statutory for Worker's
Compensation
Bodily Injury by Accident
$1,000,000 (Each Accident)
Bodily Injury by Disease
$1,000,000 (Policy Limit)
Bodily Injury by Disease
$1,000,000 (Each Employee)
Commercial General:
Including Broad Form
Coverage, Contractual
Liability, Bodily and
Personal Injury, and
Completed Operations
Bodily Injury and
Property Damage, Combined
Limits of $500,000 each
Occurrence and $1,000,000
aggregate (defense costs
excluded from face amount
of policy)
b. The Professional shall maintain professional liability (errors and
omissions/malpractice) insurance in the amount of $1,000,000. The Professional
shall provide a copy of his insurance policy to the City within 10 days of contract
execution or this contract shall be null and void. A deductible is acceptable for
professional liability insurance. a}hq-she-dom. ''-' '' '~ " -~ ~a Q~~n nnn
c. The Professional shall give the City thirty (30) days notice prior to any change or
cancellation of these insurance policies.
LIABILITY:
The Professional shall be liable only for the services performed by the Professional and
shall be responsible for only the negligent acts or omissions that the Professional has direct
control over.
SUB-CONSULTANTS AND SUB-CONTRACTORS:
The Professional shall receive written approval of the City's Representative prior to the use
ofsub-consultants and/or sub-contractors.
TERMINATION OF PROFESSIONAL:
The City retains the right to terminate the contract "at will" and to pay only for the
professional services and sub-consultant's and subcontractor's costs that were provided for
and/or that were committed to and that were City approved prior to the termination.
RECORDS:
At the City's request, the City will be entitled to review and receive a copy of all
documents that indicate work on the project.
BILLINGS:
The City will process interim progress billings and shall have up to thirty (30) days to pay
bills. All bills must demonstrate in detail the services completed.
REPUTATION IN THE COMMUNITY:
The Professional shall retain a high reputation in the Community for providing
professional services. The Professional asserts that there is no pending litigation that
would impact its ability to provide professional services for the City.
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PAYROLLS AND BASIC RECORDS:
a. The Professional shall maintain payrolls and basic payroll records during the course
• of the contract work and shall preserve them for a period of three years from the
completion of the contract for all personnel working on the contract. c~~~h-r~rds
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b. The records to be maintained under paragraph (a) of this clause shall be made
available by the Professional for inspection, copying, or transcription by the City or
their authorized representatives. The Professional shall permit such representatives
to interview employees during working hours on the job. The city will review such
records for billing reconciliation purposes as needed.
DEFAULT OF PROFESSIONAL:
a. If the Professional refuses or fails to prosecute the work or any sepazable part, with
the diligence that will insure its completion within the time specified in this contract, or fails to
complete the work within this time, the City may, by written notice to the Professional, terminate
the right to proceed with the work (or the separable part of the work) that has been delayed. In this
event, the City may take over the work and complete it by contract or otherwise, and may take
possession of and use any records necessazy for completing the work. The Professional shall be
liable for any damage to the City resulting from the Professional's refusal or failure to complete the
work within the specified time, whether or not the Professional's right to proceed with the work is
terminated. This liability includes any increased costs incurred by the City in completing the
Professional's work.
b. The Professional shall not be charged with damages under this clause if,
(1) The delay in completing the work arises from unforeseeable causes beyond
the control and without the fault or negligence of the Professional.
Examples of such causes include (i) acts of God or of the public enemy, (ii)
acts of the Government in either its sovereign or contractual capacity, (iii)
acts of another contractor or Professional in the performance of a contract
with the Government, and/or extended review or approvals by government
agencies out of the control of the Professional, (iv) acts of fire, (v) floods,
(vi) epidemics, (vii) quazantine restrictions, (viii) strikes, (ix) freight
embazgoes, (x) unusually severe weather, or (xi) delays of subcontractors or
suppliers at any tier arising from unforeseeable causes beyond the control
and without the fault or negligence of the Professional; and
(2) The Professional, within 10 days from the beginning of anydelay
(unless extended by the City's Representative), notifies the City's
Representative in writing of the causes of delay. The City's Representative
shall ascertain the facts and the extent of delay. If, in the judgment of the
City's Representative, the findings of fact warrant such action, the time for
completing the work shall be extended. •The findings of the City's
Representative shall be final and conclusive on the parties, but subject to
appeal to City Council.
c. The rights and remedies of the City in this clause aze in addition to any other rights
and remedies provided by law or under this contract.
APPLICABLE-LAW:
This contract has been made under and shall be governed by the laws of the State of Texas. The
parties agree that performance and all matters related thereto shall 6e in Jefferson County, Texas.
NOTICES:
Notices shall be mailed to the addresses designated herein or as may be designated in writing by
the parties from time to time and shall be deemed received when sent postage prepaid U.S. Mail to
the following addresses:
CITY:
City of Port Arthur
Attention: Rebecca Underhill
Assistant City Manager -Administration
P. O. Box 1089
Port Arthur, Texas 77641
PROFESSIONAL:
Gallagher Benefit Services, Inc.
3600 American Blvd. W, Suite 500
Bloomington, MN 55431
WAIVER:
No waiver by either party hereto of any term or condition of this agreement shall be deemed or
construed to be a waiver of any other term or condition or subsequent waiver of the same term or
condition.
Thin Agreement represents the entire and integrated agreement between City and
Professional and supersedes all prior negotiations, representations or agreements, either written or
oral. This agreement may only be amended by written instrument approved- and executed by the
parties. The City of Port Arthur and Professional, accept and agree to these terms.
SIGNED ON THE day of , 2009.
BY:
Attest:
SIGNED ON THE day of
2009.
CITY OF PORT ARTHUR, TEXAS
BY:
Steve Fitzgibbons,. City Manager
Attest:
Terri Hanks
City Secretazy
EXHIBIT "A-1"
SCOPE OF SERVICES
Subject to any changes and additions as may be mutually agreed by the parties in writing, Gallagher
Benefit Services, Inc. (GBS) will provide the following approach and services for the City of Port Arthur,
Texas related to the October 1, 2009 GASB No 45 actuarial valuation of Other Postemployment Benefits
(OPEB) for retired employees:
n OCTOBER 1, 2009 GASB No. 45 OPEB AcruARIAL VALUATION
a. DETERMINE THE LIABILITY AND ANNUAL COST UNDER THE OCTOBER I, 2009 OPEB PLAN
GBS will perform the following steps to determine the City's OPEB liability and annual cost
based on the City's current October 1, 2009 plan provisions:
^ Request Infornation -GBS will request information regazding the City's postemployment
healthcaze plans including active and retiree census data, historical active and retiree
medical and prescription drug claims experience, summaries of the healthcare plan
provisions (e.g., deductibles, copays, coinsurances; benefit coverage for retiree, spouses,
and beneficiaries; retirement eligibility requirements and retiree contributions),. and any
other applicable documents that assist in understanding the provisions of the
postemployment benefits (union contracts, participant letters, etc.).
^ Reseazch Plan Provisions -GBS will review plan provisions, recent amendments, union or
other agreements, and any other documents to understand the substantive plan and
determine expected future retiree contributions, healthcaze plans and coverage elections.
^ Review Assumptions -GBS will review economic assumptions (e.g., discount rate,
healthcare Vend rates) and demographic assumptions (e.g., turnover rates, mortality rates,
disability rates, retirement rates) used in calculating the OPEB liability for
postemployment benefits.
^ Develop Per Capita Claims Costs -GBS will arfalyze the historical active and retiree
medical and prescription drug claims experience and develop the expected fiscal year
October 1, 2009 to September 30; 2010 per capita healthcare vests for retirees used in
calculating the posVetirement healthcare coverage OPEB liability.
^ Determine OPEB Liability and Annual Cost -Using-the above information, GBS will
program the benefits and calculate the OPEB liability and annual cost for the October 1,
2009 to September 30, 2010 5scal yeaz based on current plan provisions in effect as of
October 1, 2009.
SCOPE OF SERVICES (Continued)
b. PROVIDE THE OCTOBER 1, 2009 GASB N0.45 OPEB VALUATION REPORT
The results of the October 1, 2009 valuation will be provided in a formal October 1, 2009
GASB No. 45 and 43 Actuarial Valuation report that will include the following:
^ Actuarial Present Value of Benefits as of October 1, 2009
^ Actuarial Accrued Liability as of October 1, 2009; October 1, 2010; and October I, 20] I
^ Unfunded Actuarial Accrued Liability as of October 1, 2009; October 1, 2010; and
October I, 2011
^ Annual Required Contribution and Annual OPEB Cost for fiscal years ending September
30, 2010 and September 30, 2011
^ Financial Statement Note Disclosures and Required Supplementary Information for the
fiscal years ending September 30, 2010 and September 30, 201 I
^ Pay-as-you-go cost projections (35-Year)
^ Summary of plan participants as of October 1, 2009
^ Summary of plan provisions as of October 1, 2009
^ Summary of actuarial assumptions as of October 1, 2009
In GASB 45 OPEB PLAN DESIGN CONSULTING
To reduce or conVOl the ongoing OPEB liability and annual costs changes in the plan's benefits, cost
sharing, eligibility requirements and/or funding may be required. Gallagher Benefit Services will provide
the Following related consulting services to assist in reducing the OPEB liability/cost:
a. Analyze current OPEB commitments and plan designs .and identify optional plan
designs/provisions to further explore the impact on the GASB 45 liability and annual costs.
b. Calculate the, impact that the optional plan designs provisions have on GASB 45 liabilities and
annual costs.
FEES
OCTOBER 1, 2009 GASB N0.45 OPEB ACTUARIAL VALUATION
The fee to complete the October 1, 2009 GASB 45 OPEB actuazial valuation described in item n above is
$10,000. This fee includes a conference call meeting to present the valuation report.
GASB 45 OPEB PLAN DESIGN CONSULTING
The fee to complete the plan design consulting described in item In above will be based on an hourly
billing rate of $185/hour. We anticipate approximately 3 to 6 hours for each optional plan design.
EXPENSES
GBS does not anticipate any expenses will be required in providing these services, but should the Ciry
desire a personal consultation, travel expenses would be in addition to the fees above.