HomeMy WebLinkAbout106536 MILLIMAN INC - CONTRACT - RFP - P988 ACTUARIAL SERVICES AND POLICY REVIEW GERPPROFESSIONAL SERVICES AGREEMENT
WORK ORDER TYPE
THIS AGREEMENT made and entered into the day and year set forth below by and
between THE CITY OF FORT COLLINS, COLORADO, a Municipal Corporation, hereinafter
referred to as the "City" and Milliman Inc. hereinafter referred to as "Professional'.
WITNESSETH:
In consideration of the mutual covenants and obligations herein expressed, it is agreed
by and between the parties hereto as follows:
1. Scope of Services. The Professional agrees to provide services in accordance
with any project Work Orders for P988 Actuarial Services & Policy Review, issued by the City.
A blank sample of a work order is attached hereto as Exhibit "A", consisting of one (1) page
and is incorporated herein by this reference. The City reserves the right to independently bid
any project rather than issuing a Work Order to the Professional for the same pursuant to this
Agreement.
2. The Work Schedule. The services to be performed pursuant to this Agreement
shall be performed in accordance with the Work Schedule stated on each Work Order.
3. Time of Commencement and Completion of Services. The services to be
performed pursuant to this Agreement shall be initiated as specified on each Work Order.
Time is of the essence. Any extensions of any time limit must be agreed upon in writing by the
parties hereto.
4. Contract Period. This Agreement shall commence July 1, 2005 and shall
continue in full force and effect until June 30, 2005 unless sooner terminated as herein
provided. In addition, at the option of the City, the Agreement may be extended for additional
one year periods not to exceed four (4) additional one year periods. Renewals and pricing
changes shall be negotiated by and agreed to by both parties. The Denver Boulder Greeley
CPIU published by the Colorado State Planning and Budget Office will be used as a guide.
EXHIBIT "C"
Limitation of Liability.
Milliman will perform all services in accordance with applicable professional standards
and shall correct or re -perform any services found to be defective. The parties agree
that Milliman shall not be liable to City for damages in any tort or contract claim, including, but
not limited to, claims for professional negligence, malpractice or breach of contract,
where such damages exceed $1,000,000. In no event shall Milliman be liable for any
incidental or consequential damages. The foregoing limitations shall not apply in the event
of the intentional fraud or willful misconduct of Milliman. The provisions of this Section will
survive the expiration or termination of the Agreement.
No Third Party Distribution. The Actuary's work product is prepared for the use and
benefit of the City in accordance with its statutory and regulatory requirements. The
Actuary recognizes that materials it delivers to the City may be public records, subject to
disclosure to third parties. However, the Actuary does not intend to benefit and assumes
no duty or liability to any third parties. The Actuary intends to include a Tooter on each
page of its work product as follows:
"This work product was prepared solely to provide assistance to the City of Fort Collins.
It may not be appropriate to use for other purposes. Milliman does not intend to benefit and
assumes no duty or liability to other parties who receive this work."
The City agrees to provide full page copies, including such footer, to any third parties
who are provided a copy of the Actuary's work product, or when posting Actuary's
work product to an intranet site.
Dispute Resolution, Mediation. In the event of any dispute arising out of or relating
to the engagement of Milliman by the City, the parties agree first to try in good faith to
settle the dispute voluntarily with the aid of an impartial mediator who will attempt to
facilitate negotiations. A dispute will be submitted to mediation by written notice to the other
party or parties. The mediator will be selected by agreement by the parties. If the parties
cannot agree on a mediator, a mediator will be designated by the American Arbitration
Association at the request of a party.
The mediation will be treated as a settlement discussion and therefore will be confidential.
Any applicable statute of limitations will be tolled during the pendency of the mediation.
Each party will bear its own costs in the mediation. The fees and expenses of the
mediator will be shared equally by the parties.
Arbitration. If the dispute has not been resolved within 60 days after the written notice
beginning the mediation process (or a longer period, if the parties agree to extend the
mediation), the mediation will terminate, and the dispute will be resolved by final and
binding arbitration under the Commercial Arbitration Rules of the American
Arbitration Association. The arbitration will take place in Denver, Colorado, before a panel
of three arbitrators. Within 30 days of the commencement of the arbitration, each party
will designate in writing a single neutral and independent arbitrator. The two arbitrators
designated by the parties will then select a third arbitrator. The arbitrators will have a
sufficient Background in either employee benefits, actuarial science, or law to reasonably
prepare them to decide a dispute. The arbitrators will have the authority to permit
limited discovery, including depositions, prior to the arbitration hearing, and such
discovery will be conducted consistent with the Federal Rules of Civil Procedure. The
arbitrators will have no power or authority to award punitive or exemplary damages.
The arbitrators may, in their discretion, award the cost of the arbitration, including reasonable
attorney fees, to the prevailing party. Any award made may be confirmed in any court
having jurisdiction. Any arbitration shall be confidential, and except as required by law,
neither party may disclose the content or results of any arbitration hereunder without
the prior written consent of the other parties, except that disclosure is permitted to a
party's auditors and legal advisors. I '
EXHIBIT "A"
WORK ORDER FORM
PURSUANT TO AN AGREEMENT BETWEEN
THE CITY OF FORT COLLINS
AND
MILLIMAN, INC
Work Order Number:
Purchase Order Number:
DATED: _July 7, 2005
I<ne a
Project Title: _Actuarial Services for the General Employees Retirement Committee
Commencement Date: _January 1, 2006
Completion Date: December31, 2006
Maximum Fee: (time and reimbursable direct costs):_$650/Meeting - $7800
$8,500 actuarial report, $3,000 Personal Retirement Statements
Project Description: Attend Monthly Committee Meetings. Produce the annual actuarial report.
Produce the annual Personal Retirement Statement report
Scope of Services: As described in Exhibit B. of the Workl Order Agreement
Acceptance�—
User
Professional agrees to perform the services
identified above and on the attached forms in
accordance with the terms and conditions
contained herein and in the Professional
Services Agreement between the parties. In
the event of a conflict between or ambiguity in
the terms of the Professional Services
Agreement and this work order (including the
attached forms) the Professional Services
Agreement shall control.
Professio a i.uGC�%\
By:
Date: aFs, aWS
WOPSA 05/01
The attached forms consisting of _N/A_ U
pages are hereby accepted and incorporated
herein, by this reference, and Notice to
Proceed is hereby given.
City of Fort
Collins
By:
Date::
By: l �
Dire or of Purchasing and Risk
Ma ment (o..y $30,000)
Date: l�Li'/�
0
State of Washington)
ss.
County of King )
Milliman, Inc.
Certification of Corporate Secretary
Brian S. Pollack, being first duly sworn upon oath, deposes and says:
1. I am the duly qualified and acting Corporate Secretary of Milliman, Inc.
2. On December 3, 2002, the following resolution was duly adopted by the Board of
Directors of the corporation.
BE IT HEREBY RESOLVED, that each Principal of the firm and any consultant
meeting requirements established by the Board of Directors are hereby granted the authority to
individually"negotiate and enter into proposals, engagement letters, contracts, letters of intent, and
other documents on behalf of the corporation for the purpose of providing consulting, actuarial,
and other professional services.
3. Patricia A. Kahle
® is a duly elected and acting Principal of the firm
❑ is a consultant of the firm who meets the requirements established by the Board
of Directors
DATEDthis ay of � 005.
17
SUBSCRIBED AND SWORN to before me this o `'day of 2005.
yN G. Cq0 ��,to
s v�.:o NpTAAy 9? Notary Pub ' in and for the State of
Washington residing at Shoreline, WA.
PueUG ::'o = My commission expires 02/09/2007.
Ij�oF`WASN\`?
OFFICES IN PRINCIPAL CITIES WORLDWIDE
0
State of Washington)
ss.
County of King )
Milliman, Inc.
Certification of Corporate Secretary
Brian S. Pollack, being first duly sworn upon oath, deposes and says:
1. I am the duly qualified and acting Corporate Secretary of Milliman, Inc.
2. On December 3, 2002, the following resolution was duly adopted by the Board of
Directors of the corporation.
BE IT HEREBY RESOLVED, that each Principal of the firm and any consultant
meeting requirements established by the Board of Directors are hereby granted the authority to
individually"negotiate and enter into proposals, engagement letters, contracts, letters of intent, and
other documents on behalf of the corporation for the purpose of providing consulting, actuarial,
and other professional services.
3. Patricia A. Kahle
® is a duly elected and acting Principal of the firm
❑ is a consultant of the firm who meets the requirements established by the Board
of Directors
DATEDthis ay of � 005.
17
SUBSCRIBED AND SWORN to before me this o `'day of 2005.
yN G. Cq0 ��,to
s v�.:o NpTAAy 9? Notary Pub ' in and for the State of
Washington residing at Shoreline, WA.
PueUG ::'o = My commission expires 02/09/2007.
Ij�oF`WASN\`?
OFFICES IN PRINCIPAL CITIES WORLDWIDE
Written notice of renewal shall be provided to the Service Provider and mailed no later than
ninety (90) days prior to contract end.
5. Early Termination by City/Notice. Notwithstanding the time periods contained
herein, the City may terminate this Agreement at any time without cause by providing written
notice of termination to the Professional. Such notice shall be delivered at least fifteen (15)
days prior to the termination date contained in said notice unless otherwise agreed in writing by
the parties. All notices provided under this agreement shall be effective when mailed, postage
prepaid and sent to the following address:
Professional: City: With Copy to:
Milliman Inc. City of Fort Collins, Finance City of Fort Collins, Purchasing
Attn: Patricia Ann Kahle PO Box 580 PO Box 580
1099 18th St Ste 3100 Fort Collins, CO 80522 Fort Collins, CO 80522
Denver, CO 80202-1931
In the event of any such early termination by the City, the Professional shall be paid for
services rendered prior to the date of termination subject only to the satisfactory performance
of the Professional's obligations under this Agreement. Such payment shall be the
Professional's sole right and remedy for such termination.
6. Design, Project Insurance and Insurance Responsibility. The Professional shall
be responsible for the professional quality, technical accuracy, timely completion and the
coordination of all services rendered by the Professional, including but not limited to designs,
plans, reports, specifications, and drawings and shall, without additional compensation,
promptly remedy and correct any errors, omissions, or other deficiencies. The Professional
shall indemnify, save and hold harmless the City its officers and employees, in accordance with
Colorado law, from all damages whatsoever claimed by third parties against the City and for
the City's costs and reasonable attorney's fees arising directly or indirectly out of the
Professional's negligent performance of any of the services furnished under this Agreement.
The Professional shall maintain commercial general liability insurance in the amount of
$ 500,000 single limits.
7. Compensation. In consideration of services to be performed pursuant to this
Agreement, the City agrees to pay Professional on a time and reimbursable direct cost basis
designated in Exhibit "B", consisting of two (2 pages, attached hereto and incorporated herein
by this reference. At the election of the City, each Work Order may contain a maximum fee,
which shall be negotiated by the parties hereto for each such Work Order. Monthly partial
payments based upon the Professional's billings and itemized statements are permissible. The
amounts of all such partial payments shall be based upon the Professional's City -verified
progress in completing the services to be performed pursuant to the Work Order and upon
approval of the Professional's direct reimbursable expenses. Final payment shall be made
following acceptance of the work by the City. Upon final payment, all designs, plans, reports,
specifications, drawings, and other services rendered by the Professional shall become the
sole property of the City.
8. City Representative. The City will designate, prior to commencement of work,
its project representative who shall make, within the scope of his or her authority, all necessary
and proper decisions with reference to the project. All requests for contract interpretations,
change orders, and other clarification or instruction shall be directed to the City Representative.
9. Monthly Report. Commencing thirty (30) days after Notice to Proceed is given
on any Work Order and every thirty days thereafter, Professional is required to provide the City
Representative with a written report of the status of the work with respect to the Work Order,
Work Schedule and other material information. Failure to provide any required monthly report
may, at the option of the City, suspend the processing of any partial payment request.
10. Independent Contractor. The services to be performed by Professional are
those of an independent contractor and not of an employee of the City of Fort Collins. The City
shall not be responsible for withholding any portion of Professional's compensation hereunder
for the payment of FICA, Workers' Compensation, other taxes or benefits or for any other
purpose.
11. Personal Services. It is understood that the City enters into this Agreement
based on the special abilities of the Professional and that this Agreement shall be considered
as an agreement for personal services. Accordingly, the Professional shall neither assign any
responsibilities nor delegate any duties arising under this Agreement without the prior written
consent of the City.
12. Acceptance Not Waiver. The City's approval of drawings, designs, plans,
specifications, reports, and incidental work or materials furnished hereunder shall not in any
way relieve the Professional of responsibility for the quality or technical accuracy of the work.
The City's approval or acceptance of, or payment for, any of the services shall not be
construed to operate as a waiver of any rights or benefits provided to the City under this
Agreement.
13. Default. Each and every term and condition hereof shall be deemed to be a
material element of this Agreement. In the event either party should fail or refuse to perform
according to the terms of this agreement, such party may be declared in default.
14 Remedies. In the event a party has been declared in default, such defaulting
party shall be allowed a period of ten (10) days within which to cure said default. In the event
the default remains uncorrected, the party declaring default may elect to (a) terminate the
Agreement and seek damages; (b) treat the Agreement as continuing and require specific
performance; or (c) avail himself of any other remedy at law or equity. If the non -defaulting
party commences legal or equitable actions against the defaulting party, the defaulting party
shall be liable to the non -defaulting party for the non -defaulting party's reasonable attorney
fees and costs incurred because of the default.
15 Binding Effect. This writing, together with the exhibits hereto, constitutes the
entire agreement between the parties and shall be binding upon said parties, their officers,
employees, agents and assigns and shall inure to the benefit of the respective survivors, heirs,
personal representatives, successors and assigns of said parties.
16 Law/Severability. The laws of the State of Colorado shall govern the
construction, interpretation, execution and enforcement of this Agreement. In the event any
provision of this Agreement shall be held invalid or unenforceable by any court of competent
jurisdiction, such holding shall not invalidate or render unenforceable any other provision of this
Agreement.
17. Special Provisions. Special provisions or conditions relating to the services to
be performed pursuant to this Agreement are set forth in Exhibit "C", consisting of two (2)
pages, attached hereto and incorporated herein by this reference.
THE CITY OF FORT COLLINS, COLORADO
By: C` , b ,-
J s B. O'Neill ll, CPPO, FNIGP
Director of Purchasing & Risk Management
Date: 61 k3 /DJ/
Milliman Inc.
By: Adl -W. A4
Title: Pr1,0b,,4 .Q I Cohswl h4 �'�/
CORPORATENT PRE IDEOR E PRESIDENT
Date: 1A"174- /1)
ATTEST:
(Corporate Seal)
Corporate Secretary
No Text
EXHIBIT "A"
WORK ORDER FORM
PURSUANT TO AN AGREEMENT BETWEEN
THE CITY OF FORT COLLINS
AND
DATED:
Work Order Number:
Purchase Order Number:
Project Title:
Commencement Date:
Completion Date:
Maximum Fee: (time and reimbursable direct costs):
Project Description:
Scope of Services:
Acceptance
Professional agrees to perform the services
identified above and on the attached forms in
accordance with the terms and conditions
contained herein and in the Professional
Services Agreement between the parties. In the
event of a conflict between or ambiguity in the
terms of the Professional Services Agreement
and this work order (including the attached
forms) the Professional Services Agreement
shall control.
Professional
By:
User
The attached forms consisting of (_) pages
are hereby accepted and incorporated herein,
by this reference, and Notice to Proceed is
hereby given.
City of Fort Collins
By:
James B. O'Neill 11, CPPO, FNIGP
Director of Purchasing and Risk Management
(over $30,000.00)
Date:
EXHIBIT "B"
provided to you by January 31,
Attila. !il
We will be able to complete the valuation by March 31 if we are given the data on
January 31. Specifically we will compare the data to the previous year's data and look
to see If it Is reasonable and If there are any inconsistencies during February. Also
during February, we will review fire plan population experience and compare It to our
expectations. At the March Retirement Committee meeting we will review the actual
asset and population experlence with the Committee. We will recommend assumption
changes to the Committee for the valuation. Once the assumptions are set In early
March we will run the valuation through our pension system and compile results in a
draft actuarial valuation repot.
The "not to exceed" cost of the actuarial valuation for the January 1, 2006 plan year is
$8,500, We would be happy to set a fee schedule beyond the 2006 plan year based
on a fixed increase such as 3% a year or tie the annual increase to an Index such as
the Denver -Boulder -Greeley DP1 as published by the U.S. Department of Labor.
Typically when an actuarial firma begins work on a new client, the recognized standard
of practice is to repkcate the previous actuary's work. The replication of the prior
valuation work must be built into the fees. Since we are the incumbent actuary, there
is no higher "first -year" fee.
A "not to exceed" coact estimate of the Personal Retirement Planning
e will be able to complete the Personal Retirement Planning Statements by March
31 if we are given the employee data by January 31 and any outside data such as
account balance information by February 15.
Processing the benefit statement data will be done in conjunction with the valuation
data.
The "riot to exceed" cost of the Personal Retirement Planning Statements for this
January 1, 2006plan year is $3,000. We would be happy to set a fee schedule
beyond the 2006 purr year based on a fixed increase such as 3% per year or tie the
annual increase to an index such as the CPI as mentioned in the previous question.
Costs for attendencae at monthly nxvt ngs and hourly rates for special prolacits.
Our fees to attend the monthly Committee rneefings will be billed at time and expense
with a "not to exceed" fee of $ O starting January 1, 2006. As in the other "hot to
exceed" oasts we would be open to fees increasing at a fixed 3% per year or tie the
annual increase to the ON as mentioned previously,
In preparing this proposal, we have taken particular care in addressing the fee basis
because we recognize that budget limitations may be a primary concern. The
actuarial services described in this proposal are quoted on a not to exceed basis for
the servic, s listed below;
* Annual actuarial valuation of the benefits provided, including a review of the Plan's
funding level, and GASB disclosure information.
* Preparation of Personal Retirement Planning Statements,
* Attendance at monthly meetings.
The following table summarizes the annuli "not to exceed" fee to be charged for the
services listed under bullets 4, S. and 6;
"Not ToExceed"
4. Actuarial Report $ 8,500
S. Peal Retirement Planning Statements 3,000
5. Attendance at 12 Monthly Meetings 7
Total $ 19,300
If the work effort required to complete the project generates a lower fee based on our
hourly rates, we will trill the lower amount.
Benefit calculations are not included in the fees specified above. Benefit calculations
are expected to require one to two hours to complete per retiring or terminating
participant, with an expected cost of less than $275 per calculation_ On occasion,
benefit calculations involving breaks -in-service, Section 415 limitations, or other
special circumstances may require additional time and expense.
We propose to bill separately, on a time -and -expense basis, for consulting services
associated with special projects, The allocation of staff on any special project will be
designed to balance the skills of the Milliman staff with the need for the lowest
possible fee. Some projects may, by their mature, require that substantially all of the
time be provided by the consulting actuaries, but otters may be heavily weighted by
lower level actuarial staff and clerical staff. When special projects arise we would be
happy to provide an estimate of the additional fee involved and if the project is well-
defined, to provide a not to exceed tee.
Our hourly rates .are increased annually at the beginning of each year. Francine
Moyer and ,Joel Stewart, who have not yet completed all their professional
examinations, may also receive mid -year increases upon successful completion of
one of these exams.
The other services listed in the RFP wilt be billed at our regular billing rates on a time
and expense basis. We will use the staff member with the lowest billing rate that best
fits the project. The 2005 billing rates follow. We anticipate that billing rates will
Increase at 3% per year to adjust for cost of living;
SW Designation 2006 Redo
Consulting Actuaries $230 - $400
Associate Actuaries $155 w $200
Actuarial Assistants $95 - $140
Administrative Assistants $60 - $100