HomeMy WebLinkAbout106536 MILLIMAN INC - CONTRACT - RFP - P988 ACTUARIAL SERVICES AND POLICY REVIEW GERP (2)a]
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:
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
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U�.`� NOTARY 9� 2
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VORN to before me this day of 2005.
Notary Pub ' in and for the State of
Washington residing at Shoreline, WA.
My commission expires 02/09/2007.
OFFICES IN PRINCIPAL CITIES WORLDWIDE
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 footer 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. ;
PROFESSIONAL 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, 2006 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.
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 18`h St Ste 3100 Fort Collins, CO 80522 Fort Collins, CO 80522
Denver, CO 80202-1931
In the event of anv such eariv termination by the Citv. the Prnfessinnai shall him nnirl fnr
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, Proiect 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, COL,ORADO
By:C`,V1�"C/�k—
Jk—
Ja s B. O'Neill II, CPPO, FNIGP
Director of Purchasing & Risk Management
Date: _ 61 k3 1
Milliman Inc`
By: i'
Title: PrrNb)9d I' 605r&AV
CORPORATE PRESIDENT OR E PRESIDENT
Date: �7'�Q � - le aU0/
ATTEST:
(Corporate Seal)
Corporate Secretary
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:
Date:
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 It, CPPO, FNIGP
Director of Purchasing and Risk Management
(over $30,000.00)
Date:
A "not to exceed" cost estimate of the Actuarial Reports, and an approxl maft
time frarrre to complete It after information Is provided to you by vitanuary 31,
2006,
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 loots
to see 0 it is reasonable and if there are any inconsistencies during February. Also
during February, we will review the plan population experience and compare it to our
expectations. At the March Retirement Committee meeting we will review the ,actual
asset and population experience 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 report.
The "not to exceed" coast of the actuarial valuation for the January 1, 2006 plan year is
$8,600. 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 -Wilder -Greeley CPI as published by the U.S. Department of Labor.
Typically when an actuarial firm begins work on a new client, the recognized standard
of practice is to replicate the previous actuary's work. The replication of the prior
valuation worts must be guilt into the fees. Since we are the incumbent actuary, there
is no higher "first -year" fee.
A "not to exceed' cost estimate of the Personal Retirement Planning
Statements.
We 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" cast of the Personal retirement Planning Statements for the
January 1, 2006 plan year is $3, 00. We would be happy to set a fee schedule:
beyond the 2006 plan 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.
Comets for att+endancrse at monthly meetings and hourly rates for special projects.
Our fees to attend the monthly Committee meetings will be billed at time and expense
with s "not to exceed fee of $0 l starting January 1, 2006, As in the other "not to
exceed" costs we would be open to fees increasing at a fined 3% per year or tie the
annual increase to the ON as mentioned previously.
In preparing this proposal, we have takers particular care in addressing the fee basis
because we recognize that budget limitations may be a primary concern. The
s: �c�r a sRa • w T• • s � :r •. �
Annual actuarial valuation of the benefits provided, Including a review of the Plan's
funding level, and t ASB disclosure Information.
Preparation of Personal Retirement Planning Statements.
Attendance at monthly meetings.
The following table summarizes the annual "nest to exceed" fee to be charged for the
sentices listed under bullets 4, 5, and 6:
"Not To l xwed"
4. Actuarial Report - $ 8,500
5. Personal Retirement Planning Statements 3,000
5. Attendance at 12 Monthly Meetings 7QQ
Total $ 19,300
If the work effort required to complete the project generates a lower fee based on our
hourly rates, we will bill 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 lens than $275 per calculation. On occasion,
benefit calculations involving breaks-in-aervics, Section 415 limitations, or ether
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 lwtlilliman staff with the need for the lowest
passible fee. Some projects may, by their nature, require that substantially all of the
time be provided by the consulting actuaries, but lathers 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 fee.
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 A P will be billed at our regular billing raters 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 yew to adjust for cost of living
SW Designation 2005 bate
Consulting Actuaries $230 - $400
Associate Actuaries $ids - $200
Actuarial Assistants $95 - $140
Administrative Assistants $50 - $100