17-0706_DEMSEY, FILLIGER & ASSOCIATES, LLC_Professional Services Agreements CITY OF SAN JUAN CAPISTRANO
PROFESSIONAL SERVICES AGREEMENT '' YY
This Agreement is made and entered into as of U- , 2017 by and
between the City of San Juan Capistrano, a municipal corpo tion o anized and operating
under the laws of the State of California with its principal place of business at 32400 Paseo
Adelanto, San Juan Capistrano, CA 92675 ("City"), and DEMSEY, FILLIGER & ASSOCIATES,
LLC a limited liability corporation, with its principal place of business at 228 Shorebreaker Drive,
Laguna Niguel, California 92677 (hereinafter referred to as "Consultant"). City and Consultant
are sometimes individually referred to as "Party" and collectively as "Parties" in this Agreement.
RECITALS
A. City is a public agency of the State of California and is in need of professional
services for the following project:
ACTUARIAL SERVICES TO VALUE OTHER POST-EMPLOYMENT BENEFITS (OPEB) IN
COMPLIANCE WITH GOVERNMENT ACCOUNTING STANDARDS BOARD STATEMENT
NO. 75(GASB 75). (Hereinafter referred to as "the Project").
B. Consultant is duly licensed and has the necessary qualifications to provide such
services.
C. The Parties desire by this Agreement to establish the terms for City to retain
Consultant to provide the services described herein.
AGREEMENT
NOW, THEREFORE, IT IS AGREED AS FOLLOWS:
1. Services.
Consultant shall provide the City with the services described in the Scope of Services
attached hereto as Exhibit "A", which include: an OPEB valuation as of June 30, 2016, related
roll-forward data for June 30, 2017, an OPEB valuation as of June 30, 2018, and related roll-
forward data for June 30, 2019.
2. Compensation.
a. Subject to paragraph 2(b) below, the City shall pay for such services in
accordance with the Schedule of Charges set forth in Exhibit "B."
b. In no event shall the total amount paid for services rendered by
Consultant under this Agreement exceed the sum of$9,000. This amount is to cover all printing
and related costs, and the City will not pay any additional fees for printing expenses. Periodic
payments shall be made within 30 days of receipt of an invoice which includes a detailed
description of the work performed. Payments to Consultant for work performed will be made on
a monthly billing basis.
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3. Additional Work.
If changes in the work seem merited by Consultant or the City, and informal
consultations with the other party indicate that a change is warranted, it shall be processed in
the following manner: a letter outlining the changes shall be forwarded to the City by Consultant
with a statement of estimated changes in fee or time schedule. An amendment to this
Agreement shall be prepared by the City and executed by both Parties before performance of
such services, or the City will not be required to pay for the changes in the scope of work. Such
amendment shall not render ineffective or invalidate unaffected portions of this Agreement.
4. Maintenance of Records.
Books, documents, papers, accounting records, and other evidence pertaining to costs
incurred shall be maintained by Consultant and made available at all reasonable times during
the contract period and for four (4) years from the date of final payment under the contract for
inspection by City.
5. Time of Performance.
Consultant shall perform its services in a prompt and timely manner and shall
commence performance upon receipt of written notice from the City to proceed ("Notice to
Proceed"). Consultant shall complete the services required hereunder no later than 90 days
following the City's fiscal year end (by September 30 of each year). The Notice to Proceed
shall set forth the date of commencement of work.
6. Delays in Performance.
a. Neither City nor Consultant shall be considered in default of this Agreement for
delays in performance caused by circumstances beyond the reasonable control of the non-
performing party. For purposes of this Agreement, such circumstances include but are not
limited to, abnormal weather conditions; floods; earthquakes; fire; epidemics; war; riots and
other civil disturbances; strikes, lockouts, work slowdowns, and other labor disturbances;
sabotage or judicial restraint.
b. Should such circumstances occur, the non-performing party shall, within a
reasonable time of being prevented from performing, give written notice to the other party
describing the circumstances preventing continued performance and the efforts being made to
resume performance of this Agreement.
7. Compliance with Law.
a. Consultant shall comply with all applicable laws, ordinances, codes and
regulations of the federal, state and local government, including Cal/OSHA requirements.
b. If required, Consultant shall assist the City, as requested, in obtaining and
maintaining all permits required of Consultant by federal, state and local regulatory agencies.
c. If applicable, Consultant is responsible for all costs of clean up and/or removal of
hazardous and toxic substances spilled as a result of his or her services or operations
performed under this Agreement.
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8. Standard of Care
Consultant's services will be performed in accordance with generally accepted
professional practices and principles and in a manner consistent with the level of care and skill
ordinarily exercised by members of the profession currently practicing under similar conditions.
9. Assignment and Subconsultant
Consultant shall not assign, sublet, or transfer this Agreement or any rights under or
interest in this Agreement without the written consent of the City, which may be withheld for any
reason. Any attempt to so assign or so transfer without such consent shall be void and without
legal effect and shall constitute grounds for termination. Subcontracts, if any, shall contain a
provision making them subject to all provisions stipulated in this Agreement. Nothing contained
herein shall prevent Consultant from employing independent associates and subconsultants as
Consultant may deem appropriate to assist in the performance of services hereunder.
10. Independent Consultant
Consultant is retained as an independent contractor and is not an employee of City. No
employee or agent of Consultant shall become an employee of City. The work to be performed
shall be in accordance with the work described in this Agreement, subject to such directions and
amendments from City as herein provided.
11. Insurance. Consultant shall not commence work for the City until it has provided
evidence satisfactory to the City it has secured all insurance required under this section. In
addition, Consultant shall not allow any subcontractor to commence work on any subcontract
until it has secured all insurance required under this section.
a. Commercial General Liability
(i) The Consultant shall take out and maintain, during the
performance of all work under this Agreement, in amounts not less than specified herein,
Commercial General Liability Insurance, in a form and with insurance companies acceptable to
the City.
(ii) Coverage for Commercial General Liability insurance shall be at
least as broad as the following:
(1) Insurance Services Office Commercial General Liability
coverage (Occurrence Form CG 00 01) or exact equivalent.
(iii) Commercial General Liability Insurance must include coverage
for the following:
(1) Bodily Injury and Property Damage
(2) Personal Injury/Advertising Injury
(3) Premises/Operations Liability
(4) Products/Completed Operations Liability
(5) Aggregate Limits that Apply per Project
(6) Explosion, Collapse and Underground (UCX) exclusion
deleted
(7) Contractual Liability with respect to this Contract
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(8) Broad Form Property Damage
(9) Independent Consultants Coverage
(iv) The policy shall contain no endorsements or provisions limiting
coverage for (1) contractual liability; (2) cross liability exclusion for claims or suits by one
insured against another; (3) products/completed operations liability; or (4) contain any other
exclusion contrary to the Agreement.
(v) The policy shall give City, its officials, officers, employees,
agents and City designated volunteers additional insured status using ISO endorsement forms
CG 20 10 10 01 and 20 37 10 01, or endorsements providing the exact same coverage.
(vi) The general liability program may utilize either deductibles or
provide coverage excess of a self-insured retention, subject to written approval by the City, and
provided that such deductibles shall not apply to the City as an additional insured.
b. Automobile Liability
(i) At all times during the performance of the work under this
Agreement, the Consultant shall maintain Automobile Liability Insurance for bodily injury and
property damage including coverage for owned, non-owned and hired vehicles, in a form and
with insurance companies acceptable to the City.
(ii) Coverage for automobile liability insurance shall be at least as
broad as Insurance Services Office Form Number CA 00 01 covering automobile liability
(Coverage Symbol 1, any auto).
(iii) The policy shall give City, its officials, officers, employees, agents
and City designated volunteers additional insured status.
(iv) Subject to written approval by the City, the automobile liability
program may utilize deductibles, provided that such deductibles shall not apply to the City as an
additional insured, but not a self-insured retention.
c. Workers' Compensation/Employer's Liability
(i) Consultant certifies that he/she is aware of the provisions of
Section 3700 of the California Labor Code which requires every employer to be insured against
liability for workers' compensation or to undertake self-insurance in accordance with the
provisions of that code, and he/she will comply with such provisions before commencing work
under this Agreement.
(ii) To the extent Consultant has employees at any time during the
term of this Agreement, at all times during the performance of the work under this Agreement,
the Consultant shall maintain full compensation insurance for all persons employed directly by
him/her to carry out the work contemplated under this Agreement, all in accordance with the
"Workers' Compensation and Insurance Act," Division IV of the Labor Code of the State of
California and any acts amendatory thereof, and Employer's Liability Coverage in amounts
indicated herein. Consultant shall require all subconsultants to obtain and maintain, for the
period required by this Agreement, workers' compensation coverage of the same type and limits
as specified in this section.
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d. Professional Liability(Errors and Omissions)
At all times during the performance of the work under this Agreement the Consultant
shall maintain professional liability or Errors and Omissions insurance appropriate to its
profession, in a form and with insurance companies acceptable to the City and in an amount
indicated herein. This insurance shall be endorsed to include contractual liability applicable to
this Agreement and shall be written on a policy form coverage specifically designed to protect
against acts, errors or omissions of the Consultant. "Covered Professional Services" as
designated in the policy must specifically include work performed under this Agreement. The
policy must "pay on behalf of" the insured and must include a provision establishing the insurer's
duty to defend.
e. Minimum Policy Limits Required
(i) The following insurance limits are required for the Agreement:
Combined Single Limit
Commercial General Liability $1,000,000 per occurrence/ $2,000,000 aggregate
for bodily injury, personal injury, and property
damage
Automobile Liability $1,000,000 per occurrence for bodily injury and
property damage
Employer's Liability $1,000,000 per occurrence
Professional Liability $1,000,000 per claim and aggregate (errors and
omissions)
(ii) Defense costs shall be payable in addition to the limits.
(iii) Requirements of specific coverage or limits contained in this
section are not intended as a limitation on coverage, limits, or other requirement, or a waiver of
any coverage normally provided by any insurance. Any available coverage shall be provided to
the parties required to be named as Additional Insured pursuant to this Agreement.
f. Evidence Required
Prior to execution of the Agreement, the Consultant shall file with the City
evidence of insurance from an insurer or insurers certifying to the coverage of all insurance
required herein. Such evidence shall include original copies of the ISO CG 00 01 (or insurer's
equivalent) signed by the insurer's representative and Certificate of Insurance (Acord Form 25-
S or equivalent), together with required endorsements. All evidence of insurance shall be
signed by a properly authorized officer, agent, or qualified representative of the insurer and
shall certify the names of the insured, any additional insureds, where appropriate, the type and
amount of the insurance, the location and operations to which the insurance applies, and the
expiration date of such insurance.
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g. Policy Provisions Required
(i) Consultant shall provide the City at least thirty (30) days prior
written notice of cancellation of any policy required by this Agreement, except that the
Consultant shall provide at least ten (10) days prior written notice of cancellation of any such
policy due to non-payment of premium. If any of the required coverage is cancelled or expires
during the term of this Agreement, the Consultant shall deliver renewal certificate(s) including
the General Liability Additional Insured Endorsement to the City at least ten (10) days prior to
the effective date of cancellation or expiration.
(ii) The Commercial General Liability Policy and Automobile Policy
shall each contain a provision stating that Consultant's policy is primary insurance and that any
insurance, self-insurance or other coverage maintained by the City or any named insureds
shall not be called upon to contribute to any loss.
(iii) The retroactive date (if any) of each policy is to be no later than
the effective date of this Agreement. Consultant shall maintain such coverage continuously for
a period of at least three years after the completion of the work under this Agreement.
Consultant shall purchase a one (1) year extended reporting period A) if the retroactive date is
advanced past the effective date of this Agreement; B) if the policy is cancelled or not renewed;
or C) if the policy is replaced by another claims-made policy with a retroactive date subsequent
to the effective date of this Agreement.
(iv) All required insurance coverages, except for the professional
liability coverage, shall contain or be endorsed to waiver of subrogation in favor of the City, its
officials, officers, employees, agents, and volunteers or shall specifically allow Consultant or
others providing insurance evidence in compliance with these specifications to waive their right
of recovery prior to a loss. Consultant hereby waives its own right of recovery against City, and
shall require similar written express waivers and insurance clauses from each of its
subconsultants.
(v) The limits set forth herein shall apply separately to each insured
against whom claims are made or suits are brought, except with respect to the limits of liability.
Further the limits set forth herein shall not be construed to relieve the Consultant from liability in
excess of such coverage, nor shall it limit the Consultant's indemnification obligations to the
City and shall not preclude the City from taking such other actions available to the City under
other provisions of the Agreement or law.
h. Qualifying Insurers
(i) All policies required shall be issued by acceptable insurance
companies, as determined by the City, which satisfy the following minimum requirements:
(1) Each such policy shall be from a company or companies
with a current A.M. Best's rating of no less than A:VII and admitted to transact in the
business of insurance in the State of California, or otherwise allowed to place insurance
through surplus line brokers under applicable provisions of the California Insurance
Code or any federal law.
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Additional Insurance Provisions
(i) The foregoing requirements as to the types and limits of insurance
coverage to be maintained by Consultant, and any approval of said insurance by the City, is
not intended to and shall not in any manner limit or qualify the liabilities and obligations
otherwise assumed by the Consultant pursuant to this Agreement, including but not limited to,
the provisions concerning indemnification.
(ii) If at any time during the life of the Agreement, any policy of
insurance required under this Agreement does not comply with these specifications or is
canceled and not replaced, City has the right but not the duty to obtain the insurance it deems
necessary and any premium paid by City will be promptly reimbursed by Consultant or City will
withhold amounts sufficient to pay premium from Consultant payments. In the alternative, City
may cancel this Agreement.
(iii) The City may require the Consultant to provide complete copies of
all insurance policies in effect for the duration of the Project.
(iv) Neither the City nor any of its officials, officers, employees, agents
or volunteers shall be personally responsible for any liability arising under or by virtue of this
Agreement.
j. Subconsultant Insurance Requirements. Consultant shall not allow any
subcontractors or subconsultants to commence work on any subcontract until they have
provided evidence satisfactory to the City that they have secured all insurance required under
this section. Policies of commercial general liability insurance provided by such subcontractors
or subconsultants shall be endorsed to name the City as an additional insured using ISO form
CG 20 38 04 13 or an endorsement providing the exact same coverage. If requested by
Consultant, City may approve different scopes or minimum limits of insurance for particular
subcontractors or subconsultants.
12. Indemnification.
a. To the fullest extent permitted by law, Consultant shall defend, with
counsel of City's choosing and at Consultant's own cost, indemnify and hold the City, its
officials, officers, employees, agents and volunteers free and harmless from any and all claims,
demands, causes of action, suits, actions, proceedings, costs, expenses, liability, judgments,
awards, decrees, settlements, loss, damage or injury of any kind, in law or equity, to property or
persons, including wrongful death, (collectively, "Claims') in any manner arising out of,
pertaining to, or incident to any alleged acts, errors or omissions, or willful misconduct of
Consultant, its officials, officers, employees, subcontractors, consultants or agents in connection
with the performance of the Consultant's services, the Project or this Agreement, including
without limitation the payment of all consequential damages, expert witness fees and attorneys'
fees and other related costs and expenses. Notwithstanding the foregoing, to the extent
Consultant's services are subject to Civil Code Section 2782.8, the above indemnity shall be
limited, to the extent required by Civil Code Section 2782.8, to Claims that arise out of, pertain
to, or relate to the negligence, recklessness, or willful misconduct of the Consultant.
Consultant's obligation to indemnify shall not be restricted to insurance proceeds, if any,
received by the City, its officials, officers, employees, agents or volunteers.
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b. Additional Indemnity Obligations. Consultant shall defend, with counsel
of City's choosing and at Consultant's own cost, expense and risk, any and all Claims covered
by this section that may be brought or instituted against the City, its officials, officers,
employees, agents or volunteers. Consultant shall pay and satisfy any judgment, award or
decree that may be rendered against the City, its officials, officers, employees, agents or
volunteers as part of any such claim, suit, action or other proceeding. Consultant shall also
reimburse City for the cost of any settlement paid by the City, its officials, officers, employees,
agents or volunteers as part of any such claim, suit, action or other proceeding. Such
reimbursement shall include payment for the City's attorney's fees and costs, including expert
witness fees. Consultant shall reimburse the City, its officials, officers, employees, agents and
volunteers, for any and all legal expenses and costs incurred by each of them in connection
therewith or in enforcing the indemnity herein provided. Consultant's obligation to indemnify
shall not be restricted to insurance proceeds, if any, received by the City, its officials, officers,
employees, agents and volunteers.
13. California Labor Code Requirements.
a. Consultant is aware of the requirements of California Labor Code
Sections 1720 et seq. and 1770 et seq., which require the payment of prevailing wage rates and
the performance of other requirements on certain "public works" and "maintenance" projects. If
the services are being performed as part of an applicable "public works" or "maintenance"
project, as defined by the Prevailing Wage Laws, and if the total compensation is $1,000 or
more, Consultant agrees to fully comply with such Prevailing Wage Laws, if applicable.
Consultant shall defend, indemnify and hold the City, its officials, officers, employees and
agents free and harmless from any claims, liabilities, costs, penalties or interest arising out of
any failure or alleged failure to comply with the Prevailing Wage Laws. It shall be mandatory
upon the Consultant and all subconsultants to comply with all California Labor Code provisions,
which include but are not limited to prevailing wages, employment of apprentices, hours of labor
and debarment of contractors and subcontractors.
b. If the services are being performed as part of an applicable "public works"
or "maintenance" project, then pursuant to Labor Code Sections 1725.5 and 1771.1, the
Consultant and all subconsultants performing such Services must be registered with the
Department of Industrial Relations. Consultant shall maintain registration for the duration of the
Project and require the same of any subconsultants, as applicable. This Project may also be
subject to compliance monitoring and enforcement by the Department of Industrial Relations. It
shall be Consultant's sole responsibility to comply with all applicable registration and labor
compliance requirements.
14. Verification of Employment Eligibility.
By executing this Agreement, Consultant verifies that it fully complies with all
requirements and restrictions of state and federal law respecting the employment of
undocumented aliens, including, but not limited to, the Immigration Reform and Control Act of
1986, as may be amended from time to time, and shall require all subconsultants and sub-
subconsultants to comply with the same.
15. Laws and Venue.
This Agreement shall be interpreted in accordance with the laws of the State of
California. If any action is brought to interpret or enforce any term of this Agreement, the action
shall be brought in a state or federal court situated in the County of Orange, State of California.
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16. Termination or Abandonment
a. City has the right to terminate or abandon any portion or all of the work
under this Agreement by giving ten (10) calendar days written notice to Consultant. In such
event, City shall be immediately given title and possession to all original field notes, drawings
and specifications, written reports and other documents produced or developed for that portion
of the work completed and/or being abandoned. City shall pay Consultant the reasonable value
of services rendered for any portion of the work completed prior to termination. If said
termination occurs prior to completion of any task for the Project for which a payment request
has not been received, the charge for services performed during such task shall be the
reasonable value of such services, based on an amount mutually agreed to by City and
Consultant of the portion of such task completed but not paid prior to said termination. City shall
not be liable for any costs other than the charges or portions thereof which are specified herein.
Consultant shall not be entitled to payment for unperformed services, and shall not be entitled to
damages or compensation for termination of work.
b. Consultant may terminate its obligation to provide further services under
this Agreement upon thirty (30) calendar days' written notice to City only in the event of
substantial failure by City to perform in accordance with the terms of this Agreement through no
fault of Consultant.
17. Documents. Except as otherwise provided in "Termination or Abandonment,"
above, all original field notes, written reports, Drawings and Specifications and other
documents, produced or developed for the Project shall, upon payment in full for the services
described in this Agreement, be furnished to and become the property of the City.
18. Organization
Consultant shall assign Brian R. Demsey as Project Manager. The Project Manager
shall not be removed from the Project or reassigned without the prior written consent of the City.
19. Limitation of Agreement.
This Agreement is limited to and includes only the work included in the Project described
above.
20. Notice
Any notice or instrument required to be given or delivered by this Agreement may be
given or delivered by depositing the same in any United States Post Office, certified mail, and
return receipt requested, postage prepaid, addressed to:
CITY: CONSULTANT:
City of San Juan Capistrano Demsey, Filliger&Associates, LLC
32400 Paseo Adelanto 228 Shorebreaker Drive
San Juan Capistrano, CA 92675 Laguna Niguel, CA 92677
Attn: Michelle Bannigan Attn.: Brian R. Demsey
Assistant Finance Director Owner&Actuary
and shall be effective upon receipt thereof.
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21. Third Party Rights
Nothing in this Agreement shall be construed to give any rights or benefits to anyone
other than the City and the Consultant.
22. Equal Opportunity Employment.
Consultant represents that it is an equal opportunity employer and that it shall not
discriminate against any employee or applicant for employment because of race, religion, color,
national origin, ancestry, sex, age or other interests protected by the State or Federal
Constitutions. Such non-discrimination shall include, but not be limited to, all activities related to
initial employment, upgrading, demotion, transfer, recruitment or recruitment advertising, layoff
or termination.
23. Entire Agreement
This Agreement, with its exhibits, represents the entire understanding of City and
Consultant as to those matters contained herein, and supersedes and cancels any prior or
contemporaneous oral or written understanding, promises or representations with respect to
those matters covered hereunder. Each party acknowledges that no representations,
inducements, promises or agreements have been made by any person which is not
incorporated herein, and that any other agreements shall be void. This Agreement may not be
modified or altered except in writing signed by both Parties hereto. This is an integrated
Agreement.
24. Severability
The unenforceability, invalidity or illegality of any provision(s) of this Agreement shall not
render the provisions unenforceable, invalid or illegal.
25. Successors and Assigns
This Agreement shall be binding upon and shall inure to the benefit of the successors in
interest, executors, administrators and assigns of each party to this Agreement. However,
Consultant shall not assign or transfer by operation of law or otherwise any or all of its rights,
burdens, duties or obligations without the prior written consent of City. Any attempted
assignment without such consent shall be invalid and void.
26. Non-Waiver
None of the provisions of this Agreement shall be considered waived by either party,
unless such waiver is specifically specified in writing.
27. Time of Essence
Time is of the essence for each and every provision of this Agreement.
28. City's Right to Employ Other Consultants
City reserves its right to employ other consultants, including engineers, in connection
with this Project or other projects.
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29. Prohibited Interests
Consultant maintains and warrants that it has not employed nor retained any company
or person, other than a bona fide employee working solely for Consultant, to solicit or secure
this Agreement. Further, Consultant warrants that it has not paid nor has it agreed to pay any
company or person, other than a bona fide employee working solely for Consultant, any fee,
commission, percentage, brokerage fee, gift or other consideration contingent upon or resulting
from the award or making of this Agreement. For breach or violation of this warranty, City shall
have the right to rescind this Agreement without liability. For the term of this Agreement, no
director, official, officer or employee of City, during the term of his or her service with City, shall
have any direct interest in this Agreement, or obtain any present or anticipated material benefit
arising therefrom.
[SIGNATURES ON FOLLOWING PAGE]
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SIGNATURE PAGE FOR PROFESSIONAL SERVICES AGREEMENT
BETWEEN THE CITY OF SAN JUAN CAPISTRANO
AND DEMSEY, FILLIGER& ASSOCIATES, LLC
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date first
written above.
CITY OF SAN JUAN CAPISTRANO DEMSEY, FILLIGER &ASSOCIATES, LLC
By: By: _ + A �
Ken AI-Imam Brian R. emsey
Chief Financial Officer/ Owner&Actuary
City Treasurer
ATTEST:
r
By: L-V A
aria.Mord II
lerk
APPROVED AS TO FORM:
By:
Jeffry :allinger
City Attorney
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EXHIBIT A
Scope of Services
EXHIBIT A
Scope of Services
The following work plan and scope of services encompass the Project Plan as outlined by the City,
in Exhibit III.
We would provide the City with an actuarial report as of June 30, 2016, for the fiscal years
ending June 30, 2017 and June 30, 2018, setting forth all City liabilities of the postretirement health
benefit program. Our report would contain the following information:
• Disclosure of the postretirement benefit obligations and Annual Required Contributions
(ARC) for the fiscal years ended June 30, 2017 and 2018, in accordance with GASB's Other
Postemployment Benefits (OPEB) accounting standard(GASB 75);
• A comprehensive report and executive summary discussing assumptions, data utilized, and
results. The report will provide sufficient information for staff to prepare GASB 75
reporting for the City's financial statements, including footnote disclosure and required
supplemental information.
• An exhibit breaking out GASB 75 components by covered groups.
• Attend one on-site meeting, at the City's option, to present the report.
• Included in the basic valuation fee is complimentary ongoing support in preparation of the
City's OPEB disclosures for the two-year cycle until the next valuation.
Our success has been built around writing reports that are clear and easily understood that
they "report themselves". Consider: why pay an actuary twice, once to write a report, and again to
explain it? Why not just find an actuary who writes a report that can be easily understood to begin
with?
Nevertheless, there are still approximately 20% of our clients who do have circumstances
that require us to make an on-site presentation, and we have received many compliments for giving
easily understood, down-to-earth presentations that help your elected officials to feel comfortable
with our report and with action steps for the future.
Our approach ensures quality and provides a solid foundation for future years' valuations.
We would:
• Conduct initial discussions with the City by telephone to develop an in-depth understanding
of its post-retirement healthcare plan. We would learn about data availability, and any
issues the City would like us to address during the review.
EXHIBIT A - Page 1 of 2
• Submit a written data request to the City.
• Gather and compile data provided by the City, and review the data for reasonableness.
Anomalies (if any) would be identified and clarified as appropriate.
• Derive a set of proposed actuarial assumptions for use in the valuation, prepare the
"Actuarial Assumptions" and "Benefit Plan Provisions" sections of the report, and discuss
with the City as appropriate before proceeding.
• Perform a comprehensive actuarial valuation of the plan. Our work will be in compliance
with GASB 74/75 statements and other applicable actuarial and accounting standards. The
analysis would be based on the City's own data to the greatest extent credible.
• Summarize the valuation results into exhibits that will become part of the draft report.
• Prepare a draft report, containing our conclusions and recommendations. The report would
be consistent with GASB 74, GASB 75, and other applicable standards.
• Discuss the draft report by telephone with representatives of the City.
- Incorporate any required changes into the draft, and issue a final report.
- Attend one meeting with City officials to discuss the report, at the City's option.
DF&A understands the importance of communication. We would be in close contact with
the City throughout all phases of the project, so that by the time the report is generated, there are no
surprises and there is already a good level of understanding as to what the report will contain. Work
would begin promptly upon receipt of data. A draft report will be available within 6-8 weeks of
receipt of all necessary data in valid, electronic format.
Included in our basic fee is ongoing support for preparation of the City's OPEB disclosures
for each CAFR affected by the measurement dates associated with each two-year valuation period
as defined in Exhibit B to this contract.
EXHIBIT A - Page 2 of 2
EXHIBIT B
Schedule of Charges/Payments
Consultant will invoice City on a monthly cycle. Consultant will include with each invoice a
detained progress report that indicates the amount of budget spent on each task. Consultant
will inform City regarding any out-of-scope work being performed by Consultant. This is a time-
and-materials contract.
EXHIBIT B
Schedule of Charges/Payments
Consultant will invoice City on a monthly basis for the work performed for the period
covered by the invoice. This is a fixed fee contract. Prior to performing any work that requires
payment beyond the agreed upon fixed fee, Consultant will receive permission in writing from the
City to perform such work.
Our flat fee for the GASB 75 actuarial valuation, and on-site presentation would be $4,500
per each two-year valuation period, and is all-inclusive based on the scope of the project outlined in
Section 6. If the City exercises the renewal option for DF&A, the proposed fee for the valuation as
of June 30, 2018 is still $4,500 (report plus presentation). No other expenses would be charged to
the project. These fees are based on our past experience regarding the average amount of time
required to complete similar assignments.
The $4,500 fee per each two-year valuation period is broken down as follows:
(1) Basic GASB 75 Valuation Report $3,500
(3) On-site presentation 1,000
Total $4,500
Each two-year valuation period will consist of a full actuarial valuation in accordance with
GASB No. 75 followed by a measurement date one year later for which a roll-forward is performed.
For each measurement date, all information required by GASB No. 75 to be disclosed or presented
in the financial statements of the City including disclosures and required supplementary information
will be provided.
The first two-year valuation period will consist of an actuarial valuation as of June 30. 2016
and roll-forward data provided for a measurement date of June 30, 2017. This would provide data
needed for the Comprehensive Annual Financial Reports covering the fiscal years ending June 30,
2017 and 2018.
The second two-year valuation period will consist of an actuarial valuation as of June 30,
2018 and roll-forward data provided for a measurement date of June 30, 2019. This would provide
data needed for the Comprehensive Annual Financial Reports covering the fiscal years ending June
30, 2019 and 2020.
EXHIBIT B - Page 1 of 2
The above fees may be renewed at the City's request for the following valuation cycle.
A project team headed by Brian R. Demsey, will be responsible for performing the
requested services.
EXHIBIT B - Page 2 of 2