11-0627_BICKMORE RISK SERVICES_Personal Services AgreementPERSONAL SERVICES AGREEMENT
THIS AGREEMENT is made, entered into, and shall become effective this 27th day
of June 2011, by and between the San Juan Capistrano (hereinafter referred to as the
"City") and Bickmore Risk Services (hereinafter referred to as the "Consultant").
RECITALS:
WHEREAS, City desires to retain the services of Consultant regarding the City's
proposal to prepare actuarial services for GASB 45 compliance reporting and,
WHEREAS, Consultant is qualified by virtue of experience, training, education and
expertise to accomplish such services.
NOW, THEREFORE, City and Consultant mutually agree as follows:
Section 1. Scope_ of Work.
The scope of work to be performed by the Consultant shall consist of those tasks as
set forth in Exhibit 'A" attached and incorporated herein by reference. To the extent that
there are any conflicts between the provisions described in Exhibit "A" and those provisions
contained within this Agreement, the provisions in this Agreement shall control.
Section 2. Term.
This Agreement shall commence on the effective date and shall terminate, and all
services required hereunder shall be completed, no later than December 15, 2011.
Section 3. Compensation.
3.1 Amount.
Total compensation for the services hereunder shall not exceed $6,500 for
the total contract amount as set forth in Exhibit 'A" attached and incorporated herein by
reference.
3.2 Method of Payment.
Subject to Section 3.1, Consultant shall submit monthly invoices based on
total services which have been satisfactorily completed for such monthly period. The City
will pay monthly progress payments based on approved invoices in accordance with this
Section.
3.3 Records of Expenses.
Consultant shall keep complete and accurate records of all costs and
expenses incidental to services covered by this Agreement. These records will be made
available at reasonable times to the City. Invoices shall be addressed as provided for in
Section 16 below.
Section 4. Independent Contractor.
It is agreed that Consultant shall act and be an independent contractor and not an
agent or employee of the City, and shall obtain no rights to any benefits which accrue to
Agency's employees.
Section 5. Limitations Upon Subcontracting and Assi nment.
The experience, knowledge, capability and reputation of Consultant, its principals
and employees were a substantial inducement for the City to enter into this Agreement.
Consultant shall not contract with any other entity to perform the services required without
written approval of the City. This Agreement may not be assigned, voluntarily or by
operation of law, without the prior written approval of the City. If Consultant is permitted to
subcontract any part of this Agreement by City, Consultant small be responsible to the City
for the acts and omissions of its subcontractor as it is for persons directly employed.
Nothing contained in this Agreement shall create any contractual relationships between
any subcontractor and City. All persons engaged in the work will be considered employees
of Consultant. City will deal directly with and will make all payments to Consultant.
Section 6. _Changes to Scope of Work.
For extra work not part of this Agreement, a written authorization from City is
required prior to Consultant undertaking any extra work. In the event of a change in the
Scope of Work provided for in the contract documents as requested by the City, the Parties
hereto shall execute an addendum to this Agreement setting forth with particularity all
terms of the new agreement, including but not limited to any additional Consultant's fees.
Section 7. Familiarity with Work and/or Construction Site.
By executing this Agreement, Consultant warrants that: (1) it has investigated the
work to be performed; (2) if applicable, it has investigated the work site(s), and is aware of
all conditions there; and (3) it understands the facilities, difficulties and restrictions of the
work to be performed under this Agreement. Should Consultant discover any latent or
unknown conditions materially differing from those inherent in the work or as represented
by City, it shall immediately inform the City of this and shall not proceed with further work
under this Agreement until written instructions are received from the City.
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Section 8. Time of Essence.
Time is of the essence in the performance of this Agreement.
Section 9. Compliance with Law; E -Verify.
9.1. Compliance with Law.
Consultant shall comply with all applicable laws, ordinances, codes and regulations
of federal, state and local government.
9.2. E -Verify.
If Consultant is not already enrolled in the U.S. Department of Homeland Security's
E -Verify program, Consultant shall enroll in the E -Verify program within fifteen days of the
effective date of this Agreement to verify the employment authorization of new employees
assigned to perform work hereunder. Consultant shall verify employment authorization
within three days of hiring a new employee to perform work under this Agreement.
Information pertaining to the E -Verify program can be found at http-//www.uscis.ciov, or
access the registration page at https:ife-verify.0 cis.cgov/enroll/. Consultant shall certify its
registration with E -Verify and provide its registration number within sixteen days of the
effective date of this Agreement. Failure to provide certification will result in withholding
payment until full compliance is demonstrated.
Section 10. Conflicts of Interest.
Consultant covenants that it presently has no interest and shall not acquire any
interest, direct or indirect, which would conflict in any manner or degree with the
performance of the services contemplated by this Agreement. No person having such
interest shall be employed by or associated with Consultant.
Section 11. Copies of '//Bork Product.
At the completion of the work, Consultant shall have delivered to City at least one
(1) copy of any final reports and/or notes or drawings containing Consultant's findings,
conclusions, and recommendations with any supporting documentation. All reports
submitted to the City shall be in reproducible format, or in the format otherwise approved
by the City in writing.
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Section 12. Ownership of Documents.
All reports, information, data and exhibits prepared or assembled by Consultant in
connection with the performance of its services pursuant to this Agreement are confidential
to the extent permitted by law, and Consultant agrees that they shall not be made available
to any individual or organization without prior written consent of the City. All such reports,
information, data, and exhibits shall be the property of the City and shall be delivered to the
City upon demand without additional costs or expense to the City. The City acknowledges
such documents are instruments of Consultant's professional services.
Section 13. Indemni .
To the fullest extent permitted by law, Consultant agrees to protect, defend, and
hold harmless the City and its elective and appointive boards, officers, agents, and
employees from any and all claims, liabilities, expenses, or damages of any nature,
including attorneys' fees, for injury or death of any person, or damages of any nature,
including interference with use of property, arising out of, or in any way connected with the
negligence, recklessness and/or intentional wrongful conduct of Consultant, Consultant's
agents, officers, employees, subcontractors, or independent contractors hired by
Consultant in the performance of the Agreement. The only exception to Consultant's
responsibility to protect, defend, and hold harmless the City, is due to the negligence,
recklessness and/or wrongful conduct of the City, or any of its elective or appointive
boards, officers, agents, or employees.
This hold harmless agreement shall apply to all liability regardless of whether any
insurance policies are applicable. The policy limits do not act as a limitation upon the
amount of indemnification to be provided by Consultant.
Section 14. Termination.
City shall have the right to terminate this Agreement without cause by giving thirty
(30) days' advance written notice of termination to Consultant.
In addition, this Agreement may be terminated by any party for cause by providing
ten (10) days' notice to the other party of a material breach of contract. If the other party
does not cure the breach of contract, then the agreement may be terminated subsequent
to the ten (10) day cure period.
Section 15. Notice.
All notices shall be personally delivered or mailed to the below listed addresses, or
to such other addresses as may be designated by written notice. These addresses shall
be used for delivery of service of process:
To City: City of San Juan Capistrano
32400 Paseo Adelanto
M
San Juan Capistrano, CA 92675
Attn: Brad Rockabrand, CPA
To Consultant: Bickmore Risk Services
Attn: Heather Fantz
5200 SW Macadam Aven
Portland, OR.97239
Section 16, Attorneys' Fees.
If any action at law or in equity is necessary to enforce or interpret the terms of this
Agreement, the prevailing party shall be entitled to reasonable attorneys` fees, costs and
necessary disbursements in addition to any other relief to which he may be entitled.
Section 17. Dispute Resolution.
In the event of a dispute arising between the parties regarding performance or
interpretation of this Agreement, the dispute shall be resolved by binding arbitration under
the auspices of the Judicial Arbitration and Mediation Service ("JAMS").
Section 18. Entire Agreement.
This Agreement constitutes the entire understanding and agreement between the
parties and supersedes all previous negotiations between them pertaining to the subject
matter thereof.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement.
CITY OF SAN .JUAN CAPISTRANO
By: @",-A q7
David Adams, Interim City Manager
CONSULTANT
By, c vim;
ATTE�
Ma.i Morris, City Cie
APPROVED AS TO FORM:
R
l ickmore Risk Services
June 16, 2011
Ms. Cindy Russell
Chief Financial Officer 1 City Treasurer
City of San Juan Capistrano
32400 Paseo Adelanto
San Juan Capistrano, CA 92675
Re: Engagement Letter for OPER Actuarial Valuation Services
As requested, we are providing this letter to propose the engagement of Bickmore Risk
Services (BRS) to complete an actuarial valuation of other postemployment benefits
(OPEB) liabilities under GASB 45 for the City of San Juan Capistrano (the "City"). .
This valuation is to be dated June 30, 2011 and it is our understanding that the results of
this valuation will be applied to the City's fiscal years ending June 30, 2011 and 2012. Work
will commence within one week following submission of all requested data and be
completed as soon as possible thereafter, but not later than 75 days following.
BRS works with over 200 government entities, predominantly in California and Nevada, for
GASB 45 compliance. We are recognized in particular for our significant knowledge and
experience in working with both the CalPERS medical program and CERBT OPEB trust
programs. We believe our general experience, combined with our knowledge of the City's
OPER benefits and funding policy will prove to be an advantage to the City. Furthermore,
we hope the consulting assistance and our availability for questions demonstrates the value
we provide beyond the mere delivery of a report.
We appreciate the opportunity to be of service to the City of San Juan Capistrano and look
forward to working with you again on this assignment. Please call me at (503) 419-0462
with any questions you may have with regard to our services or this letter. You may also
reach me by e-mail at ctacleod brsrisk.com.
Cordially,
Catherine L. MacLeod
Manager, Health & Benefit Actuarial Services
Fellow, Society of Actuaries
Member, American Academy of Actuaries
Enrolled Actuary
Enclosure
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EXHIBIT A
Overview of Valuation Process
Our general approach to providing services to the City will be as follows:
The lead consultant and actuarial analyst assigned will collect and review preliminary
information with the City and identify any specific directions and desires concerning the
upcoming valuation.
A valuation data request will be sent. This will include a word document laid out with
straightforward plan related questions and an excel file for employee data information.
We will also ask for updates regarding the City's contributions for retirees, prior year
disclosures in the financial statements and changes in benefits provided since the prior
valuation was prepared.
As to the appropriate assumption package, because City employees participate in the
OCERS retirement (pension) program,
a We will follow the package of demographic assumptions and methods used in
the most recent retirement valuations. We will request the City's assistance in
obtaining a copy of that report.
o We will review appropriate discount rates with the City to be used in the
valuation.
n A review of medical trend will also be appropriate.
We will prepare a draft OPER valuation report for the City to review which will include
sufficient documentation, details, and descriptions to enable the City to evaluate the
actuarial methodology, indexes, and mathematical approaches we used to develop the
financial information relating to OPEB benefit liabilities and annual OPEB expense.
We will be available as needed to discuss the valuation results with the City
representatives. Once any questions have been resolved we will issue our final report.
At the City's option and request, we are available for an in-person presentation of results
and/or preparation of actuarial materials, if required, to be submitted to an OPEB trust
for their reporting purposes.
Selected references are available on request.
Overview of the City's Retiree OPER benefits and Funding
OPER provided: The City has indicated that the only Other Post Employment Benefit
provided is medical plan coverage.
Eligibility for medical coverage: Medical coverage is available for employees who satisfy
the requirements for retirement under OCERS (attained age 50 with 10 years of covered
service. An employee cannot terminate employment before meeting the age condition and
be entitled to receive benefits. The City offers medical coverage through CaIPERS as
permitted under the Public Employees' Medical and Hospital Care Act (PEMHCA). As such,
the City is obligated to contribute toward the cost of retiree medical coverage for the
retiree's lifetime or until coverage is discontinued. If a covered spouse survives the retiree,
the spouse continues to receive the City subsidy described above.
Medical Subsidy provided by the City: The City has chosen to satisfy its retiree medical
benefit commitment using the unequal contribution method. Under this method, the
employer's contribution towards retiree medical benefits is determined by multiplying
together the following three items:
5% times
The number of prior years the employer has been contracted with PEMHCA times
The contribution the employer mares towards active employee health benefits, but
not less than the Minimum (required) Employer Contribution (MEC).
It is our understanding that the (direct) contribution provided by the City on behalf of active
employees is $108 for 2011'. Thus, the City's 2011 minimum monthly contribution toward
health plan benefits for retired employees is 5% times 11 (years in CaIPERS medical)
times $108, or $59.40. This amount will increase for 9 more years when it will then equal
the amount contributed to CaIPERS for active employees.
Current Funding Policy
it is our understanding that the June 2009 valuation was applied to the City's fiscal years
ending June 30, 2009 and 2010. Thus, it is expected that the results of the June 30, 2011
valuation will be applied to the City's fiscal years ending June 30, 2011 and 2012.
Unless we are told otherwise, we will assume that the City intends to continue to follow it's
previously established pay-as-you-go funding policy.
' It is our understanding that there is a pre-tax flexible benefit plan in place for active employees that
provides premiums in excess of the MEC and that such additional payments are not required to be
provided to retired employees to meet PEMHCA requirements.
2 Three retirees receive a minimum of $225 per month until they reach age 65, including one retiree who
has waived medical coverage through the City. This greater benefit is not available to any other current or
future retiree.
Professional Service Fees for this Project
Absent changes in the benefit structures provided to retirees and based on the
understanding of the City's benefits as described on the prior pages, BRS will complete the
actuarial valuation of OPER liabilities requirements for the following fees:
June 2011 Valuation report
$ 6,5003
Results will be presented based on the City's current funding policy for the fiscal
years ending June 30, 2011 and June 30, 2012. A basic comparison of results on
a prefunding basis will also be provided.
Optional services (these may be requested any time before the valuation is completed):
Separate OPEB cost by group 250 for each subgroup
Actuarial materials for OPER trust 750, only. if required
Personal visit (report delivery) 600
The basic valuation fee above includes up to 8 hours for data analysis, consolidation and
organization to prepare it for our actuarial coding. Should the plan details or employee data
require additional time to organize before we can begin our valuation or if benefits change
requiring additional actuarial coding, we reserve the right to charge for this time at the
hourly rates shown below. We would alert the City in advance if we felt additional charges
might apply.
We believe the services described above will meet the City's objectives for this project.
However, should other services beyond the scope of work outlined above be requested or
required, we will bill for our time at the rates specified below:
Consultant Hourly Rate
Senior Actuarial Staff $ 300
Actuarial Staff 160
Administrative Staff 80
The information provided in this letter may be incorporated into a separate contract or the
City may indicate its acceptance of the above fees and timeline for this project with a
binding signature and date entered below.
Yes, we would like to contract with BRS for the next two upcoming valuations for a
reduced valuation fee of $6,000 each.
Accepted:
Printed Name:
Date:
Title
Assuming no change in benefits provided to retirees, if the City would prefer to contract for the next two
valuations (.lune 2011 and June 2013), BRS will agree to prepare each for a reduced fee of $6,000. To
indicate you are electing this, simply check the box above the signature line.
4 A telephonic delivery of the report is included in the basic valuation price.
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