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CITY OF ARCADIA 110d -16
PROFESSIONAL SERVICES AGREEMENT
ACTURIAL VALUATION — GASB 43 & 45
1. PARTIES AND DATE.
This Agreement is made and entered into this It day of arch 2007 by
and between the City of Arcadia, a charter city organized under the Constitution and laws of the
State of California with its principal place of business at 240 West Huntington Drive, Arcadia,
California 91066 -6021 ( "City") and Joseph D. Sintov, a PARTNERSHIP with its principal place
of business at 1927 Highland Oaks Drive, Arcadia, CA 91006 -1741 ( "Consultant "). City and
Consultant are sometimes individually referred to as "Party" and collectively as "Parties."
2. RECITALS.
2.1 Consultant.
Consultant desires to perform and assume responsibility for the provision of certain
professional services required by the City on the terms and conditions set forth in this
Agreement. Consultant represents that it is experienced in providing actuarial services to public
clients, is licensed in the State of California, and is familiar with the plans of City.
2.2 Project.
City desires to engage Consultant to render such services for the actuarial valuation as
required by GASB 43 & 45 ( "Project') as set forth in this Agreement.
3. TERMS.
3.1 Scope of Services and Term.
3.1.1 General Scope of Services. Consultant promises and agrees to furnish to
the City all labor, materials, tools, equipment, services, and incidental and customary work
necessary to fully and adequately supply the professional actuarial consulting services necessary
for the Project ( "Services "). The Services are more particularly described in Exhibit "A"
attached hereto and incorporated herein by reference. All Services shall be subject to, and
performed in accordance with, this Agreement, the exhibits attached hereto and incorporated
herein by reference, and all applicable local, state and federal laws, rules and regulations.
3.1.2 Term. The term of this Agreement shall be from March 20, 2007 to
August 31, 2007, unless earlier terminated as provided herein. Consultant shall complete the
Services within the term of this Agreement, and shall meet any other established schedules and
deadlines as jointly agreed.
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3.2 Responsibilities of Consultant.
3.2.1 Control and Payment of Subordinates; Independent Contractor. The
Services shall be performed by Consultant or under its supervision. Consultant will determine
the means, methods and details of performing the Services subject to the requirements of this
Agreement. City retains Consultant on an independent contractor basis and not as an employee.
Consultant retains the right to perform similar or different services for others during the term of
this Agreement. Any additional personnel performing the Services under this Agreement on
behalf of Consultant shall also not be employees of City and shall at all times be under
Consultant's exclusive direction and control. Consultant shall pay all wages, salaries, and other
amounts due such personnel in connection with their performance of Services under this
Agreement and as required by law. Consultant shall be responsible for all reports and
obligations respecting such additional personnel, including, but not limited to: social security
taxes, income tax withholding, unemployment insurance, disability insurance, and workers'
compensation insurance.
3.2.2 Schedule of Services. Consultant shall perform the Services
expeditiously, within the term of this Agreement, and in accordance with the Schedule of
Services set forth in Exhibit "B" attached hereto and incorporated herein by reference.
Consultant represents that it has the professional and technical personnel required to perform the
Services in conformance with such conditions. In order to facilitate Consultant's conformance
with the Schedule, City shall respond to Consultant's submittals in a timely manner. Upon
request of City, Consultant shall provide a more detailed schedule of anticipated performance to
meet the Schedule of Services.
3.2.3 Conformance to Applicable Requirements. All work prepared by
Consultant shall be subject to the prior written approval of City.
3.2.4 Substitution of Key Personnel. Consultant has represented to City that
certain key personnel will perform and coordinate the Services under this Agreement. Should
one or more of such personnel become unavailable, Consultant may substitute other personnel of
at least equal competence upon prior written approval of City. In the event that City and
Consultant cannot agree as to the substitution of key personnel, City shall be entitled to terminate
this Agreement for cause. As discussed below, any personnel who fail or refuse to perform the
Services in a manner acceptable to the City, or who are determined by the City to be
uncooperative, incompetent, a threat to the adequate or timely completion of the Project or a
threat to the safety of persons or property, shall be promptly removed from the Project by the
Consultant at the request of the City. The key personnel for performance of this Agreement are
as follows: Joseph D. Sintov, Consulting Actuary
3.2.5 City's Representative. The City hereby designates Tracey L. Hause,
Administrative Services Director or his or her designee, to act as its representative for the
performance of this Agreement ( "City's Representative "). City's Representative shall have the
power to act on behalf of the City for all purposes under this Contract. Consultant shall not
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accept direction or orders from any person other than the City's Representative or his or her
designee.
3.2.6 Consultant's Representative. Consultant hereby designates Joseph D.
Sintov, Consulting Actuary, or his or her designee, to act as its representative for the
performance of this Agreement ( "Consultant's Representative "). Consultant's Representative
shall have full authority to represent and act on behalf of the Consultant for all purposes under
this Agreement. The Consultant's Representative shall supervise and direct the Services, using
his best skill and attention, and shall be responsible for all means, methods, techniques,
sequences and procedures and for the satisfactory coordination of all portions of the Services
under this Agreement.
3.2.7 Coordination of Services. Consultant agrees to work closely with City
staff in the performance of Services and shall be available to City's staff, consultants and other
staff at all reasonable times.
3.2.8 Standard of Care, Performance of Employees. Consultant shall perform
all Services under this Agreement in a skillful and competent manner, consistent with the
standards generally recognized as being employed by professionals in the same discipline in the
State of California. Consultant represents and maintains that it is skilled in the professional
calling necessary to perform the Services. Finally, Consultant represents that it, its employees
and subcontractors have all licenses, permits, qualifications and approvals of whatever nature
that are legally required to perform the Services, including a City Business License, and that
such licenses and approvals shall be maintained throughout the term of this Agreement. As
provided for in the indemnification provisions of this Agreement, Consultant shall perform, at its
own cost and expense and without reimbursement from the City, any services necessary to
correct errors or omissions which are caused by the Consultant's failure to comply with the
standard of care provided for herein. Any employee of the Consultant or its sub - consultants who
is determined by the City to be uncooperative, incompetent, a threat to the adequate or timely
completion of the Project, a threat to the safety of persons or property, or any employee who fails
or refuses to perform the Services in a manner acceptable to the City, shall be promptly removed
from the Project by the Consultant and shall not be re- employed to perform any of the Services
or to work on the Project.
3.2.9 Laws and Regulations. Consultant shall keep itself fully informed of and
in compliance with all local, state and federal laws, rules and regulations in any manner affecting
the performance of the Project or the Services, including all Cal /OSHA requirements, and shall
give all notices required by law. Consultant shall be liable for all violations of such laws and
regulations in connection with Services. If the Consultant performs any work knowing it to be
contrary to such laws, rules and regulations and without giving written notice to the City,
Consultant shall be solely responsible for all costs arising therefrom. Consultant shall defend,
indemnify and hold City, its officials, directors, officers, employees and agents free and
harmless, pursuant to the indemnification provisions of this Agreement, from any claim or
liability arising out of any failure or alleged failure to comply with such laws, rules or
regulations.
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3.2.10 Insurance.
3.2.10.1 Time for Compliance. Consultant shall not commence
Work under this Agreement until it has provided evidence satisfactory to the City that 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 provided evidence satisfactory
to the City that the subcontractor has secured all insurance required under this section; provided,
however, that in lieu thereof, the Consultant may provide evidence to the City that all
subcontractors are additional insureds under the Contractor's policies of insurance.
3.2.10.2 Minimum Requirements. Consultant shall, at its expense,
procure and maintain for the duration of the Agreement insurance against claims for injuries to
persons or damages to property which may arise from or in connection with the performance of
the Agreement by the Consultant, its agents, representatives, employees, subcontractors and
volunteers. Consultant shall also name and obtain insurer's consent to naming City, its directors,
officials, officers, employees, agents and volunteers as an additional insured with proof of
certificate of insurance that they are an additional insured. Such insurance shall meet at least the
following minimum levels of coverage:
(A) Minimum Scope of Insurance. Coverage shall be when
commercially available (occurrence based) at least as broad as the latest version of the following:
(1) General Liability: Insurance Services Office Commercial General Liability coverage for
premises and operations, contractual liability, personal injury, bodily injury, independent
contractors, broadform property damage, explosion, collapse, and underground, products and
completed operations; (2) Automobile Liability: Insurance Services Office Business Auto
coverage for any auto owned, leased, hired, and borrowed by Consultant or for which
Consultant is responsible; and (3) Workers' Compensation and Employer's Liability: Workers'
Compensation insurance as required by the State of California and Employer's Liability
Insurance.
City, its directors, officials, officers, employees, agents and volunteers shall be listed as
additional insured. Any deductibles or self - insured retentions must be declared to and approved
by City and conform to the requirements provided in Section 3.2.10.6 herein.
(B) Minimum Limits of Insurance. Consultant shall maintain
limits no less than: (1) General Liability: $1,000,000 combined single limit per occurrence for
bodily injury, personal injury and property damage, with an aggregate limit of $1,000,000. If
Commercial General Liability Insurance or other form with general aggregate limit is used,
either the general aggregate limit shall apply separately to this Agreement/location or the general
aggregate limit shall be twice the required occurrence limit; (2) Automobile Liability: $1,000,000
combined single limit per accident for bodily injury and property damage; and (3) Workers'
Compensation and Employer's Liability: Workers' Compensation limits as required by the Labor
Code of the State of California. Employer's Liability limits of $1,000,000 per accident for
bodily injury or disease.
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3.2.10.3 Professional Liability. Consultant shall procure and
maintain, and require its sub - consultants to procure and maintain, for a period of three (3) years
following completion of the Project, errors and omissions liability insurance appropriate to their
profession. Such insurance shall be in an amount not less than $1,000,000 per claim, and shall
be endorsed to include contractual liability.
3.2.10.4 Insurance Endorsements. The insurance policies shall
contain the following provisions, or Consultant shall provide endorsements on forms supplied or
approved by the City to add the following provisions to the insurance policies:
(A) General Liability. The general liability policy shall be endorsed to
state that: (1) the City, its directors, officials, officers, employees and volunteers shall be
covered as additional insured with respect to liability arising out of Services operations and for
completed operations performed by or on behalf of the Consultant, including materials, parts or
equipment furnished in connection with such work; and (2) the insurance coverage shall be
primary insurance as respects the City, its directors, officials, officers, employees and volunteers,
or if excess, shall stand in an unbroken chain of coverage excess of the Consultant's scheduled
underlying coverage. Any insurance or self - insurance maintained by the City, its directors,
officials, officers, employees and volunteers shall be excess of the Consultant's insurance and
shall not be called upon to contribute with it in any way.
(B) Automobile Liability. [Intentionally omitted]
(C) Workers' Compensation and Employers Liability
Coverage. [Intentionally omitted]
(D) All Coverages. Each insurance policy required by this
Agreement shall be endorsed to state that: (A) coverage shall not be, reduced or canceled except
after thirty (30) days prior written notice by certified mail, return receipt requested of
cancellation, of intended non - renewal or endorsement reduction in limit or scope of coverage;
provided, however, that in the event of cancellation due solely to non - payment of premium, ten
(10) days notice of cancellation for non - payment of premium may instead be given to the City.;
and (B) any failure to comply with reporting or other provisions of the policies, including
breaches of warranties, shall not affect coverage provided to the City, its directors, officials,
officers, employees, agents and volunteers.
3.2.10.5 Separation of Insureds: No Special Limitations. All
insurance required by this Section shall contain standard separation of insureds provisions. In
addition, such insurance shall not contain any special limitations on the scope of protection
afforded to the City, its directors, officials, officers, employees, agents and volunteers.
3.2.10.6 Deductibles and Self- Insurance Retentions. Any
deductibles or self - insured retentions must be declared to and approved by the City. Consultant
shall guarantee that, at the option of the City, either: (1) the insurer shall reduce or eliminate
such deductibles or self - insured retentions as respects the City, its directors, officials, officers,
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employees, agents and volunteers; or (2) the Consultant shall procure a bond guaranteeing
payment of losses and related investigation costs, claims and administrative and defense
expenses.
3.2.10.7 Acceptability of Insurers. Insurance is to be placed with
insurers with a current A.M. Best's rating no less than A:VIII, admitted or approved to do
business in California, and satisfactory to the City.
3.2.10.8 Verification of Coverage. Consultant shall furnish City
with complete and accurate copies of current certificates of insurance and endorsements
effecting coverage required by this Agreement on forms satisfactory to the City. The certificates
and endorsements for each insurance policy shall be signed by a person authorized by that
insurer to bind coverage on its behalf, and shall be on forms provided by the City if requested.
Copies of all certificates and endorsements must be received and approved by the City before
work commences. The City reserves the right to require complete, certified copies of all
required insurance policies, at any time.
3.2.10.9 Safety. Consultant shall execute and maintain its work so
as to avoid injury or damage to any person or property. In carrying out its Services, the
Consultant shall at all times be in compliance with all applicable local, state and federal laws,
rules and regulations, and shall exercise all necessary precautions for the safety of employees
appropriate to the nature of the work and the conditions under which the work is to be
performed. Safety precautions as applicable shall include, but shall not be limited to: (A)
adequate life protection and life saving equipment and procedures; (B) instructions in accident
prevention for all employees and subcontractors, such as safe walkways, scaffolds, fall
protection ladders, bridges, gang planks, confined space procedures, trenching and shoring,
equipment and other safety devices, equipment and wearing apparel as are necessary or lawfully
required to prevent accidents or injuries; and (C) adequate facilities for the proper inspection and
maintenance of all safety measures.
3.2.10.10 Material Breach. Lack of insurance does not negate
Consultant's obligations under this Agreement. Maintenance of proper insurance coverage is a
material element of this Agreement and failure to maintain or renew coverage or to provide
evidence of renewal may be treated by the City as a material breach of the Agreement.
3.3 Fees and Payments.
3.3.1 Compensation. Consultant shall receive compensation, including
reimbursements which receive the City's prior written authorization, for all Services rendered
under this Agreement at the rates set forth in Exhibit "C" attached hereto and incorporated herein
by reference. The total compensation shall not exceed fourteen thousand dollars ($14,000.00)
without written approval of the City Manager. Extra Work may be authorized, as described
below, and if authorized, will be compensated at the rates and manner set forth in this
Agreement.
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3.3.2 Payment of Compensation. Consultant shall submit to City a monthly
itemized statement which indicates work completed and hours of Services rendered by
Consultant. The statement shall describe the amount of Services and supplies provided since the
initial commencement date, or since the start of the subsequent billing periods, as appropriate,
through the date of the statement. City shall, within thirty (30) days of receiving such statement,
review the statement and pay all approved charges thereon.
3.3.3 Reimbursement for Expenses. Consultant shall not be reimbursed for any
expenses unless prior written authorization is obtained from the City.
3.3.4 Extra Work. At any time during the term of this Agreement, City may
request that Consultant perform Extra Work. As used herein, "Extra Work" means any work
which is determined by City to be necessary for the proper completion of the Project, but which
the parties did not reasonably anticipate would be necessary at the execution of this Agreement.
Consultant shall not perform, nor be compensated for, Extra Work without prior written
authorization from City's Representative.
3.4 Accounting Records.
3.4.1 Maintenance and Inspection. Consultant shall maintain complete and
accurate records with respect to all costs and expenses incurred under this Agreement. All such
records shall be clearly identifiable. Consultant shall allow a representative of City during
normal business hours to examine, audit, and make transcripts or copies of such records and any
other documents created pursuant to this Agreement. Consultant shall allow inspection of all
work, data, documents, proceedings, and activities related to the Agreement for a period of three
(3) years from the date of final payment under this Agreement.
3.5 General Provisions.
3.5.1 Termination of Agreement.
3.5.1.1 Grounds for Termination. City may, by written notice to
Consultant, terminate the whole or any part of this Agreement at any time and without cause by
giving written notice to Consultant of such termination, and specifying the effective date thereof,
at least seven (7) days before the effective date of such termination. Upon termination,
Consultant shall be compensated only for those services which have been adequately rendered to
City, and Consultant shall be entitled to no further compensation. Consultant may not terminate
this Agreement except for cause.
3.5.1.2 Effect of Termination. If this Agreement is terminated as provided
herein, City may require Consultant to provide all finished or unfinished Documents and Data
and other information of any kind prepared by Consultant in connection with the performance of
Services under this Agreement. Consultant shall be required to provide such document and other
information within fifteen (15) days of the request.
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3.5.1.3 Additional Services. In the event this Agreement is terminated in
whole or in part as provided herein, City may procure, upon such terms and in such manner as it
may determine appropriate, services similar to those terminated.
3.5.2 Delivery of Notices. All notices permitted or required under this
Agreement shall be given to the respective parties at the following address, or at such other
address as the respective parties may provide in writing for this purpose:
Consultant:
City:
Joseph D. Sintov, Consulting Actuary
1927 Highland Oaks Drive
Arcadia, CA 91006 -1741
City of Arcadia
240 West Huntington drive
Arcadia, CA 91066 -6021
Attn: Tracey L. Hause, Administrative Services Director
Such notice shall be deemed made when personally delivered or when mailed, forty -eight (48)
hours after deposit in the U.S. Mail, first class postage prepaid and addressed to the party at its
applicable address. Actual notice shall be deemed adequate notice on the date actual notice
occurred, regardless of the method of service.
3.5.3 Ownership of Materials and Confidentiality.
3.5.3.1 Documents & Data: Licensing of Intellectual Property. This
Agreement creates a non - exclusive and perpetual license for City to copy, use, modify, reuse, or
sublicense any and all copyrights, designs, and other intellectual property embodied in plans,
specifications, studies, drawings, estimates, and other documents or works of authorship fixed in
any tangible medium of expression, including but not limited to, physical drawings or data
magnetically or otherwise recorded on computer diskettes, which are prepared or caused to be
prepared by Consultant under this Agreement ( "Documents & Data"). The City recognizes that
it is not entitled to any software or any other tools utilized to prepare the report. Consultant
shall require all subcontractors to agree in writing that City is granted a non - exclusive and
perpetual license for any Documents & Data the subcontractor prepares under this Agreement.
Consultant represents and warrants that Consultant has the legal right to license any and all
Documents & Data. Consultant makes no such representation and warranty in regard to
Documents & Data which were prepared by design professionals other than Consultant or
provided to Consultant by the City. City shall not be limited in any way in its use of the
Documents and Data at any time, provided that any such use not within the purposes intended by
this Agreement shall be at City's sole risk.
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3.5.3.2 Confidentiality. All ideas, memoranda, specifications, plans,
procedures, drawings, descriptions, computer program data, input record data, written
information, and other Documents and Data either created by or provided to Consultant in
connection with the performance of this Agreement shall be held confidential by Consultant.
Such materials shall not, without the prior written consent of City, be used by Consultant for any
purposes other than the performance of the Services. Nor shall such materials be disclosed to
any person or entity not connected with the performance of the Services or the Project. Nothing
furnished to Consultant which is otherwise known to Consultant or is generally known, or has
become known, to the related industry shall be deemed confidential. Consultant shall not use
City's name or insignia, photographs of the Project, or any publicity pertaining to the Services or
the Project in any magazine, trade paper, newspaper, television or radio production or other
similar medium without the prior written consent of City.
3.5.4 Cooperation: Further Acts. The Parties shall fully cooperate with one
another, and shall take any additional acts or sign any additional documents as may be necessary,
appropriate or convenient to attain the purposes of this Agreement.
3.5.5 Indemnification. Consultant shall defend, indemnify and hold the City, its
officials, officers, employees, volunteers and agents free and harmless from any and all claims,
demands, causes of action, costs, expenses, liability, loss, damage or injury, in law or equity, to
property or persons, including wrongful death, in any manner arising out of or incident to any
alleged acts, omissions or willful misconduct of Consultant, its officials, officers, employees,
agents, consultants and contractors arising out of or in connection with the performance of the
Services, the Project or this Agreement, including without limitation the payment of all
consequential damages and attorney's fees and other related costs and expenses. Consultant shall
defend, at Consultant's own cost, expense and risk, any and all such aforesaid suits, actions or
other legal proceedings of every kind that may be brought or instituted against City, its directors,
officials, officers, employees, agents or volunteers. Consultant shall pay and satisfy any
judgment, award or decree that may be rendered against City or its directors, officials, officers,
employees, agents or volunteers, in any such suit, action or other legal proceeding arising from
Consultant's performance of the Services, the Project or this Agreement; except to the extent that
liability is caused by any negligence or willful misconduct by the City or its directors, officials,
officers, employees, agents or volunteers. Consultant shall reimburse City and its directors,
officials, officers, employees, agents and/or 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 directors, officials, officers, employees, agents or volunteers and shall
take effect immediately upon execution of this Agreement.
3.5.6 Entire Agreement. This Agreement contains the entire Agreement of the
Parties with respect to the subject matter hereof, and supersedes all prior negotiations,
understandings or agreements. This Agreement may only be modified by a writing signed by
both Parties.
3.5.7 Governing Law. This Agreement shall be governed by the laws of the
State of California. Venue shall be in Los Angeles County.
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3.5.8 Time of Essence. Time is of the essence for each and every provision of
this Agreement.
3.5.9 City's Right to Employ Other Consultants. City reserves right to employ
other consultants in connection with this Project.
3.5.10 Successors and Assigns. This Agreement shall be binding on the
successors and assigns of the Parties.
3.5.11 Assignment or Transfer. Consultant shall not assign, hypothecate, or
transfer, either directly or by operation of law, this Agreement or any interest herein without the
prior written consent of the City. Any attempt to do so shall be null and void, and any assignees,
hypothecates or transferees shall acquire no right or interest by reason of such attempted
assignment, hypothecation or transfer.
3.5.12 Construction; References: Captions. Since the Parties or their agents have
participated fully in the preparation of this Agreement, the language of this Agreement shall be
construed simply, according to its fair meaning, and not strictly for or against any Party. Any
term referencing time, days or period for performance shall be deemed calendar days and not
work days. All references to Consultant include all personnel, employees, agents, and
subcontractors of Consultant, except as otherwise specified in this Agreement. All references to
City include its elected officials, officers, employees, agents, and volunteers except as otherwise
specified in this Agreement. The captions of the various articles and paragraphs are for
convenience and ease of reference only, and do not define, limit, augment, or describe the scope,
content, or intent of this Agreement.
3.5.13 Amendment; Modification. No supplement, modification, or amendment
of this Agreement shall be binding unless executed in writing and signed by both Parties.
3.5.14 Waiver. No waiver of any default shall constitute a waiver of any other
default or breach, whether of the same or other covenant or condition. No waiver, benefit,
privilege, or service voluntarily given or performed by a Party shall give the other Party any
contractual rights by custom, estoppel, or otherwise.
3.5.15 No Third Party Beneficiaries. There are no intended third party
beneficiaries of any right or obligation assumed by the Parties.
3.5.16 Invalidity; Severability. If any portion of this Agreement is declared
invalid, illegal, or otherwise unenforceable by a court of competent jurisdiction, the remaining
provisions shall continue in full force and effect.
3.5.17 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
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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 member, 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.
3.5.18 Equal Opportunity Employment. Consultant represents that it is an equal
opportunity employer and it shall not discriminate against any subcontractor, employee or
applicant for employment because of race, religion, color, national origin, handicap, ancestry,
sex, sexual orientation or age. 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. Consultant shall also comply with all relevant provisions of
City's Minority Business Enterprise program, Affirmative Action Plan or other related programs
or guidelines currently in effect or hereinafter enacted.
3.5.19 Labor Certification. By its signature hereunder, Consultant certifies that it
is aware of the provisions of Section 3700 of the California Labor Code which require every
employer to be insured against liability for Worker's Compensation or to undertake self -
insurance in accordance with the provisions of that Code, and agrees to comply with such
provisions before commencing the performance of the Services.
3.5.20 Authority to Enter Agreement. Consultant has all requisite power and
authority to conduct its business and to execute, deliver, and perform the Agreement. Each Party
warrants that the individuals who have signed this Agreement have the legal power, right, and
authority to make this Agreement and bind each respective Party.
3.5.21 Counteroarts. This Agreement may be signed in counterparts, each of
which shall constitute an original.
3.6 Subcontracting.
3.6.1 Prior Approval Required. Consultant shall not subcontract any portion of
the work required by this Agreement, except as expressly stated herein, without prior written
approval of City. Subcontracts, if any, shall contain a provision making them subject to all
provisions stipulated in this Agreement.
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CITY OF ARCADIA
By: U!nKp By:
William R. Kelly
City Manager
Dated: N 2007
ATTEST:
APPROVED AS TO FORM:
�&� R t 4�
Stephen P. Deitsch
City Attorney
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D. Sintov, Consulting Actuary
U,
Cq-k5Lt,ftlw cfgQr
Consulting Actuary y
CONCUR:
it � �4,L 3 -2lr o7
Tracey L. Hawse Date
Administrative Services Director
0
EXHIBIT "A"
SCOPE OF SERVICES
0
An actuarial valuation of the benefits provided under the City's retiree medical program,
described in GASB 43 & 45 as postemployment benefits other than pensions, known as
"OPEB" will be performed.
This scope covers two areas of services:
➢ Normal Services
➢ Additional Services
These services are described as follows.
NORMAL SERVICES
The following services will be performed.
➢ Gather census data, Program descriptions, premium rates and other information necessary
in order to perform our calculations.
➢ Prepare an outline of Program provisions based on review of the information provided by
the City. This outline will be presented to the City for its approval before the actuarial
valuation is performed, to confirm our mutual understanding of the Program provisions.
➢ Work with the City to select the actuarial assumptions necessary to determine the
actuarial accrued liability and ARC.
➢ If necessary, adjust the CALPERS blended premium rate structure to an age- distinct
basis. This would be done in order to develop expected annual per capita claims costs at
each age, and thus remove the over- and under - charges that exist when a single premium
is intended to cover individuals at all ages. GASB 43 & 45 describes a blended rate
structure as having an "implicit rate subsidy ", which must be considered in the valuation.
However GASB 43 & 45 also permits an employer participating in a community -rated
plan to use the unadjusted premium rates if certain requirements are met; we will resolve
this issue once we commence our engagement.
➢ Determine the expense of the Program for the City's 2006 -2007 fiscal year in accordance
with GASB 43 & 45 and present the results in a written report. The report will include
the following:
• Presentation of the ARC and accrued actuarial liability as of July 1, 2006.
• Summary of the census data used in the valuation, expressed as age /service
distribution tables.
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• Summary of the Program provisions.
• Summary of the actuarial assumptions and methods.
• Glossary of the key GASB 43 & 45 terms used in the report, to permit a reasonable
understanding of the actuarial assumptions, methods and results.
Five hard copies of the report will be provided, along with a PDF file from which the
City may print additional copies of the report.
➢ Attend one meeting with the City's management in order to present the report.
In addition to the items described above, the valuation and report will reflect the following
important assumptions and methods:
1. The ARC will be determined based on the projected unit credit actuarial cost method.
This is a common method used under GASB 43 & 45, and in fact is the only method
permitted for reporting the GAAP expense of retiree medical programs in the private
sector (Statement 106 of the Financial Accounting Standards Board, or "FAS 106 ").
2. A single separate retirement age will be assumed for participants covered under each
employee organization. For example, participants of the Arcadia Police Officers'
Association (APOA) would be expected to retire at a younger age than participants of the
Arcadia City Employees Association (ACEA).
3. The ARC will be determined on the assumption that the Program is a single- employer
plan, i.e, the Program is not part of a cost - sharing multiple - employer plan or agency
multiple - employer plan.
4. Benefits under the program are assumed to cease at age 65.
5. It is assumed that there are approximately 300 active participants in five employee groups
and approximately 50 retired participants. The retirees are assumed to receive benefits in
accordance with the same terms currently available to actives, i.e. there are no special
substitute benefit arrangements. If the actual head counts are more than 20% above these
figures, or there are more than five employee organizations or there are substitute retiree
benefits that require special valuation, then the fee for Normal Services may be subject to
revision.
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ADDITIONAL SERVICES
The following are examples of services that can be performed for an additional charge, as
needed. These will not be performed unless requested by the City:
➢ Alternate Benefit Structure. Determine the accrued actuarial liability and ARC under an
alternate benefit structure. Under this benefit structure, benefits would be payable for a
fixed period of years following retirement. This period may vary among the employee
groups. Tentative discussion suggests that the fixed period may range from 10 years to
15 years. Thus, for instance, the period might be 15 years for APOA employees, 10 years
for ACEA employees and so forth.
➢ Determine the accrued actuarial liability and ARC on alternative sets of assumptions or
methods, Program provisions, census data, etc.
➢ Correct material errors in census and other input data.
➢ Attend additional meetings as requested.
➢ Forecasting the ARC and unfunded actuarial accrued liability under various funding or
other scenarios.
➢ Consult on complex issues, changes in GASB requirements, methods by which to reduce
the ARC, etc.
➢ Assist with Program amendments or changes to administrative forms and procedures
LIMITATIONS AND CONDITIONS
It is understood that our firm is not a plan fiduciary, is not the " ERISA Administrator" (as
defined in ERISA Section 3(16)(A)) and we have no power to make decisions as to Program
policy, interpretations, practices or procedures. Our role is to determine the respective GASB 45
information as described in this letter.
We do not audit or verify the data you submit, although we may ask you to clarify it, or furnish
us with additional data. The accuracy of employee census and other input data is the City's
responsibility. You agree to provide us with accurate data on a timely basis. We have no
responsibility with regard to the investment of any assets of the Program.
You cannot rely on our engagement to disclose errors, irregularities, prohibited transactions,
unrelated business income, or illegal acts, including fraud or defalcations that may exist.
However, we will inform you of any such matters that come to our attention during the course of
our work.
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We will use our best judgment in performing our services in accordance with our professional
standards and ethics. Whenever we are aware that applicable requirements are unclear or that
there are conflicting interpretations of these requirements, we will share our knowledge and
understanding of the possible positions which may be taken. If you desire a legal opinion before
choosing among alternative positions, then legal counsel should be separately retained for this
purpose. We will work with you and your legal counsel to the best of our abilities in giving you
whatever information we have that may help you in your decision.
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Exhibit "B"
SCHEDULE OF SERVICES
Week 1 Request/Receive Data from City
Week 2 & 3 Prepare Outline
Week 4 Approval of the outline by City
Meet w/ City to discuss key assumptions
Week 5 & 6 & 7 Preliminary Valuation Report
Week 8 Discuss results with City
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Exhibit "C"
COMPENSATION
Our fees for the proposed services are as follows:
➢ Normal Services
The fixed fee for the Normal Services described above is $9,500.00.
➢ Additional Services
Alternate benefit structure. The fee to determine the ARC and accrued actuarial liability under an alternate
benefit structure is $4,000.00.
The fixed fee for other Additional Services is based on hourly time charges. Estimates will be provided for any
project upon request.
Any out -of- pocket expenses (such as overnight mailings, messenger, etc.) are billed at cost.
A retainer in the amount of $5,000.00 is necessary to commence work on this engagement.
Invoices will be submitted as work progresses and are due and payable when rendered.
Hourly Rates:
Joseph Sintov, Consulting Actuary, at the rate of $250
Clerical staff range from $50 per hour to $75 per hour depending on the type of expertise
provided
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