HomeMy WebLinkAboutGallagher Benefit Services, Inc.-Professional Services Agreement-06.11.2007 Gallagher Benefit Services, Inc.
A Subsidiary of Arthur J. Gallagher&Co.
April 27, 2007
Ms. Nancy Eckert
City Clerk
City of Waterloo
715 Mulberry Street
Waterloo, IA 50703
Re: Consulting and Actuarial Services Proposal
Dear Nancy,
As requested at our recent meeting, Gallagher Benefit Services, Inc. is providing
the following proposal for consulting and actuarial services for the City of
Waterloo. Specifically, we are proposing to provide Iowa Chapter 509A and GASB
45 actuarial services.
Scope of Services
For the required Iowa Chapter 509A actuarial services, we would provide the
required report in the format dictated by the State for the City's submission. Once
we provide the report, the City will be responsible to submit the report to the
Department of Insurance and pay the required annual fee. Our report would cover
all self-funded health coverages currently offered by the City.
For the GASB 45 actuarial valuation, we will provide the following services:
1. Initial fact finding & objective setting discussion with the City — The intent of
this step is to fully understand retiree benefits program.
2. Data gathering by the City and its vendors — Based on the results of Step 1,
we will provide a customized data request that accounts for all data that is
necessary for completion of the GASB 45 valuation.
3. Analysis of data and finalization of assumptions — Based on the information
provided we will develop all assumptions for the valuation. The
assumptions will be those that are both recommended and consistent with
those used for GASES 45 by both the Governmental Accounting Standards
Board and the American Academy of Actuaries. As much as is possible, the
assumptions will reflect actual City experience. The assumptions will be
supplemented with those developed from our proprietary database.
6399 South Fiddler's Green Circle
Suite 200
Greenwood Village, CO 80111-4949
303.220.7575
Fax 303.220.7010
Ms. Nancy Eckert
April 27, 2007
Page 3
Project Team
The personnel to be assigned to this project are listed below along with a brief
summary of each person's anticipated role. Professional summaries have been
included as an Appendix.
Managing Consultant — William (Bill) F. Robinson, Jr. will manage the overall
engagement and be responsible for presenting the actuarial report
Client Health Actuary — Thomas Skurat, FSA, MAAA will be responsible for the
health actuarial work assignments, including GASB 45, for the City.
Senior Health Underwriter — Shawn Adkins, CPA, manger of our underwriting
department, will oversee the data gathering and evaluation for the project.
Fees
Our fee to provide the Chapter 509A actuarial certification is $1,200. This fee is
guaranteed not to increase more than 5% per year for the life of our contract with
the City.
For GASB 45, our fee for the actuarial services as requested is $9,500. This fee is
all-inclusive, but contemplates no onsite meetings to present our findings. The
managing consultant and health actuary would review the draft and final written
report by conference call. The managing consultant anticipates being in the
Waterloo area in early October to meet with clients and could present the report to
the City at that time for no additional cost if the timing was convenient with the
City. Otherwise, our fee to meet with the City to present the report is $1,500.
Should the City be required by its auditor to have an update to its GASB 45 liability
in the off year between the two year valuation cycle, our fee would be $3,500.
Our GASB 45 actuarial fees are guaranteed for two years. After the initial two
year guarantee period, fees will not increase more than 5% per year for the
duration of our contract with the City.
Any additional presentations or subsequent services that arise as a result of the
delivery of our report will be subject to additional compensation, as mutually
agreed upon.
K:\#prospects\City of Waterloo IA\Waterloo 509A and GASB proposal doc
Ms. Nancy Eckert
April 27, 2007 o
Page 2
4. Finalization of report, based on the City's feedback.
5. Discussion of results — We will review the results of the actuarial study and
answer any questions that you may have.
After receiving its GASB 45 report and valuation, if the City then requires
additional consulting and actuarial services, GBS Denver is available to assist.
Timeline
For the Chapter 509A actuarial certification, we would start the project in early
August. Then we would provide the needed information to the City to file with the
State by no later than September 15, 2007. Meeting this deadline is contingent
upon the City and its vendors providing us with the claims, enrollment and financial
data needed for us to prepare our certification.
For GASB, our proposed timeline is presented below. Meeting the deadline for
this project is also contingent upon the City and its vendors providing us with the
current and historical claims, eligibility, enrollment and financial data needed to
prepare the valuation.
GASB 45 PROPOSED* PROJECT TIMELINE
Start
Task Date Finish Responsibility Comments
Award Contract 7/2/07 City Start engagement
Project Planning
Conference Call 7/6/07 City/GBS
Develop Data Request 7/9/07 7/13/07 GBS For City and vendors
Provide Data 7/16/07 8/10/07 City
Assumes all required data is
Analysis 3/13/07 9/14/07 GBS available
Interim Progress Review 8/17/07 City/GBS
Provide draft report 9/17/07 GBS
Provide comments 9/17/07 9/21/07 City
Finalize report 8/13/07 8/17/07 GBS
Present final report TBD GBS City to schedule
Analysis of Alternatives TBD City/GBS Follow up consulting, as needed
Project completion date TBD
* Proposed. Actual timeline would be developed jointly with the City.
K:Vtprospects\City of Waterloo IA\Waterloo 509A and GASB proposal.doc
Ms. Nancy Eckert
April 27, 2007
Page 4
References
For Chapter 509A actuarial services, our Iowa references include:
• City of Cedar Falls: Brenda Balvanz, Personnel Manager, 319-268-5112
• Cedar Falls Utilities: Robert Dieter, Director of Employee Services and
General Counsel, 319-268-5203
• Southeast Polk Community Schools: Michael Hamilton, Business
Manager/Board Secretary, 515-967-4294
• Sioux City Community Schools: Steve Crary, HR Director, 712-279-6692
For GASB 45 actuarial services, our Iowa references include:
• Cedar Falls Utilities: Robert Dieter, Director of Employee Services and
General Counsel, 319-268-5203
• Southeast Polk Community Schools: Michael Hamilton, Business
Manager/Board Secretary, 515-967-4294
• Sioux City Community Schools: Steve Crary, HR Director, 712-279-6692
Please let me know if we can provide any additional information on our Company
or its services. If this proposal is acceptable, please sign below and return to my
attention. We sincerely hope to have the opportunity to again work with you and
the City on these important issues.
Sincerely,
/4"(/..
William F. Robinson, Jr.
Area Vice President
bill_robinson@ajg.com
Accepted on behalf the City of Waterloo, Iowa:
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