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HomeMy WebLinkAboutGallagher Benefit Services, Inc.-Professional Services Agreement-06.11.2007 (2) • 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 GASB 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:VlprospectsTay of Waterloo IA1Waterloo 509A and GASB proposal.doc Ms. Nancy Eckert Gismo April 27, 20071! 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 8/13/07 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:Wprospects\City of Waterloo IA1Watertoo S09A 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, . William F. Robinson, Jr. Area Vice President bill_robinson©ajg.corn Accepted on behalf the City of Waterloo, Iowa: NameMayor 6- !/-- 07 Title Date K Wprospects\City of Waterloo IAIWaterloo 509A and GASB proposal doc