23-OTHER POST-EMPLOYMENT BENEFITS (OPEB)Item No. 23
memo�andum
TO: Mayor & City Council
John Godwin, City Manager
FROM: Gene Anderson, Finance Director
SUBJECT: OTHER POST-EMPLOYMENT BENEFITS (OPEB)
DATE: 2-13-2013
BACKGROUND: The Governmental Accounting Standards Board Statement 45 (GASB 45)
requires governmental entities to have an actuarial evaluation of what are referred to as "other
post-employment benefits". The City of Paris offers only one such benefit and that is medical
insurance coverage for retirees who meet certain qualifications (hired before 10-1-2004, meet the
rule of 80, and are under age 65). As a cost savings measure, the North Central Texas Council of
Governments (NCTCOG) coordinated a request for proposals for actuarial services negotiating
with several actuarial consultants to obtain the best price for these services. The City of Paris and
over 100 other governmental entities in Texas took advantage of the reduced pricing and entered
into an agreement for these services in 2009.
STATUS OF ISSUE: The previous agreement has now expired. The NCTCOG has again
negotiated favorable rates for these services, and the City may take advantage of these new
discounted rates. Services provided in the past were excellent, and the price was about 70% of
what the City had estimated the cost to be had it negotiated a standalone agreement.
BUDGET: Total estimated cost for the City over the two fiscal year period covered by the
agreement is estimated to be $6,525. This is $525 less than the City paid over the last two years.
Money for these services is provided in the Finance Department budget.
RECOMMENDATION: Motion to approve a resolution authorizing the City Manager to
execute all documents necessary for obtaining GASB 45 actuarial services through the NCTCOG
and Gabriel, Roeder, Smith & Company.
153
RESOLUTION N0.
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PARIS,
TEXAS, AUTHORIZING THE CITY TO ENTER INTO AN
INTERLOCAL COOPERATION AGREEMENT WITH NORTH
CENTRAL TEXAS COUNCIL OF GOVERNMENTS (NCTCOG) TO
HIRE GABRIEL ROEDER SMITH & COMPANY TO CONDUCT
ACTUARIAL CONSULTING SERVICES OF THE CITY'S OTHER POST
EMPLOYMEIVT BENEFITS AS REQUIRED BY GOVERNMENTAL
ACCOUNTING STANDARDS BOARD STATEMEIVT NUMBERS 43
AND 45; MAKING OTHER FINDINGS AND PROVISIONS RELATED
TO THE SUBJECT; AND DECLARING AN EFFECTIVE DATE.
WHEREAS, the Governmental Accounting Standards Board Statement
numbers 43 and 45 requires an actuarial evaluation of other post employment
benefits (OPEB) program offered by cities; and,
WHEREAS, the City of Paris currently provides OPEB for its qualified
retirees and the evaluation will calculate the dollar amount of the City's liability for
OPEB so that it may be properly reflected on the City balance sheet along with
providing other useful financial information; and,
WHEREAS, in order to minimize the cost of this study and future studies,
the City is recommending that the Council approve using a shared actuarial
services agreement available through the North Central Texas Council of
Governments (NCTCOG); and,
WHEREAS the NCTCOG has coordinated a request for proposals for
actuarial services negotiating with several actuarial consultants to obtain the best
price for these services and using the prospect of multiple city valuations as a
negotiating point, NCTCOG was able to obtain favorable pricing for this service;
and,
WHEREAS, NCTCOG selected Gabriel Roeder Smith & Company located in
Irving, Texas to conduct the actuarial study and the estimated cost of services for
the City of Paris is $6,525.00 through this agreement for these actuarial services;
and,
WHEREAS, the City Council hereby finds that it is in the best interest of the
Ciry of Paris and its citizens that the City enter into an Agreement with North
Central Texas Council of Governments (NCTCOG) in order to provide these
actuarial services to the City of Paris and that the City Manager should be
authorized to execute any and all necessary documents related to conducting GASB
45 actuarial services.
154
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF PARIS THAT:
Section 1. The findings set out in the preamble to this resolution are
hereby in all things approved.
Section 2. The City Council of the City of Paris does hereby approve
entering into a shared services agreement with North Central Texas Council of
Governments for Governmental Accounting Standards Board Statement 45
actuarial services.
Section 3. The City Manager be, and he is hereby authorized and directed
to execute on behalf of the City of Paris a Master Agreement with Gabriel Roeder
Smith & Company, Consultants and Actuaries ("GRS") for actuarial consulting
services and an Interlocal Agreement for Cooperative Purchasing for Actuarial
Shared Services substantially in accordance with the forms attached hereto as
Exhibits A and B, and any and all other necessary documents related to conducting
GASB 45 actuarial services.
Section 5. This resolution shall be effective immediately upon passage.
PASSED AND ADOPTED this 25th day of February, 2013.
Janice Ellis, City Clerk
APPROVED AS TO FORM:
W. Kent McIlyar, City Attorney
155
A.j. Hashmi, M.D., Mayor
Gabriel Roeder Smith & Company 5605 N. MacArchur Bivd. 469.524.0000 phone
Consultants & Actuaries Suite 870 469.524.0003 fax
Irving, TX 75038-2631 www gabrielroeder.com
MASTER AGREEMENT
Pursuant to the award of Joint Actuarial Services by the North Central Texas Council of
Governments (NCTCOG), this agreement confirms the terms under which the
(name of government)
hereinafter referred to as `CONTRACTING GOVERNMENT" has engaged Gabriel,
Roeder, Smith & Co. hereinafter referred to as "GRS" to perform actuarial consulting
services. In as much as this relationship will involve several actuarial reviews and other
services that will be governed by the Request for Proposal issued by NCTCOG on May
31, 2006 and our subsequent response to that proposal, we have agreed to establish this
"master agreement" defining the general terms and conditions for all work performed.
This agreement will not, by itself, authorize the performance of any services. Rather
specific services will be authorized through a separate engagement letter that references
this master agreement and details the services to be provided and the timeframe and fees
required. In the event of an inconsistency between this master agreement and an
individual engagement letter, the master agreement will be followed.
As described in the above referenced Request for Proposal the following terms apply:
A. Tax Exempt Entities. CONTRACTING GOVERNMENT is exempt from
manufacturer's federal excise tax and states sales tax. Tax exemption certificates
will be issued upon request.
B. Role of NCTCOG. NCTCOG has served as a facilitator to the RFP and award
process but the contractual relationship is between GRS and the CONTRACTING
GOVERNMENT.
C. A�¢regate Information. GRS agrees to supply NCTCOG with the specified
results from the valuations and to aggregate that information with that of other
governments for the purpose of benchmarking.
D. Fees. GRS agrees to follow the attached pricing schedule ("Attachment A") for
pricing of its services.
E. Review of Charges. CONTRACTING GOVERNMENT has the right to review
the supporting documentation for any hourly charges or out of pocket expenses
assessed to the CONTRACTING GOVERNMENT under the fee schedule.
F. Termination. Both CONTRACTING GOVERNMENT and GRS will have the
right to terminate this agreement through written notice. CONTRACTING
GOVERNMENT will pay any charges or prorate fees incurred to the date the
termination notice is received and actuary will cease any in progress work unless
specific stopping points are provided in the letter.
EXHIBIT "A"
156
G. Work Product. The final work product will be the property of the
CONTRACTING GOVERNMENT to be used as stated in the specific engagement
letter. Ancillary use of the product is permitted but GRS is not responsible for the
reliability of those projections. It is understood that all reports are subject to the
open records laws of the State of Texas and the contracting jurisdiction.
H. Independent Contractor. All the services provided by GRS will be as an
independent contractor. None of the terms in the engagement letter will be
interpreted to create an agency or employment relationship.
Term. The term of this master ageement will be governed by the afore referenced
NCTCOG RFP and will expire on September 30, 2014.
Complete Agreement. This letter combined with the specific engagement letter
and as clarified by the RFP and Proposal set forth the entire agreement between the
CONTRACTING GOVERNMENT and GRS.
K. Indemnification. GRS covenants and agrees to indemnify and hold harmless and
defend and does hereby indemnify, hold harmless, and defend CONTRACTING
GOVERNMENT, its officers and employees, from and against any and all suits or
claims for damages or injuries, including death, to persons or property, whether real
or asserted, arising out of any negligent act or omission on the part of the
contractor, its officers, agents, servants, employees, or subcontractors, and the
contractor does hereby assume all liability for injuries, claims or suits for damages
to persons, property, or whatever kind of character, whether real or asserted,
occurring during or arising out of the performance of this contract as a result of any
negligent act or omission on the part of the contractor, its officers, agents, servants,
employees, or subcontractors to the extent permitted by law. Please review this
master agreement letter and the attached schedules and indicate your acceptance by
having an official of CONTRACTING GOVERNMENT sign below.
L. Force Maieure. A force majeure event shall be defined to include governmental
decrees or restraints, acts of God (except that rain, wind, flood or other natural
phenomena normally expected for the locality, shall not be construed as an act of
God), work stoppages due to labor disputes or strikes, fires, explosions, epidemics,
riots, war, rebellion, and sabotage. If a delay or failure of performance by either
party to this contract results from the occurrence of a force majeure event, the delay
shall be excused and the time fixed for completion of the work extended by a period
equivalent to the time lost because of the event.
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Gabriel Roeder Smith & Company
M. Professional Standards. GRS will provide qualified personnel for each
engagement and follow all professional standards ascribed by the American
Academy of Actuaries and the Governmental Accounting Standards Board.
GABRIEL, ROEDER, SMITH & CO.
:
Title:
CONTRACTING GOVERNMENT
:
Title:
Date:
Date:
�s
Gabriel Roeder Smith & Company
Attachment A
Pricing of Services — Calendar Year 2013*
The price of the valuation is based on the following components:
a) Number of participants:
b) Number of retirement plans:
There is no additional charge if the employees participate in only one retirement plan. For
each additional retirement plan, the valuation fee is increased by $1,600.
c) Number of health plans:
There is no additional charge if the participants are covered under only one health plan.
For each additional health plan, the valuation fee is increased by $1,000.
d) Annual biennial or triennial valuation:
The valuation fee is increased by $1,200 for valuations which are intended to be used for
two fiscal years and by $2,400 for valuations which are intended to be used for three
fiscal years.
e) Claims analysis:
The valuation fee is increased by $2,000 if claims experience is required.
� Pricing discount:
Employers with very simple plans may be eligible for an $800 price reduction. The
engagement agreement will specify whether the pricing discount applies.
-� 159
Gabriel Roeder Smith & Company
❖ Pricing assumes 20% paid upon acceptance by the government of the engagement, 50%
upon receipt of the draft report and 30% upon acceptance of the final report.
v Fees for additional services and optional services that are not determined as `basic' will
be based on the following rates:
GRS Position Title Hourly Rates
Senior Consultant $395
Consultants
Senior Analysts
Actuarial Analysts
$310
$200
$170
Systems Analysts and Programmers $230
Administrative Support Staff $125
*Prices will be adjusted annually beginning in January 2014 based on changes in the Consumer
Price Index, All Urban Consumers, on a December over December basis. Current rates for your
plan are reflected in the engagement agreement sent with this document.
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Gabriel Roeder Smith & Company
INTERLOCAL AGREEMENT
FOR
COOPERATIVE PURCHASING
FOR
ACTUARIAL SHARED SERVICES
THIS INTERLOCAL AGREEMENT ("Agreement"), made and entered into pursuant to the Texas Interlocal
Cooperation Act, Chapter 791, Texas Government Code (the "AcY'), by and between the North Central Texas
Council of Governments, hereinafter referred to as "NCTCOG," having its principal place of business at 616 Six
Flags Drive, Arlington, Texas 76011, and a local government, created and operated to
provide one or more governmental functions and services, hereinafter referred to as "Participant," having its
principal place of business at
WITNESSETH
WHEREAS, NCTCOG is a regional planning commission and political subdivision of the State of Texas operating
under Chapter 391, Texas Local Government Code; and
WHEREAS, pursuant to the Act, NCTCOG is authorized to contract with eligible entities to perform governmental
functions and services, including the development of a standard approach for acquiring actuarial services; and
WHEREAS, in reliance on such authority, NCTCOG has a cooperative purchasing program under which it
contracts with eligible entities under the Act; and
WHEREAS, NCTCOG extended the original agreement with Gabriel, Roeder, Smith and Company to provide such
services to until September 30, 2014; and
WHEREAS, the Participant has represented that it is an eligible entity under the Act that by Administrative Action
has authorized this Agreement on , and that it desires to contract with NCTCOG
on the terms set forth below;
NOW, THEREFORE, NCTCOG and the PARTICIPANT do hereby agree as follows:
ARTICLE 1: LEGAL AUTHORITY
The Participant represents and warrants to NCTCOG that (1) it is eligible to contract with NCTCOG under the Act
because it's a local government, as defined in the Act, and (2) it possesses adequate legal authority to enter into this
Agreement.
ARTICLE 2: APPLICABLE LAWS
NCTCOG and the Participant agree to conduct all activities under this Agreement in accordance with all applicable
rules, regulations, and ordinances and laws in effect or promulgated during the term of this Agreement.
ARTICLE 3: WHOLE AGREEMENT
This Agreement and any attachments, as provided herein, constitute the complete contract between the parties
hereto, and supersede any and ail oral and written agreements between the parties relating to matters herein.
ARTICLE 4: BILLINGS
Billings will be generated for the Actuarial Shared Services through Gabriel Roeder Smith & Company based upon
Administrative Fee of $125 per valuation cycle (effective October 1, 2012). Each party paying for the performance
of said functions of government shall make those payments from current revenues available to the paying party.
ARTICLE 5: CHANGES AND AMENDMENTS
This Agreement may be amended only by a written amendment executed by both parties, except that any alterations,
additions, or deletions to the terms of this Agreement which are required by changes in Federal and State law or
regulations are automatically incorporated into this Agreement without written amendment hereto, and shall become
effective on the date designated by such law or regulation.
NCTCOG reserves the right to make changes in the scope of services offered through the Cooperative Purchasing
Program to be performed hereunder.
EXHIBIT "B"
161
THIS INSTRUMENT HAS BEEN EXECUTED IN TWO ORIGINALS BY THE PARTIES HERETO AS
FOLLOWS:
*Denotes required fields
NOTE� Facsimile copies of this document shall not be acceptable as ORIGINALS. �ncerscace �� rev. toios
* North Central Texas Council of Governments
Name of Participant (local government, agency, or non profit 616 Six Flags Drive, Arlington, Texas 760ll
corporation)
�
Mailing Address
*
City
*gy.
Signature of Authorized Official
�
Typed Name of Authorized Official
*
Typed Title of Authorized Official
State ZIP Code
Date
��2
Signature of Authorized Official
*Monte Mercer
Typed Name of Authorized Official
*Deputy Executive Director
Typed Title of Authorized Official Date