Loading...
Bartel Associates, LLC A2009-2109-1"21 AGREEMENT NO. A09- FOR PROFESSIONAL SERVICES BETWEEN THE CITY OF CHINO HILLS AND BARTEL ASSOCIATES, LLC THIS AGREEMENT, made and entered into this 10r" day of February, 2009, between the CITY OF CHINO HILLS, a municipal corporation, hereinafter referred to as "City" and BARTEL ASSOCIATES, LLC hereinafter referred to as "Consultant", In consideration of the mutual covenants and conditions set forth herein, the parties agree as follows: 1. SCOPE OF SERVICES. Consultant agrees to perform the services set forth in Exhibit A "SCOPE OF SERVICES" attached hereto and made a part hereof. Consultant shall submit its work to the City for its review after completing each phase of the project as described in Exhibit A, or when otherwise requested by the City. Consultant shall, at its own cost, make any revisions of its own work as required by the City and re -do, at its own cost, any work which the City finds unsatisfactory due to Consultant's or subcontractor's errors or omissions. Consultant represents and warrants that it has the qualifications, experience and facilities to properly perform said services in a thorough, competent and professional manner and shall, at all times during the term of this Agreement, have in full force and effect, all licenses required of it by law. Consultants shall begin its services under this Agreement on February 10, 2009. -1- 2. STATUS OF CONSULTANT. Consultant is and shall at all times remain as to the City a wholly independent contractor. The personnel performing the services under this Agreement on behalf of Consultant shall at all times be under Consultant's exclusive direction and control. Neither City nor any of its officers, employees or agents shall have control over the conduct of Consultant or any of Consultant's officers, employees or agents, except as set forth in this Agreement. Consultant shall not at any time or in any manner represent that it or any of its officers, employees or agents are in any manner officers, employees or agents of the City. Consultant shall not incur or have the power to incur any debt, obligation or liability whatever against City, or bind City in any manner. Consultant shall not disseminate any information or reports gathered or created pursuant to this Agreement without the prior written approval of City except information or reports required by government agencies to enable Consultant to perform its duties under this Agreement. 3. CONSULTANT'S KNOWLEDGE OF APPLICABLE LAWS. Consultant shall keep itself informed of applicable local, state and federal laws and regulations which may affect those employed by it or in any way affect the performance of its services pursuant to this Agreement. Consultant shall observe and comply with all such laws and regulations affecting its employees. City and its officers and employees, shall not be liable at law or in equity as a result of any failure of Consultant to comply with this section. Q. PERSONNEL. Consultant shall make every reasonable effort to maintain the stability and continuity of Consultant's staff assigned to perform the services hereunder and shall obtain the approval of the City Manager of all proposed staff members performing services under this Agreement prior to any such performance. 5. COMPENSATION AND METHOD OF PAYMENT. Compensation to the Consultant shall be as set forth in Exhibit B attached hereto and made a part hereof. Payments shall be made within thirty (30) days after receipt of each invoice as to all undisputed fees. If the City disputes any of consultant's fees it shall give written notice to Consultant within 30 days of receipt of a invoice of any disputed fees set forth on the invoice. 6. ADDITIONAL SERVICES OF CONSULTANT. Consultant shall not be compensated for any services rendered in connection with its performance of this Agreement which are in addition to those set forth herein or listed in Exhibit A, unless such additional services are authorized in advance and in writing by the City Manager. Consultant shall be compensated for any additional services in the amounts and in the manner as agreed to by City Manager and Consultant at the time City's written authorization is given to Consultant for the performance of said services. 7. ASSIGNMENT. All services required hereunder shall be performed by Consultant, its employees or personnel under direct contract with Consultant. -3- Consultant shall not assign to any subcontractor the performance of this Agreement, nor any part thereof, nor any monies due hereunder, without the prior written consent of City Manager. 8. FACILITIES AND RECORDS. Consultant shall maintain complete and accurate records with respect to sales, costs, expenses, receipts and other such information required by City that relate to the performance of services under this Agreement. Consultant shall maintain adequate records of services provided in sufficient detail to permit an evaluation of services. All such records shall be maintained in accordance with generally accepted accounting principles and shall be clearly identified and readily accessible. Consultant shall provide free access to the representatives of City or its designees at reasonable times to such books and records, shall give City the right to examine and audit said books and records, shall permit City to make transcripts therefrom as necessary, and shall allow inspection of all work, data, documents, proceedings and activities related to this Agreement. Such records, together with supporting documents, shall be maintained for a period of three (3) years after receipt of final payment. 9. TERMINATION OF AGREEMENT. This Agreement may be renewed annually, but will terminate on June 30, 2010, unless otherwise extended in advance and in writing by the City Manager. This Agreement may be terminated with or without cause by either party upon 30 days written notice. In the event of such termination, Consultant shall be compensated for non -disputed fees under the terms of this Agreement up to the date of termination. 10. COOPERATION BY CITY. All public information, data, reports, records, and maps as are existing and available to City as public records, and which are necessary for carrying out the work as outlined in the Scope of Services, shall be furnished to Consultant in every reasonable way to facilitate, without undue delay, the work to be performed under this Agreement. 11. OWNERSHIP OF DOCUMENTS. Upon satisfactory completion of, or in the event of termination, suspension or abandonment of, this Agreement, all original data, notes, computer files, files and other documents provided to Bartel Associates by the City shall, remain the sole property of the City. With respect to computer files, Consultant shall provide to the City, upon reasonable written request by the City, the original information (data, notes, computer files, files and other documents) provided to Bartel Associates by the City. Upon satisfactory completion of, or in the event of termination, suspension or abandonment of, this Agreement, all final work product(s) (or, if final work product(s) are not available, draft work products) including studies, reports, data, notes, computer files, files and other documents prepared and intended as a final work product in the course of providing the services to be performed pursuant to this Agreement shall, become the sole property of the City. 12. RELEASE OF INFORMATION/CONFLICTS OF INTEREST. -5- (a) All information gained by Consultant in performance of this Agreement shall be considered confidential and shall not be released by Consultant without City's prior written authorization excepting that information which is a public record and subject to disclosure pursuant to the California Public Records Act, Government Code § 6250, et seg. Consultant, its officers, employees, agents or subcontractors, shall not without written authorization from the City Manager or unless requested by the City Attorney, voluntarily provide declarations, letters of support, testimony at depositions, response to interrogatories or other information concerning the work performed under this Agreement or relating to any project or property located within the City. Response to a subpoena or court order shall not be considered "voluntary" provided Consultant gives City notice of such court order or subpoena. If Consultant or any of its officers, employees, consultants or subcontractors does voluntarily provide information in violation of this Agreement, City has the right to reimbursement and indemnity from Consultant for any damages caused by Consultant's conduct, including the City's attorney's fees. Consultant shall promptly notify City should Consultant, its officers, employees, agents or subcontractors be served with any summons, complaint, subpoena, notice of deposition, request for documents, interrogatories, request for admissions or other discovery request, court order or subpoena from any party regarding this Agreement and the work performed thereunder or with respect to l� any project or property located within the City. City retains the right, but has no obligation, to represent Consultant and/or be present at any deposition, hearing or similar proceeding. Consultant agrees to cooperate fully with City and to provide City with the opportunity to review any response to discovery requests provided by Consultant. However, City's right to review any such response does not imply or mean the right by City to control, direct, or rewrite said response. (b) Consultant covenants that neither they nor any officer or principal of their firm have any interest in, or shall they acquire any interest, directly or indirectly which will conflict in any manner or degree with the performance of their services hereunder. Consultant further covenants that in the performance of this Agreement, no person having such interest shall be employed by them as an officer, employee, agent, or subcontractor without the express written consent of the City Manager. Consultant further covenants that Consultant has not contracted with nor is performing any services directly or indirectly with any developer(s) and/or property owner(s) and/or firm(s) and/or partnerships owning property in the City or the study area and further covenants and agrees that Consultant and/or its subcontractors shall provide no service or enter into any agreement or agreements with any developer(s) and/or property owner(s) and/or firm(s) and/or partnerships owning property in the City or the study area prior to the completion of the work under this Agreement without the express written consent of the City Manager. -7- 13. DEFAULT. in the event that Consultant is in default of any of the provisions of this Agreement, City shall have no obligation or duty to continue compensating Consultant for any work performed after the date of default and can terminate this Agreement immediately by written notice to the Consultant. 14. INDEMNIFICATION. (a) Consultant represents it is skilled in the professional calling necessary to perform the services and duties agreed to hereunder by Consultant, and City relies upon the skills and knowledge of Consultant. Consultant shall perform such services and duties consistent with the standards generally recognized as being employed by professionals performing similar service in the State of California. (b) Consultant is an independent contractor and shall have no authority to bind City nor to create or incur any obligation on behalf of or liability against City, whether by contract or otherwise, unless such authority is expressly conferred under this agreement or is otherwise expressly conferred in writing by City. City, its elected and appointed officials, officers, agents, employees and volunteers (individually and collectively, "Indemnitees") shall have no liability to Consultant or to any other person for, and Consultant shall indemnify, defend, protect and hold harmless the Indemnitees from and against, any and all liabilities, claims, actions, causes of action, proceedings, suits, damages, judgments, liens, levies, costs and expenses of whatever nature, including reasonable attorneys' ICE fees and disbursements (collectively "Claims"), which the Indemnitees may suffer or incur or to which the Indemnitees may become subject by reason of or arising out of any injury to or death of any person(s), damage to property, loss of use of property, economic loss or otherwise occurring as a result of or allegedly caused by the performance or failure to perform by Consultant of Consultant's services under this agreement or the negligent or willful acts or omissions of Consultant, its agents, officers, directors or employees, in performing any of the services under this agreement. If any action or proceeding is brought against the Indemnitees by reason of any of the matters against which Consultant has agreed to indemnify the Indemnitees as above provided, Consultant, upon notice from the CITY, shall defend the Indemnitees at Consultant's expense by counsel acceptable to the City. The Indemnitees need not have first paid any of the matters as to which the Indemnitees are entitled in order to be so indemnified. The insurance required to be maintained by Consultant under paragraph 15 shall ensure Consultant's obligations under this paragraph 14(b), but the limits of such insurance shall not limit the liability of Consultant hereunder. The provisions of this paragraph 14(b) shall survive the expiration or earlier termination of this agreement. The Consultant's indemnification does not extend to Claims occurring as a result of the City's negligent or willful acts or omissions. 15. INSURANCE. mom A. Insurance Reauirements. Consultant shall provide and maintain insurance acceptable to the City Attorney in full force and effect throughout the term of this Agreement, against claims for injuries to persons or damages to property which may arise from or in connection with the performance of the work hereunder by Consultant, its agents, representatives or employees. Insurance is to be placed with insurers with a current A.M. Best's rating of no less than ANIL Consultant shall provide the following scope and limits of insurance: least as broad as: (1) Minimum Scooe of Insurance. Coverage shall be at (a) Insurance Services Office form Commercial General Liability coverage (Occurrence Form CG 0001). (b) Insurance Services Office form number CA 0001 (Ed. 1187) covering Automobile Liability, including code 1 "any auto" and endorsement CA 0025, or equivalent forms subject to the written approval of the City. (c) Workers' Compensation insurance as required by the Labor Code of State of California and Employer's Liability insurance and covering all persons providing services on behalf of the Consultant and all risks to such persons under this Agreement. (d) Errors and omissions liability insurance appropriate to the Consultant's profession. -10- (2) Minimum Limits of Insurance. Consultant shall maintain limits of insurance no less than: (a) General Liability: $1,000,000 per occurrence for bodily injury, personal injury and property damage. If Commercial General Liability Insurance or other form with a general aggregate limit is used, either the general aggregate limit shall apply separately to the activities related to this Agreement or the general aggregate limit shall be twice the required occurrence limit. (b) Automobile Liability: $1,000,000 per accident for bodily injury and property damage. (c) Workers' Compensation and Employer's Liability: Workers' Compensation as required by the Labor Code of the State of California and Employers Liability limits of $1,000,000 per accident. claim. (d) Errors and Omissions Liability: $1,000,000 per B Other Provisions, Insurance policies required by this Agreement shall contain the following provisions: (1) All Policies. Each insurance policy required by this paragraph 16 shall be endorsed and state the coverage shall not be suspended, voided, canceled by the insurer or either party to this Agreement, reduced in -11- coverage or in limits except after 30 days' prior written notice by Certified mail, return receipt requested, has been given to the City. (2) General Liabilitv and Automobile Liabilitv Coveraoes. (a) City, its officers, officials, and employees and volunteers are to be covered as additional insureds as respects: liability arising out of activities Consultant performs, products and completed operations of Consultant; premises owned, occupied or used by Consultant, or automobiles owned, leased or hired or borrowed by Consultant. The coverage shall contain no special limitations on the scope of protection afforded to City, its officers, officials, or employees. (b) Consultant's insurance coverage shall be primary insurance as respect to City, its officers, officials, employees and volunteers. Any insurance or self insurance maintained by City, its officers, officials, employees or volunteers shall apply in excess of, and not contribute with, Consultant's insurance. (c) Consultant's insurance shalt apply separately to each insured against whom claim is made or suit is brought, except with respect to the limits of the insurer's liability. (d) Any failure to comply with the reporting or other provisions of the policies including breaches of warranties shall not affect coverage provided to the City, its officers, officials, employees or volunteers. -12- (3) Workers' Compensation and Emolover's Liabilitv Coverage. Unless the City Manager otherwise agrees in writing, the insurer shall agree to waive all rights of subrogation against City, its officers, officials, employees and agents for losses arising from work performed by Consultant for City. C. Other Reauirements. Consultant agrees to deposit with City, at or before the effective date of this contract, certificates of insurance necessary to satisfy City that the insurance provisions of this contract have been complied with. The City Attorney may require that Consultant furnish City with copies of original endorsements effecting coverage required by this Section. The certificates and endorsements are to be signed by a person authorized by that insurer to bind coverage on its behalf. City reserves the right to inspect complete, certified copies of all required insurance policies, at any time. (1) Consultant shall furnish certificates and endorsements from each subcontractor identical to those Consultant provides. (2) Any deductibles or self -insured retentions must be declared to and approved by City. At the option of the City, either the insurer shall reduce or eliminate such deductibles or self -insured retentions as respects the City, its officers, officials, employees and volunteers; or the Consultant shall procure a bond guaranteeing payment of losses and related investigations, claim administration, defense expenses and claims. -13- (3) The procuring of such required policy or policies of insurance shall not be construed to limit Consultant's liability hereunder nor to fulfill the indemnification provisions and requirements of this Agreement. 16. NONDISCRIMINATION/NONPREFERENTIAL TREATMENT STATEMENT. In performing this Agreement, the Parties shall not discriminate or grant preferential treatment on the basis of race, sex, color, age, religion, sexual orientation, disability, ethnicity, or national origin, and shall comply, to the fullest extent allowed by law, with all applicable local, state and federal laws relating to nondiscrimination. 17. UNAUTHORIZED ALIENS. Consultant hereby promises and agrees to comply with all of the provisions of the Federal Immigration and Nationality Act (8 U.S.C.A. & 1101, et seq.), as amended; and in connection therewith, shall not employ unauthorized aliens as defined therein. Should Consultant so employ such unauthorized aliens for the performance of work and/or services covered by this contract, and should the Federal Government impose sanctions against the City for such use of unauthorized aliens, Consultant hereby agrees to, and shall, reimburse City for the cost of all such sanctions imposed, together with any and all costs, including attorneys' fees, incurred by the City in connection therewith. 18. ENTIRE AGREEMENT. This Agreement is the complete, final, entire and exclusive expression of the Agreement between the parties hereto and supersedes any and all other agreements, either oral or in writing, between the -14- parties with respect to the subject matter herein. Each party to this Agreement acknowledges that no representations by any party which are not embodied herein and that no other agreement, statement, or promise not contained in this Agreement shall be valid and binding. 19. GOVERNING LAW. The City and Consultant understand and agree that the laws of the State of California shall govern the rights, obligations, duties and liabilities of the parties to this Agreement and also govern the interpretation of this Agreement. Any litigation concerning this Agreement shall take place in the San Bernardino County Superior Court. 20. ASSIGNMENT OR SUBSTITUTION. City has an interest in the qualifications of and capability of the persons and entities who will fulfill the duties and obligations imposed upon Consultant by this Agreement. In recognition of that interest, neither any complete nor partial assignment of this Agreement may be made by Consultant nor changed, substituted for, deleted, or added to without the prior written consent of City. Any attempted assignment or substitution shall be ineffective, null, and void, and constitute a material breach of this Agreement entitling City to any and all remedies at law or in equity, including summary termination of this Agreement. Subcontracts, if any, shall contain a provision making them subject to all provisions stipulated in this Agreement. 21. MODIFICATION OF AGREEMENT. The terms of this Agreement can only be modified in writing approved by the City Council and the Consultant. -15- The parties agree that this requirement for written modifications cannot be waived and any attempted waiver shall be void. 22. AUTHORITY TO EXECUTE. The person or persons executing this Agreement on behalf of Consultant warrants and represents that he/she/they has/have the authority to execute this Agreement on behalf of his/her/their corporation and warrants and represents that he/she/they has/have the authority to bind Consultant to the performance of its obligations hereunder. 23. NOTICES. Notices shall be given pursuant to this Agreement by personal service on the party to be notified, or by written notice upon such party deposited in the custody of the United States Postal Service addressed as follows: City. Attention: City Clerk City of Chino Hills 2001 Grand Avenue Chino Hills, California 91709-4868 Consultant. Attention: John E. Bartel, President Bartel Associates, LLC 411 Bore[ Avenue, Suite 445 San Mateo, CA 94402 The notices shall be deemed to have been given as of the date of personal service, or three (3) days after the date of deposit of the same in the custody of the United States Postal Service. -16- 24. SEVERABILITY. The invalidity in whole or in part of any provision of this Agreement shall not void or affect the validity of the other provisions of this Agreement. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed the day and year first above written. BARTEL ASSOCIATES, LLC By- L 9--, John E. Bartel Title President CITY OF CHINO HILLS Douglas N. La Oe, City Manager -17- E4'lbit A SECTION 4 WORK PLAN Project Approach We believe that there are two levels to a GASB 45 actuarial valuation. The first level is technical compliance with GASB 45. Some public employers may hire an actuary to assist only with teclmicai compliance with the standard, limiting the scope of services to preparing the required financial reporting and disclosure. The second level goes beyond reporting and disclosure issues, and includes assisting management with an understanding of GASB 45, the actuarial assumptions and methods, the valuation results, the financial statement impact, funding policies and options, and a review of the plan design. Our actuarial valuation process includes the following steps: r Data Collection - The City will provide documentation of plan provisions, healthcare providers, claim information for self -insured plans, and employee census information including individual plan and coverage elections. If there are apparent differences between the plan documentation and the substantive plan, we will work with the City to clarify its actual retiree healthcare obligations. GASB 45 requires that the actuarial valuation reflect the substantive plan. ■ Data Reconciliation - We will review the plan and participant data and provide a list of any questions. ■ Methods & Assumptions — We will recommend the actuarial assumptions and funding methods with the City's input. We generally present results using the Entry Age Normal Cost funding method. This method is used by Ca1PERS to fund their pension plans and produces an annual cost that is intended to be a level percentage of payroll. It is also one of two methods required by Ca1PERS for agencies that prefund retiree medical benefits with CERBT. We also present results using alternative amortization periods. We can review additional funding and amortization methods at the City's request. GASB 45 requires that actuarial assumptions be consistent with retirement plan assumptions. Due in part to our significant experience with 1937 Act Retirement Systems, we have the ability to clearly communicate the actuarial assumption selection process to our clients. The actuarial assumptions used for the valuation may include: discount rate, general inflation, payroll increases, healthcare trend, mortality, termination, disability, retirement, participation at retirement, healthcare plan at retirement, Medicare eligibility, marital status at retirement, spouse's age at retirement, and dependent coverage at retirement. Agencies that do not participate in Ca1PERS PEMHCA can fund their retiree healthcare plans with CalPERS. Healthcare plans funded through Ca1PERS may be required to use certain methods and assumptions. For example, Ca1PERS currently requires a discount rate of 7.75% for liabilities funded through the CERBT. It is important that the City understand the methods and assumptions used and their impact on Bartel Associates, LLC 10 City of China Hills SECTION 4 WORK PLAN GASB 45 results as these are actually assumptions set by the City, subject to our actuarial guidance and standards of practice. ■ Valuation Processing - We will prepare the actuarial valuation using Prc Val software, a comprehensive and widely used and respected retirement benefit valuation system developed by Winklevoss Technologies, LLC. Our procedures for quality control include the checking of computer programs and calculations by a second actuary and the review of results and presentation materials by senior actuaries. We keep client information secure by encrypting all files kept on our computers and by not accepting census data with Social Security numbers. ■ Preliminary Results Meeting -We will meet with the City to review the preliminary valuation results. Our preliminary results presentation will be in a discussion outline format and will include a benchmark survey comparing the City's GASB 45 information with other agency GASB 45 plan studies prepared by Bartel Associates. ■ Results Meeting -We will meet with the City Director to review the valuation results. Our preliminary results presentation will be used. ■ Executive Summary - We provide the City with a written executive summary of the results.. ■ Valuation Report - We can, at the City's request, prepare a formal valuation report including an actuarial certification. We can also prepare a draft GASB 45 financial statement footnote, if needed. ■ CalPERS Certification - If the City pre -funds its retiree healthcare benefits through CERBT, it Will need to provide an actuarial certification, a funding policy certification, and an Excel spreadsheet containing valuation information to CalPERS in addition to a formal valuation report. We can prepare this information at the City's request. We strongly believe that through our years of experience we have developed an efficient and effective process for preparing and presenting actuarial valuations. Actuarial Valuation Discussion Outline Our actuarial valuation discussion outlines are clear, concise and understandable to non - actuaries. Our outlines include: s Summary of plan provisions. ■ Summary of the data used for the valuation: • employee counts and average ages, service, pay, etc. by employee group • active and retiree coverage elections by healthcare plan • retiree coverage (single, 2-party, family) statistics by age • active age/service distributions ■ Summary of actuarial methods and assumptions. Bartel Associates, LLC I I City of Chino Hills SECTION 4 WORK PLAN ■ GASB 45 accounting information, including benefit costs and obligations as outlined below. ■ Comparison of the City's costs and obligations with that of other agencies in our database. The discussion outline will include the following GASB 45 information: ■ Actuarial value of benefits, including: • Present Value of Future Benefits • Actuarial Accrued Liability (AAL), broken down by active and retied employees • Plan Assets • Unfunded Actuarial Accrued Liability (UAAL) • Normal Cost • Expected Benefit Payments ■ Annual Required Contribution (ARC), as a dollar amount and as a percentage of payroll, identifying: • Normal Cost • Amortization of the UAAL ■ Annual OPEB Cost (AOC). ■ Net OPEB Obligation (NOO). ■ Sensitivity analysis, including: • 2 investment return scenarios (e.g., not funded and funded) • Alternative amortization periods for the UAAL (e.g., 20 and 30 years). ■ Projected contributions and AOC versus "pay-as-you-go" costs. Project Schedule We usually recommend an 8-week project schedule for the actuarial valuation. For example, if the City provides census data and plan information on February 2 2009, a possible work schedule would be as follows: Proiect Stems 1) The City provides participant data and plan information to Bartel Associates. 2) Bartel Associates meets with the City to present preliminary valuation results. 3) Bartel Associates provides a final valuation discussion outline. Estimated Dates February 2, 2009 March 16, 2009 6 weeks after (1) March 30, 2009 2 weeks after (2) Bartel Associates, LLC 12 City of Chino Hills SECTION 4 WORK PLAN We can complete the valuation within this timeframe if all the information requested is provided quickly and accurately. The City has requested that the actuarial study be completed by July 31, 2009. We usually recommend at least 8 weeks from data collection to presenting preliminary results because our experience has shown that there may be points during the project when the City may desire to take sufficient time to consider method, assumptions, and study alternatives. City Staff The City's staff will be responsible for gathering the information outlined in Section 7. The amount of time needed to do this will depend on the availability of the data at the City. City staff should also be available for at least one meeting to present preliminary results. Our meetings generally take from 2 to 3 hours each, depending on the City's needs. Bartel Associates, LLC 13 City of Chino Hills &HIbit- 5 SECTION 6 FEES Our fees are a function of the hours worked by each professional on a project and their hourly billing rates. Our hourly rates are as follows: Team Member Hourly Rate Partner $250 - $300 Assistant Vice President $200 - $225 Senior Actuarial Analyst $150 Actuarial Analyst $125 Administrative Support $75 We have prepared a budget based on the City's retiree healthcare plan design and the number of employees and eligible retirees using the information provided in the REP. We expect that our fees will be approximately $11,500 including two meetings with the City to present valuation results. The City should be certain that all responses to the RFP include the same project elements when comparing estimated fees. Our estimated fee will be lower if any of these items are not needed. Proiect Elements Estimated Fee GASB 45 Actuarial Valuation (no -funding and funding discount rates) $ 8,800 Preliminary Results Meeting 600 Executive Summary 1,500 Results Meeting with Director 600 Total $ 11,500 We expect our fees for the subsequent 2 valuations and intervening roll -forward valuations to increase by no more than the rate of inflation for the Los Angeles area over the above amount. Note that our fee estimate assumes that: ■ The only retiree medical benefit is for employees electing coverage at retirement under PEMHCA. ® Post -retirement benefits for the valuation will include medical benefits, but no City -paid dental, vision, or life insurance benefits. ■ Employees are not permitted to continue their active Kaiser coverage into retirement based on blended active/retiree premiums ■ Participant census data will be provided completely and accurately in an Excel spreadsheet with one record per participant. ■ GASB 45 costs and liabilities will be presented for the plan as a whole with no breakdowns for employee groups. Bartel Associates, LLC 15 City of Chino Hills SECTION 6 FEES ■ Costs and liabilities will be provided using one funding method and one set of assumptions including 2 discount rates: a `hot funded" discount rate representative of the expected future Ion; -term return of the City's investment fund and a "funded" discount rate representative of the expected future long-term return of a segregated investment fund. If the City is considering funding with CERBT, the funded discount rate will be 7.75% as required by CaIPERS. ■ Costs and liabilities will be provided using one funding method and one set of assumptions. ■ We will have two meetings with City to valuation results. We will provide a "Preliminary Results" discussion outline for these meetings. ■ Our presentation outline and valuation' report will contain the information needed for the City's CAFR. However, we have included a fee estimate to prepare a draft financial statement footnote at the City's request. ■ There will be no additional charges for expenses (e.g., travel, telephone, copying, etc.). The hourly rates listed above include our costs for these items. ■ We based our estimated fee on our best guess of the amount of time required for the project. While this represents the likely cost of the study, it is possible that unexpected work or complexities may arise that will require additional time. We understand the City's budgeting needs and agree not to bill more than $13,000 one meeting with the City unless the scope of the project changes as described below. ■ We will invoice the City monthly based on time incurred, subject to the above maximum fee. The above fees might be higher if the scope of the project changes from that described above, for example: ■ The retiree healthcare promise differs from the information provided in the RFP or if the City is not in compliance with CalPERS PEMHCA rules. ■ Participant data is not relatively clean and free from internal inconsistencies or is not provided in the forrnat requested. ■ Valuation results are needed for additional actuarial assumption sets, funding methods, contribution policies, or alternative plan designs. For example, if the City funds less than the ARC with CaIPERS, the discount rate used for the valuation will be less than 7.75%. For example, a sensitivity analysis of the medical trend assumption might cost between $500 and $1,060. ■ The City requests additional meetings, such as a planning meeting, a meeting with the City's outside auditors, or a presentation to the City Council. We will base our fee for additional meetings on our billing rates and the time needed for the meetings and preparation. For example, a 2-hour meeting where we can use our discussion outline with no additional preparation would cost about $600. Bartel Associates, LLC 16 City of Chino Hills SECTION 6 FEES ■ Our presentation outline will contain the information needed for the City's CAFR. We can provide additional reports, such as a formal valuation report or a draft financial statement footnote, at the City's request. We estimate our fees will be $2,000 for a formal valuation report and $1,000 for a draft financial statement footnote. ■ If the City pre -funds its retiree healthcare benefits through CERBT, it will need to provide CalPERS a formal valuation report, an actuarial certification, a funding policy certification, and an Excel spreadsheet containing the valuation results and funding information. In lieu of a formal valuation report, CalPERS will accept our results discussion outline with a certification and cover letter summarizing the valuation results. Our estimated fees to prepare the information required by CaIPERS are $500 for the certifications and Excel spreadsheet and $750 for a certified discussion outline and cover letter. If the City prefers a formal valuation report rather than a certified discussion outline for CalPERS or its auditors, our fee will be approximately $2,000 for a formal report. Additional studies, such as to explore potential benefit design changes, will be billed at our hourly rates. We will provide a fee estimate after the scope of the project is defined and before work is begun. Plan Design Study The City requested a study to help design the current retiree healthcare program. We recommend discussing the scope of the study at a GASB 45 planning meeting, or over the telephone. Furthermore, the City will be in the best position to help define benefit alternatives after we present our preliminary results showing the costs and obligations of the current retiree healthcare program. After we define the scope of the study we can estimate our fees, which will be based on our hourly rates and the estimated time needed for the study. For example, a simple study that maintains the basic design but increases the benefit levels may cost between $1,000 and $2,000. A more comprehensive study that significantly changes the structure of the current design might cost between $5,000 and $10,000. Bartel Associates, LLC 17 City of Chino Hills