Actuarial Valuation of Post-Employment Benefits Copyright 2014
City of Dubuque Consent Items # 5.
ITEM TITLE: Actuarial Valuation of Post-Employment Benefits
SUMMARY: City Manager recommending that Menard Consulting, Inc.,
be selected to conduct the GASB45 actuarial valuation for
2017.
SUGGESTED DISPOSITION: Suggested Disposition: Receive and File; Approve
ATTACHMENTS:
Description Type
Actuarial Valuation of Post Employment Benefit Plans- City Manager Memo
MVM Memo
Staff Memo Staff Memo
Menard Consulting Actuarial Services Agreement Supporting Documentation
THE CITY OF Dubuque
DUB E i"
Masterpiece on the Mississippi 2007.2012.2013
TO: The Honorable Mayor and City Council Members
FROM: Michael C. Van Milligen, City Manager
SUBJECT: Actuarial Valuation of Post Employment Benefit Plans
DATE: January 10, 2017
The City completed an actuarial valuation of the post employment benefit plans in 2009,
2011, 2013 and 2015, and the City is required to do another actuarial valuation in 2017.
Personnel Manager Randy Peck is recommending that Menard Consulting, Inc. be
selected to conduct the GASB-45 actuarial valuation for 2017.
1 concur with the recommendation and respectfully request Mayor and City Council
approval.
ZIA-z k�4 ZyL1 -A^--
Mic ael C. Van Milligen
MCVM:jh
Attachment
cc: Crenna Brumwell, City Attorney
Cindy Steinhauser, Assistant City Manager
Teri Goodmann, Assistant City Manager
Randy Peck, Personnel Manager
THE CITY Or ,,� Dubuque
DUBE AlbpmedeaCity
Masterpiece on the Mississippi
2007
TO: Michael C. Van Milligen, City Manage
FROM: Randy Peck, Personnel Manager
SUBJECT: Actuarial Valuation of Post Employment Benefit Plans
DATE: December 28, 2016
Actuarial valuations of our post-employment benefit plans were completed in 2009,
2011, 2013 and 2015. We are required to do another actuarial valuation in 2017. The
City provides post employment benefits for eligible participants who are enrolled in City
sponsored health plans. The benefits are provided in the form of an implicit rate
subsidy where pre-age 65 retirees receive health insurance coverage by paying a
combined retiree/active rate for the self-insured medical and prescription drug plan and
an explicit rate subsidy where the City pays for the full cost of the fully insured life
insurance plan.
I received quotes from two actuarial firms to perform the actuarial valuation. Quotes
were received from:
• SilverStone Group, Omaha, Nebraska — Cost - $5,450
• Menard Consulting, Inc., Addison, Illinois — Cost - $2,500
1 recommend that Menard Consulting Inc. be selected to conduct the GASB-45 actuarial
valuation for 2017.
The Actuarial Services Agreement has been reviewed by Assistant City Attorney
Maureen Quann and she found the terms to be acceptable. I request that the City
Council pass a motion approving the Agreement and authorizing you to sign the
Agreement.
Since we will be implementing GASB-75 in 2018, we will be doing an actuarial valuation
in 2017 and 2018.
RP:Imh
a
Menard Consulting,Inc.
1690 W.Lake Street,Suite I MC, Inc
Addison,11,60101
-lel: (630)228-06'76 Menard Consulting, Inc.
wiv .MenardConsult.corn Actuaries &
wConsultants
November 1, 2016
Mr.Randy Peck
Personnel Manager
City of Dubuque
City Hall-50 West 13th Street
Dubuque,IA 52001
RE: Fiscal Year 2017 GASB 45 Actuarial Valuation Services
Dear Mr. Peck:
Menard Consulting, Inc. ("Menard") appreciates the opportunity to provide actuarial consulting services to the
City of Dubuque ("Client") in connection with GASB 45 financial reporting requirements. This is the agreement
for the project.
Project Scope& Fees
The following services will be provided at the fee indicated.
Core Services
- Prepare Actuarial Valuation report(includes footnote disclosure information for audit)
- Initial Kick-Off Discussion
- Discussion(s)re.the Actuarial Report
- Discussion(s)with Auditors re. Actuarial Report
- Valuation Update&Consultation with Auditors in Off Valuation Years
Fee for the Fiscal Year 2017 Actuarial Valuation
- Calculations under GASB 45: $2,500
- Calculations under GASB 75 $2,900
Services include roll-forward calculations in interim years at no additional cost.
This fee is consistent with that quoted in our August 26,2016 proposal.
c
Mr. Randy Peck
November 1, 2016
Page 2
Professional fees will be invoiced as follows:
• %2 the total fee upon commencement of work
• Remaining balance upon delivery of report
Invoice payment is due and payable within 30 days. Fees are all-inclusive of professional service time and
expenses.
You will not be charged more than the fee quoted above unless there is a signed Addendum to this
Engagement Letter.
General Business Terms for this engagement are attached and are incorporated into this Engagement Letter by
this reference.
This Engagement Letter, together with the General Business Terms, constitute the entire agreement between the
City of Dubuque and Menard Consulting, Inc. with respect to the subject matter hereof and supersede all other
oral and written.representations,understanding, or agreements relating to the subject matter hereof.
Please indicate your agreement by signing the signature page of this letter and returning it. If you have any
questions,please call me at(630)228-0676.
Sincerely,
Menard Consulting,Inc.
144 4, .
John Ritchie,ASA,MAAA
Mr, Randy Peck
November 1, 2016
Page 3
AGREEMENT
C„ Ina
The services and terms described in the foregoing Engagement Letter dated November 1, 2016 to provide OPEB
Actuarial Valuation Services for the City of Dubuque •and the attached General Business Terms are hereby
acceptable. We agree to the terms specified herein.
Accepted and Agreed: City of Dubuque, Iowa
By:
Title:
Date:
Michael C. Van Milligen
(Print)
(Signature)
City Manager
lr
C
Mr. Randy Peck
November 1, 2016
Page 4
GENERAL BUSINESS TERMS
1. Services
It is understood and agreed that Menard Consulting, Inc.'s services may include advice and recommendations,but all decisions in
connection with the implementation of such advice and recommendations shall be the responsibility of,and made by,the Client.In
connection with its services hereunder,Menard Consulting,Inc.shall be entitled to rely on all decisions and approvals of the Client.
2. Payment of Invoices
Properly submitted invoices where payment is not received within thirty(30)days of the invoice date shall accrue a late charge of
the lesser of 1.0%per month or the highest rate allowable by law,in each case compounded monthly to the extent allowable by law.
Without limiting its rights or remedies, Menard Consulting, Inc, shall have the right to halt or terminate its services entirely if
payment is not received within thirty (30) days of the invoice date. Menard Consulting, Inc. shall also have the right at their
discretion to waive any late charges accrued.
3. Term
Unless terminated sooner in accordance with its terms, this engagement shall terminate on the completion of Menard Consulting,
Inc.'s services hereunder.This engagement may be terminated by either party at any time by giving written notice to the other party
not less than thirty(30)days before the effective date of termination,
4. Ownership
a) Menard Consulting, Inc. Technology. Menard Consulting, Inc. has created, acquired, or otherwise has rights in, and may, in
connection with the performance of services hereunder,employ,provide,modify, create,acquire or otherwise obtain rights in
various concepts, ideas, methods, methodologies, procedures, processes, know-how, and techniques (including, without
limitation, function, process, system and data models); templates; generalized features of the structure, sequence, and
organization of software, user interfaces and screen designs; general purpose consulting and software tools, utilities and
routines;and logic,coherence,and methods of operation of systems(collectively,the"Menard Consulting,Inc.Technology").
b) Ownership of Deliverables.Except as provided below,upon fill and final payment to Menard Consulting,Inc. hereunder,the
tangible items specified as deliverables or work product in the arrangement letter to which these terms are attached (the
"Deliverables") shall become the property of the Client. To the extent that any Menard Consulting, Inc. Technology is
contained in any of the Deliverables, Menard Consulting, Inc, grants the Client, upon full and final payment to Menard
Consulting,Inc,hereunder,a royalty-free,fully paid-up,worldwide,non-exclusive license to use such Menard Consulting,Inc.
Technology in connection with the Deliverables,
c) Ownership of Menard Consulting, Inc. Property. To the extent that Menard Consulting, Inc. utilizes any of its property
(including, without limitation, the Menard Consulting, Inc. Technology or any hardware or software of Menard Consulting,
Inc.)in connection with the performance of services hereunder,such property shall remain the property of Menard Consulting,
Inc.and,except for the license expressly granted in the preceding paragraph,the Client shall acquire no right or interest in such
property.Notwithstanding anything herein to the contrary,the parties acknowledge and agree that(a)Menard Consulting,Inc.
shall own all right,title, and interest, including, without limitation,all rights under all copyright, patent and other intellectual
property laws, in and to the Menard Consulting, Inc. Technology and (b) Menard Consulting, Inc. may employ, modify,
disclose, and otherwise exploit the Menard Consulting, Inc. Technology(including, without limitation, providing services or
creating programming or materials for other clients). Menard Consulting, Inc, does not agree to any terms that may be
construed as precluding or limiting in any way its right to (a) provide consulting or other services of any kind or nature
whatsoever to any person or entity as Menard Consulting,Inc.,in its sole discretion,deems appropriate or(b)develop for itself,
or for others,materials that are competitive with those produced as a result of the services provided hereunder, irrespective of
their similarity to the Deliverables.
5. Limitation on Warranties
This is a Services Engagement. Menard Consulting, Inc, warrants that it shall perform services hereunder in good faith. Menard
Consulting,Inc.disclaims all other warranties,either express or implied,including,without limitation,warranties of merchantability
and fitness for a particular purpose.
Mr. Randy Peck
November 1, 2016
Page 5
6. Limitation on Damages and Indemnification
a) The Client agrees that Menard Consulting,Inc, and its personnel shall not be liable to the Client for any claims, liabilities,or
expenses relating to this engagement for an aggregate amount in excess of the fees paid by the Client to Menard Consulting,
Inc.pursuant to this engagement,except to the extent finally judicially determined to have resulted primarily from negligence,
or the bad faith or intentional misconduct of Menard Consulting,Inc.In no event shall Menard Consulting,Inc.or its personnel
be liable for consequential, special, indirect, incidental, punitive or exemplary loss, damage, or expense relating to this
engagement.
b) The Client shall indemnify and hold harmless Menard Consulting, Inc. and its personnel from all claims, liabilities, and
expenses relating to this engagement, except to the extent finally judicially determined to have resulted primarily from
negligence,or the bad faith or intentional misconduct of Menard Consulting,Inc.
c) The provisions of this Paragraph and Paragraph 9 shall apply to the fullest extent of the law, whether in contract, statute,tort
(such as negligence), or otherwise. In circumstances where all or any portion of the provisions of this Paragraph are finally
,judicially determined to be unavailable, Menard Consulting, Inc.'s aggregate liability for any claims, liabilities, or expenses
relating to this engagement shall not exceed an amount which is proportional to the relative fault that Menard Consulting,Inc.'s
conduct bears to all other conduct giving rise to such claims,liabilities,or expenses.
7. Cooperation
The Client shall cooperate with Menard Consulting,Inc. in the performance by Menard Consulting,Inc. of its services hereunder,
including, without limitation,providing Menard Consulting, Inc. with reasonable facilities and timely access to data, information,
and personnel of the Client.The Client shall be responsible for the performance of its personnel and agents and for the accuracy and
completeness of all data and information provided to Menard Consulting, Inc. for purposes of the performance by Menard
Consulting,Inc,of its services,
8. Force Majeure
Menard Consulting, Inc, shall not be liable for any delays or non-performance resulting from circumstances or causes beyond its
reasonable control, including, without limitation, acts or omissions or the failure to cooperate by the Client (including, without
limitation, entities or individuals under its control or any of their respective officers, directors, employees, other personnel, and
agents),acts or omissions or the failure to cooperate by any third party,fire or other casualty,act of God,strike or labor dispute,war
or other violence,or any law,order,or requirement of any governmental agency or authority.
9. Limitation on Actions
No action, regardless of form, relating to this engagement may be brought by either party more than two years after the cause of
action has accrued,except that an action for non-payment may be brought by a party not later than two years following the date of
the last payment due to such party hereunder.
10. Independent Contractor
It is understood and agreed that each of the parties hereto is an independent contractor and that neither party is, nor shall be
considered to be, an agent, distributor, partner, fiduciary, or representative of the other.Neither party shall act or represent itself,
directly or by implication,in any such capacity in respect of the other or in any manner assume or create any obligation on behalf of,
or in the name of,the other.
It. Confidentiality and Internal Use
a) The Client agrees that all services hereunder and Deliverables shall be solely for the Client's informational purposes and
internal use,and are not intended to be and should not be used by any person or entity other than the Client.
b) To the extent that, in connection with this engagement, Menard Consulting, Inc, comes into possession of any proprietary or
confidential information of the Client,Menard Consulting,Inc.will not disclose such information to any third party without the
Client's consent, except (a) as may be required by law, regulation,judicial or administrative process, or in accordance with
applicable professional standards, or in connection with litigation pertaining hereto, or(b) to the extent such information (i)
shall have otherwise become publicly available (including, without limitation, any information filed with any governmental
agency and available to the public)other than as the result of a disclosure by Menard Consulting, Inc, in breach hereof, (ii)is
disclosed by the Client to a third party without substantially the same restrictions as set forth herein,(iii)becomes available to
Mr. Randy Peck
November 1, 2016
Page 6
Menard Consulting, Inc. on a non-confidential basis from a source other than the Client which Menard Consulting, Inc.
believes is not prohibited from disclosing such information to Menard Consulting, Inc. by obligation to the Client, (iv) is
known by Menard Consulting, Inc. prior to its receipt from the Client without any obligation of confidentiality with respect
thereto, or (v) is developed by Menard Consulting, Inc. independently of any disclosures made by the Client to Menard
Consulting,Inc.of such information.
12. Assignment
Except as provided below, neither party may assign, transfer or delegate any of its rights or obligations hereunder (including,
without limitation, interests or claims relating to this engagement) without the prior written consent of the other party. Menard
Consulting,Ine, may,without the consent of the Client,assign or subcontract its rights and obligations hereunder to(a)any affiliate
or related entity or(b)any entity which acquires all or a substantial part of the assets or business of Menard Consulting,Inc.
13. Waiver of Jury Trial
Menard Consulting,Inc. and the Client hereby irrevocably waive,to the fullest extent permitted by law, all rights to trial by jury in
any action, proceeding or counterclaim (whether in contract, statute, tort (such as negligence), or otherwise) relating to this
engagement.
14. Entire Agreement,Amendment and Notices
These terms, and the engagement letter to which these terms are attached, including exhibits, constitute the entire agreement
between Menard Consulting, Inc, and the Client with respect to this engagement, supersede all other oral and written
representations, understandings, or agreements relating to this engagement, and may not be amended except by written agreement
signed by the parties. In the event of any conflict, ambiguity, or inconsistency between these terms and the engagement letter to
which these terms are attached,these terms shall govern and control. All notices hereunder shall be(i) in writing, (ii)delivered to
the representatives of the parties at the addresses first set forth above,unless changed by either party by notice to the other party,and
(iii)effective upon receipt.
15. Governing Law and Severability
These terms,the arrangement letter to which these terms are attached,including exhibits,and all matters relating to this engagement
(whether in contract, statute, tort(such as negligence), or otherwise), shall be governed by, and construed in accordance with, the
laws of the State of Iowa (without giving effect to the choice of law principles thereof). If any provision of such terms or
arrangement letter is found by a court of competent jurisdiction to be unenforceable, such provision shall not affect the other
provisions,but such unenforceable provision shall be deemed modified to the extent necessary to.render it enforceable,preserving to
the fullest extent permissible the intent of the parties set forth herein.
16. Survival and Interpretation
The agreements and undertakings of the Client contained in the arrangement letter to which these terms are attached,together with
the provisions of Paragraphs 1,2,4,5,6,7, 8,9, 10, 11, 12, 13, 14, 15 and 16 hereof, shall survive the expiration or termination of
this engagement. For purposes of these terms, "Menard Consulting,Inc."shall mean Menard Consulting,Inc. and its subsidiaries;
all of their partners,principals,members,owners,directors,staff and agents;and in all cases,any successor or assignee.
Cit of Dubuque Insurance City q e Requirements for Professional Services
Insurance Schedule C
Menard Consulting,Inc. shall furnish a signed Certificate of Insurance to the City of Dubuque,Iowa for the
coverage required in Exhibit I prior to commencing work and at the end of the project if the term of work
is longer than 60 days. Providers presenting annual certificates shall present a Certificate at the end of
each project with the final billing. Each Certificate shall be prepared on the most current ACORD form
approved by the Iowa Department of Insurance or an equivalent. Each certificate shall include a
statement under Description of Operations as to why issued.Eg: Project 4 or Project Location at
or construction of
2. All policies of Insurance required hereunder shall be with a carrier authorized to do business in Iowa and
all carriers shall have a rating of A or better in the current A.M. Best's Rating Guide,
3. Each Certificate shall be furnished to the contracting department of the City of Dubuque.
4. Failure to provide minimum coverage shall not be deemed a waiver of these requirements by the City of
Dubuque. Failure to obtain or maintain the required Insurance shall be considered a material breach of
this agreement.
5. Consultants shall require all subconsultants and sub-subconsultants to obtain and maintain during the
performance of work insurance for the coverages described In this Insurance Schedule and shall obtain
certificates of insurances from all such subconsultants and sub-subconsultants. Consultants agree that it
shall be liable for the failure of a subconsultants and sub-subconsultants to obtain and maintain such
coverages.The City may request a copy of such certificates from the Consultants.
6. All required endorsements to various policies shall be attached to Certificate of Insurance.
7. Whenever a specific ISO form is listed,an equivalent form may be Substituted subject to the provider
Identifying and listing In writing all deviations and exclusions that differ from the ISO form,
8. Provider shall be required to carry the minimum coverage/limits,or greater if required by law or other
legal agreement,In Exhibit I. If provider's limits of liability are higher than the required minimum limits
then the provider's limits shall be this agreement's required limits.
9. Whenever an ISO form is referenced the current edition of the form must be used,
Page 1 of 2 Schedule C Professional REVISED For Spec Situation-2
City of Dubuque Insurance Requirements for Professional Services
Specific Project
Insurance Schedule C (continued)
Exhibit I
A) COMMERCIAL GENERAL LIABILITY
General Aggregate Limit $2,000,000
Products-Completed Operations Aggregate Limit $1,000,000
Personal and Advertising Injury Limit $1,000,000
Each Occurrence $1,000,000
Fire Damage Limit(any one occurrence) $ 50,000
Medical Payments ' $ 5,000
B) WORKERS' COMPENSATION &EMPLOYERS LIABILITY
Statutory benefits covering all employees Injured on the Job by accident or disease as prescribed by
Iowa Code Chapter 85 as amended.
Coverage A Statutory—State of Iowa
Coverage B Employers Liability
Each Accident $100,000
Each Employee-Disease $100,000
Policy Limit-Disease $500,000
C) UMBRELLA LIABILITY $1,000,000
Umbrella liability coverage must be at least following form with the underlying policies included
herein,
D) PROFESSIONAL LIABILITY $1,000,000
a) Provide evidence of coverage for 5 years after completion of project.
E) CYBER LIABILITY $1,000,000
Coverage for First and Third Party liability including but not limited to lost data and
restoration, loss of income and cyber breach of information,
Yes X No
Page 2 of 2 Schedule C Professional REVISED For Spec Situation-2