HomeMy WebLinkAbout04/17/2012 04D Actuarial Study Agreement with Milliman, Inc. K
C r
BUSINESS OF THE CITY COUNCIL
YAKIMA, WASHINGTON
AGENDA STATEMENT
Item No. CM
For Meeting of: April 17, 2012
ITEM TITLE: Resolution authorizing an agreement for actuarial services
for certain pension plans and other post - employment
benefits provided by the City of Yakima.
SUBMITTED BY: Cindy Epperson, Acting Director of Finance & Budget
Debbie Baldoz, Accountant
CONTACT Debbie Baldoz, 576 -6687
PERSON /TELEPHONE:
SUMMARY EXPLANATION:
As one of the many requirements for receiving an unqualified audit opinion (the best opinion
there is) on the City's Financial Statement, accounting regulations mandate that cities the
size of Yakima have an actuarial study of our own pension plans, (pre -LEOFF 1 retirees),
LEOFF 1 medical benefits and certain other post - employment benefits for all employees
every three years. The City's 2011 financial statements, to be issued in 2012, must include
an updated three -year actuarial study that includes some new costing provisions related to
medical costs to comply with the most recent accounting regulations. The contract attached
for your review and approval with Milliman Inc. will provide for those services at a total cost
of $50,000, to be shared by the Police Pension, Fire Pension, and the Employees' Health
Benefit funds. Under the current accounting regulations, these services will not need to be
performed again until the 2014 Statements are issued in 2015.
Resolution X Ordinance Other
(specify)
Contract: X Mail to: Frank Thoen, Principal, Milliman, Inc. 1301 Fifth
Ave. STE 3800 Seattle, WA 98101
Contract Term: Amount: $50,000 Expiration Date:
Insurance Required? No
Funding Police Pension, Fire Pension and
Phone: 206 504 -5695
Source: Employees' Health Benefit Funds
APPROVED FOR ,
SUBMITTAL: City Manager
STAFF RECOMMENDATION:
Adopt Resolution
BOARD /COMMISSION RECOMMENDATION:
ATTACHMENTS:
Click to download
E Res - Milliman Agreement
Milliman Adendum
RESOLUTION NO. R -2012-
A RESOLUTION authorizing the execution of a Consulting Services Agreement with
Milliman, Inc. Actuaries and Consultants for an actuarial study for the
purposes of determining the City's estimated liabilities relating to
pensions and other post - employment benefits for LEOFF and PERS
members in order to meet the City's financial reporting requirements
and bond issuance disclosure obligations.
WHEREAS, every three years or if a significant change occurs in the plan
membership or benefits during the period the City is required to have an actuarial study
performed for the purposes of determining an estimated liability for pension and other
postemployment benefits; and
WHEREAS, for the December 31 2011 Financial Statements this study is required
by Generally Accepted Accounting Principles under amended regulations GASB 43 and 45;
and
WHEREAS, Milliman, Inc. has experience and expertise in providing actuarial
analysis and has agreed to provide those services on behalf of the City under the terms and
conditions of the attached and incorporated Professional Services Agreement; and
WHEREAS, the actuarial pension and employment benefit analysis requested from
Milliman, Inc. is required information for documents pertaining to the issuance of publicly
offered bonds issued by the City of Yakima and;
WHEREAS, the City Council deems it to be in the best interests of the City of
Yakima to have an actuarial study of retirement and other postemployment benefits
performed for the December 31 2011 Financial Statements, Now, Therefore
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF YAKIMA:
The City Manager is hereby authorized and directed to execute the attached and
incorporated Consulting Services Agreement with Milliman, Inc. for the provision of
professional actuarial analysis of the City's pension and post - employment benefits.
ADOPTED BY THE CITY COUNCIL this 17th day of April, 2012.
ATTEST: Micah Cawley, Mayor
City Clerk
res/Milliman Actuarial Consulting
Agreement
Amendment to Consultant Agreement, dated February 5, 2009
Description of Consulting Services and Fees for the
2012 Actuarial Valuations for the
City of Yakima, Washington
For the period commencing on the execution date of this Amendment, this Schedule shall be
attached to and part of the Consulting Services Agreement executed by Milliman, Inc.
(CONSULTANT) and the City of Yakima, Washington (CLIENT).
CONSULTANT agrees to provide the services below:
2012 ACTUARIAL VALUATIONS AND CALCULATIONS OF UNFUNDED LIABILITIES
Firefighters' Pension Plan (FPP) $ 8,000
Police Pension Plan (PPP) 8,000
Other Post - Employment Benefits (OPEB) for Law Enforcement Officers and
Firefighters Plan 1 (LEOFF 1) and retirees under the City's FPP and PPP.
Includes Medical Benefits and Long -Term Care 16,000
OPEB for LEOFF 2 and Public Employees Retirement System (PERS) members 18.000
Total $50,000
CONSULTANT shall prepare reports that will include an executive summary, cash flow
projections, and actuarial information for accounting purposes. The reports will also include
appendices to summarize the actuarial assumptions used, the benefit provisions valued, claims
cost information, and the census data used.
The calculations will be done in compliance with GASB Statements Nos. 25, 27, 43, and 45.
The accounting section of the reports will contain all schedules required for the financial
statements for the defined benefit pension plans and OPEB plans.
The $50,000 fee includes the cost of one in- person meeting to present the reports.
CONSULTANT's reports shall be completed and submitted to CLIENT within eight weeks of
receiving this signed Amendment, and all requested data.
Additional requested work shall be agreed upon by both parties in writing and will be on a time -
and- expense basis at CONSULTANT's standard billing rates shown below
Consultant Hourly Rate
Senior Actuary $460
Supervising Actuary $365
Senior Actuarial Analyst $235
Entry Analyst $200
Fgv0014.docx
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MILLIMAN, INC.
I have read and agree to the terms and conditions
of this Amendment. j
Accepted by: i i4 1/46 1 "
Franklin Thoen
Title: Principal Date: April 3, 2012
CITY OF YAKIMA
I have read and agree to the terms and conditions of
this Amendment.
Accepted by:
Title: Date:
Attest:
City Clerk
City Contract No.
Resolution No.
Fgv0014.docx
25 0003 FQV 97 / FNT /DRW /nlo