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Home My WebLink About2011 CON Epler Company - Actuarial Valuation ServicesNOTE TO FILE 06-29-11 IN THE MATTER OF: Agreement by and between the City of National City and The Epler Company in the amount not to exceed $5,000 to perform an updated actuarial valuation as of July 1, 2010 to determine the amount of the actuarial liability for the City's current retiree health benefits program in accordance with GASB 45. Please note the following: A FULLY EXECUTED ORIGINAL AGREEMENT WAS NEVER FILED WITH THE OFFICE OF THE CITY CLERK ORIGINATING DEPARTMENT: _ CDC _ Housing & Grants City Attorney _ Human Resources X City Manager _ MIS _ Community Svcs. Planning Engineering _ Police Finance Public Works Fire * 06-29-11- The copy provided was a scanned copy from the Consultant and signed by the City Manager. NTF The Company BENEFITS AND COMPENSATION CONSLQTANTS AND ACTUARIES May 11,2011 PRIVATE City of National City Finance Department Attn: Ms. Tess Limfueco 1243 National City Blvd National City, CA 91950 Re: GASB Actuarial Valuation for the City of National City (the "City') Dear Tess: We offer the following letter of engagement for the City's signature. 450 B Street, Suite 750 San Dino. CA 92101-8002 Telephone (6I9) 239-0831 Facsimile (619) 239-0807 roroia.rpiercompuny.cam BACKGROUND The City sponsors a retiree health benefits program for its retirees. The City is seeking an updated actuarial valuation of its retiree health benefits program. The actuarial valuation will provide the required accounting information under GASB 45 for the City. The prior actuarial valuation was as of July 1, 2008. Under GASB 45, an actuarial valuation needs to be performed at least once every two years. CONSULTING SERVICES The Epler Company will perform an updated actuarial valuation as of July 1, 2010 to determine the amount of the actuarial liability for the City's current retiree health benefits program in accordance with GASB 45. The actuarial valuation will be performed using generally accepted actuarial procedures, updated census, and plan and rate information provided by the City. A data request is being provided separately. We will provide the City with a report setting forth all City liabilities as required under GASB 45 for its retiree health benefits program. The actuarial valuation results will also provide information regarding level -dollar and level -percentage -of -pay funding options. The valuation results will be split between active and retired employees. Our report will contain the following information: Ms. Tess Limfueco May 11, 2011 Page 2 • Executive Summary. • Summary of Expected Cost: Projected annual pay-as-you-go expenditures (expected retiree health benefit payments by the City) for the next 20 years and representative years, thereafter. • Summary of Plan Provisions. Terms of the plan provisions - eligibility, benefits period, etc., used in the valuation. • Summary of Actuarial Assumptions: Key financial and demographic assumptions used in the valuation. • Summary of Liabilities: Present value of expected retiree health benefit payments by the City. • Determination of the expected impact on the City's financial statement under GASB 45, including the unfunded actuarial accrued liability and the estimated annual accrual accounting expense (annual required contribution) for the next two fiscal periods. GASB 45 requires disclosure of the unfunded liability associated with retiree health benefits and accrual accounting (versus pay-as-you-go) for the expensing of retiree health benefits. • Funding Analysis: Recommended funding amounts to pre -fund the obligation on level -dollar and level -percentage -of -pay basis. • Sensitivity Analysis: Results using alternative discount rates to reflect funding strategies. • Age and Service Distribution: Statistics of employee population included in the valuation. • Actuarial Certification. G:1Proposals\RetMed\GASB 45\National City\2010\Engagement Letter National City 2010.doc Ms. Tess Limfueco May 11, 2011 Page 3 ESTIMATED FEES & TIMING Our not -to -exceed fee, including non -travel related expenses, for the services outlined above are $5,000. Our fees are based on the projected number of hours spent by each consultant on the project, multiplied by a billable rate that varies according to the experience and credentials of the consultant. We make every effort to hold down the costs incurred in preparing the report, but not to the point of jeopardizing the successful conclusion of the assignment. We will bill for our services monthly and payment is due 30 days after receipt of a monthly invoice. * * * * We look forward to working with you on this assignment. If you need additional information or have any questions, please feel free to contact me at (619) 239-0831. Please provide at your earliest convenience a signed copy of this letter as acceptance of this engagement. City of National City The Epler Company Agreed to: Agreed to: By v L LJ By .....- Chris Zapat City Manager Date: 9 -- I Marilyn K. Js, ASA, MAAA, EA, FCCA Vice President & Actuary Date: sjaiaoH G:\Proposals\RetMed1GASB 451National City\2010\Engagement Letter National City 2010.doc OFFICE OF THE CITY CLERK 1243 National City Blvd. National City, California 91950 Michael R. Dalla, CMC - City Clerk 619-336-4228 phone / 619-336-4229 fax June 29, 2011 Ms. Marilyn Jones The Epler Company 450 B Street, Suite 750 San Diego, CA 92101 Dear Ms. Jones, We are enclosing for your records a fully executed copy of the Letter of Engagement between the City of National City and The Epler Company. Sincerely, Esther Clemente Deputy City Clerk Enclosure cc: Finance Dept.