R09-167
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3 RESOLUTION NO. R09-/(, 7
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5 A RESOLUTION OF THE CITY OF BOYNTON
6 BEACH, FLORIDA, APPROVING THE AWARD OF
7 RFP #050-1410-09/JA TO THE SEGAL COMPANY
8 FOR PENSION CONSULTING SERVICES;
9 AUTHORIZING THE CITY MANAGER TO
10 EXECUTE A THREE YEAR CONSULTANT
11 AGREEMENT BETWEEN THE PARTIES; AND
12 PROVIDING AN EFFECTIVE DATE.
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15 WHEREAS, Procurement Services opened and tabulated three (3) proposals to
16 the RFP "Pension Consulting Services"; and
17 WHEREAS, after review and evaluation by the three-person evaluation team it
18 has been determined by staff to recommend award of this RFP to The Segal Company of
19 Atlanta, Georgia whose RFP was overall responsive and responsible proposer; and
20 WHEREAS, upon recommendation of staff, the City Commission of the City of
21 Boynton Beach does hereby approve the award of RFP #050-1410-09/JA to The Segal
22 Company of Atlanta, Georgia, Florida.
23 NOW, THEREFORE, BE IT RESOLVED BY THE CITY COMMISSION
24 OF THE CITY OF BOYNTON BEACH, FLORIDA, THAT:
25 Section 1. The foregoing "Whereas" clauses are hereby ratified and confirmed
26 as being true and correct and are hereby made a specific part of this Resolution upon
27 adoption hereof.
28 Section 2. The City Commission of the City of Boynton Beach, Florida,
29 hereby approves the award ofRFP #050-1410-09/JA to The Segal Company of Atlanta,
30 Georgia, for Pension Consulting Services.
E:\Data\37\ltems\37\500\286\Reso_-Award_oCRFP _ -_Pension_ Consulting_ - _ Segal.doc
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1 Section 3. That the City Manager is hereby directed to execute a three (3) year
2; Consultant Agreement with the option to renew the Agreement for two (2) additional one
3 (1) year periods for Pension Consulting Services between the City of Boynton Beach and
4 The Segal Company of Atlanta, Georgia, a copy of which is attached hereto.
5 Section 4. That this Resolution shall become effective immediately.
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6 PASSED AND ADOPTED this.3 day of November, 2009.
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17 Commissioner - Ronald Wel an
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24 ATTEST:
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E:\Data\37\1tems\37\500\286\Reso_ -Award_oCRFP _ -_Pension_ Consulting_ -_ Segal.doc
CONSULTANT AGREEMENT
FOR Ro~- (~7
PENSION CONSULTING SERVICES FOR THE
CITY OF BOYNTON BEACH
THIS AGREEMENT is entered into between the City of Boynton Beach, hereinafter referred to
as "the City", and The Sel!aI Company. Inc., hereinafter referred to as "the Consultant", in
consideration ofthe mutual benefits, terms, and conditions hereinafter specified.
1. PROJECT DESIGNATION. The Consultant is retained by the City to perform Consultant
services in connection with the project designated PENSION CONSULTING SERVICES.
2. SCOPE OF SERVICES. Consultant agrees to perform the services, identified on Exhibit
"A" attached hereto and incorporated herein by reference, including the provision of all
labor, materials, equipment and supplies. No modifications will be made to the original scope
of work without the written approval of the City Manager or his designee.
3. TIME FOR PERFORMANCE. Work under this agreement shall commence upon the giving
of written notice by the City to the Consultant to proceed. Consultant shall perform all
services and provide all work product required pursuant to this agreement by _ calendar
days from the date written notice is given to proceed, unless an extension of such time is
granted in writing by the City.
4. TERM: This Agreement shall be for a period of three (3) years commencing on the date the
Agreement is executed by the City, subject to earlier termination as set forth in Paragraph 15
herein below, with an option to renew for two (2) additional one (I) year periods subject to
consultant acceptance, satisfactory performance and determination that renewal will be in the
best interest of the City of Boynton Beach.
5. PAYMENT. The Consultant shall be paid by the Provider/City for completed work and for
services rendered under this agreement as follows:
a. The total contract price, as referred to herein, shall be the total amount of payment to
consultant for services provided under this agreement for the entire term of the Agreement
b. Payment for the work provided by Consultant shall be made promptly on all invoices
submitted to the City properly, provided that the total amount of payment to Consultant shall
not exceed the total contract price without express written modification of the Agreement
signed by the City Manager or his designee.
c. The Consultant may submit invoices to the City once per month during the progress of the
work for partial payment for project completed to date. Such invoices will be reviewed by
the City, and upon approval thereof: payment will be made to the Consultant in the amount
approved.
d. Final payment of any balance due the Consultant of the total contract price earned will be
made promptly upon its ascertainment and verification by the City after the completion of the
work under this Agreement and its acceptance by the City.
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e. Payment as provided in this section by the City shall be full compensation for work
performed, services rendered and for all materials, supplies, equipment and incidentals
necessary to complete the work.
f. The Consultant's records and accounts pertaining to this agreement are to be kept
available for inspection by representatives of the City and State for a period of three (3) years
after the termination of the Agreement. Copies shall be made available upon request.
6. OWNERSHIP AND USE OF DOCUMENTS. All documents, drawings, specifications and
other materials produced by the Consultant in connection with the services rendered under
this Agreement shall be the property of the City whether the project for which they are made
is executed or not. The Consultant shall be permitted to retain copies, including reproducible
copies, of drawings and specifications for information, reference and use in connection with
Consultant's endeavors. In the event that Consultant claims that any such document contains
trade secrets or proprietary information as may be defined by Florida Statutes and thereby
exempt from public disclosure under Chapter 119, Florida Statutes, Consultant must
expressly identify each such document and clearly state the nature of such exemption In the
event that a public record request is made for any documents or records so identified by
Consultant, City shall notify Consultant and afford Consultant the opportunity to take any
and all legal measures necessary to prevent the disclosure of such documents. Consultant
shall undertake such legal efforts in a timely fashion and in such a manner so as not to
subject the City to any claims of violating the Florida Public Records Laws. Moreover, in
asserting its claim to protect its proprietary information or trade secrets, and a legal Claim is
made by Claimant relating to such records, Consultant agrees that it shall hold the City
harmless and indemnify the City from any and all damages or claims pertaining to any
violations of the Florida Public Record Laws.
7. COMPLIANCE WITH LAWS. Consultant shall, in performing the services contemplated
by this Agreement, faithfully observe and comply with all federal, state and local laws,
ordinances and regulations that are applicable to the services to be rendered under this
agreement.
8. INDEMNIFICATION. Consultant shall indemnify, defend and hold harmless the City, its
offices, agents and employees, from and against that portion of any and all claims, losses or
liability, or any portion thereof, including attorneys fees and costs, arising from injury or
death to persons, including injuries, sickness, disease or death to Consultant's own
employees, or damage to property occasioned by a negligent act, omission or failure of the
Consultant.
9. INSURANCE. The Consultant shall secure and maintain in force throughout the duration of
this contract comprehensive general liability insurance with a minimum coverage of
$ I ,000,000 per occurrence and $ 1,000,000 aggregate for personal injury; and $ 1,000,000 per
occurrence/aggregate for property damage, and professional liability insurance in the amount
of $1 ,000,000 per occurrence to 2 million aggregate with defense costs in addition to limits.
Said general liability certificate of insurance shall name the City of Boynton Beach as an
additional named insured and shall include a provision prohibiting cancellation of said policy
except after insurer provides thirty (30) days prior written notice to the City. Certificates of
coverage as required by this section shall be delivered to the City within fifteen (15) days of
execution of this agreement.
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10. INDEPENDENT CONTRACTOR. The Consultant and the City agree that the Consultant is
an independent contractor with respect to the services provided pursuant to this agreement.
Nothing in this agreement shall be considered to create the relationship of employer and
employee between the parties hereto. Neither Consultant nor any employee of Consultant
shall be entitled to any benefits accorded City employees by virtue of the services p'rovided
under this agreement. The City shall not be responsible for withholding or otherwise
deducting federal income tax or social security or for contributing to the state industrial
insurance program, otherwise assuming the duties of an employer with respect to Consultant,
or any employee of Consultant.
11. COVENANT AGAINST CONTINGENT FEES. The Consultant warrants that he has not
employed 'or retained any company or person, other than a bonafide employee working solely
for the Consultant, to solicit or secure this contract, and that he has not paid or agreed to pay
any company or person, other than a bonafide employee working solely for the Consultant,
any fee, commission, percentage, brokerage fee, gifts, or any other consideration contingent
upon or resulting from the award or making of this contract.
For breach or violation of this warranty, the City shall have the right to annul this contract
without liability or, in its discretion to deduct from the contract price or consideration, or
otherwise recover, the full amount of such fee, commission, percentage, brokerage fee, gift,
or contingent fee.
12. DISCRIMINATION PROHIBITED. The Consultant, with regard to the work performed by
it under this agreement, will not discriminate on the grounds of race, color, national origin,
religion, creed, age, sex or the presence of any physical or sensory handicap in the selection
and retention of employees or procurement of materials or supplies.
13. ASSIGNMENT The Consultant shall not sublet or assign any of the services cov'ered by
this Agreement without the express written consent of the City.
14. NON-WAIVER Waiver by the City of any provision of this Agreement or any time
limitation provided for in this Agreement shall not constitute a waiver of any other provision.
]5. TERMINATION.
a. The City reserves the right to terminate this Agreement at any time by giving tel)
(10) days written notice to the Consultant.
b. In the event of the death ofa member, partner or officer of the Consultant, or any of its
supervisory personnel assigned to the project, the surviving members of the Consultant
hereby agree to complete the work under the terms of this Agreement, if requested to do
so by the City. This section shall not be a bar to renegotiations of this Agreement
between surviving members of the Consultant and the City, ifthe City so chooses.
16. DISPUTES. Any disputes that arise between the parties with respect to the performance of
this Agreement, which cannot be resolved through negotiations, shall be submitted to a
court of competent jurisdiction in Palm Beach County, Florida. This Agreement shall be
construed under Florida Law.
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17. NOTICES. Notices to the City of Boynton Beach shall be sent to the following address:
City of Boynton Beach
P.O. Box 310
Boynton Beach, FL 33425-03 I 0
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Notices to Consultant shall be sent to the following address:
The Segal Company, Inc.
2018 Powers Ferry Road. Suite 850
Atlanta, Ga 30339
Attn: Leon F. Joyner, Jr.
18. INTEGRATED AGREEMENT. This agreement, together with attachments or addenda,
represents the entire and integrated agreement between the City and the Consultant and
supersedes all prior negotiations, representations, or agreements written or oral. This
agreement may be amended only by written instrument signed by both City and Consultant.
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DA TED this jI--aay of , 20Q!L.
TON BEACH CONSULTANT
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City Manager
Attest! Authenticated: V;L<!.. P.....J,.,J- ",~J. fi<-f..IA"'r-1-
Title
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Approved as to FOffi!. Attest! Authenticated:
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EXHIBIT "A"
Scope of Services
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The firm shall describe their understanding of the scope of services and the proposed
approach that they will use to complete the tasks listed in the scope of services of this
Request for Proposal. This should include a detailed time schedule to complete each task,
proposed interaction with City staff and officials as well as other project components and
features.
We anticipate that the requested services can be completed in a twelve week time frame. A
suggested timeline is shown below.
Slrp Timr
l. Initial meeting with City staff and Pension Boards Weeks 1-2
2. Data I document gathering and initial analysis Weeks 3-5
3. Analysis of current actuarial assumptions, methodology, valuation report, Weeks 4-7
and benefit design
4. Discussions or meetings with City to review details of actuarial methods Weeks 5-6
used in the last valuation
5. Meet with City Staff and Pension Boards to discuss the valuations and Weeks 6-8
benefit analvsis
6. Develop estimated impact on future contribution requirements and the final Weeks 9-11
reoort
7. Present results to City Staff and Pension Boards Week 12
SCOPE OF SERVICES
The following are tasks that the consultant may be asked to complete for anyone or all of
the City's three defined benefit plans. The consultant will also act in an advisory capacity
to City management on other matters that arise relevant to the pension plans.
1. Review the existing plan design and general management of the plan to insure the
long-term stability of plan assets and make recommendations for change, if
needed.
We will provide our understanding and approach to the Scope of Services in the
Technical potion of our response, below.
We will review the past funding history and look for any unexplained patterns. We will
also compare recent benefit payouts with the demographic data and the expected
contribution income to ascertain if any difficult issues are anticipated to emerge in
future years. Our goal regarding this question is to develop a broad view of the
sustainability of the plan's benefits.
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2. Review the existing benefit structure and make recommendations for change, if
needed.
a. Current Funding Rate
b. Current Pension Multiplier
c. Current Cost of Living
d. Current Pension Maximum
We will examine the benefit structure and provide the following:
,. A comparison of the benefit structure to nearby governmental plans as well as to
national averages;
,. An expected replacement income of the participant's salary at retirement and a
comparison to accepted benchmarks as to the adequacy of this benefit to sustain
one's standard of living; and
,. A review of the current cost of living and maximum benefit provisions of the plans
and how these either augment or detract from one's ability to retire.
3. Review current actuarial assumptions and funding levels to ensure the long-term
solvency of the plan,
a. Current Methodology
b. Pros and Cons of Smoothing
c. Interest Rate Assumptions
d. Unfunded Liability
Generally, we will assess whether the actuarial valuation assumptions are reasonable
and consistent with generall y accepted actuarial standards and practices. This
assessment will also determine whether the assumptions are reasonable based on each
plan's experience and appropriate to the current benefit structure.
Segal sets assumptions by looking at the experience of each plan and then comparing to
national trends when appropriate. We consider not only past experience but also the
future expectations of the client in setting assumptions. Typically, clients will perform
an experience review every 5 to 7 years, which is used as the basis for any changes in
assumptions.
We will assess whether actual plan experience and assumptions are in line with
evaluating the most recent experience study of each plan, if available. Our focus will be
to determine whether the recommended assumptions are appropriate, reasonable and
supported by the actual experience. If we recommend any adjustments to the
assumptions, we will provide a detailed rationale for our recommendations and a
description of the general effect on each plan.
We will evaluate both economic and non-economic assumptions of each plan for
reasonableness and internal consistency. This examination will generally include an
analysis of the following assumptions:
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Economic Assumptions:
,. Inflation;
,. Investment yield (interest);
,. Salary increases for individuals (general increases plus merit/seniority); and
,. Aggregate covered payroll increases.
Non-Economic Assumptions:
,. Withdrawal due to voluntary or involuntary cessation of employment other than
death, disability or retirement;
,. Disability rates, including proportions of service and non-service disabilities;
,. Pre-retirement mortality;
.,. Post-retirement mortality for service and disability retirements;
,. Retirement rates; and
,. Survivor benefits (proportion married and spousal ages).
A separate discussion will be provided regarding the key economic assumptions of
investment return and salary scale. Relatively low inflation in recent years has spurred
substantial debate with regard to both assumptions. The relationship of the inflation
assumption to the investment return and salary scale assumptions will also be
considered and discussed.
We are able to draw on the experience we have gained working with the City and other
public retirement systems regarding trends and practices. We will also identify areas, if
any, not addressed in the current actuary's experience reviews that may be appropriate
for future reviews.
4, Provide analysis of current DROP provisions of each plan and make
recommendations for change, if needed.
In addition to reviewing the existing benefit structures of all three plans and reviewing
the current actuarial assumptions and funding levels, we will provide an analysis for the
DROP provision of each of the plans and make recommendations, as necessary.
Specifically we will review the provisions of the DROP option and look for "steering"
elements. That is, does the DROP encourage particular behavior and does this behavior
work constructively with the other plan benefits to achieve a cohesive whole.
5. Provide a written report of findings and recommendations for changes based on
the review of each plan.
We will prepare a comprehensive written report summarlzmg the results of our
actuarial services and findings for each of the plans. The report will include the
following:
,. Our specific findings with regard to each of the reviews and recommendation
elements;
,. A recap of any specific discrepancies, varlatlOns or exceptions identified, the
estimated impact of those items, the resolution of those items, and any items that
remain outstanding;
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, Our opinIOn as the reasonableness of the most recent valuation assumptions,
methods and conclusions, and their conformance with generally accepted actuarial
standards and practices;
,. A description of any improvements that can be made to the annual actuarial
valuation, including the valuation process, the valuation results and the form of
presentation;
, Our comments on the overall profile of the plans, including benefit design, the
actuarial funding method and actuarial valuation asset method;
, Detailed recommendations based on all of the above findings. These
recommendations will be identified within the report and within an executive
summary.
6. Provide continuing fee proposal for ongoing supplemental actuarial and financial
analysis to any proposed plan amendment submitted to either the City Manager
or City Commission.
We will provide ongoing supplemental actuarial and financial analysis to any proposed
plan amendment submitted to either the City Manager or City Commission.
7. Provide contingency plan for Plan closure and/or conversion to defined
contribution plan.
Plan Termination
Terminating a defined benefit plan, particularly one that has been in place for many
years, is an intricate and delicate undertaking. Segal works with our clients to review
and analyze all available program options up front, before a decision is made on future
plan design. In many cases, particularly in public sector plans where there may be many
retirees receiving benefits, it is difficult to have a full termination and liquidation of the
plan. Most often, the legacy defined benefit plan must remain intact for participants
who accrued benefits through that plan. The frozen plan then wastes over a number of
years.
Conversion from Defined Benefit to Defined Contribution
In situations where the employer looks to move from a defined benefit plan to a defined
contribution plan, Segal conducts special actuarial studies to identify how individuals
and groups will be affected by the change of plan type. We help the client think through
how the existing assets and accrued benefits in the defined benefit plan will be treated
once the defined benefit plan is terminated. We conduct various actuarial calculations
to determine the amount of unfunded liability in the plan at the time of termination or
freezing of accruals. We also work closely with the client to solve crucial issues
relating to payout of plan benefits, funding through terminal annuities, potentia] transfer
of assets to the defined contribution plan and disclosure to participants of their options
for the new program.
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Implementing a Defined Contribution Plan
Implementation of a defined contribution plan requires an equally intense process
including: design of the plan; drafting of the plan documentation; selection of the
recordkeeping administrator; selection of investment managers and fund options to be
offered; construction of intemal administration functions for the plan; development and
documentation of policies and procedures relating to the administration of the plan; and
development of effective initial and ongoing communications for the plan. Segal has
assisted many plan sponsors in the defined contribution implementation process and has
conducted over 70 administrator searches for defined contribution administrators in the
last few years. Segal works jointly with our Segal Advisors, Inc. subsidiary (a
registered investment advisory firm) on the selection and monitoring of investment
options.
8. Meet with Citv Commission and Board of Trustees of each Fund to explain any
finding or recommendations, if needed.
We will meet with the City Commission and Board of Trustees of each Fund,
separately or together, to explain our findings and recommendations if the City
requests.
Terms of Agreement:
The agreement shall be for a period of three (3) years with an option to renew for (2)
additional one (1) year periods subject to consultant acceptance, satisfactory performance
and determination that renewal will be in the best interest of the City of Boynton Beach.
Segal has read the Terms of Agreement and does not take any exception to the length of the
agreement.
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The City of Boynton Beach
City Clerk's Office
100 E BOYNTON BEACH BLVD
BOYNTON BEACH FL 33435
(561) 742-6060
FAX: (561) 742-6090
e-mail: prainitoj@cLboynton-beach.fl.us
www.boynton-beach.org
MEMORANDUM
TO: Carol Doppler
Purchasing Agent
FROM: Janet M. Prainito, CMC
City Clerk
DATE: November 4,2009
SUBJECT: R09-167 Consulting Agreement for Pension Consulting Services
for the City of Boynton Beach
Attached for your handling is the original agreement mentioned above and a copy of
the Resolution. Once the document has been executed, please return the original to
the City Clerk's Office for final execution.
Thank you.
&~.T' 'tn P/l ~(.~
Attachments (2)
C: Central File
S:\CC\WP\AFTER COMMISSlON\Departmentaf Transmittals\2009\Carol Doppler RD9-167.doc
America's Gateway to the Gulfstream
The City of Boynton Beach
City Clerk's Office
100 E BOYNTON BEACH BLVD
BOYNTON BEACH FL 33435
(561) 742-6060
FAX: (561) 742-6090
e-mail: prainitoj@ci.boynton-beach.f1.us
www.boynton-beach.or9
MEMORANDUM
TO: Carol Doppler
Procurement
FROM: Janet M. Prainito, CMC
City Clerk
DATE: December 3,2009
SUBJECT: R09-167 Consultant agreement for Pension Consulting Services
for the City of Boynton Beach
Attached for your information and files is a copy of the fully executed agreement
mentioned above. Since the document has been fully executed, I have retained the
original for Central File.
Thank you.
ft~j) vn. P~-/~-i Ii,
Attachment
C: Central File
S:\CC\WP\AFTER tOMMISSION\Departmental Transmtttals\ZOO9\Carol Doppler R09-167 Pension Consulting Services Agreementdcx:
America's Gateway to the Gulfstream