HomeMy WebLinkAbout05. Authorize amendment to consulting agreement with Bartel & Associates for actuarial services Page 1 of 3
Item 5.
CENTRAL SAN CENTRAL SAN BOARD OF DIRECTORS
POSITION PAPER
MEETING DATE: OCTOBER 18, 2018
SUBJECT: AUTHORIZE THE GENERAL MANAGER TO EXECUTE A$51,000
AMENDMENT TO A CONSULTING SERVICES AGREEMENT WITH BARTEL
&ASSOCIATES, WITH ACOST CEI LING NOT TO EXCEED $150,000, TO
PROVIDE ACTUARIAL SERVICES THROUGH OCTOBER 27, 2021
SUBMITTED BY: INITIATING DEPARTMENT:
TEJI O-MALLEY, HUMAN RESOURCES ADMINISTRATION-FINANCE
MANAGER
PHIL LEIBER, DIRECTOR OF FINANCE AND
ADMINISTRATION
REVIEWED BY: ANN SASAKI, DEPUTY GENERAL MANAGER
Roger S. Bailey
General Manager
ISSUE
Board authorization is required to execute an agreement with Bartel &Associates in an amount greater
than $100,000 to perform actuarial work in connection with Other Post-Employment Benefit (OPEB) Plans
and pension related matters through October 2021.
BACKGROUND
The original Bartel &Associates agreement was executed on October 27, 2016 to provide an actuarial
valuation required in connection with preparing the July 1, 2016 OPEB valuation report. Five
amendments have been executed since then related to changes in funding and term. This has been done
to facilitate the provision of additional services related to potential changes in benefit programs offered by
Central San, actuarial analysis related to court decisions on pension matters, actuarial analysis related to
negotiations, and new GASB 74/75 (and GASB 45) reports. The cumulative effect of all the amendments
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to date have the agreement valid through December 31, 2019 with a cost ceiling of$99,000.
The proposed amendment would provide actuarial services for required OPEB valuation related work and
supplemental services related to pension valuation matters through October 2021.
1. OPEB VALUATION WORK.
a. Valuation work necessary for development of financial statements - OPEB valuations for compliance
with GASB 45/74/75, which are required every two years. The primary objectives for this actuarial valuation
include:
1. Ensuring compliance with GASB Statement 45/74/75;
2. Determining OPEB related valuation and roll-forward data for June 30, 2020;
3. Preparing necessary information for inclusion in Central San's audited financial statements for the
fiscal years ending June 30, 2020. (This includes drafting, in its entirety, the note for inclusion in the
District's financial statements that conforms to all of the requirements of GASB 45/74/75; and all of
the required supplementary information required by the same.); and
4. Providing assistance in implementing any new GASB statements and other financial
pronouncements related to OPEB and providing ongoing professional consultation.
b. OPEB valuations related to benefit plan modifications such as changes in healthcare providers (i.e.
movement to CalPERS).
c. Ad-hoc valuation work in connection with valuation issues related to litigation and other Board related
inquiries requiring actuarial services.
2. PENSION VALUATION WORK.-
a.
ORK.a.Ad-hoc valuation work in connection with pension valuation issues related to litigation and other Board-
related inquiries requiring actuarial services.
Continued use of Bartel &Associates for this work is viewed as being in the best interest of Central San to
ensure timeliness and continuity of services in light of the upcoming transition to CalPERs healthcare
plans, and the need for a valuation upon entry to that new plan.
Central San would intend to release a Request for Proposal (RFP)for continuing required actuarial
valuation services beyond October 2021, prior to the expiration of this contract.
ALTERNATIVES/CONSIDERATIONS
Actuarial valuation services are needed for the development of Central San's financial statements, so such
services need to be procured through this contract or another means.
The Board could decide to proceed earlier with an RFP to obtain necessary actuarial valuation services.
However, it is viewed as in the best interests of Central San to retain the existing provider through the
transition to CalPERs and the subsequent OPEB valuation through 2020 as required by GASB 45/74/75.
FINANCIAL IMPACTS
The original contract amount was $23,000. An RFP process was not used for the original solicitation.
Five amendments were executed, extending the expiration through December 31, 2019, and bringing the
contract limit to $99,000. Payments to date have been $55,025 with the last invoice received in November
2017. The costs of the GASB 45/74/75 OPEB valuations for the June 30, 2018 period, which are
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underway now, are likely to cost about$25,000, and will bring spending under the current contract to more
than $80,000. Without an amendment, there maybe inadequate funding to complete work related to the
transition to CaIPERs during early 2019, and other potential work through October 2021.
COMMITTEE RECOMMENDATION
The Administration Committee reviewed the matter on October 9, 2018 and recommended Board
approval of the amendment.
RECOMMENDED BOARD ACTION
Authorize the General Manager to approve an amendment to the consulting services agreement with
Bartell &Associates for$51,000, bringing the total agreement to an amount not to exceed $150,000, to
perform actuarial work in connection with OPEB plans and pension-related matters through October 27,
2021.
Strategic Plan Tie-In
GOAL TWO: Strive to Meet Regulatory Requirements
Strategy 3- Comply with all federal, state, and local regulations related to District administration
GOAL THREE: Be a Fiscally Sound and Effective Water Sector Utility
Strategy 2- Manage costs
October 18, 2018 Regular Board Meeting Agenda Packet- Page 32 of 46