R2008-91 AUTHORIZING THE INTERIM CITY MANAGER TO HIRE MILLIMAN CONSULTANTS AND ACTUARIES

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r Mr. Ronald Neufeld � June 28, 2007 Pa e 3 g e. Written Report. We will document the results and methodology from Steps c. and d. in a written report. The report will include a gain/loss analysis outlining the reasons for change in the unfunded liability since the prior full actuarial valuation. We will work with the City to identify a mutually agreeable date for completion after we receive all requested information. Generally, our turnaround time for completion of actuarial , valuations of retiree health care/life insurance benefits is 8-12 weeks from the receipt of all the information necessary to complete our work. It is our understanding that GASB 45 will first be effective for the City for the fiscal year May 1, 2008 — April 30, 2009. Note that for ' budgeting/planning purposes you may want us to perform an actuarial valuation of the GASB 45 liabilities and Annual OPEB Cost using a May l, 2007 valuation date. Since under GASB 45 the actuarial valuation of OPEB plans is only required biennially for the City, the results of a May 1, 2007 actuarial valuation can be used to satisfy the requirements of GASB 45 for the May 1, 2008—Apri130, 2009 reporting year. Fee Quote Based on the information we have received about the City's retiree benefits and our ' understanding of the project and the deliverables as described above, our fixed fee for the initial actuarial valuation is $7,500. If there have been little or no changes to the retiree medical program and participant data, we can use the results from the full valuation described , above to provide interim valuations at considerable cost savings. The labor intensive steps of analyzing the employee and retiree data can be performed every other year. Our GASB 45 valuation techniques can produce accurate, up to date figures for the "off' fiscal year by incorporating changes in your premium/contribution structure and changes in the economic environment without needing to perform costly reruns. Our fee estimate for the "off' fiscal year calculation of the GASB 45 results is $3,000. Our fees for subsequent years would be expected to increase with inflation. ' These fee estimates assume: ➢ Our data needs can be provided by the City in a timely and accurate manner in our requested format. If the requested data,is not provided in a timely and accurate manner in our requested format, additional fees based on our standard hourly rates will appl . Y ➢ Our evaluation is limited to the City's current benefit plans as included in the general summary of retirement benefits provided via fax dated May 18, 2007. ' Subsequent presentations, studies, and alterations will be billed on a time and expense basis based on our standard billing rates. We would be happy to provide fee quotes in advance once the scope of the additional project is defined. MILLIMAN