HomeMy WebLinkAboutContract 39761 CONSULTING AGREEMENT
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This Consulting Agreement (this "Agreement") is made on this day of
2010 , by and between Gallagher Benefit Services, Inc., a Delaware corporation("GBS"), and the City of
Fort Worth,TX (the"City").
The City wishes to enter into a consulting relationship with GBS with the terms and conditions set forth
in this Agreement, and GBS is willing to accept such a consulting relationship.
In consideration of and in reliance upon the previous paragraph and the terms and conditions contained in
this Agreement, the City and GBS agree as follows:
1. Engagement
The City engages GBS as an employee benefits consultant as stated in this Agreement and GBS
accepts this engagement. During the time that GBS is performing services for the City under this
Agreement, and for all purposes outlined in this document, GBS' status will be that of an independent
contractor of the City.
2. Term and Termination
The Effective Date of this Agreement is November 1, 2009. The term of GBS' engagement under
this Agreement (the "Consulting Period") will begin as of the Effective Date and will remain in effect for
two (2) years from the Effective Date. The Consulting Period may be extended for an additional year
on each anniversary of the Effective Date by both parties signing a written addendum to this
Agreement. Either party may terminate this Agreement by giving the other party at least thirty (30) days
written notice of its intent to terminate. In the event such termination is effective during the Consulting
Period (including any renewed Consulting Period), the City shall be responsible to GBS for any services
performed prior to the date of termination.
3. Services
GBS will provide actuarial consulting services to the City and consult with its employees,
representatives, agents and contractors as to such matters as more fully described in Exhibit A attached to
this Agreement and incorporated herein. GBS will perform other services as the City and GBS mutually
agree in writing. Prior to commencement of work, GBS will provide an addendum to Exhibit A to
summarize the scope of requested services.
4. Compensation
Subject to any changes as may be mutually agreed by the parties, GBS will receive, as
compensation for its services under this Agreement, an amount equal to $200 for each hour of consulting
services performed by GBS actuarial consultants with a total annual amount not to exceed $24,000.00.
Invoices will be prepared and expected to be paid in monthly installments. For additional information
regarding GBS compensation, please see our revenue disclosure policy and schedule set forth in Exhibit
B.
S. City Obligations and Responsibilities
To enable GBS to perform its obligations under this /agreement, the City shall at no charge to
GBS: -
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(a) Make available, as reasonably requested by GBS, timely management decisions,
complete and accurate documentation and information (including without limitations documentation and
information regarding Plan participants and/or beneficiaries) so that the Services contemplated by this
Agreement may be accomplished.
(b) Furnish written notification to GBS with complete and accurate copies of the current Plan
Documents, Summary Plan Descriptions, and Plan Amendments, as soon as reasonably possible.
(c) Exercise all discretionary authority and control over the management and disposition of
Plan assets to the exclusion of GBS. GBS shall not exercise any authority or control with respect to the
management or disposition of the assets of the Plan. GBS shall have no responsibility or liability with
respect to any funding of Plan Benefits.
(d) Perform any other administrative functions not expressly assumed by GBS hereunder.
6. Performance and Scope
(a) GBS Not a Fiduciary Under ERISA. To the extent that one or more of the City's
employee benefit plans are subject to the Employee Retirement Income Security Act, as amended
(ERISA) and in spite of any other provision of this Agreement to the contrary, the parties agree and
acknowledge that:
(i) GBS' services under this Agreement are not intended in any way to impose on GBS or
any of its affiliates a fiduciary status under the Employee Retirement Income Security Act of
1974, as amended("ERISA") ; and
(ii) this Agreement does not provide GBS, and the City will not cause or permit GBS to
assume, without prior written consent of GBS, any:
(A) discretionary authority or discretionary control respecting management of
any "employee benefit plan" within the meaning of Section 3(3) of ERISA (an "ERISA
Plan"),
(B) authority or control respecting management or disposition of the assets of any
ERISA Plan, or
(C) discretionary authority or discretionary responsibility in the administration of
any ERISA Plan.
(b) Reliance. GBS may rely upon any written instructions or information relating to GBS's
performance of Services provided to GBS by the City or the City's designated representatives, and
reasonably believed by GBS to be genuine and authorized by Customer. In the performance of its duties,
GBS may rely upon, and will have no obligation to independently verify the accuracy, completeness, or
authenticity of, any written instructions or information provided to GBS by the City or its designated
representatives and reasonably believed by GBS to be genuine and authorized by the City. GBS shall
incur no liability resulting from GBS's reasonable reliance on such instructions or information.
(c) No Practice of Law. GBS will not be obligated to perform, and the City will not request
performance of, any services which may constitute unauthorized practice of law. The City will be solely
responsible for obtaining any legal advice, review or opinion as may be necessary to ensure that its own
conduct and operations, including the engagement of GBS under the scope and terms as provided herein,
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conform in all respects with applicable State and Federal laws and regulations (including ERISA, the
Internal Revenue Code, State and securities laws and implementing regulations) and, to the extent that the
City has foreign operations, any applicable foreign laws and regulations.
(d) Conflict of Interest. GBS' engagement under this Agreement will not prevent it from
taking similar engagements with other clients who may be competitors of the City. GBS will,
nevertheless, exercise care and diligence to prevent any actions or conditions which could result in a
conflict with the City's best interest.
(e) Subcontractors. GBS may not cause another person or entity, as a subcontractor of GBS,
to provide some or all of the services required to be performed by GBS hereunder unless GBS first
receives City approval of such person or entity.
(f) Acknowledgements. In connection with GBS' services under this Agreement, the City
agrees that:
(1) Any compensation of the types described above and disclosed to the City does not
constitute a conflict of interest and the City expressly waives any claims alleging any such
conflict of interest.
(ii) The final decision to choose any plan vendor has been made by the City in its sole and
absolute discretion.
(iii) The compensation payable to GBS is solely for the services set forth under this
Agreement, including Exhibit A. Any additional administrative, claims representative or other
services (collectively, "Additional Services") will be governed by the terms of a separate
agreement covering the Additional Services.
7. Confidentiality
(a) City Information. GBS recognizes that certain confidential information may be furnished
by the City to GBS in connection with its services pursuant to this Agreement ("Confidential
Information"). GBS agrees that it will disclose Confidential Information only to those who the City has
designated as having a need to know such information. Confidential Information will not include
information that (i) is in the possession of GBS prior to its receipt of such information from the City, or
(ii) is or can be independently acquired or developed by GBS without violating any of its obligations
under this Agreement. However, disclosure by GBS of any Confidential Information pursuant to the
terms of a valid and effective subpoena or order issued by a court of competent jurisdiction, judicial or
administrative agency or by a legislative body or committee will not constitute a violation of this
Agreement.
(b) Use of Names; Public Announcements. No party will use the names, logos, trademarks
or other intellectual property of the other party without its prior written consent. Except as may be
required by law, no party will issue any press releases or make any public announcements of any kind
regarding the relationship between the parties without the other party's prior consent.
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8. Indemnification
In performing its obligations under this Agreement, GBS neither insures nor underwrites the
liability of the City's Plan. GBS shall have no duty or obligation to defend against any legal action or
proceeding brought to recover a claim for Plan benefits or any causes of actions for expenses or liabilities
incident to the Plan. GBS shall, however, make available to the City and its counsel, such evidence
relevant or related to such action or proceeding as GBS may have as a result of its services on behalf of
the City. GBS shall promptly notify in writing the City or its designated legal counsel of any legal
actions that involve the Plan or the City.
9. GBS Limitation of'Liability
LIMITATION OF LIABILITY: Notwithstanding anything contained herein to the
contrary, even if advised of the possibility of loss, liability, damage or expense, GBS shall not be
liable for any indirect damages, including any lost profits, data, business, goodwill, anticipated
savings, opportunity or use or other incidental or consequential damages. Furthermore:
i. GBS shall not be responsible for damages caused by acts of the City's
employees, representatives, agents, subcontractors, vendors, or suppliers.
ii. The City hereby expressly acknowledges and agrees that in view of the
amount of the fees paid or to be paid hereunder,the limitations of liability in
this Section 9 are in all respects fair and reasonable and reflect a duly
considered allocation of risk between the Parties.
iii. Notwithstanding the foregoing, this Section 9 shall not limit any liability for
the personal injury to or death of any individual or physical property
damage directly caused by GBS or beyond the extent to which the limitation
would be prohibited by applicable law.
10. Notices
Any notices, requests and other communications pursuant to this Agreement will be in writing
and will be deemed to have been duly given, if delivered in person or by courier, telegraphed, or by
facsimile transmission (provided that the sender received electronic confirmation of receipt by recipient)
or sent by express, registered or certified mail, postage prepaid, addressed as follows:
If to the City: City of Fort Worth
1000 Throckmorton
Fort Worth, Texas 76103
Attention: Ron Josselet
(Fax: )
If to GBS: Gallagher Benefit Services, Inc.
3600 American Boulevard West, Suite 500
Bloomington, MN 55431
Attention: Doug Anderson
(Fax: 866-743-5313
GBS 1 PA & C0msulting Agreement
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Either party may, by written notice to the other, change the address to which notices to such party are to
be delivered or mailed.
H. Miscellaneous
(a) Severability. The various provisions and subprovisions of this Agreement are severable
and if any provision or subprovision or part thereof is held to be unenforceable by any court of competent
jurisdiction, then such enforceability will not affect the validity or enforceability of the remaining
provisions or subprovisions or parts thereof in this Agreement.
(b) Entire Agreement; Amendment. This Agreement, including all exhibits hereto,
constitutes the entire agreement between the parties and supersedes all prior agreements and
understandings, whether oral or written, between the parties regarding the subject matter hereof. This
Agreement may be modified or amended only by a written instrument executed by both parties.
(c) Governing Law, Rule of Construction. This Agreement will be construed, interpreted
and enforced in accordance with the laws of the State of Texas without giving effect to the choice of law
principles thereof or any canon, custom or rule of law requiring construction against the drafter.
(d) Successors. This Agreement shall be binding upon and shall inure to the benefit of all
assigns, transferees and successors in the interest of the parties hereto.
(e) Counterparts. This Agreement may be executed by the parties in several counterparts,
each of which shall be deemed to be an original copy.
(f) Survival of Provisions. Sections 5, 6, 7, 8 and 9 will survive the termination of this
Agreement.
[The remainder of this page intentionally left blank. The parties' signatures appear on the
following page.]
OBS I PA & C'unsu111112 :A,,reemenl
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IN WITNESS WHEREOF, the parties hereto have caused this Consulting Agreement to be duly executed
on the date first written above.
City of Fort Worth, TX GALLAGHER BENEFIT SERVICES, INC.
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Name: Karen L . Montgomery Name: �indti� ^
Title: Assistant City Manager Title: y / W" 41
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Page 6 of 9
EXHIBIT A
SCOPE OF SERVICES
Subject to any changes and additions as may be mutually agreed by the parties in writing, GBS will, upon
written request, provide the following services for the City of Fort Worth:
ACTUARIAL CONSULTING SERVICES RELATED TO THE EMPLOYEES' RETIREMENT FUND OF
THE CITY OF FORT WORTH,INCLUDING,BUT NOT LIMITED TO:
❑ Services requested to determine the actuarial cost impact of plan provision changes,
including:
❑ Participant benefit changes
❑ Participant contribution rate changes, and
❑ City contribution rate changes
❑ Services requested to determine the actuarial cost impact of known or expected
demographic or economic changes,including:
❑ budgeted salary changes
❑ budgeted reductions or increases in employee positions
❑ Actuarial audit or review of results prepared by the Fund's actuary.
❑ Attendance and presentations, as requested,to the City Council, the Audit & Finance
Committee,the Budget Committee,the Employee Retirement Fund,or any other group
identified by the City.
GBS I PA & Cmsulting Agreement
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EXHIBIT B
GALLAGHER BENEFIT SERVICES, INC.
COMPENSATION DISCLOSURE STATEMENT
One of the core values highlighted in The Gallagher Way states, "We are an Open Society," and our open
society extends to the compensation Gallagher receives. As our industry moves toward complete
disclosure of all forms of compensation, we embrace this effort and are committed to leading the way. To
achieve this purpose, we have disclosed the commission or fee we will earn on each and every coverage
we will place on your behalf.
In general, Gallagher may be compensated as follows:
1. Gallagher companies are primarily compensated from commissions or fees received from the
brokerage and servicing of policies handled for a client's account. As permitted by law,
Gallagher companies may receive both commissions and fees.
2. Gallagher companies may access other facilities, including wholesalers, reinsurance
intermediaries, underwriting managers and others that act as intermediaries for both Gallagher
and other brokers in the insurance marketplace. If such a facility was utilized in the placement of
a client's account, it may have earned and retained brokerage commission or fees for its work.
For Employers and Plan Sponsors Subject to ERISA:
This Disclosure Statement is being given to the Buyer(1) to make sure Buyer knows about GBS' and GBS affiliates'
income before purchasing the insurance product, if applicable, and(2) for plans subject to ERISA, to comply with the
disclosure, acknowledgment and approval requirement of Prohibited Transaction Class Exemption No. 84-24', which
protects both Buyer and GB S2.
It should also be noted that:
• GBS is not an intermediary, broker/dealer, investment advisor or exchange and does not provide services
as such.
• GBS is effecting the transaction for the Plan(s) in the ordinary course of GBS business.
• The transaction set forth is at least as favorable to the Plan(s) as an arm's length transaction with an
unrelated party.
• GBS is not a trustee of the Plan(s).
• GBS is neither the Plan Administrator of the Plan(s), a fiduciary of the Plan(s), nor an employer which
has employees in the Plan(s).
Which allows an exemption trom a prohibited transaction under Section 408(x)of the Employee Retirement Income Security
Act of 1974(ERISA).
In making these disclosures. no position is taken. nor is one to be intcrrcYl. regarding the use of assets of a plan suhject to
FRISA to purchosc such insurance.
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For Plans subject to ERISA:
As stated above, ERISA requires Gallagher Benefit Services, Inc. (GBS) to make certain disclosures to
you concerning the sale of insurance, if applicable, and the compensation that GBS will receive from it.
Disclosure must be made to an independent plan fiduciary for the ERISA Plan(s), and your
acknowledgement confirms that you are agreeing that this is a reasonable transaction in the best interest
of participants in your ERISA Plan(s).
For more information on Gallagher's compensation arrangements, please visit
www.ajg.com/compensation.
In the event a client wishes to register a formal complaint regarding compensation Gallagher
receives, please send an email to Compensation_Complaints @jg.com or send a letter to:
AVC Compliance Officer
c/o Internal Audit Department
Arthur J. Gallagher & Co.
Two Pierce Place
Itasca, IL 60143
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M&C Review Pagel of 3
Official site of the City of Fort Worth,Texas
CITY COUNCIL AGENDA FoR T�OR_TH
COUNCIL ACTION: Approved on 2/2/2010
DATE: 2/2/2010 REFERENCE NO.: **C-24060 LOG NAME: 14GALLAGHER
CODE: C TYPE: CONSENT PUBLIC NO
NO
SUBJECT: Authorize Execution of an Agreement with Gallagher Benefit Services, Inc., for Actuarial
and Consulting Services with an Anticipated First Year Cost of Approximately $50,000.00
RECOMMENDATION:
It is recommended that the City Council authorize the City Manager to execute an agreement with
Gallagher Benefit Services, Inc., for actuarial and consulting services on a fee-for-service basis with
an anticipated first year cost of approximately $50,000.00.
DISCUSSION:
Section XIII of the City's Financial Management Policy Statements for Fiscal Year 2009-2010 require
the City Council to obtain the services of an independent actuary for the following purposes relating i
the Employees' Retirement Fund pension benefits and retiree healthcare benefits:
1. Certify to the City Council the actuarial impact of any proposed retirement fund benefit
improvements or changes in contribution levels;
2. Determine the actuarial impact of assumptions included in the City Manager' s Proposed
Budget on the Employees' Retirement Fund;
3. Certify to the City Council the actuarial impact of any proposed health benefit improvement!
or changes; and
4. Determine the actuarial impact of assumptions included in the City Manager' s Proposed
Budget related to the actuarially determined Annual Required Contribution (ARC) and the
period of time necessary to fully fund the ARC in accordance with Governmental Accounting
Standards Board Statement 45.
This agreement with Gallagher Benefit Services provides for the above actuarial services required bi
Financial Management Policy Statements. Gallagher Benefit Services will also provide actuarial and
consulting services to the City in relation to two committees appointed by the City Manager to review
and evaluate pension and healthcare benefits and resulting recommendations from these committee
regarding potential changes to these benefit programs for Fiscal Year 2010-2011 budget
consideration.
Compensation to Gallagher Benefit Services shall be on a fee-for-service basis. The annual costs of
services for Fiscal Year 2009-2010 are estimated based upon the following fee schedule:
EMPLOYEES' RETIREMENT FUND SCOPE OF SERVICES
Cost Range Services to be Provided
$2,500 to $5,000 each Services requested to determine the actuarial cost impact of
proposed change plan provision changes
$5,000 to $10,000 Services requested to determine the actuarial cost impact of
known or expected demographic or economic changes
http://apps.cfwnet.org/council_packet/mc_review.asp?ID=12893&councildate=2/2/2010 2/4/2010
M&C Review Page 2 of 3
$12,000 to $18,000 Actuarial audit or review of results prepared by the Fund's
actuary
$5,000 to $10,000 Travel for meetings attendance and presentations, as requested
by the City and for other customary reasonable and necessary
fees
OTHER POST-EMPLOYMENT BENEFIT (OPEB) SCOPE OF SERVICES
Cost Range Services to be Provided
$15,000 to $25,000 Actuarial audit of the most current actuarial valuation results
prepared by the City's actuary
$2,500 to $5,000 per Cost impact analysis of alternative plan designs
design
$2,000 to $5,000 Cost impact analysis of different amortization methods and
discount rates
$5,000 to $10,000 Travel for meetings attendance and presentations, as requested
by the City and for other customary reasonable and necessary
fees
The expected total cost of services in Fiscal Year 2009-2010 is anticipated to be approximately
$50,000.00. There is no guaranteed amount for this contract since services are billed on the basis o
what is actually required.
Gallagher Benefit Services (previously, The Stanton Group) has provided actuarial and consulting
services to the City for the past four years. Gallagher Benefit Services is a Division of the Arthur J.
Gallagher family of companies, one of the world's largest commercial insurance and risk
management companies.
TERM AND RENEWAL —The initial term of this agreement will be for two years beginning January
1, 2010 and extending through December 31, 2011. At the City's option, this agreement may be
renewed for three additional one-year periods unless terminated by either party. Renewal of the
agreement will not require additional specific City Council approval as long as the City Council has
appropriated sufficient funds to satisfy the City's obligations during the renewal term.
M/WBE —A waiver of the goal for M/WBE subcontracting requirements was requested by the Humar
Resources Department and approved by the M/WBE Office because the purchase of goods or
services is from sources where subcontracting or supplier opportunities are negligible.
FISCAL INFORMATION/CERTIFICATION:
The Financial Management Services Director certifies that funds are available in the current operatin
budget, as appropriated, of the General Fund.
TO Fund/Account/Centers FROM Fund/Account/Centers
GG01 _539120 014300_0 $50,0.00.00
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Submitted for City Manager's Office by: Karen Montgomery (6222)
Originating Department Head: Karen Marshall (7783)
Additional Information Contact: Ron Josselet (8058)
ATTACHMENTS
http://apps.cfwnet.org/council_packet/mc_review.asp?ID=12893&councildate=2/2/2010 2/4/2010