2012-28 Actuarial Valuation ProposalRESOLUTION 2012 -28
• A RESOLUTION OF THE VILLAGE COUNCIL OF THE VILLAGE OF
NORTH PALM BEACH, FLORIDA APPROVING THE PROPOSAL
SUBMITTED BY MILLIMAN, INC. TO PERFORM THE ACTUARIAL
VALUATION REQUIRED BY GASB STATEMENT NUMBER 45 BY
PIGGYBACKING THE STATE CONTRACT FOR ACTUARIAL SERVICES;
AUTHORIZING THE MAYOR TO EXECUTE THE PROPOSAL ON BEHALF
OF THE VILLAGE; AND PROVIDING FOR AN EFFECTIVE DATE.
WHEREAS, GASB Statement Number 45 requires government employers to measure and report
liabilities associated with post - employment benefits other than pension benefits through an
actuarial evaluation; and
WHEREAS, Village Administration recommended accepting the proposal submitted by
Milliman, Inc. to perform such actuarial evaluation services by piggybacking State of Florida
Contract No. 973 - 020 -07 -1; and
WHEREAS, the Village's Purchasing Policies require Council approval for multi -year contracts
in excess of $10,000 and specifically authorize piggyback purchases; and
WHEREAS, the Village Council determines that the adoption of this Resolution is in the best
interests of the Village and its residents and employees.
NOW, THEREFORE, BE IT RESOLVED BY THE VILLAGE COUNCIL OF THE VILLAGE
OF NORTH PALM BEACH, FLORIDA as follows:
Section 1. The foregoing recitals are ratified as true and incorporated herein.
Section2. The Village Council hereby approves the proposal submitted by Milliman, Inc. in
the total amount of $13,500.00 to perform the actuarial valuations required by GASB Statement
No. 45 through September 30, 2014 and authorizes the Mayor to execute the proposal on behalf
of the Village. The funds for these services shall be expended from Account No. A4801 -33210
(Accounting and Auditing).
Section 3. This Resolution shall take effect immediately upon its
PASSED AND ADOPTED THIS 12th DAY OF APRIL
( Vi
illage Seal)
.,
( I1A „o.' MAYOR
AiTLStT=
VILLAGE CLERK
GASB 45
Proposal to Provide GASB 45 Analysis for the Village of North Palm Beach for
the Fiscal Period Ending 2012
March 12, 2012
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Milliman Proposal
TABLE OF CONTENTS
A. GASB 45 Analysis - Project Steps
B. Project Team
C. Fee Schedule
Exhibit 1 - Service Agreement
GASB 45
Proposal to Provide GASB 45 Analysis for the Village of North Palm Beach
March 12, 2012
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Milliman Proposal
A. GASB 45 ANALYSIS — PROJECT STEPS
Proposed Services
The initial phase of the GASB 45 analysis is expected to accomplish the following
objectives:
1. Data Collection — We will gather necessary information from the Village of North Palm
Beach related to other post - employment benefits (OPEBs) offered to retirees.
2. Valuation — We will perform calculations in accordance with GASB guidance and
current actuarial standards of practice. Key computations will include the OPEB
liability, the annual required contribution, and projected future benefit payments.
3. Meeting to Present Results — We will meet with you to present valuation results and
discuss important issues. The meeting will be conducted either in person or via web
conference.
Timing for Completion of the Initial Valuation
From the time we receive the requested information, we expect to provide the September
30, 2012 disclosure report within six weeks.
GASB 45
Proposal to Provide GASB 45 Analysis for the Village of North Palm Beach
March 12, 2012
Milliman '' .,; ... ,.
B. PROJECT TEAM
Consulting Actuary
Mr. Upchurch is an Actuary with the Atlanta office of Milliman. He joined the firm in 1990.
As a Principal in Atlanta's Employee Benefits Practice, he is the lead consultant for a variety
of private, public and multi - employer plan sponsors of pension and savings plans. His
consulting activities focus on the administration, design and funding of these plans.
Mr. Upchurch has been a consultant for more than 20 years in the employee benefits field.
In addition to pension and savings plans, he has extensive experience with post- retirement
medical plans. He is also a frequent participant in pension workshops and panels for
various professional groups.
Professional Designations
• Fellow, Society of Actuaries
• Enrolled Actuary under ERISA
• Member, American Academy of Actuaries
Degrees
■ BS (Management Science) - GA Institute of Technology, MAS — GA State University
Support Actuary
Mr. Jaramillo is an actuarial associate with the Atlanta office of Milliman. Mr. Jaramillo
practices in the employee benefits field, working with defined benefit and post- retirement
medical plans
In addition to preparing and analyzing actuarial valuations, Mr. Jaramillo assists pension
and post- retirement medical plan sponsors in quantifying the financial risk associated with
such plans.
Professional Designations
• Associate, Society of Actuaries
• Enrolled Actuary under ERISA
• Member, American Academy of Actuaries
Degrees
■ BS (Mathematics), Tulane University
Ben Upchurch, FSA, EA
Consulting Actuary.
Sebastian Jaramillo, ASA, EA
Support Actuary.
GASB 45
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Proposal to Provide GASB 45 Analysis for the Village of North Palm Beach
March 12. 2012
Milliman
C. FEE SCHEDULE
Fee Assumptions
The estimated fees are based on the following assumptions:
• There are approximately 140 eligible active employees
• There are approximately 23 covered retirees and beneficiaries
• There are two medical options available to retirees.
• Data provided is usable without audit or significant follow up
Estimated Fees
■ Full Valuation under GASB 45 for the Not to exceed - $9,500*
period ending September 30, 2012
■ Roll Forward Valuation for the period $2,000
ending September 30, 2013
■ Roll Forward Valuation for the period $2,000
ending September 30, 2014
If a material difference in fees becomes evident due to a change in the scope of the assignment, we will advise you.
*If you prefer that Milliman make an on -site final presentation, our fees will be an additional $1,000 (out -of- pocket travel
expenses to be billed separately).
GASB 45
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Proposal to Provide GASB 45 Analysis for the Village of North Palm Beach
March 13, 2012
Milliman Nropos
EXHIBIT 1 — CONSULTING SERVICES AGREEMENT
This document will serve as the Service Agreement between Milliman and the Village of North Palm Beach the
provision of actuarial services required to meet GASB 43/45 requirements and other services, as requested. To the
extent not modified herein, the terms and conditions of State of Florida Contract No. 973 - 020 -07 -1 ( "State Contract "),
as amended, are hereby incorporated herein by reference. The terms of the State Contract shall control unless
expressly modified herein.
Terms and Conditions
1. Limitation of Liability. Milliman will perform all services in accordance with applicable professional standards. The parties
shall be bound by the limitation of liability set forth in Section 3.20 of the State of Florida Contract #973 - 020 -07 -1.
2. Disputes. If any dispute occurs between the parties, they shall attempt in good faith to resolve the dispute by mediation. In
such mediation, the parties thereto will choose a mutually acceptable mediator with a background in insurance, actuarial
science or law. If such mediation fails after a good -faith effort has occurred, only then may a party institute litigation. If a
party files a lawsuit, and both a state and federal court have subject matter jurisdiction over all of the claims to be filed, then
the party shall file such suit in federal district court. The parties hereby irrevocably submit to venue is the state and federal
courts sitting in the Southern District of Florida. Both parties agree to waive the right to a trial by jury. If any legal action or
other proceeding is brought for the enforcement of this Agreement, or because of an alleged dispute, breach, default or
misrepresentation in connection with any provisions of this Agreement, the successful or prevailing party or parties shall be
entitled to recover reasonable attorney's fees, court costs and all expenses (including taxes) even if not taxable as court
awarded costs (including, without limitation, all such fees, costs and expenses incident to appeals), incurred in that action or
proceeding, in addition to any other relief to which such party or parties may be entitled.
3. Choice of Law. The construction, interpretation, and enforcement of this Agreement shall be governed by the substantive
contract law of the State of Florida without regard to its conflict of laws provisions. In the event any provision of this
agreement is unenforceable as a matter of law, the remaining provisions shall stay in full force and effect. Notwithstanding
any Florida law to contrary, the parties recognize and agree that it is the intent of the parties, as sophisticated parties
represented by counsel, that the limitation of liability section in this Agreement should be enforced in its entirety. In the event
any provision of this Agreement is unenforceable as a matter of law, the remaining provisions will stay in full force and effect.
4. No Third Party Distribution. . Milliman's work product is prepared solely for the use and benefit of the Village of North
Palm Beach in accordance with its statutory and regulatory requirements. Milliman recognizes that materials it delivers to the
Village of North Palm Beach may be public records subject to disclosure to third parties, however, Milliman does not intend to
benefit and assumes no duty or liability to any third parties who receive Milliman's work product in this fashion and may
include disclaimer language on its work product so stating. To the extent that Milliman's work product is not subject to
disclosure under applicable public records laws, the Village of North Palm Beach agrees that it shall not disclose Milliman's
work product to third parties without Milliman's prior written consent; provided, however, that the Village of North Palm
Beach may distribute Milliman's work product in its entirety to (i) its professional service providers who are subject to a duty
of confidentiality and who agree to not use Milliman's work product for any purpose other than to provide services to the
Village of North Palm Beach, or (ii) any applicable regulatory or governmental agency, as required.
5. Terms of Agreement. This Agreement will become effective upon the signature of both parties, and will remain in effect until
terminated by either party as provided herein. Either party may terminate this Agreement upon thirty (30) days prior written
notice. Milliman will retain any records it has relating the Services provided under this Agreement for a period of three years
following the termination of this Agreement.
6. Fees. The parties hereby agree that the fees for this engagement shall not exceed $9,500.00 for the full valuation for the
period ending September 30, 2012. Fees for interim updates shall not exceed $2,000 each.
GASB 45
Proposal to Provide GASB 45 Analysis for the Village of North Palm Beach
March 13, 2012
Milliman Proposal
This Service Agreement will take effect upon the signature of both parties below.
VILLAGE OF NORTH PALM BEACH
I have read and agrps -�o the t�r ns and conditions
Accepted b .
Printed Name: VJ
Title: AllTpprL Date: L
GASB 45
Proposal to Provide GASB 45 Analysis for the Village of North Palm Beach
March 13, 2012
MILLIMAN, INC.
I have read and agree to the terms and conditions
of is Agreement.
Accepted by:
Printed Name: rJ D JGV l.s
Title: Prinaal Date: 3
MILLIMAN, INC.
BUSINESS ASSOCIATE AGREEMENT
/T is BUSINESS ASSOCIATE AGREEMENT ( "Agreement ") is entered into effective
the day of & , 2012 by and between the Village of North Palm Beach
( "Client ") and Milliman, Inc. ( "Milliman ").
RECITALS
A. Client is a Covered Entity as defined under the Health Insurance Portability and
Accountability Act of 1996 ( "HIPAA ") and is therefore subject to HIPAA and its implementing
regulations, including the Standards for Privacy of Individually Identifiable Health Information
(the "Privacy Rule ") and the Security Standards for the Protection of Electronic Protected Health
Information (the "Security Rule "), and Subtitle D of the Health Information Technology for
Economic and Clinical Health Act ( "HITECH ") enacted as part of the American Recovery and
Reinvestment Act of 2009 (collectively, HIPAA, the Privacy Rule, Security Rule and HITECH
shall be referred to herein as the "HIPAA Regulations ").
B. Protected Health Information received from Client or created or received by
Milliman on behalf of Client ( "PHI") may be needed for Milliman to perform the services (the
"Services ") requested by Client and described in any underlying agreement between the parties
(the "Underlying Agreement ").
C. To the extent Milliman needs to access PHI to perform the Services, it will be
acting as a Business Associate of Client and will be subject to certain provisions of the HIPAA
Regulations.
D. Milliman and Client wish to set forth their understandings with regard to the use
and disclosure of PHI by Milliman so as to comply with the HIPAA Regulations.
AGREEMENTS
in consideration of the Recitals and the mutual agreements below, the parties agree as
follows:
1. Defined Terms. Capitalized terms used, but not otherwise defined, in this
Agreement shall have the same meaning as those terms in the HIPAA Regulations.
2. Milliman's Obligations and Permitted Activities.
(a) Milliman agrees to not use or further disclose PHI other than as required
to perform the Services, requested by Client or Required By Law, or as otherwise permitted
herein.
(b) Milliman agrees to use reasonable safeguards to prevent use or disclosure
of PHI other than as provided for by this Agreement, and shall develop, implement, maintain and
use appropriate administrative procedures, and physical and technical safeguards, to reasonably
preserve and protect the confidentiality, integrity and availability of electronic PHI.
(c) Milliman agrees to report to Client, without unreasonable delay and in no
case later than five (5) business days following actual knowledge by Milliman:
(i) Any use or disclosure of PHI not provided for by this Agreement.
(ii) Any Security Incident of which Milliman becomes aware;
provided, however, that the parties acknowledge and agree that this section constitutes notice by
Milliman to Client of the ongoing existence and occurrence of attempted but Unsuccessful
Security Incidents of which no additional notice to Client shall be required. Unsuccessful
Security Incidents shall include, but not be limited to, pings and other broadcast attacks on
Milliman's firewall, port scans, unsuccessful log -on attempts, denials of service and any
combination of the above, so long as such incidents do not result in unauthorized access, use or
disclosure of Client's electronic PHI.
(iii) Any Breach of Unsecured PHI, as defined in 45 CFR 164.402.
Following the initial notification of any such Breach, Milliman shall provide a report to Client
that includes, to the extent possible: [A] a brief description of what happened, including the date
of occurrence and the date of the discovery by Milliman; [B] a description of the PHI affected,
including the names of any Individuals whose PHI has been or is reasonably believed to have
been accessed, acquired or disclosed and the types of PHI involved (such as full name, social
security number, date of birth, home address, account numbers, etc.); and [C] a brief description
of what Milliman has done to investigate the Breach, to mitigate harm to Individuals, and to
protect against any further Breaches. Milliman also shall provide to Client any other available
information Client is required to include in its notification to affected Individual(s).
(d) Milliman agrees to ensure that any agent or subcontractor to whom it
provides PHI agrees to the same or substantially similar restrictions and conditions as those that
apply to Milliman through this Agreement with respect to such PHI.
(e) Milliman shall make its internal policies, procedures and records relating
to the use and disclosure of PHI reasonably available to the Secretary or to Client if necessary or
required to assess Milliman's or the Client's compliance with the HIPAA Regulations.
(f) It is not anticipated that Milliman will maintain a Designated Record Set
on behalf of Client; however, if Milliman maintains a Designated Record Set on behalf of Client,
Milliman agrees to, at Client's written request: (i) provide access to such PHI in order to assist
Client in meeting its obligations under the Privacy Rule, and (ii) make any amendment(s) to such
PHI as Client so directs or agrees to pursuant to the Privacy Rule.
(g) So that Client may meet its disclosure accounting obligations under the
HIPAA Regulations, Milliman agrees to document disclosures of PHI made by Milliman which
are not excepted from disclosure accounting requirements under the HIPAA Regulations.
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(h) Milliman may use PHI for Milliman's proper management and
administration or to carry out its legal responsibilities. Milliman may disclose PHI for
Milliman's proper management and administration, provided that: (i) Milliman obtains
reasonable assurances from the person to whom PHI is disclosed that it will remain confidential
and used or further disclosed only as Required By Law or for the purpose for which it was
disclosed to the person; and (ii) the person notifies Milliman of any instances of which it is
aware in which the confidentiality of PHI has been breached. Milliman also may make
disclosures that are required by law.
(i) Milliman may use PHI to provide Data Aggregation services to Client as
permitted by the Privacy Rule.
0) Milliman may, at its option:
(i) Deidentify PHI in accordance with the requirements of the Privacy
Rule and maintain such deidentified health information indefinitely; provided that all identifiers
are destroyed or returned in accordance with this Agreement.
(ii) Create a Limited Data Set for the purpose of providing the
Services, provided that Milliman:
[a] Does not use or further disclose PHI contained in the
Limited Data Set except as necessary to provide the Services or as provided for in this
Agreement or otherwise Required By Law;
[b] Uses appropriate safeguards to prevent the use or disclosure
of PHI contained in the Limited Data Set other than as provided for by this Agreement;
[c] Reports to Client any use or disclosure of PHI contained in
the Limited Data Set of which Milliman becomes aware that is not provided for by this
Agreement;
[d] Ensures that any agents or subcontractors to whom it
provides access to the Limited Data Set agree to the same restrictions and conditions that apply
to Milliman under this Agreement; and
[e] Does not re- identify PHI or contact the Individuals whose
information is contained within the Limited Data Set.
3. Client's Obligations.
(a) Client shall not request Milliman to use or disclose PHI in any manner that
would not be permissible under the Privacy Rule or the Security Rule if done by Client.
(b) Client shall not provide Milliman with more PHI than that which is
minimally necessary for Milliman to provide the Services and, where possible, Client shall
provide any PHI needed by Milliman to perform the Services in the form of a Limited Data Set,
in accordance with the HIPAA Regulations.
(c) Client shall clearly and conspicuously designate all PHI as such before
providing it to Milliman.
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(d) Client acknowledges and agrees that neither this Agreement nor the
Underlying Agreement requires Milliman to make any disclosure for which an accounting would
be required under the HIPAA Regulations. Client further agrees that it shall be solely
responsible for tracking and providing Individuals an accounting of any disclosures made by
Client to Milliman.
(e) Client acknowledges and agrees that the provisions of section 20)(ii) of
this Agreement shall constitute a Data Use Agreement between the parties.
4. Term and Termination.
(a) Term. This Agreement shall be effective as of the date first written above,
and shall terminate when all PHI is destroyed or returned to Client. If Milliman determines, in
accordance with subsection 4(c)(ii) below, that it is infeasible to return or destroy PHI, the
protections of this Agreement with respect to such PHI shall remain in effect until such PHI is
returned or destroyed.
(b) Termination. Upon a party's knowledge of a material breach by the other
party, the nonbreaching party shall either:
(i) Provide an opportunity for the breaching party to cure the breach
or end the violation and terminate this Agreement if the breaching party does not cure the breach
or end the violation within the time specified by the nonbreaching party; or
(ii) Immediately terminate this Agreement if the breaching party has
breached a material term of this Agreement and cure is not possible.
(c) Effect of Termination.
(i) Except as otherwise provided in subsection 4(c)(ii) below, upon
termination of this Agreement for any reason, Milliman shall return or destroy all PHI. This
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—1- f, nur «>— : � +t— -r ..t _._ .�_ _r
provision wean alSO apply w r iii utaL is iii Liic PosScssiort vi subcont acto s or agents of
Milliman.
(ii) If Milliman determines that returning or destroying any or all PHI
is infeasible, the protections of this Agreement shall continue to apply to such PHI, and Milliman
shall limit further uses and disclosures of PHI to those purposes that make the return or
destruction infeasible, for so long as Milliman maintains such PHI. Client hereby acknowledges
and agrees that infeasibility includes Milliman's need to retain PHI for purposes of complying
with its work product documentation standards.
M
5. Miscellaneous.
(a) Regulatory References. A reference in this Agreement to a section in the
HIPAA Regulations means the section as in effect or as amended, and for which compliance is
required.
(b) Amendment. Upon the effective date of any final regulation or
amendment to the HIPAA Regulations, this Agreement shall be deemed automatically amended
so that the obligations it imposes on the parties remain in compliance with such regulations.
Following amendment of the Agreement in this manner, the parties shall, as necessary, work
together to clarify their respective obligations with respect to any new requirements under the
modified HIPAA Regulations.
(c) Independent Contractors. Milliman and Client are independent
contractors and this Agreement will not establish any relationship of partnership, joint venture,
employment, franchise or agency between Milliman and Client. Neither Milliman nor Client
will have the power to bind the other or incur obligations on the other party's behalf without the
other party's prior written consent, except as otherwise expressly provided in this Agreement.
(d) Conflicts. In the event that any terms of this Agreement are inconsistent
with the terms of the Underlying Agreement, then the terms of this Agreement shall control.
(e) Entire Agreement. This Agreement shall constitute the entire agreement
of the parties hereto with respect to the subject matter hereof and supersedes all prior
agreements, oral or written, and all other communications between the parties hereto relating to
such subject matter.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of
the date first written above.
MILLIMAN, INC.
By J D DC'nrLo
RTH PhL34 BEACH
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