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CONSULTING SERVICES AGREEMENTCONSULTING SERVICES AGREEMENT BETWEEN THE CITY OF CLEARWATER, FLORIDA AND GABRIEL, ROEDER, SMITH & COMPANY Section I General InfQrmatio A. Purpose The City of Clearwater (City) hereby enters into a contractual agreement with Gabriel, Roeder, Smith & Company (GRS) for actuarial and consulting services pertaining to the City of Clearwater Employees Pension Fund and its Other Post-Employment Benefits (OPEB). The client in this matter shall be the City. This Contract does not create any relationship between GRS and any other related private, not for profit, or governmental entity, including, but not limited to, the City employees or collective bargaining units covering such employees. Such entities may rely upon GRS work products only with the permission of both GRS and the City. GRS shall have no obligation to work for such entities, however, GRS may freely elect to work for such an entity with consent of the City and provided that copies of all related work products are provided to the City. B. Entire Agreement and Order of Precedence This Agreement, together with the Proposal issued by GRS to the City and dated September 28, 2009 collectively, form the complete and exclusive contract between the parties as it relates to this transaction. In the event of any conflict among these documents, the following order of precedence shall apply (in descending order of precedence): 1. This Agreement 2. GRS' Proposal for Actuarial and Consulting Services dated September 28, 2009 The failure of a party to insist upon strict adherence to any term of the contract shall not be considered a waiver, or deprive the party of the right thereafter to insist upon strict adherence to that term, or any other term, of the contract. The contract may not be modified, amended, extended, or augmented, except by a writing executed by the parties, and any breach or default by a party shall not be waived or released other than in writing signed by the other party. Each provision of the contract shall be deemed to be severable from all other provisions of the contract and, if one or more of the provisions of the contract shall be declared invalid, the remaining provisions of the contract shall remain in full force and effect. The contract shall in all respects be governed by, and construed in accordance with, the laws of the State of Florida. Any legal action under this Agreement shall be brought in Pinellas County, Florida. Gabriel Roeder Smith & Company -1- C. Term of Contract The contract is for the 60-month period extending from January 1, 2010 through December 31, 2014. D. Contractor Responsibilities GRS assumes responsibility for all contractual activities whether or not it performs them directly. GRS shall be the sole point of contact with regard to contractual matters, including payment of any and all charges resulting from the contract. The City reserves the right to interview the key personnel assigned by GRS to this project and to the reassignment of personnel deemed unsatisfactory by the City. If any part of the work is to be subcontracted, the City reserves the right to approve the subcontractors in advance, and to require that GRS replace any subcontractors found by the City to be unacceptable. GRS shall be responsible for adherence by the subcontractor to all provisions of the contract. E. Client Responsibilities The City agrees to review information supplied by GRS for general reasonableness, and to ensure that GRS has properly understood the assignment. In the event that the City finds a GRS work product to be unreasonable or otherwise unsatisfactory, the City shall not distribute such work product or otherwise make use of it, or rely upon it, until a correction has been made, or GRS has explained matters to the satisfaction of the City. The City agrees that GRS is not responsible for the accuracy of any data provided to GRS by the City. In the event of discovery of an error by GRS in a calculation, the City agrees to take immediate steps to mitigate the effects of such error. Any actuarial communication, report and presentation materials may be provided to parties other than the City only in their entirety and only with the permission of the City. F. Accounting Records GRS shall maintain all pertinent financial and accounting records and evidence pertaining to this contract in accordance with generally accepted accounting principles (GAAP). G. Patent/Copyright Infringement and General Indemnification GRS shall indemnify, defend and hold harmless the City and its employees and agents from and against all losses, liabilities, penalties, fines, damages and claims (including taxes), and all related costs and expenses (including reasonable attorneys' fees and disbursements and costs of investigation, litigation, settlement, judgments, interest and penalties) incurred in connection with any action or proceeding threatened or brought against the City to the extent that such action or proceeding is based on a claim that any piece of equipment, software, commodity, or service supplied by GRS or its subcontractors, or the operation of such equipment, software, commodity, or service, or the use or reproduction of any documentation provided with such equipment, software, commodity, or service infringes any United States or foreign patent, copyright, trade secret or other proprietary right of any person or entity, which right is Gabriel Roeder Smith & Company -2- enforceable under the laws of the United States. In addition, should the equipment, software, commodity, or service, or the operation thereof, become, or in GRS' opinion be likely to become, the subject of a claim of infringement, GRS shall at its sole expense, (i) procure for the City the right to continue using the equipment, software, commodity, or service, or if such option is not reasonably available to GRS, (ii) replace or modify the same with equipment, software, commodity, or service of equivalent function and performance so that it becomes non-infringing, or if such option is not reasonably available to GRS, (iii) accept its return by the City with appropriate credits to the City against GRS' charges and reimburse the City for any losses or costs incurred as a consequence of the City ceasing to use and returning the equipment, software, commodity, or service. GRS agrees to indemnify the City from claims made by GRS employees while working on the City premises on the City projects, provided that the City has complied with all relevant Fcdcral and State Laws related to workplace safety, and human rights, including, but not limited to anti-discrimination and anti-harassment laws. In any and all claims against the City, or any of its agents or employees, by any employee of the contractor or any of its subcontractors, the indemnification obligation under the contract shall not be limited in any way by the amount or type of damages, compensation, or benefits payable by or for GRS or any of its subcontractors under worker's disability compensation acts, disability benefit acts, or other employee benefit acts. This indemnification clause is intended to be comprehensive. Any overlap in subclauses, or the fact that greater specificity is provided as to some categories of risk, is not intended to limit the scope of indemnification under any other sub clauses. The duty to indemnify will continue in full force and effect not withstanding the expiration or early termination of the contract with respect to any claims based on facts or conditions, which occurred prior to termination. H. Liability Insurance GRS shall purchase and maintain such insurance as will protect it from claims which may arise out of or result from its performance under the contract, whether such performance be by GRS or by any subcontractor or by anyone directly or indirectly employed by any of them, or by anyone for whose acts any of them may be liable. The insurance shall be written for not less than the greater of $1,000,000 and any limits required by law, and shall include contractual liability insurance as applicable to GRS' obligations under the indemnification clause of this contract. 1. Board Minutes The City shall routinely provide GRS with copies of Board Minutes for GRS's reference in connection with work to be performed pursuant to this contract. GRS is not obligated to provide corrections to the minutes. Silence on the part of GRS does not constitute agreement with the minutes, even with respect to meetings that the GRS Consultant attended or at which GRS was directly or indirectly quoted. Gabriel Roeder Smith & Company -3- I Cancellation The City, with 30 days written notice, may cancel the contract. GRS may also cancel the contract with 30 days written notice for any of the following reasons: 1) the City, or one or more plan participants or beneficiaries, or the State has filed a lawsuit against GRS in a matter related to the City, its participants, or its beneficiaries, 2) a member of the City or Staff has been found guilty of criminal or civil breach of fiduciary responsibility or other severe wrongdoing with respect to the City or GRS, or 3) the City or Staff demands that GRS take actions deemed by GRS Management to be unethical or illegal. GRS may otherwise cancel the contract upon giving 90 days written notice. If the City cancels the contract for any cause other than the failure of GRS to fulfill the obligations of the contract, the City shall pay GRS' reasonable final invoice for work performed under the contract. In the event of the failure of GRS to fulfill its obligations under the contract, or in the event that GRS cancels this contract without sufficient notice as described above, the City may procure the services of other sources, and hold GRS liable for any excess costs occasioned thereby, up to the greater of $50,000 or 500 of the amount paid under the contract for the most recently completed fiscal year. Excess costs for this purpose do not include the costs of preparing and issuing an RFP. The City, as an entity of government, is subject to the appropriation of funds by its legislative body in the amount sufficient to allow continuation of its performance in accordance with the terms and conditions of this contract for each and every fiscal year following the fiscal year in which this contract shall remain in effect. Upon notice that sufficient funds are not available in the subsequent fiscal years, the City shall therefore be released of all terms and conditions. K. Delegation/Assignment GRS shall not delegate any duties under this contract to a subcontractor unless the City has given prior written consent to the delegation. GRS may not assign the right to receive money due under the contract without the prior written consent of the City. In addition, the City reserves the right to approve subcontractors for this project and to require GRS to replace subcontractors who in the City's judgment are unacceptable. L. Non-Discrimination Clause In performing the contract, GRS agrees not to discriminate against any employee or applicant for employment, with respect to their hire, tenure, terms, conditions or privileges of employment, or any matter directly or indirectly related to employment, because of race, color, religion, national origin, ancestry, age, sex, height, weight, marital status, physical or mental handicap or disability. GRS further agrees that every subcontract entered into for the performance of any contract resulting here from will contain a provision requiring non- discrimination in employment, as herein specified, binding upon each subcontractor. M. Fees The fees set forth in this contract shall be firm for the duration of the contract as specified on pages 36-38 of GRS submitted proposal to RFP 21--09 (as attached as Exhibit A). Other than routine fee updates for inflation, no fee changes will be permitted without prior written consent of the City. Gabriel Roeder Smith & Company -4- N. Modification of Services The City reserves the right to modify the service requirements during the course of the contract. Modifications may include adding, deleting, or altering the work to be performed under the contract. Any changes in pricing (increases or decreases) proposed by GRS as a result of service modifications are subject to written acceptance by the City. In the event that price changes are not acceptable to the City, the contract may be canceled and subject to competitive bidding based upon the new specifications. 0. Confidentiality GRS shall instruct its employees and the employees of any subcontractor to keep as confidential information concerning the business of the City, its financial affairs, its relations with its participating municipalities and courts, members, retirees and beneficiaries, and its employees, as well as any other information which may be specifically classified as confidential by the City. At the City's request, GRS or any subcontractor(s) and each of their employees may be required to sign confidentiality statements prior to beginning or continuing to work on the contract. GRS will not normally print full Social Security numbers on documents used for communication with the City or its participants. The only exception GRS will make to this policy without direction from the City, relates to certain necessary and confidential communications between GRS and the City that are directly related to work assignments. In the event that the City directs GRS to make further exceptions to this policy, the City agrees to indemnify GRS for any illegal use or misuse or security breaches or identity thefts related to such information by individuals other than GRS employees. All copies of information developed by GRS in connection with the contract are the property of and will be returned to the City, upon request. GRS reserves the right to shred or otherwise dispose of information one year following receipt, unless it receives instructions to the contrary from the City. GRS will not reveal or disclose either information or findings concerning this contract with anyone who does not have a substantial need-to-know and who has not been expressly authorized in writing by the City to receive the information/findings. GRS must ensure that all safeguards and proper procedures are implemented to protect confidential information. P. Tax Advice Legal Advice and Investment Advice Based upon its general background and research on federal income tax, legal issues, and investment matters, GRS employees may from time to time provide general comments and information on same. However, no GRS work product shall be deemed to provide income tax advice, legal advice, or investment advice unless such work product contains one of the following phrases or substantially equivalent language. • "This work product is intended to provide income tax advice." • "This work product is intended to provide legal advice." • "This work product is intended to provide investment advice." Gabriel Roeder Smith & Company -5- No oral communication of any GRS employee shall be interpreted to provide income tax advice, legal advice, or investment advice. Further, no GRS work product shall be used for the purpose of avoiding tax-related penalties under the Internal Revenue Code, or marketing or recommending to another party any tax-related matter addressed within the work product. Q. Third Party Dealings GRS will not provide information related to the City to third parties except with the permission of, and under the specific direction of, the City. By giving such direction and permission, the City agrees to indemnify GRS, or to require such third party to indemnify GRS, against the misuse or misunderstanding of GRS work products by such third party. GRS shall not review any third party work product except under the specific written direction of the City to do so, and only for reasonable compensation. Such review if undertaken shall be limited to those areas in which GRS has expertise, and shall specifically exclude conclusions related to income tax, investment matters, and legal matters. R. Limitations L Actuary is an independent contractor and is not an agent, employee or subcontractor of the City. Actuary and its agents and employees shall not accrue leave, retirement, insurance bonding, use of city vehicle, or any other benefit afforded to city employees or City members as a result of this agreement. The Actuary shall be governed in its relations with the City and the plan by the requirements of Chapter 112, Part VII, Florida Statutes. In all of its relations with the plan, the Actuary will utilize the skill, prudence, and diligence that would be expected of a professional actuary in a comparable position.. 2. Notwithstanding anything in this agreement to the contrary, Actuary's primary responsibility under this agreement is to the plan and its members, and it will place their interests above all others. The Actuary will not enter into any agreement or take any action contrary to that responsibility. Actuary will not accept or perform any engagement involving the plan or its members for any organization other than the City without the prior written consent of the City or action by the City at a meeting. The Actuary shall not have any discretionary authority or control with respect to management of the plan's assets; render investment advice for a fee or other compensation (direct or indirect) as to any monies or any other property of the plan; nor have any discretionary authority or discretionary responsibility in the administration of the provisions of the plan. The City retains absolute discretion over, and responsibility for, deciding what, if any, action to take with respect to any report, analysis, or recommendation by Actuary and for the implementation of such decision. S. Warranty GRS warrants that all work performed under the contract will be performed by individuals who are qualified to do so in accordance with requirements as are from time to time issued by various actuarial and other professional bodies. GRS warrants that the work product will be subject to an internal peer review procedure. Finally GRS warrants that GRS has no direct or indirect financial relationship to the City, other than the relationship described in this contract. Gabriel Roeder Smith & Company -6- Section 11 Work Statement A. Scope GRS shall perform actuarial and consulting services for the City for the period January 1, 2010 through December 31, 2014. B. Duties The regular and special services duties to be performed by GRS are set forth on pages 30 through 38 of GRS' proposal for Actuarial and Consulting Services dated September 28, 2009. GRS is not constrained from supplementing this list with additional items or elements deemed necessary to permit the development of alternative approaches or the application of proprietary analytical techniques, within the price schedule set forth in the proposal, unless agreed otherwise by the parties in writing. C. Other Services From time-to--time, the City may require services other than those described. GRS may be asked to provide communication services, applied technology services, defined contribution plan services, or other supplemental consulting services not described above. Fees for such services shall be based on hourly rates. D. Transition if at the end of this contract, another vendor succeeds GRS as the City's actuary, GRS shall fully cooperate in the transition of actuarial services, including providing the successor firm with up-to-date actuarial valuation data, assumptions and results. Such cooperation is contingent upon the City's agreement to pay GRS' reasonable final invoice for work performed under this contract. GRS shall charge fees for the transition requirements in accordance with the rates described herein. E. Actuarial Audit In the event that an Actuarial Audit of GRS' work for the City is performed during the term of this contract, GRS shall cooperate with the actuarial audit and the City shall pay GRS reasonable fees associated with such cooperation. Gabriel Roeder Smith & Company -7- Section III Price and Payment Schedule A. Price for Actuarial Valuations and Consulting Services GRS' fixed fees for Actuarial Valuations and Consulting Services set forth in the Proposal for Actuarial and Consulting Services dated September 28, 2009 are listed below and apply to the first year. Prices for future contract years are updated for inflation based on changes to the 12/31 CPI--U index, and changes, if any, in the scope of services requested. The City shall pay these fees to GRS as projects are being performed, within 30 days of receiving an invoice. • Annual Fee for Retainer Services Pertaining to the Employees Pension Fund $16,000 • Annual Fee for Retainer Services Pertaining to OPEB Plans $16,000 B. Fees for Additional Meetings and Other Services Hourly rates applicable to these items are set forth on Page 38 of the Proposal for Actuarial and Consulting Services. These fees are adjusted annually based upon changes to the 12/31 CPI-U index. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed effective the 1st day of January, 2010. For GRS: ?iabriel, Roeder, S itb & Company Ky CRw ? .2 2009 n r- CITY OF CLEARWATE®R?, FLORIDA By:_ c 04. William B. Horne II City Manager Attest: C' air Cy t "a E. Goudeau City lerk Counte signed: rank V. Hibbard, Mayor Appr ved as to form: Leslie K. Dougall-Side Assistant City Attorney Gabriel Roeder Smith & Company -8-