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PERFORM ACTUARIAL STUDY FOR EMPLOYEES PENSION PLAN .. -t M E M 0 R A N 0 U M T O. Trus.tees of City of · Clearwater Employees' Pension Plan The City Com mission of the City of Clearwater SUBJECT: Alenda No. /.t h Meeting Date: 3/!7!86 I APPOINTMENT OF ACTUARY TO PERFORM JANUARY 1, 1986 ACTUARIAL STUDY RECOMMENDATION: To appoint Ogle & Waters, Inc. to perform the actuarial study for the Employees' Pension Plan as of January 1, 1986 for a fee not to exceed $8,000. o And that the appropriate officials be authorized to execute same. BACKGROUND: The following firms responded to our RFP to perform an actuarial study of the plan as of January 1, 1986: FIRM Ron Hirsch & Associates Ogle & Waters, Inc. T.P.F. & C. Lawsgn.. ,Group, Inc. Wyatt Company Mouton & Co. FEE QUOTE $ 7,500 8,000 8,000* 9,600 10,700 13,000 ,\.. * Does not include a review of current actuarial assumptions. .' Although Ron Hirsch & Associates was the actual lowest bidder, we feel that there were sufficient questions raised by his most recent report to warrant obtaining a new perspective from a different actuary. . City staff met with both Ogle & Waters and T.P.F. & C., to review their proposals. Ogle & Waters prop?sed to review our existing actuarial assumptions before beginning, while T.P.F.,& C. would charge us additional to do so. Ogle & Waters is a local firm with extensive experience, excellent credentials and strong references. The committee is unanimous in'cur recommendation to award the study to them. Commission Disposition: 1. Approved as Recommended/Revlsed/Condltlonel 2. Continued to Follow-up Action: dot. Submitted by: ,L~.. t...~f~~- Advertised: City Manager Date: Paper: CJ Affected Parties Notified of Meeting Costs: OAttachments: Funding Source: o Capital Improve- ment Budget o Operating Budget o Other Date aSequentlal Reference [J Not Required 0 Not Required OrlQlnatlnQ Department: Finance Appropriation Code o None OC -. C?:2 'C') _(17;~ I I ~'''''. ~ P ti." :. ~ \.l (I (. ,.:~ . .1.,.:~ \,,; ~.... .,. ~ '.' \ ~ I ~-n ~~:., ( '~" .(':.\ II. ... ij ij ~~, \ f 'i Ii li '""..:~.!.I . ''-il~1 U .1 ,;.. ~ March 27, 1986 Mr. John A. Lessl Director of Actuarial Department Ogle & Waters, Inc. One Corporate Drive Clearwater, FL 33520 Dear John: This letter will confirm your appointment to perform an actuarial study for the City of Clearwater Employees' Pensi~,:, Plan as of January I, 1986. This study will be performed in accordance with our Request for Proposal No. 39- 86 and your response to this request dated February 4, 1986. Your contact for payroll information will be Barbara Weston, Assistant City Treasurer, and for asset valuation will be David Curtis, Assistant Finance Director. Both can be reached at 462-6930. Also, we would like to discuss the set of actuarial assumptions to be used with you before you begin the actual study. It .Is our understanding that this study will be completed within 90 days of your receipt of our data at a total cost not to exceed $8,000. Thank you for responding ., to ou~ request, and congratulations on your appojntment. We look forward to working with you. . Sincerely, Daniel J. Deignan, CPA Finance Director/City Treasurer cc: Gerald Weimer, Assistant City Manager David Curtis, Assistant Finance Director Barbara Weston, Assistant ~lty Treasurer , I CITY OF CLEARWATER, FLORIDA . Request for Proposals for Actuarial Services in Connection With City Pension Plans I. General Information Qualified firms of actuarial consultants are requested to submit proposals for providing an actuarial valuatio'n for the City's Employees' Pension Plan and the Firemen's Relief and Pension Plan as of January I, 1986. Copies of the most recent actuarial valuations, performed as of January I, 1985, ore available upon request through the Finance Department (462-6930). Respondents are encouraged to address the specific points of Information requested below. Firm promotional material may be included as supplemental Ihformation, but will not constitute a proposal of itself. To facilitate the selection process, firms should submit three copies of your sealed proposal to: Don Petersen, Purchasing. Officer City of Clearwater 711 Maple Street P.O. Box 4748 Clearwater, FL 33518 '; The deadline for receipt of these proposals is 2:00 PM, February 5, 1986. Proposals not received prior to that time will be returned fo sender without further consideration, even though such proposals may show a postmark prior to the deadline specified. II. Overview of the City The City of Clearwater is a City Manager/Commission form of local government which offers a traditional mix of municipal services to a population estimated at 91,879. For the 1985-86 fiscal year, all City budgets, including capital projects, approxi- mate $89.2 million. Of this amount, $40.3 million is budgeted for the General Fund, and -1- I I $34.8 million for proprietary activities. The latter include primarily the provision of water, sewer, gas and sanitat!on utility services and the operation of a toll bridge, marina and parking facilities. The City employs approximately 1,600 persons, over 1,150 of whom are covered by the Employees' Pension Plan, a self-administered defined benefit plan in which all permanent, full-time employees who successfully pass the required physical examination and have not reached their forty-fifth birthday at the date of their employment are required to participate, except for flreme'n employed prior to July I, 1963, and certain nonclassified (primarily managerial) employees. The assets of this fund approximate $64 million as of January I, 1986. Those firemen who were employed prior to July I, 1963, who otherwise meet eligibility requirements are participants in the Firemen's Relief and Pension Fund, a self-administered defined benefit plan with assets that approximate $3 million as of January I, 1986. There remain only a few active participorfts In this rlon. While the" City maintains two additional pension plans and one deferred compensa- tion plan covering various categories of employees, actuarial studies either are not required for such plans or, In one case, the study is performed by an insurance company providing coverage under the plan. III. Performance Standards (I) Valuation must be performed In accordance with accepted actuarial principles including the use of appropriate actuarial assumptions and the determination of I;present and future funding requirements on a sound basis. (2) The techniques and assumptions used and the content of the report issued must conform to the requirements of Part VII, Chapter 112, Florida Statutes and Chapter 22 of the Florida Administrative Code. (3) The actuarial methods used and financial information produced, including the employer's pension expense for the current year and the relationship between the plan assets and the actuarially computed value of vested benefits at year end, must be in accordance with Generally Accepted Accounting Principles. -2- I I (4) Actuarial studies must be completed and the reports thereon must be rendered within 120 days of the date the contract is signed. . (5) The City has consistently employed a 1965 mortality table in the computation of estimated benefits. We will consider your recommendation, but we believe it will be appropriate to use a more recent mortality table in the 1986 study. IV. Qualifications and Other Factual Information (I) Firm Qualifications (including local offices of national or regional firms) (a) Provide an overview of the firm's experience in performing actuarial valua- tions of defined benefit pension plans, giving an indication as to the size of pension plans for which valuations are or have been madE( (e.g., number of participants, total assets, etc.), the industry categories involved and the regulatory authorities whose requirements must be complied with in perform- ing and reporting on the valuations. Special emphasis should be given to describing experience in performing actuarial valuations of pension plans of governmental uni ts. (b) Indicate whether your. firm qualifies as an "Enrolled Actuary" as defined in Chapter 22 D - 1.02(e) of .the Florida Administrative Code. (2) , Qualifications of Personnel to be Assigned . .' .. . (a) Provide resumes of personnel who would be involved in performing actuarial services for the City, including but not limited to: (j) Formal and any supplemental education; (ij) Experience in performing actuarial services and consultation regarding employee benefit programs; (ili) Knowledge of. State of Florida regulatory requirements applying to municipal pension plans; -3- I I (Iv) Memberships in professional organizations; and, (v) Professional ~ecognltlon and awards. (3) References (a) Provide names and addresses of officials who might be contacted for references from: . (j) Municipalities for which actuarial services have been or are being performed, Including the largest municipal client served in the last three years; and, (jj) Other entities, either in the public or private. sector, for which actuarial services or other services relating to employee benefits have been or are being performed. (b) Submit sample copies .~f reports of actuarial valuations issued to present or previous clients demonstrating format and writing style; if possible, include a report Issued to a F1Qrlda municipality within the last three years. (4) Form of Contract (a) Submit the firm's standard form contract for legal content only. (b) State the firm's policy regarding progress billings and details on invoicing. (c) If the report can be prepared in less than 120 days, please indicate the amount of time you would require (all City data will be available by January 31, 1986). (5) Cost of Services Please provide estimates of total fees separately for each plan, including a guaranteed "Not to Exceed" fee for each. Also please indicate any appropriate fee reduction should your firm be selected to perform both valuations. -4- I I v. Evaluation, Selection and Award Process A review committee, including the City Manager, will evaluate and rank the proposals on the basis of qualifications, relevant experience, proposed fee, and respon- siveness of the individual firms., The committee reserves the right to request additional information from proposers. The members of the review committee responsible, along with the City Manager, for making the final recommendation to tHe Boards of Trustees of the two plans are: Gerold Weimer, Assistant City Manager for Administration Daniel Deignan, Finance Director David Curtis, Assistant Finance Director Carole Greiner, Payroll Services Manager Please direct all questions regarding this request to Mr. Deignan at 462-6930. The City reserves the right to reject any and all proposals submitted. Any award made will be made to the firm which~ in the opinion of the City, is best qualified. We anticipate award of the contract at the February 17th Meeting of the Boord of Trustees for the Employees' Pension Plan, and soon thereafter for the Firefighters Relief and Pension Plan. . , -5- I I . PROPOSAL FOR ACTUARIAL PROFESSIONAL SERVICES FOR THE CITY OF CLEARWATER, FLORIDA PENSION PLANS JANUARY 31, 1986 ~.. ~.' -,..' Presented By: John A. Lessl, Director of Actuarial Department . , OGLE & WATERS, INC. One Corporate Drive Clearwater, Florida 33520 (813) 577-2884 ~ ~ I 08le (6 Waters. Inc. ONE CORPORATE DRIVE , CLEARWATER, FL 33520 CLEARWATER/ST. PETERSBURG (813) 577-2884 TAMPA (813) 224-9106 IN FLORIDA 1-800-282-5247 , I Wall." l 0",1" J..n"'~ J Wi11rr~ rsrA M^^" r /.. February 4, 1986 Bhola N Ano,a. M5f'A fA Ootlillfl G Brf'dht"l' Rwh;lId N raqll'I~'1'1 John W f ""HC' hOIf E 0;'1 John J Hi1111f"ld W,11on l Hf'mlel~oll Ehuflf'S Jorrl,ln John A L.,,,,. A5A MAAA r A E"'A'mcl W luci1~. SPHR Oonnld n Lund. AEP_ Cef' John W Mr.radrt~n S;uuha A Mo~s Rnnilhf J Ros!-lomnmlo OflO"" 2 Slor, CCP AU'lP.,r E Slallilev, CPA krnnf'lh l Wooff Review Committee for Selection of Actuarial Consultant City of Clearwater 711 Maple Street Clearwater, Florida 33515 erllf:f'S Crosc:wllllr Vlf:,,"rG G';1I11 [;uol ^ l!o'f'd N.11lf:V J Llll ('1l1f'", CflA ChtlSlilH' k Md adf''' M,~tldv I Md("lHltv Wllh"'l1 0 Mllv',. enlvlI' r Ny,,"onl W.IIlilO1 E "'rllo Kr'llh A Walk.., Ros" r Willi",. COP Re:. Letter of Transmittal Gentlemen: Ogle & Waters; -I~c., enthusiastically presents this proposal to provide actuarial professional services to the City of Clearwater. We are free of any obligations and interests which might conflict with the interests of the City of Clearwater, and we have the capacity to provide the reque~ted services on a timely basis. Ogle & Waters' management philosophy is based upon three funda- mental principles that govern all our client relationships: COMMITMENT TO PROFESSIONAL EXCELLENCE We are recognized as an effective, high quality consult- ing firm. This track record has enabled us to expand .o?r client base throughout the United States. COMMITMENT TO PLACING CLIENT INTERESTS FIRST We serve our clients with integrity and objectivity, making every effort to ensure that our advice is based on the impartial consideration of all pertinent facts and responsible opinions. COMMITMENT TO PRACTICAL AND USEFUL SERVICES As a matter of firm pOlicy, we will accept only those engagements we are qualified to undertake and that benefit our clients. We require our staff to enhance their education on a regular basis so that our clients will always have the benefit of up-to-date expertise. Ogle & Waters, Inc., qualifies as an "Enrolled Actuary" as defined in Chapter 22D-l.02(e) of the Florida Administration Code. THE CONSULTING GROUP. INC,: AN INVESTMENT MANAGEMENT SUBSIDIARY I I Review Committee for Selection. of Actuarial Consultant pag e 2 February 4, 1986 I will be the primary contact and the responsible consulting actuary for this engagement. Please contact me if you require any additional information. We look forward to a long and successful association. Respectfully submitted, Department :.. jm Enclosures: Sample Actuary's Report Firm Brochure ), '; I I TABLE OF CONTENTS Letter of Transmittal Performance Standards Qualifications and other Factual Information .. I (1) Firm Qualifications (2) Qualifications of Personnel (3) References .." -, . (4) Form of Contract (5) Cost of Services I, '~ }, ~ I I PERFORMANCE STANDARDS (1) Actuarial Valuations will be performed in accordance with accepted actuarial principles. (2) Techniques and assumptions, and the content of the Actuary's Report will comply with the requirements of Part VII, Chapter 112, Florida Statutes and Chapter 22 of the Florida Adminis- trative Code. (3) ~ The actuarial methods used and financial information I?repared will be in accordance with Generally Accepted Accounting Prin- ciples. (4) Actuarial studies and reports will be completed within 90 days of the date of receipt of all employee and financial data. (5) Our preferred client/consultant relationship is well illus- trated by our philosophy concerning the establishment of the actuarial basis. (In the term "actuarial basis," we include the actuarial cost method, the asset valuation method, and the actuarial assumptions.) We consider the actuarial basis to be a shared responsibility between the actuary and the client. The actuary provides technical and professional expertise; the client provides investment goals, funding philosophy, and pro- jections of its own future. Both the actuary and the client must be satisfied with the actuarial basis finally adopted. The starting point in establishing the actuarial basis is the basis used in previous valuations. It must be reviewed and analyzed for its success in providing adequate funding and smooth and reasonable contribution levels in prior years. This is followed by discussions with the Pension Boards and Cjty staff for their input regarding satisfaction with prior assumptions, fiscal attitude,-and.l'ong-range goals. The re- vised actuarial basis evolving out of this process must be analyzed for theoretical consistency, logic, completeness and appropriateness to the plan provisions, compliance with regu- latory requirements, and comparison with other similar plans. -In the last step, the revised actuarial basis is submitted to the Pension Boards for formal approval and adoption. As a point of information, the earliest mortality table used by any of our clients for the last 6 years has been the 1971 Group Annuity Mortality Table. Today almost all of our cli- ents have switched to the 1983 Group Annuity Mortality Table, with some using an adjustment to anticipate mortality improve- ments beyond 1983. ~ I . I QUALIFICATIONS AND OTHER FACTUAL INFORMATION OGLE & WATERS, INC. (1) Firm Qualifications (a) Background, History and Actuarial Services: The decade of the 70's was a revolutionary period in the employee pension field. As the number of workers covered by private and public pension plans increased, so did the level of concern within many segments of our society. Attention focused on na- tional retirement pOlicy. The protection and expan- sion of the rights of workers, past, present .and future, to retirement income ultimately manifested itself through the enactment of the Employee,Retire- ment Income Security Act (ERISA) of 1974. r ERISA caused major revisions in the field of deferred compensation planning for retirement. It established minimum standards for participation, vesting, ana funding; expanded existing reporting and disclosure requirements; imposed a more rigorous set of fiduci- ary responsibilities; and created a program of plan termination insurance. Perceiving a need for a qualified benefit firm to provide the expertise needed to meet the challenge posed by the legislation, Walter L. Ogle and James J. Waters formed Ogle & Waters, Inc., in 1975. Since our inception, we have experienced uninterrupted growth. From a staff of three, Ogle & Waters, Inc., has grown today to over 75 full-time actuaries, pen- sion consultants, administrative specialists, human resource consultants, data .processing personnel, and clerical support staff. Geographically, we have also grown. Incorporated in Florida, with our office located in Clearwater, Ogle & Waters, Inc., now provides services to clients in 15 states. Ogle & Waters, Inc., is positioned for the challenges of the 80's. The ERISA legislation is incredibly com- plex and is still undergoing continued interpretation and modifications. New amendments have been added. More are still to come as the federal government de- emphasizes Social Security as the primary source of retirement income, encourages private and public pen- sion plans, and imposes new legislation to govern this expanding industry. Further regulation of public plans is imposed by the State of Florida, and this regulation also undergoes rontinued updating and amendment. ~ I I Our Actuarial Department offers a full spectrum of actuarial services related to defined benefit and similar plans. 'Moreover, we will work with you to take the mystery out of these plans for you and your employees. Services include: Actuarial valuations of liabilities and costs for defined benefit plans, disability plans, supplemental executive retirement plans, salary continuation and severance plans, etc. · Design of optimal def~ned benefit plan/defined contribution plan combinations to comply with Internal Revenue Code limitations . Cost containment and Social Security integration studies . Cost and benefit projections · Certification of amounts of individual retire- ment income under all types of payment forms ;,./ .., I · Actuarial gain/loss analyses by cause Replacement ratio, retirement income, and spend- able income studies . Cash flow projections . Experience studies. and development of actuarial assumptions · Determinations of ERISA Section 4044 Asset Allocation upon plan termination. J. 'j: The firm currently provid~s actuarial services to 150 defined benefit plans ranging in size from only one employee to several thousand. Our clients cross all industry categories. All actuarial services are performed in accordance with the applicable regula- tory and professional guidelines: Internal Revenue Codes and Regulations, Florida Statutes and Administrative Guidelines, and Guidelines of the American Academy of Actuaries. (b) John A. Lessl, Bhola N. Aneja, and James J. Waters are all "Enrolled Actuaries" as defined in Chapter 22D-l.02(e) of the Florida Administrative Code. ~ I I (2) Qualification of Personnel Ogle & Waters, .Inc., is committed to developing and maintain- ing a qualified staff which is diversified in experience. Our dedication to professional excellence is reflected in the firm's personnel policy which encourages its employees to work toward maintaining their professional abilities and training at or near the state-of-the-art. The firm provides training opportunities and assistance through on-the-job training and formal training programs. Ogle & Waters, Inc.'s, professionals are skilled and versatile. They have solved technical and management problems at all lev- els and in most environments. Each consultant has had prior operating experience in one or more functional areas before joining our firm. A brief description of the qualifications of the assigned consultants follows. All Ogle & Waters' pro- fessionals are available to clients, however, as the need arises. Brief resumes of some of the professionaf staff are included in the enclosed brochure. . Professional staff numbers in excess of 35, including enrolled actuaries, CPA's, Certified Pension Consultants, and many other professional designations in the fields of benefits and compensation, data processing systems management, and communi- cations program developm~nt. Assigned Consultants: John A. Lessl, ASA, MAAA, EA Consulting Actuary . Director of Actuarial , Department John Lessl is a principal of the firm and will have primary .r;esponsibility for the engage'!1ent.." He will be supported by Bhola N. Aneja, who is also an Enrolled Actuary and consul- tant, and the actuarial department's staff supervisor. Bhola N. Aneja, MSPA, EA Consulting Actuary Mr. Lessl was a Senior Consultant and Actuary with Coopers & Lybrand in New York before joining Ogle & Waters, Inc. Mr. -Lessl has a B.S. in Applied Mathematics from the Georgia Institute of Technology, and an M.S. in Actuarial Science from the University of Wisconsin, has written instructional and educational articles for actuaries, accountants and cli- ents, and regularly speaks before various Florida pension associations. He is an Associate of the Society of Actuaries, a Member of the American Academy of Actuaries and an Enrolled Actuary licensed with. the Joint Board of the Departments of Labor and Treasury. Mr. Lessl has extensive knowledge and experience in working with the municipal pension plans in the State of Florida. These include the Town of Longboat Key, City of Tarpon ~ " I , Springs, and Seminole Volunteer Fire Department, and special consulting for the Police and Fire Pension Boards of the City of St. PeterSburg. Bhola N. Aneja has joined Ogle & Waters, Inc., as a consulting actuary. Mr. Aneja managed his own actuarial consulting prac- tice in Rockford, Illinois, for nine years prior to joining Ogle & Waters. His responsibilities at Ogle & Waters are to supervise the actuarial department and provide actuarial consulting services. He is a graduate of California State Polytechnic University, a member of the American Society of Pension Actuaries, and an Enrolled Actuary licensed with the Joint Board of the Departments of Labor and Treasury. (3) References r~\J~ ~ ~ ~ ~ , ~. (a) Clients Freedom Savings & Loan Assoc. (305) 646-6191 Gavin Watson Senior Vice President, Administration 750 South Orlando Avenue Winter Park, Florida 32789 Golden Gem Growers, Inc. Dudley Zeller " Director-Personnel/Risk Management Post Office Drawer 9 Umatilla, Florida 32784 (904) 669-2101 Home Federal Bank of .Florida, FSB Alfred T. May President Post Office Box 12288 St. PeterSburg, Florida 33733 (813) 823-1111 .. , City of Leesburg (904) 787-4313 (Our largest municipal client) Rex Taylor f=.oo H~""Dr::~ -\ ~soc - ^-.so (\C"/t\'l/f:':': City Manager ~1-?P3-7r~( Post Office Box 630 Leesburg, Florida 32748 City of Tarpon Springs (813) 938-3711 . Robert Bublitz f<E""c::.8V\l...'f ~rt.eO- Finance Director 1l~ IttSFf1... A~.5f"T:> htor"'1 PAvL t:2~~ Post Office Box 1575 Jrvs --ro SJ,v 13lhJJo<.. Tarpon Springs, Florida 34286 Town of Longboat Key . (813) 383-3721 Dennis Kelly Ikfl.ll5 DC\JJlcK.- f\~.tSr ~ D, 1.)).';'1/.' Town Manager Ol1ot_ 8 )'.;)1~--5 ~ ?<iO 01 t) i I . Post Off ce Box 107 ~"') J..'.;.bh Longboat Key, Florida 33~71 1 ! / '1' r':! >., ~ ~ I I Waterman Medical Center Carl J. Bender Administrator' Darrell C. Shonkwiler Assistant Administrator Post Office Box B Eustis, Florida 32727-0377 (904) 589-3333 (4) Form of Contract (a) We do not use any contract form for our services. (b) Billings are made monthly on the basis of time and expenses incurred. Payment is expected within 30 days. (c) Reports can be prepared within 90 days from receipt of all employee and financial data. (5) Cost of Services ~. (a) Basic Services :,-.1 ._,'. The basic service to be provided is the annual actu- arial valuation of each of the two municipal Pension Plans. Each plan will have a separate, complete actuary's report. Each actuary's report will comply with all Florida (and federal, if applicable) require- ments, the guidelines of the American Academy of Actuaries, and the,applicable accounting guidelines. The American Academy ,guidelines include disclosure of all actuarial assumptions and special procedures along with explanations of the information presented. Additional services included are: · Telephone conferences (a r~asonable number of calls not involving compute~ analysis). · Responsibility for responding to state inquiries regarding the actuary's reports. · Two trips to the City for ppn~i~n P~~td meetings and/or staff briefings. It is assumed that census and other necessary data shall be available in an immediately usable format. (b) Recordkeeping and Data Transfer We are committed to establishing an efficient method of data transfer which is most beneficial to both the City and our firm. Toward this end, Ross F. Wilder, Systems and Programming Manager with our data proces- sing department (please see resume below), will work ~ .. (c) '. . ~ j I with the City's data processing and personnel staff to identify the,optimal method of data transfer and to facilitate its installation. Data may be transferred by tape, floppy disc, or di- rect telephone line communications between the City's computer and Ogle & Waters' computer. Hard copy data may be sUbmitted, but electronic transfer methods are preferred. Annual updating of information can also be accomplished by any of these methods. Ross F. Wilder; C.D.P. Systems and Programming Manager Before joining Ogle & Waters, Inc., Mr. Wilder gained a wide variety of experience in data processing as a Programmer/Analyst for a large utility company and as an information management consultant. He received a B.A. in business management from the University of South Florida, and is currently working towards an M.B.A. with a concentration in data processing at Flo- rid~ Institute of Technology. He is also an adjunct faculty member at Tampa College. Mr. Wilder holds a Certificate in Data Processing and is a member of the Data Processing Management Association. Cost of Actuarial Valuation r as of January 1, 198X~ City of Clearwate~ Employees' Pension Plan $ 8,000.00 City of Clearwater Firemen's Relief and Pension Fund 3,000.00 $11,000.00 Charges are guaranteed not to exceed the amounts shown above. There is no fee reduction should Ogle & Waters, Inc., be elected to perform both valuations. D ~