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THE CITY OF ~ O ~# °~ °~ -~- "' CITY COUNCIL AGENDA REPORT ~'L£~S~NTONo April 7, 2009 Finance Department TITLE: APPROVAL OF A FOURTH AMENDMENT TO AN AGREEMENT FOR PROFESSIONAL SERVICES WITH BARTEL ASSOCIATES, LLC, FOR ACTUARIAL CONSULTING AND RELATED SERVICES SUMMARY The City Manager approved an agreement with Bartel Associates, LLC, dated July 1, 2006, and subsequently Amendments #1, #2 and #3, to provide consulting services for preparation of an actuarial study and related consulting services in implementing new accounting and financial reporting requirements for retiree medical benefits. Implementing the new accounting standards will involve actuarial projections, and potentially establishment of an irrevocable trust to fund retiree medical benefits. The City previously has had Bartel Associates conduct similar actuarial studies in 2001 and 2004 in conjunction with setting aside funds in reserve for retiree medical benefit payments. RECOMMENDATION Approve the Fourth Amendment to Professional Services Agreement with Bartel Associates, LLC, for an additional fee of $33,000 and a new total not to exceed $107,000. This total covers expenditures from 2006 through the end of 2009 for an average of $26,750 for each year. FINANCIAL STATEMENT The amount expended on the initial contract and Amendments #1, #2 and #3 is $74,000. This action requests an additional amount not to exceed $33,000. Funding is available in the budget in Special Revenue Funds; Retiree Medical Reserve Fund and LPFD Retiree Medical Reserve Fund. If additional funding is needed, staff will return to Council for an additional appropriation. The additional funding is needed for ongoing consulting and actuarial estimates related to provide support and analysis during the GASB 45 implementation year (2008-09) for both the City and the LPFD JPA, assist with financial statement accounting and footnote disclosure issues and finalize a formal certified actuarial report, or reports, as required by trust providers. As assumptions and benefit plan design changes have been implemented actuarial estimates have been updated to reflect the change in liabilities and annual required contributions. The June 30, 2007 valuation will be used to determine the liabilities and annual required contribution for FY 2008-09. The updated June 30, 2008 valuation will be used to determine the liabilities and annual required contributions for FY 2009-10 and FY 2010-11 in an effort to provide certainty in the amount needed to be budgeted in the next 2 year budget cycle.