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Res No 100-15-14439RESOLUTION NO.100-15-14439 A Resolution authorizing the City Manager to contract with Gabriel Roeder Smith & Company to perform other Post-Employment Benefits (OPEB)valuation required for fiscal years 2015,2016,and2017 Comprehensive Annual Financial Report (CAFR). WHEREAS,the state and local government employers provide Other Post-Employment Benefits (OPEB)to retirees in addition to typical pension benefits.OPEB takes form of retiree health insurance, dental,vision,prescription drug,life,or other healthcare benefits;and, WHEREAS,GASB No.45 -Accounting and Financial Reporting by employers for the post- employment benefits other than pension establishes new standards for the recording of OPEB expense and the liabilities in the financial reports of state and local government employers;and, WHEREAS,employers must account for and report the annual cost of OPEB similar to how pensions are reported.Florida State Statues require that the employer make health coverage available to retirees at the employer's group rate;and, WHEREAS,for purpose of GASB 45,a valuation isan examination of other (than pension)post- employment benefits to assess the cost and liability associated with those benefits.Valuations are typically handled by actuaries with specific qualifications to perform the work. NOW THEREFORE BE IT RESOLVED BY THE MAYOR AND CITY COMMISSION OF THE CITY OF SOUTH MIAMI,FLORIDA THAT; Section 1.TheCity Manager is authorized contract with Gabriel Roeder Smith &Company,the pension board's current actuary,to perform the Other Post-Employment Benefits (OPEB)valuation required under the GASB for fiscal years 2015,2016,and 2017 Comprehensive Annual Report (CAFR),for afixed retainer not to exceed $6,000 using account 001.141.513.3210,Finance Auditor's Fee,forfiscal year 2016. Section 2.This resolution shall take effect immediately upon adoption. PASSED AND ADOPTED this 16dayof June .2015 READ AND LANGUAGE EXE EDASTO FORM, APPROVED: COMMISSION VOTE:5-0 Mayor Stoddard:Yea Vice Mayor Harris:Yea Commissioner Welsh:Yea Commissioner Liebman:Yea Commissioner Edmond:Yea THE CITY OF PLEASANT LIVING CITY OF SOUTH MIAMI OFFICE OF THE CITY MANAGER INTER-OFFICE MEMORANDUM To:Maria Menendez,CityClerk / From:Alfredo Riverol,Chief Financial Off/cer Date:November 4,2015 Subject:Resolution No.100-15-14439 May this memorandum serve as notice that the account number listed in Section 1 of Resolution No.100-15-14439 is to be corrected to 001.1410.513.3210. Alfredo Ri Finance Director Souths'Miami THE CITY OF PLEASANT LIVING CITY OF SOUTH MIAMI OFFICE OF THE CITY MANAGER INTER-OFFICE MEMORANDUM To:The Honorable Mayor &Members of the City Commission From:Steven Alexander,City Manager Date:June 16,2015 Agenda Item: Subject:A Resolution authorizing the City Manager to contract with Gabriel Roeder Smith &Company to perform other Post-Employment Benefits (OPEB) valuation required forfiscal years 2015,2016,and 2017 Comprehensive Annual Financial Report (CAFR). BACKGROUND &ANALYSIS State and local government employers provide Other Post-Employment Benefits (OPEB)to retirees in addition to typical pension benefits.OPEB takes form of retiree health insurance, dental,vision,prescription drug,life,or other healthcare benefits.GASB No.45-Accounting andFinancial Reporting by employers for the post-employment benefits other than pension establishes new standards for the recording of OPEB expense and the liabilities in the financial reports of state and local government employers. Furthermore,employers must account for and report the annual cost of OPEB similar to how pensions are reported.Florida State Statues require that the employer make health coverage available to retirees at the employer's group rate.For purpose of GASB 45,a valuation isan examination of other (than pension)post-employment benefits to assess the cost and liability associated with those benefits.Valuations are typically handled by actuaries with specific qualifications to perform the work. TheCity obtained three quotes from actuarial firms.TheCity Manger is requesting to contract with Gabriel Roader Smith &Company,the pension board's current actuary,to perform the Other Post Employment Benefits (OPEB). Actuarial and Consulting Firms Florida League of Cities Gabriel Roeder Smith &Company Milliman $7,875.00 $6,000.00 $7,500.00 Page I of2 AMOUNT Afixed amount not to exceed $6,000 ACCOUNTS 001.1410.513.3210,Finance Auditor's Feeforfiscalyear2016 ATTACHMENTS Resolution for Approval GRS proposal Milliman proposal Florida LeagueofCities/Southern Actuarial proposal Page2of2 Florida League of Cities,Inc. 301 South Bronough Street,Suite 300 ♦PostOfficeBox1757 ♦Tallahassee,FL 32302-1757 (850)222-9684 ♦Fax (850)222-3806 ♦Web site:www.flclties.com May 14,2015 Alfredo Rivera! CityofSouth Miami Re:Preparation of GASB 45 Disclosures for the City of South Miami Dear Mr.Riverol: Pursuant toyourrequest,Ihave set forth below ourfeetoprovidetheactuarialcalculationsrequiredby Governmental Accounting Standards Board Statement No.45 (GASB 45),alongwitha detailed listingof the services covered by the fee. It ismyunderstanding that the Citycurrently:(i)hasapproximately132active employees whopotentially maybecomeeligiblefor post-employment benefits;(ii)hasapproximately7individualswhoare receiving post-employmenthealthcarecoverage;and (iii)provides fully-insured post-employmenthealthcarebenefits. Based on our email conversation and my understanding of the number of employees and retirees entitled to post-employment benefits,aswellas the typeofpost-employment benefits currentlyofferedby the Cityof South Miami,Ihave prepared the following feequotation. Our fixed retainer fee will be $7,875.00 for the following services: 1.Preparationofanannualactuarialvaluationreportasof April 1,2015which will beusedtodevelopthe GASB 45 liabilities and expense for the fiscalyearsending September 30,2015,September 30,2016and September 30,2017,completewithallnecessarycalculations,information,anddisclosuresasrequiredby GASB 45 and other applicable actuarial professional standards,including the following: a.A summary of current planprovisions; b.A summary ofall assumptions and methods appliedindeveloping the plan expense and liabilities; c.Liabilities and expenses by employee groupbasedoncoveredmedical benefits; d.Liabilities byactive,deferred vested,retiree,andbeneficiary status;and e.A projection of the cash flowsto provide aforward-looking estimate of the financialimpact to the City of South Miamiof retiree health care costs,liabilities,and contributions. 2.Upto15boundcopiesof the final valuation report prepared as described initem1. 3.Miscellaneous telephone calls between our actuary,Charles Carr at Southem ActuarialServicesandany City employees or other professionals connected with the citedwork,including conference telephone calls as needed to discuss the assumptions used in the calculations and to explain the results of the valuation to Cityofficials. The report will be provided approximately 12weeks from the date on which wereceiveallnecessary information,including butnot limited to employee and retiree data,claims experience (if applicable),retiree premiums,City contributionsand/orpremiums,andother information set forth inour standard datarequest letter. Inaddition,ifyou would like fortheactuarytoattenda meeting inpersontodiscusstheresultsofthe 'valuation,thefee will be $2,500.00.Thecitedmeeting attendance fee includesall associated travel expenses.The $2,500.00 feeisinadditionto the fixed retainer feeof $7,875.00. Thisquote will be goodfora valuation for fiscal yearsendingSeptember30,2015,September30,2016and September 30,2017 only ifyourlast valuation producedwasfor fiscal yearending September 30,2014.If your last valuation wasproducedfor a prior fiscal year,it maynotbe possible toproduceavaluationfor September 30,2015,September 30,2016andSeptember30,2017untilthelapsed years havebeenvalued. Ifyouhavequestionsorconcerns,orwould like toverifythe dates ofyourlastvaluation,pleasedonot hesitate to discuss this with us. Ifyouagreetothis proposal,pleasehavethis signed anddated by the appropriate ofRdal andsendacopyto me. Signature Title Printed Name Date Sincerely, JeffBlomeley Investment andRetirementServicesManager Florida League of Cities,Inc. P.O.Box 1757 Tallahassee,FL 32302 800-616-1513 x 3614 GRS GabrielRoederSmith &Company One East Broward Blvd.954.527.1616 phone Consultants 8c Actuaries Suite505 954.525.0083 fax Ft.Lauderdale,FL 33301-1804 www.gabrielroeder.com November 12,2014 Follow-up Req^t 2/5/2015 Mr.Alfredo Riverol Chief Financial Officer City of South Miami 6130 Sunset Drive South Miami,Florida 33143 Re:Retiree Health Care Program -Actuarial Valuation as of October 1,2014 Dear Alfredo: Asin prior years,Gabriel,Roeder,Smith&Company(GRS)is pleased to present this Engagement Letter to continue to provide professional actuarialand consulting services including an Actuarial Valuation as of October 1,2014 fortheCity of SouthMiami Retiree Health Care Program under Governmental Accounting Standards Board Statement Number 45 (GASB 45). Weare enthusiastic about continuing our existing relationship with the City onthis important assignment. Wehavea long-standing commitment and experience with working on behalf of public sector benefit programs.Our philosophy of developing a partnership with our clients emphasizes the collaborative nature of theGRS working relationship.We strive toearn your trust as your advisor.Wewill continue to work together with youinthe best interest of the interested parties. Description of Services The professional services would be provided underthe supervision of Larry Wilson, A.S.A.,a Senior Consultant and Actuary withover25years of experience in employee benefit plans,Kelly Adams,A.S.A.,a Consultant and Actuary with over 15 years of experience with employee benefit plansandJen Borregard,E.A.,a Consultant and Actuary with over 15 years of experience with retirement systems. Our Report will add value by including: >Primer on available fundingvehicles, >10-year projections of totalprogram(notallocatedbygroups)and >Sensitivity analysis of the health trend rates. Webelievethisinformationwillbe of greatusetotheCity.Thesefeatures of ourReport distinguish GRSfromour competitors. Mr.Alfredo Riverol November 12,2014 Page Two Data Requirements Upon engagement,we understand theCitywillprovidecensusdata,medical insurance information and other information needed generally in electronic (spreadsheet)form.We expect information relating to coverage and eligibilities willbe provided in hardcopy- Plan Documents /member booklets. •Census Data Requirements Please seethe attached request for member census information as of October 1, 2014 needed in order to complete the Actuarial Valuation. Plan Document and Financial Information Please provide the following information: >Current summary plan description (booklet)for each benefit >Whether fully or self insured >OPEBinitial per-capita cost information -see attached data request >Reviewtheattached Summary ofBenefits as of October 1,2011 andupdate forany changes as of October1,2014 orindicatethattherearenochanges. >Any changes being considered >Schedule of most recent premiums /contributions withtheir effective date >Based onthe City's September 30,2013 Annual Financial Report,we understand theCityhasadoptedthe pay-as-you-go funding approach witha 4.0%discount rate. •Please confirm thecostandliabilitiesshouldcontinuetobedeveloped usingthe pay-as-you-go fundingapproach. •Inour experience,mostclientsarecurrentlydisclosingdiscountratesinthe range 3.5%-4.0%.This assumption isultimatelythe responsibility of the City andits auditors.Please letusknow what discount ratetheCityhas selected.Uponrequest,weareavailableto consult onthesetting of this assumption. • Gabriel Roeder Smith &;Company Mr.Alfredo Riverol November 12,2014 Page Three Fees >The amount tobe reported foreach of the following items under GASB45in the Comprehensive AnnualFinancial Report (CAFR)forthefiscalyearended September 30,2014 each of the following items: •Annual Required Contribution (ARC)forthe fiscal year ended September 30,2014 •Net OPEB Obligation (NOO)as of September 30,2014 We anticipate our not-to-exceed feefortheentire project willbeassetforthinthe following table: Valuation DateFYApplicable September 30,2015 October 1,2014 $6,000 (same as prior valuation) September 30,2016*October 1,2014 None September 30,2017*October 1,2014 None *The intermediate years of thisengagementpresumea roll-forward,wherebythe previous year's valuation would be adjusted soastoapplytothe projected year. GASB Statement No.45 permits fully compliant valuations every other year (biennially otherwise everytriennialfor employers with200 covered members or less)unless significant changesoccur,inwhichcaseanewfully compliant valuation must be performed with additional fees necessary. The roll-forward will be included in the October 1,2014 Actuarial Valuation Reports -the City would incur no additional feesfor OPEB actuarial services for thefiscalyearending September 30,2016 and September 30,2017. Ifafully compliant valuation wererequiredor requested bytheCityinthe intermediate year(s),the cost forthe valuation would be the same as the cost of the October 1,2014 Actuarial Valuation. Pleaseseetheattached Scope ofServices Exhibit foradetailedexplanation of theservices that are included in this fee. Timing TheActuarial Valuation willbedeliveredwithinsixty(60)daysfollowingdirectionto proceed and receipt of all necessary member census data,medical insurance information and plan documentation. Gabriel Roeder Smith &Company Mr.Alfredo Riverol November 12,2014 Page Four We look forward tothe opportunity to work with you again this year onthis important project. Please donot hesitate to contact us should youhaveany questions or require additional information. Sincerest regards, Lawrence F.Wilson,A.S.A. Senior Consultant and Actuary Enclosures Gabriel Roeder Smith &Company City of South Miami Retiree Health Care Program Data Request OPEB Initial Per-Capita Cost Information Please provide all data electronically,where available. 1.Please provide a summary of Retiree HealthCare Program Provisions foreachhealthcare option.For example,please listco-pays,and deductibles foreachPPOoption,HMOoption, etc.If a summary is not available,a member booklet should suffice. 2.If any portions of retireehealthbenefitsarefullyinsured,pleaseprovideuswiththe 2013-2014 and 2014-2015 fully-insured monthly activeandretiree premium ratesfor one-person andtwo- personcoverage.Fortheretirees,wewouldlikebothpre-65(regularpremiumrates)andpost- 65 (complementary premium rates).Ifavailable,itwouldbehelpfultohavethepremiumrate brokendownby coverage component (i.e.,medical,prescription drug,life,and/orvision).For allRateSheets submitted,pleaseindicatethefullperiodtheseratesareeffective.Billing statements do not contain the information needed;therefore they are not necessary to 3.Pleaseexplainwhichgroups/suffixesareavailableforfutureretirees.Ifmorethanone group/suffixisavailable,pleaseexplainwhatwouldcausearetireetochooseonetypeof coverage over another. 4.If anyportions of retireehealthbenefitsareself-insured,pleaseprovidethefollowinghealth careclaims information.Please separate health care claims between active employees and retirees,and then further between claims forpre-65 and post-65 retirees and between medical and Rx claims,if possible. a.Monthly health care claims experience by group/suffix, i.Incurred 10/01/11 to 09/30/12 and paid through September 30,2014 ii.Incurred 10/01/12to09/30/13andpaidthroughSeptember 30,2014 iii.Incurred 10/01/13 to 09/30/14 and paid through September 30,2014 iv.Please notethat separate claimreportsfor regular and comprehensive members should be provided. b.Monthlyexposuredatabygroup/suffixfortheperiodscorrespondingtotheaboveclaim experience periods. c.Please provide the illustrative premiums forthe medical groups/suffix. d.Stop loss attachment point as of October 1,2014. e.Monthly stop lossfeeper contract as of October 1,2014. f.Monthly medical administrative fee per contract as of October L 2014. 5.Please explain any major changes that have occurred tothe retiree health plan (e.g.,changes in co pays,deductibles,change from self-insured to fully-insured,switching to high deductible health plans,etc.)inthe past three years. Gabriel Roeder Smith 6c Company City of South Miami Retiree Health Care Program Data Request OPEB Initial Per-Capita Cost Information (continued) 6.Ifyourdentalplanisself-insuredandretireespaylessthan 100%ofthecostofthedentalplan, pleaseprovidethefollowing information forallsuffixeswithdentalcoverage. a.Monthly dental claims experience by group/suffix, i.Incurred 10/01/11 to 09/30/12 and paid through September 30,2014 ii.Incurred 10/01/12 to 09/30/13 and paid through September 30,2014 iii.Incurred 10/01/13to 09/30/14 andpaid through September 30,2014 iv.Pleasenotethatseparateclaimreportsforregularandcomprehensivemembers should be provided. b.Monthlyexposuredatabygroup/suffixfortheperiods corresponding totheaboveclaim experience periods. c.Please provide the illustrative premiums forthedental groups/suffix. 7.Ifyourdentalplanisfully-insuredandretireespaylessthan100%of thecost,pleaseprovide the 2013-2014 and 2014-2015 fully-insured monthly activeandretiree premium ratesforone- person and two-person coverage. 8.If retireespaylessthan 100%of thecost of yourdentalplan,pleaseprovidethefollowing. a.Monthly dental administrative fee per contract as of October L 2014. b.The percentage or amount theCitypays toward the retiree benefits 9.Foranylife insurance benefits,please provide premiums,eligibility conditions,andgroupsfor whomthese benefits areavailable.If theCity provides anyother retirement benefitsplease provide premiums,eligibility conditions,andgroupsfor whom these benefits are available. 10.Please provide utilization dataforthe past three (3)years.This should include a listing of everyone who has retired fromtheCity of South Miami over the past three (3)years.For each retiree,please indicate (a)if the retiree was eligible for health and/or other post-employment benefits,and(2)if they chose toenrollin health or other post-employment benefits. 11.Are retirees required to enroll in Medicare upon reaching age65?If so,are they required to enroll in Medicare Part A,or both Medicare Parts A and B? 12.Forretirees enrolled in health coverage withtheCitywhoare currently overage65,please indicate whether each of themis covered by Medicare Part A,Medicare Part B,both Medicare Parts A and B,or not enrolled in Medicare. Gabriel Roeder Smith6c Company City of South Miami Retiree Health Care Program Data Request Demographic Data Requirements TheactuarialvaluationwillbeperformedusingdataasofOctober1,2014(valuationdate).Wewill becalculatingonecontributionrate.Enclosedisa CD-ROM withanExcel©filewhichcontainsthe activeandinactive member censusdatareportedas of October1,2011.Pleaseupdatethedatainthe Excel©file with the information below for members as of October 1,2014.(If youare submitting dataviae-mailandyouchoosetouseSocialSecuritynumbersastheuniqueidentifier,forthe protectionofyourmembers,youshouldconsiderpasswordprotectingorencodingthisidentifier.) 1)Foractiveemployeesasofthevaluationdate,pleaseprovideanelectroniclisting including the following information -pleaseincludearecordlayout. 2) Unique identifier (i.e.,employeenumberorSocialSecuritynumber) Name Gender (M or F) Date of birth Date of hire Annual salary Years and Months of Service (YY/MM) Employment group (General,Police) Health groupcode (if applicable.Pleasefurnishalist of codes.) Health Plan (HMO,PPO) Type of coverage(i.e.,single,employeeplusspouse,family,etc.) Spouse date of birth Spouse gender Forretiredemployeesandbeneficiariesasofthevaluationdate,pleaseupdate/ reviewthe attached Excel©fileincludingthefollowinginformation. Uniqueidentifier(i.e.,employeenumberorSocialSecuritynumber) Name Gender (MorF) Date of birth Date of retirement Status(Retiree,Disabled,Beneficiary,etc.) Employment group(Fire,General,Police) GabrielRoederSmith6c Company City of South Miami Retiree Health Care Program Data Request Demographic Data Requirements (continued) Healthgroupcode(ifapplicable.Pleasefurnishalist of codes.) Health Plan (HMO,PPO,etc.) Type of coverage(retireeonly,retireeplusspouse,family,tworegularcontracts, one complementary contract,etc.) Does coverage continue for beneficiary after retiree's death?(YorN) Beneficiary gender Beneficiary date of birth Member contribution Medicare coverage if over age65(PartAonly,Part Bonly,Parts AandB,None) Life insurance amount and Member Contribution (if applicable) Dental coverage and Member Contribution member (if retireepaysless than 100% of premium) Vision coverage and Member Contribution member (if retiree payslessthan 100% of premium) 3)For former employees whoarenotyetretired,butwhowillbe eligible for retiree health care benefits,please provide an electronic listing including the following information -please include a record layout. Uniqueidentifier(i.e.,employeenumberorSocialSecuritynumber) Name Gender (M or F) Date of birth Date of hire Date of termination Dateorageatwhich person becomes eligibleforretireehealthcarebenefits Employment group(Fire,General,Police) Healthgroupcode (if applicable.Pleasefurnishalist of codes.) LifeinsuranceamountandMember Contribution (if applicable) DentalcoverageandMemberContributionmember(ifretireepayslessthan 100% of premium) VisioncoverageandMember Contribution member(ifretireepayslessthan 100% of premium) GabrielRoederSmith &Company SCOPE OF SERVICES A detailed analysis ofthe work plan for this project WORK PLAN Having performed over500OPEBactuarial valuations underGASB45,GRShasa well-established track forthe process. Step 1 -Collect Employee and Retiree Census Data and Benefit Plan Data Census data will be requested fromtheCity.TheCitymay need to request certain data fromitsown personnel/payroll system andfromthe health plan vendors.TheCity may need to massage or supplement the data obtained from these sources (if necessary)to provide clean data files (consolidated)and confirm the completeness and accuracy of the data. Information onthe Benefit Plans,loss ratios,renewal reports,experience rating, worksheets,rate charts,etc.,willbe required fromthe respective health plan vendors in order to develop the initial per capita retiree claims cost for the benefit types. Step 2 -Draft and Approve Substantive Plan Provisions GASB Statement No.45 requires the actuarial valuation of employer-provided other post-employment benefits,as constituted inthe substantive plan —theplan terms as understood by the parties (the City andthe members).This maybethe most important step of the whole process.Sincethe program has previously been valued under GASB 45,this may simply involve updating the sample Summary of Plan Provisions included with the Engagement Letter. This may require usto obtain memoranda,documents,etc.,which describe allthe benefits provided.We must identify those benefits that qualify as employer-provided other post-employment benefits —andthe eligibilities and conditions under which they aremade available.Wewill draft a written version of the substantive planand request City confirmation before proceeding. Step 3 -Develop Initial Per Capita Costs Each relevant benefit type needs aninitialper capita cost forthegroup.Thisisthe baseline starting point forthe project andrequires short-term healthactuarialexpertise. Short-term because theinitialper capita claimcostisthetotal underlying cost(not necessarily the premium)expected forthe year following the valuation date forall employees and retirees under age65. GabrielRoederSmith6c Company SCOPE OF SERVICES Fullyinsuredpremiumsareblended premiums usedforactiveand pre-age 65retired members.Thesepremiumsareadjustedtoreflectdifferingutilizationbyageand gender,usingthemostrecentenrollment,intoasinglecompositepre-age65retireecost usingtheReddenandAnderscomprehensivehealthcaredatabase.Thissingle compositepre-65retireecostisthenconvertedtoagespecificretireecostsreflecting morbidity. Fullyinsuredpremiumsforage65andaboveretiredmembersareadjustedtoreflect differing utilization byageandgender,duetotheimpact of theMedicareprogram, usingthemostrecentenrollment,intoasinglecompositeage-65-and-aboveretireecost usingtheReddenandAnderscomprehensivehealthcaredatabase.Thissingle composite age-65-and-above retireecostisthenconvertedtoagespecificretireecosts reflecting morbidity. For self-insured programs,actualclaimsexperienceoverthethreeyear period priorto the valuation dateare analyzed to determine theage specific retiree costs reflecting morbidity. The premium developed bythe preceding process is appropriate forthe unique age distribution currently existing.Over the future years covered by this valuation,the age and gender distribution will most likely change.Therefore,our process distributes the average premium over all age/gender combinations and assigns a unique cost foreach combination.This process more accurately reflects health care costs in the retired population over the projection period. Itis important tonote that yourclaimcostswillbe developed under the direction of a fully qualified dedicated health care actuary. Step 4 -Calculate All Projected Benefits and Present Values Expected costs forall currently covered retirees and dependents is projected based on selectand ultimate health caretrendassumptionsforeach benefit type.Wewillsetup our long-term actuarial modeling systembaseduponthe Summary of Substantive Plan Provisions.Part of thisstepisrecognitionofhowthe City's PensionPlanplayan integralpartinitsOPEBobligation.Naturally,wewilluseallthe retirement eligibility requirements of the Pension Planfornormal,early,dutyand non-duty disability and death,as applicable.Initially,weuseall of the demographic actuarial assumptions (suchasturnover,retirement,disability,andmortalityrates)usedbytherespective PensionPlansbecausewebelieveitisnotpropertosimplypullsuchratetables off the shelf whenthe Pension Planstypicallyperformactuarial experience studiestosetthe rate tables based onthe City's own demographic experience. Use of the Pension Plan's demographicassumptionsshouldbeconsideredminimum requirements fora proper actuarial valuation of the City's OPEBcostsand liabilities. GabrielRoederSmith &Company SCOPE OF SERVICES Intheend,theassumptionsandmethodsemployedaretheCity'sassumptionsand methods.TheyaretobeadoptedbytheCitybecausetheyarethebasisforentriesin the City's financialstatements.WewilladviseCitystaffconcerningtheassumptions and methods.To that end,wewill conduct conferences with key staff regarding these actuarial assumptions and methods tobeusedinthe valuation. Allfuture years'benefit costsare projected andtakenbackto today's dollarsina presentvalue.Theseactuarialpresentvalues of expectedbenefitspayableformthe basis forthe accounting entries and disclosures required under GASB 45. WecanadviseCity officials (particularly thoseinfinanceand treasury)concerning how theywouldbe setting the discount rate.Ultimately,all actuarial assumptions and methods are chosen or adopted bytheCity.Part of ourroleisto advise the officials on such matters. Step 5 -Calculate Expense and Liabilities Wewill calculate these expense and liability disclosures under a pay-as-you-go (unfunded)basis and discuss options for advance funding. Step 6 -Prepare Draft Report for Review GRS will prepare a draft version of our Actuarial Valuation Report and submit ittothe City for initial review and comments. Thedraft report will include an Executive Summary,tablesorcharts presenting the development of the results,a description of all primary actuarial assumptions and methods,anda summary of theplan benefits.Our report will include the issuance of a Statement of Actuarial Opinion (SAO)in accordance with the Qualification Standards of the American Academy of Actuaries.In addition,GRSwillbe available to meet withCity officials,as necessary,for education,presentation of results,planning,and other purposes. Step 7-Finalize Report After discussion regarding thedraftreport,wewillmakechangesandissueourformal bound Report tothe client. Varioustelephoneconferencesmayberequiredoradvisableastheproject proceeds— forthepurposes of clarification,education(ofGRSandCitypersonnel),anddecisions bytheCityastotheusage of certain assumptions andmethods. Finally,wewillpresenttheresultstostaffand/orcommitteesinpersonorbyphoneto explaintheGASBrequirementsandimplicationsandtoreviewourReportandany recommendations or options there may be. GabrielRoederSmith&Company Summary of Benefits as of October 1,2011 Program Participants AllEmployees of theCityareeligibletoreceiveretireehealthcarebenefits. Normal Retirement Benefits Normalretirementeligibilityconditionsforretireehealthcarebenefitsareasfollows: Police Officers: 1.Attainment of age60and completion of 10 years of credited service or 2.Completion of 25years of creditedservice General Employees: 1.Attainment of age 55 and completion of 10 years of credited service All Members Health Care Benefit Provided by Plan Member:Eligible Members areeligibletoelectpost retirement coverage.Memberpaysthe full blended cost of coverage. Spouse:Eligible Members areeligibletoelectspousal coverage which continues forthelife of thespouse should the spouse survivetheretiree.Member /Spouse paysthefullblendedcost of spousal coverage. Dependent:Eligible Members are eligible to elect dependent coverage which continues up untilage26.Member /dependent paysfull blended cost of dependent coverage. Early Retirement Benefits Police Officers: 1.Attainment of age 50 and completion of 15 years of service Death in Service Retirement Benefits Death retirement eligibility conditions for retiree health care benefits areas follows: Health Care Benefit Eligibility Conditions Immediately. Health Care Benefit Provided by Plan Spouse:Spouseeligibletoelectcoveragewhichcontinuesforthelife of thespouse. Spouse pays full blended cost of coverage. Dependent:Dependentsareeligibletoelectcoveragewhichcontinuestoage26. Dependent paysfull blended cost of coverage. Gabriel Roeder Smith &Company Summary of Benefits as of October 1,2014 Disabled Retirement Benefits Disability retirement eligibility conditions forretireehealthcare benefits areasfollows: Health Care Benefit Eligibility Conditions Totallyand permanently disabledforasixmonthperiodwhileactivelyemployed. Health Care Benefit Provided by Plan Member:Members are eligible to elect post retirement coverage. Spouse:Members areeligibletoelectspousalcoveragewhichcontinuesforthelife of the spouse should the spouse survive theretiree. Dependent:Members are eligible to elect dependent coverage which continues up untilage26 of the dependent. Benefits for Spouses of Retired Employees Spouses of retired employees are eligible to receive retiree health care benefits.Coverage continues to surviving spouses of deceased retirees. NON-MEDICARE AND MEDICARE-ELIGIBLE PROVISIONS Retirees arenot required to enroll in Medicare plansonce eligible.If a retiree enrolls in Medicare retiree pays Medicare premiums. Vision Coverage Health Care Benefit Eligibility Conditions Members whomeetretireehealthcareeligibility conditions mayelectvisionbenefits. Health Care Benefit Provided by Program Member:Member pays fullcost of coverage. Dental Coverage Health Care Benefit Eligibility Conditions Memberswhoretiremeetretireehealthcareeligibilityconditionsmayreceivedental benefits. Health Care Benefit Provided by Plan Member:Member paysfullcost of coverage. Life Insurance Coverage Life Insurance coverage isnot available toretireesandisnot included inthis valuation. GabrielRoederSmith &Company May 13,2015 GASB 45 Analysis MILLIMAN PROPOSAL FOR GASB 45 ANALYSIS Prepared fortheCity of SouthMiami U 444 44 U U 4 41 * mmmm^.iSaS^**.?^ii^i 1a uu LlMilliman 10000 N.Central Expressway Suite 1500 Dallas,Texas 75231 Tel +1 214 863 5500 Fax +1 214 863 5501 milliman.com Table of Contents Proposal A)Milliman's ActuarialConsultingServices 3 B)GASB45Analysis-Project Steps 5 C)Project Team ';\j D)Fee Schedule....,9 Exhibits Exhibit 1-2015 Milliman Fact Sheet Exhibit 2-2015 Sample Client List Exhibit 3-Requested Information Exhibit 4 -Service Agreement Exhibit 5 -BusinessAssociateAgreement (HIPAA Compliance) Exhibit6 -White Paperon Proposed GASB45NewRegulations El Milliman May 13,2015 MILLIMAN PROPOSAL FOR GASB 45 ANALYSIS Prepared forthe City of South Miami A)Milliman's Actuarial Consulting Services Milliman differentiates itselfinthedeliveryofactuarialconsulting services by seeking outanddevelopingprofessionalswhoarenotonlytechnicallysound,but who canalso communicate complex actuarial and accounting concepts inan understandable way.Asa result,we bring measurable value to our client's abilityto make sound decisions. Public Sector Experience Milliman isnationallyrecognized for oursubstantialcommitmenttothepublic sector,which includes publication of our PERiScope newsletter,active participation in national meetingsandadvisorycommittees,andthe funding of specialized research.With oneofthelargestgroupsofpublic-sectorclientsin the U.S.,our consultants are extremely well versed in the GASB standards relatingto post-employment benefit arrangements.They arealsomindfulofthe impactthatstateandlocallawhasonpublic employer benefitplansas they consider and analyze the effect thatapplicablelawmay have oh currentand future liabilities. We have been retained by numerous public employers toperform GASB 45 valuations and consult on issues related to GASB 43 and 45.We have included a Representative ClientList as Exhibit 2. Milliman alsoprovidesabroadrangeofother services topublicplan sponsors, includingactuarial services,benefitsconsulting,compliance,recordkeeping, employee communication and investment advisory services. Health and Welfare Expertise For many years,ourHealthPractice has been considered thepremier provider of healthactuarial services intheU.S.This expertise and experience are particularly important since employers'GASB 45 liability ishighly dependent on the cost structure of the health plan offered toits retirees and due to anticipated medical inflation. Inadditionto serving as actuaryfor some ofthe nation's larger healthcare providers,Milliman's healthcare group publishes the Healthcare Cost Guidelines, aninvaluabletoolfordevelopingpercapitaclaims costs andmedicalinflation assumptions for post-employment medical benefit valuations.The Guidelines werefirst developed in 1954 asaresultof Milliman's continuingresearchon healthcare costs and the publicationhas been updatedand expanded annually ever since andarecontinuallymonitoredastheyareutilizedinmeasuringthe experienceand evaluating theratesofour clients,and comparing the information to other data sources; The Guidelines also provideaflexiblebut consistent basis forthe determination ofclaim costs forawide variety ofhealthbenefitplansandmaybe used to estimate future claimlevels,set provider budgets,setservicecategorybudgets, evaluate past experience,andestablish interrelationships between different health coverages. Milliman has clients across the entire spectrum ofpublic sector organizations,including: •City,County &State Governments •School Districts •Law Enforcement Agencies •Hospital Districts •Transportation Authorities •Power &UtilitiesOrganizations Li Milliman May 13,2015 MILLIMAN PROPOSAL FOR GASB 45 ANALYSIS Prepared fortheCity of South Miami Independence Recognized asan industry leader,Milliman isan independent firm of consultants andactuaries.Wearenot affiliated with other organizations that might impair our objectivity orourfocus on your needs.We deliver top-quality service because our flexible internal structure allows ustoassemble collaborative project teams that providebroad expertise under the guidanceofan assigned consultantwho understands theCityofSouth Miami andyourunique needs. State-of-the-Art Valuation System Milliman hasdevelopedastate-of-the-art valuation systemfor GASB 45 valuationsthatallowsourconsultantsto effectively analyzeand maintain data, produce valuationresults and project anticipated futureGASBcosts.Because notwoplansarealike,oursystemis flexible.Accordingly,weareequippedto servealltypesofclients with abroadspectrumofplandesigns. Client Commitment Wehaveworkedhardtoearnthetrustofourpublic-sectorclientsbybeingvery approachable and accessible,usingtechnologyto simplify andsupportall services,and by delivering onour commitments.We intendtofollow the same clientservicemodelfortheCityofSouth Miami and earn thesamehighlevelof trust. Thought Leadership and Legislative Updates Milliman isalreadyworking with ourclientsonalertingthemtothe proposed changes to theGASB45 standard and will partner withCityofSouthMiamito illustrate how the new standards will impact their financials as well as their reporting requirements fortheir OPEB plan.We have included as Exhibit 6 a white paper that Milliman wrote regarding the potential impacts ofthe proposed updates toGASB45. CE Milliman May13,2015 MILLIMAN PROPOSAL FOR GASB 45 ANALYSIS Prepared fortheCity of South Miami B)GASB Analysis -Project Steps Assess Your Needs TheGASB45Analysisisexpectedtoaccomplishthe following objectives: 1)Data Collection We will gather requested information fromtheCityofSouth Miami relatedto otherpost-employmentbenefits(OPEBs)offeredtoretirees.This will includetheprioractuarialvaluationreport,sothatwemay assess the reasonably ofthe baseline assumptions andvaluationresults.Uponthe reviewofthepriorvaluation,we will discuss any proposed changes in advance of completing the updated results. 2)Valuation We will perform calculations in accordance withGASB guidance and current actuarial standards of practice.Key computations will include the OPEB liability,the annual required contribution,and projected future benefit payments. 3)Sensitivity Analysis We willprovide sensitivity analysis to demonstrate the impactofvariationin the assumed discount rate and other key assumptions.This information will be valuable in identifying the key drivers of expected cost of associated with providing OPEBs to retirees. 4)Meeting to Present Results We will meet withyouvia WebEx or conference callto present valuation results and discuss important issues. 5)Financial Statement Preparation We will assist your auditors,as necessary,to review the GASB45 section of the financial statement to assure that the disclosed information is consistent with our valuation results. Strategy and Implementation Basedon conclusions drawn from the valuation,we will bereadytodiscussnext steps.Those next steps typicallyinclude analysis of strategies youmay want to explore priortotheeffective date ofdisclosingGASB45informationin employer financial statements.Key considerations mayinclude: »Theeffectofpotentialplan design changes onGASB cost »The impactof changes in employee cost-sharing provisions »Whether advance fundingofbenefitsinatrustisappropriate Ongoing Reporting Aftercompletionofthevaluationandadditionalanalysis,asneeded,we will be well-positioned toprovideOPEB valuations onanongoing basis as required underGASB45.The steps involvedinperformingongoingvaluations will be similartothe steps described above forthisvaluation,except inthe case where a moresimplified approach maybeusedforinterimvaluations.Following CImmi May13,2015 iman MILLIMAN PROPOSAL FOR GASB 45 ANALYSIS Prepared fortheCity of South Miami completion ofthe valuation,we will meet with you to discuss results and follow with issuanceofa formal valuation report. Services Agreement Aservice agreement is provided as Exhibit 4.If you wish to engage us to provide the GASB 45 consulting services as described herein,please sign this document and return the agreement tous.We will then sign the agreement, provide acopytoyouand begin workonthe project. To complete your valuation,we will need certain censusand plan information. The enclosed Exhibit 3 providesalistofthis information. Timingfor Completion of Valuation From the time we receive the requested information anda completed service agreement,weexpecttocompleteyour valuation within sixtoeightweeksand schedule ameetingto discuss theresultswithyou. GASB Analysis Timeline '!••••--i t r '""-p*"' ^i i .—i—t i i. i j Ij • | i t j i T fJ .j 45 WEEKS •Data Collection #Valuation 0 Sensitivity Analyse Li Milliman May 13,2015 MILLIMAN PROPOSAL FOR GASB 45 ANALYSIS Prepared fortheCityofSouth Miami C)Milliman Project Team Lead Actuary BenisaPrincipalandConsulting Actuary withtheAtlantaofficeof Milliman.He joinedthe firm in1990.Asa principal in Atlanta's EmployeeBenefits practice,he is the lead consultant foravarietyofprivate,public,andmulti-employerplan sponsors of pension and savings plans.His consulting activities focus on the administration,design,and fundingof these plans. Ben has been a consultant for over 30 years in the employee benefits field.In addition to pension and sayings plans,he also has extensive experience with post-retirement medical plans.Heisa frequent participantin pension workshops and panels for professional groups. Professional Designations »Fellow,Society of Actuaries »Member,American Academy of Actuaries »Enrolled Actuary under ERISA Degrees »BS,Management Science,GeorgiaInstituteofTechnology »MAS,Georgia State University »Plan Actuary Consulting Actuary Mr.Jaramilloisa consulting actuarywiththeAtlantaofficeof Milliman.Mr. Jaramillo practicesinthe employee benefits field,workingwithdefinedbenefit and post-retirement medical plans. Inadditiontopreparingand analyzing actuarialvaluations,Mr.Jaramillo assists pensionand post-retirement medical plan sponsorsin quantifying the financial risk associated with such plans. Professional Designations »Associate,SocietyofActuaries(ASA) »Member,American Academy ofActuaries (MAAA) »Enrolled Actuary (EA) Degrees »BA (Mathematics),Tulane University Ben Upchurch FSA,EA Relationship Manager and Consulting Actuary Sebastian Jaramillo ASA,MAAA,EA ConsultingActuary Li Milliman May 13,2015 MILLIMAN PROPOSAL FOR GASB 45 ANALYSIS Prepared fortheCityofSouth Miami HealthActuary Ms.Noonan isan Actuarial Consultant with the Employee Benefits Health and Welfare practice in the Dallas office.Asa credentialed actuary,Stephanie is responsible for actuarial reports and analysis for medical,dental,life,disability, paid time off,and other ancillary plans.Stephanie's main responsibility is direct consulting to large employers.Shealsoassistsonour platform of services for fullyinsuredplans. Prior to joining Milliman in 2007,Stephanie hadalmost10 years of extensive actuarial experienceintheinsurance industry working inareassuchasasset/ liability management,financial reporting,and product development.Her primary areas of expertise include: »Asset /Liability cash flow testing »Asset /Liability duration /convexity studies »DueDiligence »Valuation of liabilities for insurance and annuities »Price/Developinsuranceandannuityproducts »XXX7AXXXreserve financing In her current position asan Actuarial Consultant,Stephaniespecializes in the following: Large,complex actuarial projects suchasHP Assist,FSA Assist Calculating IBNR reserves Benchmarking plan designsand recommending changes »Calculatingthevalueofplan design changes using Milliman's proprietary actuarial cost model,Health Cost Guidelines and Dental Cost Guidelines »Performing retiree medical valuations (FASB/GASB) »Evaluating the feasibility of self-insurance »PerformingMedicarePartD Attestations Professional Designations »Fellow,Society of Actuaries »Chartered Enterprise Risk Analyst »Member,American Academy of Actuaries Education »BS,Biology/Chemistry /Mathematics,college ofSaint Mary,Omaha,NE Stephanie Noonan FSA,CERA,MAAA ConsultingActuary Milliman May 13,2015 MILLIMAN PROPOSAL FOR GASB 45 ANALYSIS Prepared forthe City of South Miami D)Fee Schedule Fee Assumptions The estimated fees are based on the following assumptions: »There are approximately 132 active employees »There are approximately 7 retirees and beneficiaries »There are three medical options availabletoretirees,aswellasvisionand dental »Data provided is usable without auditor significant followup »Travel and other out-of-pocket expenses arebilled separately Estimated Fees Phase Fee Valuation Ifyouprefer thatMilliman makean on-site final presentation,our fees will be an additional $1,000. $7,500 RollForward valuations under GASB 45for two years after afull valuation $1,300 per year Plan Design andFunding Analysis Provided as needed and based on scope Ifamaterialdifferenceinfees becomes evidentduetoachangeinthe scope of the assignment,we willadvise you. CS Milliman May 13,2015 MILLIMAN PROPOSAL FOR GASB 45 ANALYSIS Prepared fortheCityofSouth Miami Exhibit 1-Milliman Facts 2015 Milliman is among the world's largest independent actuarial and consulting firms.With more than 3,000 employees and revenues of $838 million in 2014,the firm serves the full spectrum of business, governmental,and financial organizations.Milliman was founded in 1947 and today has offices in principal cities woridwide,covering markets in North America,Latin America,Europe,Asia and the Pacific,and the Middle East. Organization Milliman isownedandmanagedbyapproximately400 principals,whohave been elected inrecognitionoftheirtechnical,professional,and business achievements. Leadership Stephen A.White,President andCEOKennethP.Mungan,Chairman Firm Highlights Our consultants have served in leading rolesintheactuarial profession,includingas presidents of the American Academy of Actuaries,the BrazilianInstitute of Actuaries, the Casualty Actuarial Society,the Institute of Actuaries,andthe Society of Actuaries, and as board members for the Institute of Actuaries of India,the Staple InnActuarial Society,The ActuarialFoundation,and the Actuarial Standards Board.Currently, Craig Reynolds is president of the Society ofActuaries,Rajish Sagoenie is immediate past presidentoftheDutchActuarialAssociation,and Dermot Corry ispresidentof the Society of Actuaries inIreland. Millimanis the leading providerofactuarialandrelatedproductsand services to insurance markets worldwide. Employee Benefits •Milliman's Pension Funding Study,published annually,and Pension Funding Index,publishedmonthly,areindustrystandardsfor corporate pension funding on a U.S.GAAP basis. •Milliman's PublicPensionFundingStudy,examiningthe funded statusofthe100 largestU.S.public pensionplans,hasbeenwidelycitedbyReuters,Yahoo!, Pension &Benefits Daily,TheBond Buyer,and other industrypublications. •Milliman receivedaGoldcup,rankingfirstin number ofbest-in-classawards among participating providers acrossthelarge-size plan market,inadditiontoa Bronzecupinthe mid-size planmarket,with40awardsinoutstandingserviceto bothplan sponsors andparticipantsinthe2014 PlanSponsor magazineDC survey. •Milliman introducedthe PlanAhead for Retirement®calculator on its participant website.This unique toolcan house ailofaparticipant's potential retirement income and expense information and utilizes a Monte Carlo simulator to analyze uptoa thousand scenarios forprojectingretirement outcomes. Primary Practice Areas •Employee benefits,investment, and compensation consulting services •Health consulting services •Lifeandfinancialconsulting services •Property and casualty consulting sen/ices G Milliman May 13,2015 MILLIMAN PROPOSAL FOR GASB 45 ANALYSIS PreparedfortheCityofSouth Miami 10 Health •Milliman has consulted on health issues to clients in more than 36 countries on sixcontinents,andhasmoreactuarieswhofocus specifically onhealth issues than anyotherfirmintheworld. •Milliman actuaries certified more than 40%of the Medicare Advantage and Medicare Part Dbidsin 2014.The firm'sdisability actuaries consult to more than 65%ofindividualdisabilityinsurers,andourlong-termcare(LTC)actuaries consult tomorethan80%ofmajorLTC insurers intheUnited States.Milliman assisted morethan90%of the successful CO-OPplansinobtainingtheir initial federalfunding.Milliman actuaries also have helped morethan 2,500 employers analyzetheproviderdiscounts generated bytheirnetworks. •Milliman manages and organizes medicalclaimdatafor250clientsandmore than 80million members-encompassing over9billiontotal healthcare records- through it Medlnsight®data warehouse software package. •The Milliman Advanced Risk Adjusters™(MARA™)toolshavehigherpredictive value forhealth costs thari otherindustryproducts. Life and Financial Services •Milliman hasworkedwith44ofthetop50insurers globally anditslifeinsurance actuarial consulting practiceis the largest intheUnited States andis one ofthe leaders in Europe andAsia. •Milfman's Financial RiskManagementpracticeisthe leading providerofhedging services intheretirement savings industry,workingwith $180 billion of assets on behalfofinsurersandvariableannuity,401(k),and retail mutualfunds.The practice operatesona global basis,managing financial risk in all major markets. •Milliman has been involved asan advisor inmorethan80%ofthe major life insurance company mergerandacquisitiontransitionsintheUnited States since 2000 andisaglobal leader inthis area. •Milliman workedwithThePhoenix Group to fully industrialize the financial reporting process using cloud-based technology to provide Solvency II,IFRS, and MCEV results within 20daysofthecloseofa quarter,along with daily updates tocapitalrequirementsbasedonactualchangesinthemarket.Phoenix reports thatthe transformation project paid for itselfthreetimesoverbytheend of the three yearprogram.Milliman has received numerous awards forthetools built to support industrialization of actuarial modeling,most recently receiving the 2014 Insurance Risk Award for Best Actuarial Software. Property and Casualty •Milliman's property and casualty reserving software is relied upon by approximately 1,000 professionals at220 insurers and agencies throughout the world.The firm's new Arius®solution combines Milliman's 20+yearsof providing themost widely used deterministic tools with its industry-leading research into using multiple models to simulate loss distributionsand reserve variability. •Milliman's actuarial and risk management expertsare helping many leading P&C insurers adapt tothe technical demandsof Solvency II andORSA regulations £k Milliman May13,2015 MILLIMAN PROPOSAL FOR GASB 45 ANALYSIS Prepared fortheCityofSouth Miami 11 throughout the world. Milliman's property arid casualty practice is among the .largest inthe world, providing actuarial,underwriting,and claims consulting servicesto insurers, corporations,andgovernmentagencies.It'smortgageinsurance,titleinsurance, captive insurance,and M&A expertsare recognized leaders intheir respective fields. The Milliman Risk Institute providesthoughtleadership arid marketresearchon best practicesforenterpriserisk management ona global basisfor all major industrysectors,including insurance,energy,transportation,and banking. Emm May13,2015 iman MILLIMAN PROPOSAL FOR GASB 45 ANALYSIS Prepared fortheCityofSouth Miami 12 Exhibit2-Representative Client List ALABAMA City,ofAthens Cityof Gadsden City of Scottsbpro Cityof Florence Cityof Montgomery Montgomery County ARKANSAS Arkansas Tech University FLORIDA BayCounty CityofPortSt.Lucie Santa RosaCounty School Board CityofApopka EscambiaCounty SouthwestFLWater Mgmt. Cityof Dania Beach Franklin County St.John River WaterMgmt.District Cityof Eustis GulfCounty State of Florida Cityof Haines City Jacksonville Aviation Authority SumterCount Cityof Madeira Beach :MiamiBeachFraternalOrderofPolice Union County School Board CityofNaplesFire Control &Rescue PutnamCounty Village of North Palm Beach Cityof North Port GEORGIA Camden County Cityof Smyrna Georgia Ports Authority Gordon County Troup County LOUStANA 16th JudicialDistrictCourt EastBaton RougeParish Sheriffs Office Plaquemines Parish Sheriffs Office Acadia Parish SchoolBoard East Carroll ParishSchoolBoard Rapides Parish Library AllenParish Police Jury EastFelicianaParish Sheriffs Office Rapides Parish Police Jury AlienParishSchoolBoard Evangeline Parish Assessor's Office RedRiverParish Sheriffs Office AllenParish Sheriffs Office Evangeline Parish School Board RichlandParishSchoolBoard AssumptionParish Sheriffs Office Evangeline Parish Sheriffs Office RichlandParish Sheriffs Office Bayou Lafourche Freshwater District Franklin ParishSchoolBoard St.'Charles Parish Sheriffs Office Caddo ParishSchoolBoard GrantParishSchoolBoard St.HelenaParishSchoolBoard CalcasieuParishSchoolBoard Greater New Orleans Expwy Commission St.James Parish Sheriffs Office CalcasieuParish Sheriffs Office IberiaParishSheriffsOffice StJohnthe Baptist Parish Sheriff CaldwellParishSchoolBoard Iberville Parish Sheriffs Office St Landry Parish Sheriffs Office CameronParish Sheriffs Office JacksonParishSchoolBoard St MartinParish Schools Cityof Abbeville Lafayette Parish Clerk of Court St Mary Parish School Board City of Baton Rouge/E.Baton Rouge Parish Lafayette Parish School System St Tammany Parish School Board CityofBunkie Lafayette Parish Sheriffs Department St Charles Parish Sheriffs Office CityofDeRidder LakeCharlesHarbor&Terminal District Tangipahoa Parish Con.GD Dist 1 CityofDeQuincy LaSaileParishSchoolBoard Tangipahoa Parish Government CityofLake Charles Lincoln ParishSchoolBoard TensasParishSchoolBoard City of Leesvflte Livingston.Parish SheriffsOffice Terrebonne Parish Sheriffs Office City ofScott LA Assessor's Association (50 offices)UnionParish School 8oard Cityof VillePlatte MadisonParishSchoolBoard VernonParishClerkofCourt ClaiborneParish Schools MadisonParish Sheriffs Office VernonParish Government ConcordiaParishSchoolBoard Monroe City Schools VernonParishSchoolBoard OeSoto Parish Schools MorehouseParishSchoolBoard West CarrollParishSchoolBoard DeSoto Parish Police Jury Ouachita Parish PoBce Jury WinnParishSchoolBoard CS Milliman May13,2015 MILLIMAN PROPOSAL FOR GASB 45 ANALYSIS Prepared fortheCityofSouth Miami 13 / I TENNESSEE CityofMillington TEXAS BowieCounty City ofPiano Potter County. BrazosCounty City ofWebster SanJacintoRiver Authority Burleson County Cameron County TarrantAppraisal District Cameron County Collin County TexarkanaWater Utilities CityofAllen FortBend County Travis County CityofBrenham Gulf CoastWaste Disposal Pecos County Cityof Denton Hays County Port of Corpus Christ!Authority CityofEuless.Jefferson County Trinity River Authority CityofJasper Lower NechesValley Authority Williamson County CityofKaty Metropolitan Transit Authority of Harris County.Winkler County Cityof Laredo North Texas Municipal WaterDistrict CityofMount Pleasant Portof Houston Authority CS Milliman May 13,2015 MILLIMAN PROPOSAL FOR GASB 45 ANALYSIS Prepared fortheCityofSouth Miami 14 Exhibit 3-Requested Information Data is preferred inanExcelformat whenever possible. 1)Employee/RetireeInformation(seelayoutbelow) Data Element ^^^^^^^m Format Identification Number ;Alpha/Numeric Group Code (ifappficabfe)Alpha/Numeric Zip Code Numeric Gender Alpha Date of Birth mm/dd/yyyy Original Date ofHire mm/ddfyyyy Date of Rehire ftf applicable)mm/dd/yyyy DateofTermination mrn/dd/vyyy Benefit Coverages (medical plan ifmore than one,dental etc.)Alpha Medical Plan Design (PP01,PP02,etc.)Alphanumeric Tier (Employee Only,Employee &Spouse,etc.)Afpha/Numeric Dental Plan Design (DM0,indemnity,etc.)Alpha/Numeric Tier (Employee Only,Employee &Spouse,etc.)Alpha/Numeric Annual Compensation (ifappkabfe)..999999:99 •DataEtement .Format Identification Number Alpha/Numeric Group Code Of applicable)Alpha/Numeric Gender Alpha DateofBirth .mm/dd/yyyy DateofTermination mm/daVyyyy Benefit Coverages Alpha Tier (Employee Only,Employee &Spouse,etc.)Alpha/Numeric Life Insurance (ifapplicable)99999999 DataEtement •"-Format'• Identification Number Alpha/Numeric Group Code(tfapplicable)Alpha/Numeric ZipCode Numeric Gender Alpha DateofBirth mm/ddfyyyy Participant Contribution Rate 9999.99 Benefit Coverages Alpha Medical Plan Design (PP01,PP02,eta)Alpha/Numeric Tier [Employee Only,Employee &Spouse,etc.)Alpha/Numeric Dental Plan Design (DMO,indemnity,etc.)Alpha/Numeric Tier (Employee Only,Employee &Spouse,etc.)Alpha/Numeric Life Insurance (ifapplicable)99999999 Beneficiary identification Number Alpha/Numeric Beneficiary Dateof Birth mrn/daVyyyy D Milliman May 13,2015 MILLIMAN PROPOSAL FOR GASB 45 ANALYSIS PreparedfortheCityofSouth Miami 15 2)Summary of plan provisions and any pian changes over pastthree years. »Type of Insurance:self-insured,fully insured or partially insured (ASO agreement) Please note ifthetypeof insurance is different for actives,pre-65 retirees and post-65 retirees ; »Medical benefits (for each medical plan) -Deductible ~Co-insurance ~Officevisitco-pay ~:."Out-of-pocket maximum »Prescriptiondrugbenefits(foreachRxplan) -Copay ~Other »Otherpost-employmentbenefits(otherthan retirement),including life insurance,vision,dental,etc. »For Medicare eligible retirees ~Areall post-65 retirees required toenrollinMedicare Parts A and B? PartD? r How does the Plan coordinate with Medicare? ~Do retirees over 65 continue to receive health,life insurance,vision; dental,etc.? ~Are post-65 retirees ona Medicare Advantage Plan? 3)Contribution Schedule (for actives,pre-65 retirees,and post-65 retirees as applicable) »Include both the employer and participant rates separately as well as the total monthly rate 4)Claims information -24-36 months needed (if self-insured) »Employee groups -active and retirees/beneficiaries »Is the group rated as one entityor are actives and retirees rated separately? »Typeof benefit -medical,prescription drug,other »Timeperiod-informationfor the most recent full year needed;claims information forprior three years preferred »Data should include: ~Monthly/annual employee counts or membership ~Claimlags (groups over 2000)or annual paidclaims ~State if claims are net of stop loss recoveries -Specific and Aggregate Stop Loss premiums and recoveries (ifnot adjusted in claims) -Administrative expenses 5)Groups not covered by Medicare -if any 6)Most recent pension valuation report (if available) 7)Anticipated plan design changes (if applicable) 8)Name and Contact information of your Auditor Cl Milliman May 13,2015 MILLIMAN PROPOSAL FOR GASB 45 ANALYSIS PreparedfortheCity of South Miami 16 Exhibit 4-Consulting Services Agreement Company: Contact: Address: Telephone: Milliman Office: City of South Miami Fax: CSA Effective Date: This Agreement is entered into between Milliman,Inc.("Milliman")andCityofSouthMiami{''Company")asof 5/13/2015.Such services may bemodifiedfrom time to time andmayalsoinclude general consulting services.These terms and conditions will apply to all subsequent engagements ofMillimanbyCompanyunlessspecificallydisclaimedinwritingbyboth parties priortothe beginning of the engagement.Subject to the terms ofthisAgreement,Company hereby engages Millimantoprovide the Services described hereinfortheplanssetforthinthe attached ScheduleofServices,and Milliman herebyacceptssuch engagement In consideration forMilliman agreeing to perform these services,Company agrees asfollows. Terms and Conditions 1.Limitation of Liability.Millimanwillperformallservicesin accordance withapplicableprofessional standards.The parties agree that Milliman,itsofficers,directors,agents and employees,shall not beliable to the Company,under any theory oflawincluding negligence,tort,andbreachof contract or otherwise,for any damages which exceed 5 times the total professional fees paidin the previous12-month period.In no event shallMillimanbeliableforlostprofitsof the Companyorany other type ofincidentalorconsequentialdamages.Theforegoinglimitationsshallnotapplyin the event of the intentional fraud or willful misconduct of Milliman. 2.Disputes.In theeventofany dispute arising out oforrelatingtothe engagement ofMillimanbytheCompany,the parties agree that the dispute willberesolvedbyfinalandbinding arbitration under the Commercial Arbitration Rules ofthe American Arbitration Association.Thearbitrationshalltakeplacebeforeapanelof three arbitrators.Within30 daysofthecommencementofthearbitration,eachpartyshalldesignatein writing asingleneutralandindependent arbitrator.Thetwo arbitrators designated bythepartiesshall then selectathird arbitrator.The arbitrators shallhave a background ineitherinsurance,actuarial scienceor law.Thearbitrators shall havetheauthoritytopermit limited discovery,including depositions,priortothearbitration hearing,andsuch discovery shallbeconductedconsistentwith the Federal Rules of Civil Procedure.The arbitrators shall have no power or authority toaward punitive or exemplary damages.The arbitrators may,intheir discretion,award thecostofthe arbitration,including reasonable attorney fees,tothe prevailing party.Any award mademaybe confirmed inanycourt having jurisdiction.Any arbitration shall be confidential,andexceptas required by law,.neither partymay disclose thecontentorresultsofanyarbitration hereunder without thepriorwrittenconsentoftheother parties,exceptthat disclosure ispermittedtoaparty's auditors and legal advisors. 3.Choice oflaw.The construction,interpretation,and enforcement ofthis Agreement shallbe governed by the substantive contract law oftheStateof New York without regard toits conflict of laws provisions.In theeventany provision ofthisagreementis unenforceable asamatterof law,the remaining provisions shall stayin full forceand effect. 4.NoThird Party Distribution.Milliman's workisprepared solely fortheinternalbusinessuseofthe Company. Milliman's workmaynotbe provided tothirdpartieswithout Milliman's priorwrittenconsent.Milliman doesnot intendtobenefitanythirdpartyrecipientofitsworkproduct,evenif Milliman consentstothereleaseofitswork product to suchthird party. 17 5. 6. Use of Name.Company agrees thatit shall notuse Milliman's name,trademarks or service marks,orreferto Milliman directly or indirectly in any media release,public announcement or public disclosure,including in any promotional or marketing materials,customer lists,referral lists,websites or business presentations without Milliman's prior written consentforeachsuchuseor release,which consent shall be given in Milliman's sole discretion. Indemnification.Company agrees thatit will be responsible forsatisfying any losses,claims,damages,judgments, liabilities or reasonable expenses (including reasonable attorneys'feesand expenses)ofor against Milliman andits respective officers,employees and agents,resulting from or arising in connection with (i)inaccurate data provided by Company,or (ii)Company's gross negligence or willful misconduct.Milliman agreesthat it will be responsible for satisfying any losses,claims,damages,judgments,liabilities,reasonable expenses (including reasonable attorneys'fees andexpenses)oforagainst Company,its affiliates andits respective officers,employeesandagents,orthe Plan resultingfromorarisinginconnectionwith Milliman's gross negligence or willful misconduct.Theterm"affiliate" meansanymemberofacontrolledgroupofcorporationsoragrouportradesorbusinessesundercommoncontrol, withinthemeaningofSections414(b)and 414(c)oftheInternal Revenue Code.This provision survives the termination ofthis Agreement. 7.Terms of Agreement.ThisAgreement will becomeeffectiveuponthesignatureofbothparties,and will remainin effectuntilterminatedbyeitherpartyas provided herein.Either partymayterminatethis Agreement uponninety (90)dayspriorwritten notice.Milliman will retainanyrecordsithas relating the Services provided underthis Agreementforaperiodof three yearsfollowingtheterminationofthisAgreement. 8.Payment ofFeesandExpenses*FortheServicesprovidedonor after the CSA EffectiveDate,Companywill payor causetobepaidto Milliman thefeesandexpensesspecifiedfor such Services.Milliman willinvoiceCompanyorthe Planmonthly,andallInvoiceswillbepaidwithinthirty(30)daysofitsreceiptoftheinvoice. 9.Direct Expenses.Unless otherwise excepted,Milliman'sfee schedule isexclusiveof direct expenses,including reasonable travel expenses,printing,shipping,and express mail charges,allofwhich are charged atcost;provided, however,that allsuch out-of-pocket expenses willbelimitedto reasonable costs andairlinetravel expenses willbe limited to non-restricted coach fares. 10.AdditionalFees.Milliman mayassessadditionalfeesforany Services requestedby Company which arebeyondthe scope of the Services described in the attached schedule(s).Suchfeeswillbe determined based on standard hourly rates unless another basis is agreed tobyCompany.Millimanmay assess additional fees at standard hourly rates for Servicesitperformsasaresultofinaccurateorincompletedata that isprovidedto Milliman byoronbehalfof Company. ThisService Agreement will take effect upon the signature of both parties below. City of South Miami /have read and agree to the termsand conditions of this Agreement Accepted by: Printed Name: Title:Date: MILLIMAN,INC. /havereadand agree tothetermsandconditions of thisAgreement. Accepted by: Printed Name: Title:Principal Date: 18 Schedule A Actuarial Services Included Entities:Cityof South Miami This document provides a description of Milliman's actuarial consulting servicesandthe framework on which our fees for these services are based.Unless otherwise indicated,these services are considered "Basic Services"andare provided forthefees outlined inthefeeschedulethatappliesto these Services. ServicesoutsidethescopeofBasicServicesare "Additional Consulting Services"provided ona time-and- expense basisandarenot included inthefees provided forBasic Consulting Services. CONTENTS Description of Actuarial Consulting Services II.Fees forActuarial Consulting Services 19 GASB45 Analysis, I.Description of Actuarial Consulting Services A.Basic Consulting Services 1)Data Collection We will gather requested information from the City ofSouth Miami relatedtoother post-employment benefits (OPEBs)offeredto retirees.This will include the prior actuarialvaluationreport,so thatwemay assess thereasonabilityofthe baseline assumptions and valuation results.Uponthereviewof the priorvaluation,wewill discuss any proposed changes in advance ofcompleting the updated results. 2)Valuation We will perform calculations in accordance withGASB guidance andcurrent actuarial standards of practice.Key computations will include the OPEB liability,the annual required contribution,and projected future benefit payments. 3)Sensitivity Analysis We will provide sensitivity analysis to demonstrate the impact ofvariationin the assumed discount rate and other key assumptions.This information will be valuable inidentifying the key drivers of expected cost of associated withproviding OPEBs to retirees. 4)Meeting to Present Results We will meet withyouviaWebExor conference callto present valuationresults and discuss important issues. 5)Financial Statement Preparation We will assistyourauditors,asnecessary,to review the GASB 45sectionofthe financial statement to assure that the disclosed information is consistent with our valuation results. B.Additional Consulting Services Additional actuarialconsultingnotincludedinourBasicServiceisthatmaybe needed fromtimetotime as approvedinadvanceby Client.Examplesinclude responding torequests from auditors,benefitplanchange analyses,fundingalternatives,other financialprojections,andcommunicationprojects. 20 II.Fees for Actuarial Consulting Services This isa not-to-exceed fee project basedonthe Basic Consulting Services listed in Section I.Description of Actuarial Consulting Services.Milliman will notify the Client of any change in this fee schedule prior to suchchange becoming effective in theevent out-of-scope work is anticipated.Thefeeisdue,in full,once the report has been presented andfinalized. The estimated fees are based on the following assumptions: »There are approximately 132 active employees »There are approximately 7 retirees and beneficiaries »There are three medicaloptionsavailabletoretirees,as well as visionanddental »Data provided is usable without audit or significant follow up »Traveland other out-of-pocket expenses arebilled separately GASB 45 Valuation* If you prefer that Milliman make an on-site final presentation,our fees will be anadditional $1,000 (out-of-pockettravel expenses to be billed separately). $7,500 RollForward valuations underGASB45fortwo $1,300 per year years after afull valuation Plan Design and Funding Analysis Impact ofnewGASB45Legislation Provided as needed and based on scope Provided if Requested If a material difference in fees becomes evident due toa change in the scope of the assignment,wewill advise you. 21 Exhibit5-Business Associate Agreement (HIPAA Compliance) MILLIMAN,INC. BUSINESS ASSOCIATE AGREEMENT ThisBUSINESSASSOCIATEAGREEMENT("Agreement")isenteredintoeffectivethe __day of ,2015 byandbetweentheCityofSouthMiamiandcertain of its member offices("Client")andMilliman,Inc.("Milliman"). RECITALS A.Client isaCovered Entity asdefinedunderthe Health Insurance Portability and AccountabilityAct of 1996 ("HIPAA")andisthereforesubjecttoHIPAAanditsimplementing regulations,includingtheStandardsforPrivacyof Individually IdentifiableHealthInformation (the "Privacy Rule")andtheSecurityStandardsfortheProtection of ElectronicProtectedHealth Information (the "Security Rule"),andSubtitleD of theHealthInformationTechnologyfor EconomicandClinicalHealthAct("HITECH")enactedaspart oftheAmericanRecoveryand ReinvestmentAct of 2009 (collectively,HIPAA,thePrivacyRule,SecurityRuleandHITECH shallbe referred to herein asthe "HIPAA Regulations"). B.Protected Health Information received from Client or created or received by MillimanonbehalfofClient("PHI")maybeneededfor Milliman toperformtheservices(the "Services")requested byClientand described inany underlying agreement between the parties (the "Underlying Agreement"). C.TotheextentMillimanneedstoaccess PHI toperformthe Services,itwill be acting asaBusinessAssociate of Clientandwillbesubjecttocertainprovisions ofthe HPAA Regulations. D.MillimanandClientwishtosetforththeirunderstandingswithregardtotheuseand disclosure of PHIbyMillimansoastocomplywiththeHIPAA Regulations. AGREEMENTS InconsiderationoftheRecitalsandthemutualagreementsbelow,thepartiesagreeas follows: 1.DefinedTerms.Capitalized terms used,butnot otherwise defined,inthis Agreement shallhavethesamemeaningasthosetermsintheHIPAA Regulations. 2.Milliman's Obligations and Permitted Activities. (a)Milliman agrees tonotuseor further disclose PHIotherthanas required to perform the Services,requested by Client or Required By Law,oras otherwise permitted herein. 22 (b)Milliman agrees to use reasonable safeguards to prevent useor 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 PHL (c)Milliman agrees to report to Client,without unreasonable delay and inno caselaterthanfive(5)businessdays following actual knowledge byMilliman: (i)AnyuseordisclosureofPHInotprovidedforbythisAgreement. (ii)AnySecurityIncidentofwhichMillimanbecomesaware;provided, however,thattheparties acknowledge andagreethatthissectionconstitutesnoticebyMillimanto ClientoftheongoingexistenceandoccurrenceofattemptedbutUnsuccessfulSecurityIncidents of whichnoadditionalnoticetoClientshallberequired.UnsuccessfulSecurityIncidentsshall include,butnotbelimitedto,pingsandotherbroadcastattacksonMilliman'sfirewall,portscans, unsuccessful log-on attempts,denials of serviceandanycombination of theabove,solongassuch incidents do not result in unauthorized access,use or disclosure of Client's electronic PHI. (iii)Any Breach of Unsecured PHI,asdefined in45 CFR 164.402. Followingtheinitialnotification of anysuchBreach,MillimanshallprovideareporttoClientthat includes,totheextentpossible:[A]abrief description ofwhathappened,includingthedateof occurrenceandthedate ofthediscoverybyMilliman;[B]adescription of thePHIaffected, includingthenames of anyIndividualswhosePHIhasbeenorisreasonablybelievedtohavebeen accessed,acquired or disclosed andthetypesofPHI involved (suchasfull name,socialsecurity number,dateofbirth,homeaddress,accountnumbers,etc.);and[C]abriefdescriptionofwhat Milliman has done to investigate the Breach,to mitigate harm to Individuals,andto protect against anyfurther Breaches.MillimanalsoshallprovidetoClientanyother availableinformation Client isrequiredtoincludein its notificationto affected Individual(s). (d)Millimanagreestoensurethatanyagentorsubcontractortowhomit providesPHIagreestothesameor substantially similar restrictions andconditionsasthosethat apply to Milliman through this Agreement with respect to such PHI. (e)Milliman shallmakeits internal policies,procedures andrecords relating to theuseand disclosure ofPHI reasonably available to the Secretary orto Client if necessary or required to assess Milliman's ortheClient's compliance withthe HIPAA Regulations. (f)Itis not anticipated that Milliman will maintain a Designated RecordSeton behalfof Client;however,if Milliman maintains a Designated RecordSetonbehalfof Client, Millimanagreesto,atClient'swrittenrequest:(i)provideaccesstosuchPHIinordertoassist Clientinmeetingits obligations underthe Privacy Rule,and(ii)makeany amendment(s)tosuch PHIasClientsodirectsoragreestopursuanttothePrivacyRule. 23 (g)Sothat 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. (h)Milliman mayuse PHI for Milliman's proper management and administration orto carry out its legal responsibilities.Milliman may disclose PHI for Milliman's propermanagementandadministration,providedthat:(i)Millimanobtainsreasonableassurances fromthepersontowhomPHIisdisclosedthatitwillremainconfidentialandusedorfurther disclosed onlyas Required ByLaworforthe purpose for which itwas disclosed tothe person;and (ii)theperson notifies Milliman ofany instances of which itis aware in which the confidentiality ofPHIhasbeen breached.Millimanalsomaymake disclosures thatare required bylaw. (i)MillimanmayusePHItoprovideDataAggregationservicestoClientas permitted bythe Privacy Rule. (j)Milliman may,atitsoption: (i)DeidentifyPHIinaccordancewith the requirements of thePrivacy Ruleandmaintainsuchdeidentifiedhealthinformationindefinitely;providedthatallidentifiersare destroyed or returned in accordance with this Agreement (ii)CreateaLimitedDataSetforthe purpose ofprovidingtheServices, provided thatMilliman: [a]DoesnotuseorfurtherdisclosePHIcontainedintheLimited DataSetexceptasnecessarytoprovidetheServicesorasprovidedforinthisAgreementor otherwise Required By Law; [b]Uses appropriate safeguards topreventtheuse or disclosure of PHIcontainedintheLimitedDataSetotherthanasprovidedforbythisAgreement; [c]Reports toClientanyuseor disclosure ofPHI contained in theLimitedDataSet of whichMillimanbecomesawarethatisnotprovidedforbythisAgreement; [d]Ensures thatany agents or subcontractors towhomitprovides accesstotheLimitedDataSetagreetothesamerestrictionsandconditionsthatapplytoMilliman under this Agreement;and [e]Doesnotre-identifyPHIorcontacttheIndividualswhose information is contained within the Limited Data Set. 3.Client's Obligations. (a)ClientshallnotrequestMillimantouseordisclosePHIinanymannerthat wouldnotbe permissible underthe Privacy Rule orthe Security Ruleifdoneby Client. (b)Clientshallnotprovide Milliman withmorePHIthanthatwhichis minimally necessary for Milliman to provide the Services and,where possible,Clientshall provide anyPHI needed byMillimantoperformthe Services intheformofa Limited DataSet,in accordance with the HIPAA Regulations. 24 (c)Client shall clearly and conspicuously designate all PHI as such before providingittoMilliman. (d)Client acknowledges and agrees that neither this Agreement northe Underlying Agreement requires Milliman to make any disclosure for which an accounting would be required under the HIPAA Regulations.Client further agrees thatit shall be solely responsible for tracking and providing Individuals an accounting ofany disclosures made by Client to Milliman. (e)Client acknowledges andagreesthatthe provisions ofsection 2(j)(ii)ofthis Agreementshallconstitute a DataUseAgreementbetweentheparties. 4.Term and Termination. (a)Term.This Agreement shallbe effective as ofthedatefirstwrittenabove, andshallterminatewhenallPHIisdestroyedorreturnedtoClient.If Millimandetermines,in accordance with subsection 4(c)(ii)below,thatitisinfeasibleto return or destroy PHI,the protections of this Agreement withrespecttosuchPHIshallremainineffectuntilsuchPHIis returned or destroyed. (b)Termination.Uponaparty'sknowledge of amaterialbreachbytheother party,the nonbreaching partyshalleither: (i)Provideanopportunityforthebreachingpartytocurethebreachor endtheviolationandterminatethis Agreement ifthe breaching partydoesnotcurethebreachor endtheviolationwithinthetimespecifiedbythe nonbreaching party;or (ii)ImmediatelyterminatethisAgreementifthebreachingpartyhas breached amaterialtermofthis Agreement andcureisnot possible. (c)Effect of Termination. (i)Exceptas otherwise provided in subsection 4(c)(ii)below,upon termination ofthis Agreement forany reason,Milliman shall returnor destroy all PHI.This provision shallalsoapplytoPHIthatisinthe possession of subcontractors oragentsof Milliman. (ii)If Milliman determines that returning or destroying any orallPHIis infeasible,the protections ofthis Agreement shall continue toapplytosuch PHI,and Milliman shalllimit further usesand disclosures ofPHItothose purposes thatmakethereturnor destruction infeasible,forsolongas Milliman maintains such PHI.Client hereby acknowledges and agrees that infeasibility includes Milliman's need to retain PHIfor purposes of complying withitswork product documentation standards. 25 5.Miscellaneous. (a)Regulatory References.AreferenceinthisAgreementtoasectioninthe HIPAA Regulations meansthesectionasineffectoras amended,andforwhich compliance is required. (b)Amendment Upontheeffectivedateofanyfinalregulationoramendment totheHIPAA Regulations,thisAgreementshallbedeemed automatically amendedsothatthe obligationsitimposesonthepartiesremainincompliancewithsuchregulations.Following amendment of theAgreementinthismanner,the parties shall,asnecessary,worktogetherto clarify theirrespective obligations withrespecttoanynewrequirementsunderthe modified HIPAA Regulations. (c)IndependentContractors.MillimanandClientareindependentcontractors andthisAgreementwillnotestablishanyrelationship of partnership,jointventure,employment, franchiseoragencybetweenMillimanandClient.NeitherMillimannorClientwillhavethe powertobindtheotherorincur obligations ontheotherparty'sbehalf without theotherparty's priorwrittenconsent,exceptasotherwise expressly providedinthisAgreement. (d)Conflicts.Inthe event thatany termsof this Agreement are inconsistent withthetermsofthe Underlying Agreement,thenthe terms ofthis Agreement shall control. (e)Entire Agreement.This Agreement shall constitute the entire agreement of the parties hereto with respect tothe subject matter hereof and supersedes all prior agreements,oral orwritten,andallother communications between the parties hereto relating to such subjectmatter. IN WITNESS WHEREOF,the parties havecausedthis Agreement tobe executed as of the date first written above. MILLIMAN,INC.City of SouthMiami By By___ Title Title 26 Exhibit6-White Paper on Proposed GASB 45 New Regulations £5 Milliman ALERT GASB Issues Two Other Postemployment Benefit (OPEB)Related Exposure Drafts SUMMARY The Governmental Accounting StandardsBoard (GASB)issuedtwo Exposure Drafts regarding OPEB-related financial reporting bystate andlocalgovernments.Theseproposed standards will significantly alterthemethodsusedtoaccountforpostemploymentOPEBs,similar tothenewGASB67/68pensionstandards.Like thepensionstandards,theunfunded liability will becomeabalance sheet itemratherthan anotedisclosure.TheExposureDraftsareavailableon GASB's website,www.gasb.org. KEY CHANGES INCLUDED IN THE EXPOSURE DRAFTS: »Themost significant effectofthe Exposure Draft isto require that governments reporta Net OPEB Liability intheirstatementof financial position,thecalculationofwhichdiffers significantly fromtheNetOPEBObligationunderthecurrentGASB45standard.Thisamountis the difference betweenthetotalOPEB liability (i.e.,the Entry Age Normal Accrued Liability)andtheplan's fiduciary net position (i.e.,the Market Value ofAssets)for governments that provide OPEB benefits through a trust meeting specified criteria.If thereisnotrustorthe criteria arenotmet,the net OPEB liability reportedinitsstatementof financial position isthe entire OPEB liability. •It alsoproposes significant changestothe calculation ofthetotalOPEB liability andexpense,including: —Useofa bifurcated discount ratethat applies a)the expected long-term rateof return on investments foryears in which the plan is projected to have assets,and b)the interest rateona tax-exempt 20-year AA-or-higher rated municipal bond index for yearsafter the plan is projected tono longer have assets (if sucha point isever expected to occur).The expected long-term rateof return on investments may beusedif1)thetrustmeets specified criteria and2)plan assetsare invested using a strategy to achieve that return. Otherwise,the interest rate ona tax-exempt 20-year AA-or-higher rated municipal bond index is used asthe discount rate for all years. —Required useofthe Entry Age Normal cost method to determine the total pension liability andthe normal cost component ofthe OPEB expense.Theuseofthe Unit Credit orthe Projected Unit Credit cost method isno longer permitted. —Immediate recognition of additional components ofOPEB expense.This means immediate recognition ofchangesinthetotalOPEB liability resulting from plan changes,and significantly accelerated recognition of changes in the total OPEB liability resulting from assumption changes orplanexperience. —Community-rated plans (i.e.,plans where the premium rates are not affected by theclaims experience ofthegroup)will be required to measure OPEB;liabilities using age adjusted premiums.This means that plan sponsors of community-rated plans will be required to record a financial statement liability to reflect the implicit rate subsidy,even if retirees pay 100%ofthe premium.Under the current GASB standards,employers who sponsor community-rated plans where retirees pay 100%ofthe premium recognize no financial statement liability.An implicit rate subsidy takes into account thefactthatthecostof healthcare is higher for retirees not eligible for Medicare versustheaverage premium paidby employers for active employees, —A more extensive setof footnote disclosures and required supplementary information. August 2014 27 ALERT -An actuarial valuation at least every two years.The current GASB standards required an actuarial valuation every three years for some public employers. -The Exposure Drafts continue the option tousea specified Alternative Measurement Method in placeofan actuarial valuation for purposesof determining the total OPEB liability for benefits provided through OPEB plans in which thereare fewer than 100 plan membersinordertoreducethe administrative costsof complying with the GASB standardsfor smaller governments. BACKGROUND GASBisproposing "major improvements"foraccountingand reporting onOPEBs,suchas retiree medical benefits,that governments provideto.their employees..Italsoaimsto improve information relating toentitiesthat provide financial supporttoothergovernments. According to GASB,"Governments havean obligation to pay OPEBbasedonthe level of retirement benefits promised to employees in exchangefortheirservice.The GASB's proposedstandardsaddresshowtomeasurethe long-term liability and annual costs ofOPEB forthepurposeof reporting themintheannualaudited financial statements.Theproposals donot applytohowagovernment measures OPEB forthe purpose ofdetermining whether to set assets asidetofundfuture OPEB paymentsand,ifso,howmuchto set aside." ••The Accountingand FinancialReporting for Postemployment BenefitsOther Than Pensions ExposureDraft(OPEB Employer Exposure Draft)relatesto reporting by governments thatprovideOPEBto their employees andfor governments thatfinanceOPEBfor employeesofothergovernments (amending GASBStatementNo.45).Thisstatement would beeffectivefor fiscal years beginning after December 15,2016. •TheFinancial Reporting for Postemployment BenefitPlansOtherThanPensionPlans ExposureDraft (OPEB PlanExposure Draft) addresses thereportingbytheOPEBplansthatadminister those benefits(amendingGASB Statement No.43).This statement wouldbe effectiveforfiscal years beginning after December 15,2015. The comment period willhave two components:. •Written comments are requested fromthe users ofgovernment financial information byAugust29 •Public hearings willbeheld oh September 10,11,and 12 IMPLICATIONS The proposed changes inOPEBreportingare sweeping in scope,andthey will servetoincreasethe balance sheet liability andmay significantly increase the volatility ofannual OPEB expense.Thereareseveralareasthataresignificant departures from current practice,and may therefore cause concern for governmental employers,some ofwhichare: •TherecognitionoftheNet OPEB Liability intheemployer'sfinancialstatements:will likely beasignificantincreaseintheamountof liability than was reported under priorGASB standards. •TheannualOPEBexpense,because itincludesimmediaterecognitionof liability changes resultingfromplan changes andsome assumptionchanges,will be significantly more volatile from yeartoyearthantheAnnual Required Contribution under.GASB45.Itis unlikely thatemployers will wishto fund,theirplans based ontheannualOPEBexpense,sothere will likely betwo sets ofcalculationsin thefutureforemployerswhoare funding theirbenefits,onefor financial reporting andoneforplanfunding. •For those employersfundingtheirOPEBbenefits,theadvantageofusingahigherdiscountratefor financial reporting purposes will only applyfortheperiodinwhich invested assets andprojectedfuturecontributionsareusedtocoverprojectedOPEBbenefits.This will requireareviewofcurrentfundingpoliciesandtheimpactundertheproposed standards. •For those employerswhoparticipateincommunityratedplans,theExposureDrafts will requirethereflectionofany "implicit rate subsidy." Thismeans that.some employers will needto modify currentmethodsfor determining theOPEB liability andsomeemployers will nowbe requiredtorecognizea liability for OPEB where the current standards did not ACTION Every state andlocalgovernmentcurrentlycomplyingwithGASB43and45shouldreviewtheproposedrequirementsoftheExposure Draftsandbeawarethat stakeholders arenowbeing requested toprovidecommentarytoGASB.Formore information,pleasecontactyour Milliman consultant. Copyright c 2014 Milliman.Inc.AllRights Reserved.28 MIAMI HERALD |MiamiHerald.com SOAPBOX Traffic laws need to be enforced Do you ever wonder what it would be like if the traffic laws in Florida were actual ly enforced?I'm talking about how some drivers as sume that once you make it driving through Pinecrest (south of the border)the en forcement of traffic laws is nonexistent. Calming adjustments were discussed for our inte rior and major roads inPal metto Bayto help combat speeding drivers.I've been trying to get something done inmy neighborhood fordecades.When mycom plaints were finally ad dressed,radar speed signs were temporally placed and anoccasional speed trapis set up.So after allthis,after a couple ofweeksthe speed ingandrecklessdrivingon my street continues.If I mightmakea suggestion to help solve this issue con cerning traffic calming, complain to Miami-Dade Public Works if our local government seems reluc tant to aggressively follow through (asinthe past)with this. Most importantly,itall comes down to the enforce ment of our driving laws. When I drive through the Village of Pinecrest,I don't see many traffic calming de vices except foronething, signs on their speeding signs saying "STRICTLY SE SUNDAY,JUNE 7,2015|29SE iinDomoTad,as-ivyellir ENFORCED."Golly,could that be one solution? —Randy Burns,Palmetto Bay CITY OF SOUTH MIAMI COURTESY NOTICE NOTICE ISHEREBY given thattheCityCommissionoftheCityofSouthMiami, FloridawillconductPublicHearing(s)atitsregularCityCommissionmeetingscheduled forTuesday.June 16*2015beginningat7:00p.m.,intheCityCommissionChambers, 6130 Sunset Drive,to consider thefollowingitem(s): /A Resolution authorizing the City Manager to contract with Gabriel Roeder Smith\ /&Company toperform other Post-Employiucnt Benefits (OPEB)valuation required \ [for fiscal years 2015,2016,and 2017 Comprehensive Annual Financial Report I^(CAFR)./ AResolutionrelatingtoarequestforavariancefromSection20-3.5(E)ofthe Land Development Codetoexceedthe maximum building coverage of30%fora one-storyaddition toasingle family residence locatedat7830SW57Court.South Miami,Plorida,within the RS-3 zoningdistrict. ALLinterestedpartiesareinvitedtoattendandwill be heard. Forfurtherinformation,pleasecontacttheCityClerk'sOfficeat:305-663-6340. Maria M.Menendez,CMC CityClerk PursuanttoFloridaStatutes 286.0105,the City herebyadvisesthepublicthatifapersondecidesto appealanydecisionmadebythis Board,Agencyor Commission withrespecttoanymatterconsidered atitsmeetingorhearing,heorshewillneedarecordofthe proceedings,and that forsuchpurpose, affected person mayneedto ensure thata verbatim record ofthe proceedings ismade which record includesthetestimonyandevidenceuponwhichtheappealistobebased. GET THE MOST OUTOF YOUR INTERNET WHAT YOU WANT.INSTANTLY ATLANTIC' broadband TV-INTERNET -PHONE