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Res No 092-20-15532RESOLUTION NO.092-20-15532 A Resolution authorizing the City Manager to contract with Gabriel Roeder Smith & Company to perform Other Post -Employment Benefits (OPEB) valuation required under the GASB for fiscal year 2020 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, in order to comply with Governmental Accounting Standards Board ("GASr) provisions it is necessary to comply with GASB 75, Accounting and Financial Reporting by employers for the post -employment benefits other than pension for the recording of OPEB expense and the liabilities in the financial reports of state and local governments; and WHEREAS, employers must account for and report the annual cost of OPEB similar to how pensions are reported. Florida State Statutes require that the employer make health coverage available to retirees at the employer's group rate; and WHEREAS, GASB 75 valuation is an examination of other 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 COMMISSIONERS OF THE CITY OF SOUTH MIAMI, FLORIDA: Section 1. The foregoing recitals are hereby ratified and confirmed as being true and they are Incorporated into this resolution by reference as if set forth in full herein. Section 2. The City Manager is authorized to 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 the fiscal year 2020 Comprehensive Annual Report (CAFR), for a fixed retainer not to exceed $6000 using account 001.1410.513.5210, Finance Auditors Fee, for the fiscal year 2020. Section 3. Corrections. Conforming language or technical scrivener -type corrections may be made by the City Attorney for any conforming amendments to be incorporated into the final resolution for signature. Section 4. Severability. If any section clause, sentence, or phrase of this resolution is for any reason held invalid or unconstitutional by a court of competent jurisdiction, the holding shall not affect the validity of the remaining portions of this resolution. Pagel of 2 Resolution No. 092-20-15532 Section 5. Effective Date. This resolution shall become effective immediately upon adoption. PASSED AND ADOPTED this 4th day of August, 2020. ATTEST: APPROVED: CITY 8LERK MAYOR READ AND APPROVED AS TO FORM, LANGUAGE, LEGALITY AND EXECUTION THEREOF % \ C. TT)vATTORNEY COMMISSION VOTE: 5-0 Mayor Philips: Yea Vice Mayor Welsh: Yea Commissioner Harris: Yea Commissioner Liebman: Yea Commissioner Gil: Yea Page 2 of 2 Agenda Rem No:1. City Commission Agenda Item Report Meeting Date: August 4, 2020 Submitted by: Jaclyn Cuesta Submitting Department: Finance Department Rem Type: Resolution Agenda Section: Subject: A Resolution authorizing the City Manager to contract with Gabriel Roeder Smith & Company to perform Other Post -Employment Benefits (OPEB) valuation required under the GASB for fiscal year 2020 Comprehensive Annual Financial Report (CAFR). 315 (City Manager -Finance Dept.) Suggested Action: Attachments: Memo= _OPEB_Valuation_Requirement_FY_2020.docx Resolution_ _OPEB_Valuation_Requirement.doc Fee_GASB75 FL League 2020.pdf South Miami OPEB Engagement Letter and Data Request.pdf Milliman - City of South Miami GASB 75 Proposal.pdf 7eX'A Soutiami 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: Shari Karnali, City Manager Date: August 4, 2020 Subject: A Resolution authorizing the City Manager to contract with Gabriel Roeder Smith & Company to perform Other Post -Employment Benefits (OPEB) valuation required under the GASB for fiscal year 2020 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 or other healthcare benefits. GASB 75, 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. Florida State Statues require that the employer make health coverage available to retirees at the employer's group rate. For purpose of GASB 75, a valuation is an 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. The City obtained three quotes from actuarial firms. The City Manager is requesting to contract with Gabriel Roader Smith & Company, the pension board's current actuary, to perform the Other Post -Employment Benefits (OPEB) valuation calculation. Below are a summary of the three quotes. Actuarial and Consulting Firms Florida League of Cities Gabriel Roeder Smith & Company Milliman $7,200 $6,000 $6,000 Page I of 2 AMOUNT A fixed amount not to exceed $6,000 ACCOUNT 001.1410.513.3210, Auditor's Fee with a current balance of $25,000. ATTACHMENTS Resolution for Approval Florida League of Cities/ Southern Actuarial proposal Gabriel Roeder Smith proposal Milliman proposal Page 2 of 2 3 GRS r June 24,2020 Mr. Alfredo Riverol Chief Financial Officer City of South Miami 6130 Sunset Drive South Miami, Florida 33143 P:954.527.1616 F:954.525.0083 1 ww..gmconzulting.com Re: Retiree Health Care Program —Actuarial Valuation as of October 1, 2019 Dear Alfredo: As in prior years, Gabriel, Roeder, Smith & Company (GRS) is pleased to present this Engagement Letter to continue to provide professional actuarial and consulting services including an Actuarial Valuation as of October 1, 2019 for the City of South Miami Retiree Health Care Program. We are enthusiastic about continuing our existing relationship with the City on this important assignment. We have a 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 the GRS working relationship. We strive to earn your trust as your advisor. We will continue to work together with you in the best interest of the interested parties. Description of Services The professional services would be provided under the supervision of Shelly Jones, A.S.A., a Consultant and Actuary with over 10 years of experience in employee benefit plans, Nicolas Lahaye, F.S.A., a Consultant and Actuary with over 16 years of experience in employee benefit plans and Jen Borregard, E.A., a Consultant and Actuary with over 20 years of experience with retirement systems. We will provide education and support in understanding and implementing changes due to GASB 75. Mr. Alfredo Riverol June 24, 2020 Page Two Our Report will add value by including 10-year projections of the total program. We believe this information will be of great use to the City and distinguishes GRS from our competitors. Please review, sign and date the enclosed Business Associate Agreement. Data Requirements Upon engagement, we understand the City will provide census data, medical insurance information, coverage and other information needed generally in electronic (spreadsheet) form via secure file transfer through our secure website, GRSAdvantage. We expect information relating to benefit coverage and eligibilities (Plan Documents / member booklets) will be provided electronically or via hard copy. Secure file transfer may be used for these items or alternatively if there is no individual personal data email may be used. • Census Data Requirements Please see the attached request for member census information as of October 1, 2019 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 ➢ OPEB initial per -capita cost information — see attached data request ➢ Review the attached Summary of Benefits as of October 1, 2017 and update for any changes as of October 1, 2019 or indicate that there are no changes. ➢ Any changes being considered ➢ Schedule of most recent premiums / contributions with their effective date LGRS Mr. Alfredo Riverol June 24, 2020 Page Three ➢ We understand the City has adopted the pay-as-you-go funding approach. ■ Please confirm the cost and liabilities should continue to be developed using the pay-as-you-go funding approach. Timing and Fees The Actuarial Valuation will be delivered within sixty (60) days following confirmation of the receipt of all necessary member census data, medical insurance information and plan documentation. Our fee for the entire project, including 60 day turn -around, will be $6,000 (same as prior valuation). In the event a shorter turn -around is required, it will require a combination of rescheduling of other work and overtime. A required turn -around of less than 60 days will increase the fee by 20%. We look forward to your response and to the opportunity to work with you on this important project. Please do not hesitate to contact us should you have any questions or require additional information. Sincerest regards, 'rnik& jv7l� Shelly L. Jones, A.S.A., E.A., F.C.A., M.A.A.A., C.F.A. Consultant and Actuary Enclosures GRS 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 the City of South Miami Retiree Health Care Program provisions for each healthcare option. For example, please list co -pays and deductibles for each PPO option, HMO option, etc. If a summary is not available, a member booklet should suffice. 2. If any portions of retiree health benefits are fully insured, please provide us with the 2017-2018, 2018-2019, and 2019-2020 fully -insured monthly active and retiree premium rates for one -person and two -person coverage. For the retirees, we would like both pre-65 (regular premium rates) and post-65 (complementary premium rates). If available, it would be helpful to have the premium rate broken down by coverage component (i.e., medical, prescription drug, life, and/or vision). For all Rate Sheets submitted, please indicate the full period these rates are effective. Billing statements do not contain the information needed; therefore they are not necessary to send. 3. Please explain which groups/suffixes are available for future retirees. If more than one group/suffix is available, please explain what would cause a retiree to choose one type of coverage over another. 4. If any portions of retiree health benefits are self -insured, please provide the following health care claims information. Please separate health care claims between active employees and retirees, and then further between claims for pre-65 and post-65 retirees and between medical and Rx claims, if possible. a. Monthly health care claims experience by group / suffix, I. Paid 10/01/16 to 09/30/17 ii. Paid 10/01/17 to 09/30/18 iii. Paid 10/01/18 to 09/30/19 iv. Please note that separate claim reports for regular and comprehensive members should be provided. b. Monthly exposure data by group/suffix for the periods corresponding to the above claim experience periods. c. Please provide the illustrative premiums for the medical groups/suffix. d. Stop loss attachment point as of October 1, 2019. e. Monthly stop loss fee per contract as of October 1. 2019. f. Monthly medical administrative fee per contract as of October 1. 2019. 5. Please explain any major changes that have occurred to the retiree health plan (e.g., changes in co pays, deductibles, change from self -insured to fully -insured, switching to high deductible health plans, etc.) in the past two years. City of South Miami Retiree Health Care Program Data Request OPEB Initial Per -Capita Cost Information (continued) 6. If your dental plan is self -insured and retirees pay less than 100% of the cost of the dental plan, please provide the following information for all suffixes with dental coverage. a. Monthly dental claims experience by group / suffix, i. Paid 10/01/16 to 09/30/17 ii. Paid 10/01/17 to 09/30/18 iii. Paid 10/01/18 to 09/30/19 iv. Please note that separate claim reports for regular and comprehensive members should be provided. b. Monthly exposure data by group / suffix for the periods corresponding to the above claim experience periods. c. Please provide the illustrative premiums for the dental groups / suffix. 7. If your dental plan is fully -insured and retirees pay less than 100% of the cost, please provide the 2017-2018, 2018-2019, and 2019-2020 fully -insured monthly active and retiree premium rates for one -person and two -person coverage. 8. If retirees pay less than 100% of the cost of your dental plan, please provide the following. a. Monthly dental administrative fee per contract as of October 1, 2019. b. The percentage or amount the City pays toward the retiree benefits. 9. For any life insurance benefits, please provide premiums, eligibility conditions, and groups for whom these benefits are available. If the City provides any other retirement benefits please provide premiums, eligibility conditions, and groups for whom these benefits are available. 10. Please provide election /participation data for the past two (2) years. This should include a listing of everyone who has retired from the City over the past two (2) 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 to enroll in health or other post -employment benefits. 11. Are retirees required to enroll in Medicare upon reaching age 65? If so, are they required to enroll in Medicare Part A, or both Medicare Parts A and B? 12. For retirees enrolled in health coverage with the City who are currently over age 65, please indicate whether each of them is covered by Medicare Part A, both Medicare Parts A and B, or not enrolled in Medicare. 4 W City of South Miami Retiree Health Care Program Data Request Demographic Data Requirements The actuarial valuation will be performed using data as of October 1, 2019 (valuation date). In the secure file transfer tool of our secure website, GRSAdvantage is an Excel© file with a worksheet to be completed with active member information and a worksheet to be completed with inactive member information. Please provide the following information in the Excel(D file for members as of October 1, 2019. We would appreciate receiving this information through our secure electronic transfer. 1) For active employees as of the valuation date, please provide an electronic file including the following information — please include a record layout. • Unique identifier (i.e., employee number or Social Security number) • 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 group code (if applicable. Please furnish a list of codes.) • Health Plan (HMO, PPO, etc.) • Type of coverage (i.e., single, employee plus spouse, family, etc.) • Spouse date of birth • Spouse gender 2) For retired employees and beneficiaries as of the valuation date, please provide an electronic file including the following information — please include a record layout. • Unique identifier (i.e., employee number or Social Security number) • Name • Gender (M or F) • Date of birth • Date of retirement • Status (Retiree, Disabled, Beneficiary, etc.) • Employment group (Fire, General, Police) City of South Miami Retiree Health Care Program Data Request Demographic Data Requirements (continued) • Health group code (if applicable. Please furnish a list of codes.) • Health Plan (HMO, PPO, etc.) • Type of coverage (retiree only, retiree plus spouse, family, two regular contracts, one complementary contract, etc.) • Does coverage continue for beneficiary after retiree's death? (Y or N) • Beneficiary gender • Beneficiary date of birth • Member contribution • Medicare coverage if over age 65 (Part A only, Part B only, Parts A and B, None) • Life insurance amount and Member Contribution (if applicable) • Dental coverage and Member Contribution member (if retiree pays less than 100% of premium) • Vision coverage and Member Contribution member (if retiree pays less than 100% of premium) 3) For former employees who are not yet retired, but who will be eligible for retiree health care benefits, please provide an electronic file including the following information — please include a record layout. • Unique identifier (i.e., employee number or Social Security number) • Name • Gender (M or F) • Date of birth • Date of hire • Date of termination • Date or age at which person becomes eligible for retiree health care benefits • Employment group (Fire, General, Police) • Health group code (if applicable. Please furnish a list of codes.) • Life insurance amount and Member Contribution (if applicable) • Dental coverage and Member Contribution member (if retiree pays less than 100% of premium) • Vision coverage and Member Contribution member (if retiree pays less than 100% of premium) 4 W Summary of Benefit Provisions Program Participants All employees of the City are eligible to receive retiree health care benefits. Normal Retirement Benefits Normal retirement eligibility conditions for retiree health care benefits are as follows: Police Officers: Earlier of: 1. Attainment of age 60 and completion of 10 years of credited service or 2. Completion of 25 years of credited service General Employees: 1. Attainment of age 55 and completion of 10 years of credited service for other than Tier 2 or AMSC under the South Miami Pension Plan 2. Attainment of age 65 and completion of 10 years of credited service or completion of thirty- three (33) years of credited service regardless of age for Tier 2 general employees under the South Miami Pension Plan 3. Attainment of age 65 and completion of 3 years of credit service or completion of thirty-three (33) years of credited serviced regardless of age for AMSC employees under the South Miami Pension Plan All Members Health Care Benefit Provided by Program Member: Eligible members are eligible to elect post retirement coverage. Member pays full blended cost of coverage. Spouse: Eligible members are eligible to elect spousal coverage which continues for the life of the spouse should the spouse survive the retiree. Member / spouse pays full blended cost of spousal coverage. Dependent: Eligible members are eligible to elect dependent coverage which continues to age 26. Member / dependent pays full blended cost of dependent coverage. Early Retirement Benefits Police Officers: Attainment of age 50 and completion of 15 years of service AMSC Members: Attainment of age 55 and completion of 10 years of service Death in Service Retirement Benefits Death retirement eligibility conditions for retiree health care benefits are as follows: Health Care Benefit Eligibility Conditions Immediately. QRetireRetirementR"o'nt City of South Miami Retiree Health Care Program 21 Consulting Summary of Benefit Provisions (continued) Health Care Benefit Provided by Program Spouse: Spouse eligible to elect coverage which continues for the life of the spouse. Generally, spouse pays full blended cost of coverage. The City will pay the full premium for the surviving spouse of any Police Officer if they are killed in the line of duty as a result of an act of violence inflicted by another person or is catastrophically injured in the line of duty and the spouse survives the member. The City will stop paying the full premium if the surviving spouse remarries. Dependent: Dependents are eligible to elect coverage which continues to age 26. The City will pay the full premium for the surviving dependent of any Police Officer if they are killed in the line of duty as a result of an act of violence inflicted by another person or is catastrophically injured in the line of duty and the dependent survives the member. Disabled Retirement Benefits Disability retirement eligibility conditions for retiree health care benefits are as follows: Health Care Benefit Eligibility Conditions Totally and permanently disabled for a six-month period while actively employed. Health Care Benefit Provided by Program Member: Members are eligible to elect post retirement coverage. Generally, member pays full blended cost of coverage. The City will pay the full premium for any Police Officer who is catastrophically injured in the line of duty. Spouse: Members are eligible to elect spousal coverage which continues for the life of the spouse should the spouse survive the retiree. Generally, member/spouse pays full blended cost of coverage. The City will pay the full premium for any Police Officer who is catastrophically injured in the line of duty. The City will stop paying the full premium if the surviving spouse remarries. Dependent: Members are eligible to elect dependent coverage which continues up until age 26 of the dependent. The City will pay the full premium for any Police Officer who is catastrophically injured in the line of duty. 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 are not required to enroll in any Medicare plans once eligible. If a retiree enrolls in Medicare retiree pays Medicare premiums. Vision Coverage Health Care Benefit Eligibility Conditions Members who meet retiree health care eligibility conditions may elect vision benefits. Health Care Benefit Provided by Program Member: Member pays full cost of coverage. i Retrement City of South Miami Retiree Health Care Program 22 G R S or i Summary of Benefit Provisions (continued) Dental Coverage Health Care Benefit Eligibility Conditions Members who retire meet retiree health care eligibility conditions may receive dental benefits. Health Care Benefit Provided by Program Member: Member pays full cost of coverage. Life Insurance Coverage Life Insurance coverage is not available to retirees and is not included in this actuarial valuation. Changes in Provisions Since Prior Valuation Normal Retirement Benefits were: Normal retirement eligibility conditions for retiree health care benefits are as follows: Police Officers: Earlier of: 1. Attainment of age 60 and completion of 10 years of credited service or 2. Completion of 25 years of credited service General Employees: 1. Attainment of age 55 and completion of 10 years of credited service All Members Health Care Benefit Provided by Program Member: Eligible members are eligible to elect post retirement coverage. Member pays full blended cost of coverage. Spouse: Eligible members are eligible to elect spousal coverage which continues for the life of the spouse should the spouse survive the retiree. Member / spouse pays full blended cost of spousal coverage. Dependent: Eligible members are eligible to elect dependent coverage which continues to age 26. Member / dependent pays full blended cost of dependent coverage. Early Retirement Benefits were: Police Officers: 1. Attainment of age 50 and completion of 15 years of service Retirement City of South Miami Retiree Health Care Program 23 4;v con.ulting