DEPARTMENT: Finance
DEPARTMENT HEAD: Troy Elliott, CPA
COUNCIL DISTRICTS IMPACTED: City Wide
SUBJECT:
Engagement of Actuarial Firm
SUMMARY:
This ordinance authorizes the City Manager or her designee to enter into a contract with AMI Risk Consultants, Inc. to provide actuarial services for the City of San Antonio Finance Department. The term of this contract is three (3) years, beginning October 1, 2014, and ending September 30, 2017, with an option to extend the contract for up to two (2) one (1) year extensions, subject to and contingent upon funding by City Council, with total compensation not to exceed $65,000.00. The estimated annual expense is approximately $13,000.00.
BACKGROUND INFORMATION:
The City maintains Workers' Compensation and General Liability Internal Service Funds ("WC/GL Internal Service Funds") from which it pays approximately 1,400 workers' compensation and 1,000 general liability claims annually. The City retains the services of a licensed Independent Consulting Actuary who is a member of the Casualty Actuarial Society to conduct a comprehensive annual actuarial analysis and a mid-year adjustment to the annual actuarial analysis of the City's self-insured workers' compensation and liability programs to ensure the program is adequately funded. The City may also request the Consulting Actuary to evaluate the existing methodology for City-wide assessments to be charged against individual City department's cost centers within the City budget, which will enhance the current process. The assessment methodology will be created by utilizing the Consultant's expertise, skills and identified industry best practices.
On May 15, 2014, the Finance Department issued a Request for Proposals (RFP) for a licensed Independent Consulting Actuary who is a member of the Casualty Actuarial Society to conduct a comprehensive annual actuarial analysis and, at the City's option, a mid-year adjustment to the annual actuarial analysis, of the City's self-insured workers' compensation and liability programs with a submission deadline of June 16, 2014. Three qualified proposals were received and evaluated by the selection committee ("committee"). AMI Risk Consultants, Inc. was selected by the committee as the recommended Respondent for award. The committee based its decision on several weighted factors, including experience, background, qualifications and proposed plan. Additional factors were applicable, including price, Local Preference Program and Veteran-Owned Small Business Program, and were considered in the final scoring.
The committee consisted of members from the Finance and Human Resources Departments.
If requested by City, Consultant shall conduct a comprehensive annual actuarial analysis and, at the City's option, a mid-year adjustment to the annual actuarial analysis, of the City's self-insured workers' compensation and liability programs with a submission deadline of June 16, 2014, and apply the methodology to ascertain the appropriate assessments against individual City department's cost centers in order to finance the WC/GL Internal Service Funds. Consultant shall identify industry best practices to City, including how Consultant derived such practices, and a detailed explanation justifying its proposed methodology to City in a report, along with the proposed methodology and the actual assessments proposed. Consultant shall provide a draft of this report no later than 14 calendar days from the date City requests these services. City shall review the report and may request clarification or revision. If so, Consultant shall provide a revised report no later than 5 calendar days from City's request for clarification or revision. City shall notify Consultant in writing when City accepts Consultant's report as final.
ISSUE:
Award of this contract will allow for the continuation of City Council's policy of providing actuarial consulting services for the purpose of insuring proper assessments are charged against individual department's cost centers within the City budget to finance the WC/GL Internal Service Funds.
This contract is within the scope of the Small Business Economic Development Advocacy (SBEDA) Program. However, due to the lack of availability of small, minority, and/or women-owned businesses to perform the services being procured and value of the contract, no SBEDA tool was applied to this solicitation.
There were no proposals submitted from local respondents for this contract; therefore, the Local Preference Program was not applied.
There were no proposals submitted from veteran-owned small business respondents for this contract; therefore, the Veteran-Owned Small Business Preference Program was not applied.
ALTERNATIVES:
The alternative of taking no action would result in inaccurate assessment of necessary contributions from individual departments, which is required to maintain the integrity and viability of the City's WC/GL Internal Service Funds.
The City could also re-engage in the RFP process to select a vendor, but this course of action would require a significant amount of time and could result in a possible disruption of services.
FISCAL IMPACT:
This ordinance authorizes the execution of a professional services agreement with AMI Risk Consultants Inc. for actuarial consulting services. Funds in the amount of $13,000 are available in the FY 2015 Adopted Budget in the Workers Compensation Fund.
RECOMMENDATION:
Staff recommends approval of this ordinance to execute a professional services agreement for actuarial consulting services for a term beginning October 1, 2014 and ending on September 30, 2017, with an option to extend the contract up to two (2) one (1) year extensions, subject to and contingent upon funding by City Council. Contracts Disclosure Form is required.