CITY COUNCIL AGENDA ITEM
ACTION REQUESTED:
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Approve the award of Change Order #2 to Contract 16-259, Actuarial Services, to Foster & Foster Inc. for an amount not to exceed $4,000 and a total award of $110,682
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DEPARTMENT: Finance Department
SUBMITTED BY: Rachel Mayer, Director
BOARD/COMMISSION REVIEW:
N/A
BACKGROUND:
The City is required by state statute to have an independent actuarial valuation completed for its Police and Fire pension funds on an annual basis. This information is used in preparation of reports for the City's yearly tax levy and the Comprehensive Annual Financial Report (CAFR). In addition, the City is also required to have an evaluation performed for other post-employment benefits (OPEB) for final preparation of the CAFR Government Accounting Standards Board (GASB) statement disclosure information and required supplementary information. OPEB services are completed every three years and updated annually.
On November 15, 2016, the City Manager awarded Contract 16-259, Actuarial Services, to Foster & Foster. The term of the contract is three years beginning January 1, 2017 through December 31, 2019 with two, one-year options to extend the contract.
Change Order #1 was approved by the City Council on January 17, 2017 to add a proprietary modeling tool to the contract. The tool can be used to illustrate the long-term financial implications of retirement plans and has the ability to change variable inputs that allow for the running of multiple scenarios in determining pension funding options. The cost to add the modeler was $14,000.
DISCUSSION:
In 2018, staff worked with Foster & Foster to conduct an experience study for both public safety pension funds to review the City's current actuarial assumptions and methods to determine which changes, if any, were necessary to improve the accuracy of future funding levels.
The assumptions and methods investigated included investment return, salary increases, payroll growth, mo...
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