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1'an~el~r ~1.reruIs-Kitrg ()ctaber 23, 2007 !~ Page 3 ,~ Please note: ^ We will bill the City at the following hourly rates: President & Senior Actuary $300 Actuary $225 Consultant $Z00 Actuarial Analyst $17S Actuarial Trainee $1 SO Administrative Support $7S ^ Provision for miscellaneous expenses (for travel, computer, outline production, etc.) are included in the above hourly rates. ^ Qur study wilt include retiree medical benefits, but no dental, vision, or life insurance benefts. ^ Results will be shown separately for Miscellaneous and Safety employee groups. ^ Costs and Iiabiiities will be provided using one funding method and one set of assumptions including 2 investment return scenarios {not funded and funded with Ca1PERS). ^ We will have 2 meetings with the City: one to review the data, plan provisions, methods, and assumptions and a second to review preliminary valuation results ^ We will provide a forma] valuation report. ^ If the City's outside auditor determines the City does not need an actuarial analysis of the usage of unused sick leave for retiree medical benefts, the above estimate will be reduced by $5,000. ^ The above fees assume the retiree medical subsidy programs contain individual accounts and GASB 45 does not apply. However, if these programs do not contain individual accounts and the City's outside auditor determines GASB 45 does apply, then our fees will be higher. Without additional information we can't estimate what our additional fees will be. ^ The above fees are estimates and may be higher if. • participant data is not relatively clean and free from internal inconsistencies or is not provided in electronic format (Excel workbook); • the City's retiree healthcare promise is more complicated than we summarized above; • results are needed separately for additional employee or bargaining groups; • results are needed for additional assumptions, funding methods, or alternative plan designs; • the City requests more than 2 meetings to discuss actuarial methods and assumptions and to present. the study results, a presentation to the City Council, a meeting with outside auditors, or meetings with bargaining groups. An additional meeting may cast, far example, $S00 fora 2- hour presentation or $1,500 fora 2-hour meeting that requires 3 hours of preparation or additional work. ^ Our results outline and valuation report will include all the information needed for the City's financial statement. if the City would like us to prepare an executive summary or draft footnote, our estimated fees would be $1,750 for an executive summary and $1,250 for a draft financial statement footnote. ^ We agree to bill not more than $32,000 in fees based on the above project scope and including a City Council meeting and an Executive Summary. ^ if the City pre-funds using the CERB'1', the City will need an actuarial certification and an Excel spreadsheet completed. fur fees to complete this information will be approximately $1.,500, Data Requirements To complete the GASB 45 and GASB 16 study, please provide: ^ Summary of plan provisions and copies of the most recent MQUs far bargained employee groups and agreements for unrepresented groups or documentation of plan changes since the June 30, 2006 actuarial valuation. ^ Total pay-as-you-go costs .for the last 3 complete fiscal years (2004/05, 2005/OG, 2006/07} and ail esti~natc for the fiscal year ending June 30, 2008. ^ The City's CatPEa~S (PT:MiICA} healthcare program contract or resolution joining Pt;MHCA. ^ City investment fund annual returns for the last ] 0 years or as many years as are available, if less. 25G-~ 1