BICKMORE & ASSOCIATES, INC. 2-2016

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Proposal to Provide Actuarial Valuation of OPEB Liabilities For the City of Santa Ana May 2016 1. Detailed Project Approach General Background: The City is seeking professional services for the preparation of updated actuarial valuation of the City's postemployment healthcare costs. For purposes of this Proposal, we have assumed the valuation will be as of June 30, 2016, with results developed for the City's fiscal years ending June 30, 2016 and June 30, 2017. Process Overview: Our approach to providing services to the City will be for the consultant to collect and review preliminary Information with appropriate City representatives to obtain their specific directions and needs regarding the upcoming valuation, Including any issues relating to prior valuations that the City would like to bring to our attention to address or resolve. At this time, a tentative schedule will be developed concerning: (1) Review of actuarial assumptions and the recommended actuarial funding method; (2) Data preparation and delivery for the annual valuation; (3) A telephonic meeting or meetings to discuss preliminary results; (4) Delivery of the final report; and (5) Presentation by the lead consultant of the results contained in the final report either by telephone or in person to the appropriate City personnel, Finance Committee and/or City Council, as desired. Our intent Is to make senior consultants and analysts readily available to the City. We are also available by telephone or email at any time. Required information includes census data on covered active employees, retirees and their dependents, and plan documents, MOUS or bargaining agreements, resolutions or employee communications detailing the substantive plan provided by the City. We will also request copies of all PEMHCA resolutions executed and on file with CaIPERS, OPEB information reported in the City's financial statements (already received) and confirmation of actual contributions made each year to pay retiree benefits. A sample of our Data Request Part I and Data Request Part II have been attached as Attachment A and B respectively. ➢ Comment: We worked closely with the City when preparing the 2014 actuarial valuation to develop a strong understanding of the City's other post employement benefits and eligibility criteria. We anticipate that there will be little new ground to cover in this area, and, combined with elimination of the subsidy plans, this should significantly shorten the overall timeline and reduce the City's time involvement in the process relative to two years ago. ➢ Comment: The City requested OPEB data extracts from CaIPERS to provide a core of employee data for the 201.4 actuarial valuation. We encourage the City to again request these extracts. When this is provided to us, we are able to send an abridged employee data request (Part 11) for the remaining information. The process for requesting this data extract can be found on the CaIPERS website at this link: https://www.c�ers.ca.gov/page/em p Kers/benefit-programs/cerbt Then scroll down and click on the "GASB 43, 45 & 57" line. If interested, the City may want to initiate the extract process Immediately, in order to shorten any waiting time for receiving the data. Bickmore