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CAG2020-395 - Original - Select Actuarial Services, Inc. - 2021 & 2022 Actuarial Services & Allocation Studies - 12/08/2020
ApprovalOriginator:Department: Date Sent:Date Required: Authorized to Sign: Director or Designee Mayor Date of Council Approval: Grant? Yes No Type:Review/Signatures/RoutingDate Received by City Attorney: Comments: Date Routed to the Mayor’s Office: Date Routed to the City Clerk’s Office:Agreement InformationVendor Name:Category: Vendor Number:Sub-Category: Project Name: Project Details: Agreement Amount: Start Date: Basis for Selection of Contractor: Termination Date: Local Business? Yes No* *If meets requirements per KCC 3.70.100, please complete “Vendor Purchase-Local Exceptions” form on Cityspace. Notice required prior to disclosure? Yes No Contract Number: Agreement Routing Form For Approvals, Signatures and Records Management This form combines & replaces the Request for Mayor’s Signature and Contract Cover Sheet forms. (Print on pink or cherry colored paper) Visit Documents.KentWA.gov to obtain copies of all agreementsadccW22373_1_20 Budget Account Number: Budget? Yes No Dir Asst: Sup/Mgr: Dir/Dep: rev. 200821 FOR CITY OF KENT OFFICIAL USE ONLY KENT WasHrNcroN CONSULTANT SERVICES AGREEM ENT between the City of Kent and Select Actuarial Services, Inc. THIS AGREEMENT is made between the City of Kent, a Washington municipal corporation (hereinafter the "City"), and Select Actuarial Services, Inc. organized under the laws of the State of Tennessee, located and doing business at 28 White Bridge Road, Suite 205 Nashville, TN 37205-1428 (hereinafter the "Consultant"). I. DESCRIPTION OF WORK. The Consultant shall perform the following services for the City in accordance with the following described plans and/or specifications: Actuarial consulting services to assist in the management of the City's workers compensation and liabilitycoverages, as more particularlydescribed in the attached and incorporated Exhibit A The Consultant further represents that the services furnished under this Agreement will be performed in accordance with generally accepted professional practices within the Puget Sound region in effect at the time those services are performed. II. TIME OF COMPLETION. The parties agree that work will begin on the tasks described in Section I above immediately upon the effective date of this Agreement, The Consultant shall complete the work described in Section I by February 15, 2022. III. COMPENSATION. A. The City shall pay the Consultant an all-inclusive fee not to exceed $20,000, including any applicable Washington State sales tax, as further described in Exhibit A, for the services described in this Agreement. This is the maximum amount to be paid under this Agreement for the work described in Section I above, and shall not be exceeded without the prior written authorization of the City in the form of a negotiated and executed amendment to this agreement. The Consultant agrees that the hourly or flat rate charged by it for its services contracted for herein shall remain locked at the negotiated rate(s) fora period of one (1) year from the effective date of this Agreement. The Consultant's billing rates shall be as delineated in Exhibit A. B.The Consultant shall submit intermittent payment invoices to the City which reflect elements of work completed, and a final bill upon completion of all services described in this Agreement. The City shall provide payment within forty-five (45) days of receipt of an invoice. If the City objects to all or any portion of an invoice, it shall notify the Consultant and reserves the option to only pay that portion of the invoice not in dispute. In that event, the parties will immediately make every effort to settle the disputed portion, Card Pavment Program. The Consultant may elect to participate in automated credit card payments provided for by the City and its financial institution. This Program is provided as an alternative to payment by check and is available for the convenience of the Consultant. If the Consultant voluntarily participates in this Program, the Consultant will be solely responsible CONSULTANT SERVICES AGREEMENT - 1 ($20,000 or Less) c for any fees imposed by financial institutions or credit card companies. The Consultant shall not charge those fees back to the City. IV. INDEPENDENT CONTRACTOR. The parties intend that an Independent Contractor- Employer Relationship will be created by this Agreement. By their execution of this Agreement, and in accordance with Ch. 51.08 RCW, the parties make the following representations: A. The Consultant has the ability to control and direct the performance and details of its work, the City being interested only in the results obtained under this Agreement. The Consultant maintains and pays for its own place of business from which the Consultant's services under this Agreement will be performed, The Consultant has an established and independent business that is eligible for a business deduction for federal income tax purposes that existed before the City retained the Consultant's services, or the Consultant is engaged in an independently established trade, occupation, profession, or business of the same nature as that involved under this Agreement. The Consultant is responsible for filing as they become due all necessary tax documents with appropriate federal and state agencies, including the Internal Revenue Service and the state Department of Revenue. The Consultant has registered its business and established an account with the state Department of Revenue and other state agencies as may be required by the Consultant's business, and has obtained a Unified Business ldentifier (UBI) number from the State of Washington. The Consultant maintains a set of books dedicated to the expenses and earnings of its business. V. TERMINATION. Either party may terminate this Agreement, with or without cause, upon providing the other party thirty (30) days written notice at its address set forth on the signature block of this Agreement. After termination, the City may take possession of all records and data within the Consultant's possession pertaining to this project, which may be used by the City without restriction. If the City's use of the Consultant's records or data is not related to this project, it shall be without liability or legal exposure to the Consultant. VI. FORCE MAJEURE, Neither party shall be liable to the other for breach due to delay or failure in performance resulting from acts of God, acts of war or of the public enemy, riots, pandemic, fire, flood, or other natural disaster or acts of government ("force majeure event"), Performance that is prevented or delayed due to a force majeure event shall not result in liability to the delayed party. Both parties represent to the other that at the time of signing this Agreement, they are able to perform as required and their performance will not be prevented, hindered, or delayed by the current COVID-19 pandemic, any existing state or national declarations of emergency, or any current social distancing restrictions or personal protective equipment requirements that may be required under federal, state, or local law in response to the current pandemic. If any future performance is prevented or delayed by a force majeure event, the party whose performance is prevented or delayed shall promptly notify the other party of the existence and nature of the force majeure event causing the prevention or delay in performance, Any excuse from liability shall be effective only to the extent and duration of the force majeure event causing the prevention or delay in performance and, provided, that the party prevented or delayed has not caused such event to occur and continuesto use diligent, good faith efforts to avoid the effects of such event and to perform the obligation. Notwithstanding other provisions of this section, the Consultant shall not be entitled to, and the City shall not be liable for, the payment of any part of the contract price during a force majeure event, or any costs, losses, expenses, damages, or delay costs incurred by the Consultant due to a force majeure event. CONSULTANT SERVICES AGREEMENT - 2 ($20,000 or Less) B c D E F Performance that is more costly due to a force majeure event is not included within the scope of this Force Majeure provision. If a force majeure event occurs, the City may direct the Consultant to restart any work or performance that may have ceased, to change the work, or to take other action to secure the work or the project site during the force majeure event. The cost to restart, change, or secure the work or project site arising from a direction by the City under this clause will be dealt with as a change order, except to the extent that the loss or damage has been caused or exacerbated by the failure of the Consultant to fulfill its obligations under this Agreement. Except as expressly contemplated by this section, all other costs will be borne by the Consultant, VII. DISCRIMINATION. In the hiring of employees for the performance of work under this Agreement or any subcontract, the Consultant, its subcontractors, or any person acting on behalf of the Consultant or subcontractor shall not, by reason of race, religion, color, sex, age, sexual orientation, national origin, or the presence of any sensory, mental, or physical disability, discriminate against any person who is qualified and available to perform the work to which the employment relates. The Consultant shall execute the attached City of Kent Equal Employment Opportunity Policy Declaration, Comply with City Administrative Policy L.2, and upon completion of the contract work, file the attached Compliance Statement. VIII. INDEMNIFICATION. The Consultant shall defend, indemnify and hold the City, its officers, officials, employees, agents and volunteers harmless from any and all claims, injuries, damages, losses or suits, including all legal costs and attorney fees, arising out of or in connection with the Consultant's performance of this Agreement, except for that portion of the injuries and damages caused by the City's negligence. The City's inspection or acceptance of any of the Consultant's work when completed shall not be grounds to avoid any of these covenants of indemnification. Should a court of competent jurisdiction determine that this Agreement is subject to RCW 4.24.L15, then, in the event of liability for damages arising out of bodily injury to persons or damages to property caused by or resulting from the concurrent negligence of the Consultant and the City, its officers, officials, employees, agents and volunteers, the Consultant's duty to defend, indemnify, and hold the City harmless, and the Consultant's liability accruing from that obligation shall be only to the extent of the Consultant's negligence. IT IS FURTHER SPECIFICALLY AND EXPRESSLY UNDERSTOOD THAT THE INDEMNIFICATION PROVIDED HEREIN CONSTITUTES THE CONSULTANT'S WAIVER OF IMMUNITY UNDER INDUSTRIAL INSURANCE, TITLE 51 RCW, SOLELY FOR THE PURPOSES OF THIS INDEMNIFICATION. THE PARTIES FURTHER ACKNOWLEDGE THAT THEY HAVE MUTUALLY NEGOTIATED THIS WAIVER, In the event the Consultant refuses tender of defense in any suit or any claim, if that tender was made pursuant to this indemnification clause, and if that refusal is subsequently determined by a court having jurisdiction (or other agreed tribunal) to have been a wrongful refusal on the Consultant's part, then the Consultant shall pay all the City's costs for defense, including all reasonable expert witness fees and reasonable attorneys'fees, plus the City's legal costs and fees incurred because there was a wrongful refusal on the Consultant's part. The provisions of this section shall survive the expiration ortermination of this Agreement, IX. INSURANCE. The Consultant shall procure and maintain for the duration of the Agreement, insurance of the types and in the amounts described in Exhibit B attached and incorporated by this reference. X. EXCHANGE OF INFORMATION. The City will provide its best efforts to provide reasonable accuracy of any information supplied by it to the Consultant for the purpose of completion of the work under this Agreement. XL OWNERSHIP AND USE OF RECORDS AND DOCUMENTS. Original documents, drawings, designs, reports, or any other records developed or created under this Agreement shall belong to and CONSULTANT SERVICES AGREEMENT - 3 ($20,000 or Less) become the property of the City. All records submitted by the City to the Consultant will be safeguarded by the Consultant. The Consultant shall make such data, documents, and files available to the City upon the City's request. The Consultant acknowledges that the City is a public agency subject to the Public Records Act codified in Chapter 42.56 of the Revised Code of Washington. As such, the Consultant agrees to cooperate fully with the City in satisfying the City's duties and obligations underthe Public RecordsAct. The City's use or reuse of any of the documents, data, and files created by the Consultant for this project by anyone other than the Consultant on any other project shall be without liability or legal exposure to the Consultant. XII. CITY'S RIGHT OF INSPECTION. Even though the Consultant is an independent contractor with the authority to control and direct the performance and details of the work authorized under this Agreement, the work must meet the approval of the City and shall be subject to the City's general right of inspection to secure satisfactory completion. XIII. WORK PERFORMED AT CONSULTANT'S RISK. The Consultant shall take all necessary precautions and shall be responsible for the safety of its employees, agents, and subcontractors in the performance of the contract work and shall utilize all protection necessary for that purpose. All work shall be done at the Consultant's own risk, and the Consultant shall be responsible for any loss of or damage to materials, tools, or other articles used or held for use in connection with the work. XIV. MISCELLANEOUSPROVISIONS. A. Recvclable Materials. Pursuant to Chapter 3,80 of the Kent City Code, the City requires its contractors and consultants to use recycled and recyclable products whenever practicable, A price preference may be available for any designated recycled product. B. Non-Waiver of Breach. The failure of the City to insist upon strict performance of any of the covenants and agreements contained in this Agreement, or to exercise any option conferred by this Agreement in one or more instances shall not be construed to be a waiver or relinquishment of those covenants, agreements or options, and the same shall be and remain in full force and effect. C. Resolution of Disoutes and Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Washington. If the parties are unable to settle any dispute, difference or claim arising from the parties' performance of this Agreement, the exclusive means of resolving that dispute, difference or claim, shall only be by filing suit exclusively under the venue, rules and jurisdiction of the King County Superior Court, King County, Washington, unless the parties agree in writing to an alternative dispute resolution process. In any claim or lawsuit for damages arising from the parties' performance of this Agreement, each party shall pay all its legal costs and attorney's fees incurred in defending or bringing such claim or lawsuit, including all appeals, in addition to any other recovery or award provided by law; orovided, however, nothing in this paragraph shall be construed to limit the City's right to indemnification under Section VIII of this Agreement. D. Written Notice. All communications regarding this Agreement shall be sent to the parties at the addresses listed on the signature page of the Agreement, unless notified to the contrary. Any written notice hereunder shall become effective three (3) business days after the date of mailing by registered or certified mail, and shall be deemed sufficiently given if sent to the addressee at the address stated in this Agreement or such other address as may be hereafter specified in writing, E. Assignment. Any assignment of this Agreement by either party without the written consent of the non-assigning party shall be void, If the non-assigning party gives its consent to any assignment, the terms of this Agreement shall continue in full force and effect and no further assignment shall be made without additional written consent. F. Modification. No waiver, alteration, or modification of any of the provisions of this Agreement shall be binding unless in writing and signed by a duly authorized representative of the City and the Consultant. CONSULTANT SERVICES AGREEMENT - 4 ($20,000 or Less) G. Entire Agreement. The written provisions and terms of this Agreement, together with any Exhibits attached hereto, shall supersede all prior verbal statements of any officer or other representative of the City, and such statements shall not be effective or be construed as entering into or forming a part of or altering in any manner this Agreement. All of the above documents are hereby made a part of this Agreement, However, should any language in any of the Exhibits to this Agreement conflict with any language contained in this Agreement, the terms of this Agreement shall prevail, H. Compliance with Laws. The Consultant agrees to comply with all federal, state, and municipal laws, rules, and regulations that are now effective or in the future become applicable to the Consultant's business, equipment, and personnel engaged in operations covered by this Agreement or accruing out of the performance of those operations. I. Public Records Act. The Consultant acknowledges that the City is a public agency subject to the Public Records Act codified in Chapter 42.56 of the Revised Code of Washington and documents, notes, emails, and other records prepared orgathered bythe Consultant in its performance of thisAgreement may be subject to public review and disclosure, even if those records are not produced to or possessed by the City of Kent. As such, the Consultant agrees to cooperate fully with the City in satisfying the City's duties and obligations under the Public Records Act. J. City Business License Reouired. Prior to commencing the tasks described in Section I, Contractor agrees to provide proof of a current city of Kent business license pursuant to Chapter 5.01 of the Kent City Code, K. Counteroarts and Signatures bv Fax or Email. This Agreement may be executed in any number of counterparts, each of which shall constitute an original, and all of which will together constitute this one Agreement. Further, upon executing this Agreement, either party may deliver the signature page to the other by fax or email and that signature shall have the same force and effect as if the Agreement bearing the original signature was received in person. IN WITNESS, the paÉies below execute this Agreement, which shall become effective on the last date entered below. All acts consistent with the authority of this Agreement and prior to its effective date are ratified and affirmed, and the terms of the Agreement shall be deemed to have applied. CONSULTANT SERVICES AGREEMENT - 5 ($20,000 or Less) CONSULTANT: By (ra /t-1 Digrtally signed by Laura CNLUa-U 44411Æ<- Sprouse, FcAs, MAAA) I ñâlê t1,tô-1t-î,a 1) 19 1ñ (signature) Print Name ; Laura Sprouse, FCAS, MAAA ItS' Partner & Consulting Actuary (t¡tle) DATE 't2t8t20 CITY OF KENT: Print Name:Teri Smith HR DirectorIts: DATE: / NOTICES TO BE SENT TO: CONSULTANT: Laura Sprouse Select Actuarial Services 28 White Bridge Rd. Suite 205 Nashville, TN 37205 6t5-62O-7 584 (telephone) 615-269-4878 (facsi m i le) NOTICES TO BE SENT TO: CITY OF KENT: Chris Hills, Risk Manager City of Kent 220 Fourth Avenue South Kent, WA 98032 (253) 856-5285 (telephone) (253) 856-627 O (facsim ile) ATTEST: Kent Citv Clerk P:/RISK MGlvl/Risk I\4anagemen¡/Actuar¡al/Select Actuar¡al Serv¡ces CONSULTANT SERVICES AGREEMENT - 6 ($20,000 or Less) DECLARATION CITY OF KENT EQUAL EMPLOYMENT OPPORTUNITY POLICY The City of Kent is committed to conform to Federal and State laws regarding equal opportunity. As such all contractors, subcontractors and suppliers who peform work with relation to this Agreement shall comply with the regulations of the City's equal employment opportunity policies. The following questions specifically identify the requirements the City deems necessary for any contractor, subcontractor or supplier on this specific Agreement to adhere to. An affirmative response is required on all of the following questions for this Agreement to be valid and binding. If any contractor, subcontractor or supplier willfully misrepresents themselves with regard to the directives outlines, it will be considered a breach of contract and it will be at the City's sole determination regarding suspension or termination for all or part of the Agreement; The questions are as follows: 1. I have read the attached City of Kent administrative policy number 1.2 2 During the time of this Agreement I will not discriminate in employment on the basis of sex, race, color, national origin, age, or the presence of all sensory, mental or physical disability. During the time of this Agreement the prime contractor will provide a written statement to all new employees and subcontractors indicating commitment as an equal opportunity employer. During the time of the Agreement I, the prime contractor, will actively consider hiring and promotion of women and minorities. Before acceptance of this Agreement, an adherence statement will be signed by me, the Prime Contractor, that the Prime Contractor complied with the requirements as set forth above. By signing below, I agree to fulfill the five requirements referenced above Laura Sprouse, FCAS, MAAA By For:SAS, LLC doing business as Select Actuarial Services 3 4 5 Title:Partner & Consulting Actuary Date: 12lÙl20 EEO COMPLIANCE DOCUMENTS - 1 CITY OF KENT ADMINISTRATIVE POLICY NUMBER: L.2 EFFECTIVE DATE: January 1, 1998 SUBJECT:MINORITY AND WOMEN CONTRACTORS SUPERSEDES: April 1, 1996 APPROVED BY Jim White, Mayor t POLICY: Equal employment opportunity requirements for the City of Kent will conform to federal and state laws. All contractors, subcontractors, consultants and suppliers of the City must guarantee equal employment opportunity within their organization and, if holding Agreements with the City amounting to $10,000 or more within any given year, must take the following affirmative steps: Provide a written statement to all new employees and subcontractors indicating commitment as an equal opportunity employer. 2. Actively consider for promotion and advancement available minorities and women. Any contractor, subcontractor, consultant or supplier who willfully disregards the City's nondiscrimination and equal opportunity requirements shall be considered in breach of contract and subject to suspension or termination for all or part of the Agreement. Contract Compliance Officers will be appointed by the Directors of Planning, Parks, and Public Works Departments to assume the following duties for their respective departments. Ensuring that contractors, subcontractors, consultants, and suppliers subject to these regulations are familiar with the regulations and the City's equal employment opportunity policy. 2. Monitoring to assure adherence to federal, state and local laws, policies and guidelines 1 EEO COMPLIANCE DOCUMENTS - 2 CTTY OF KENT EQUAL EMPLOYMENT OPPORTUNITY COMPLIANCE STATEMENT This form shall be filled out AFTER COMPLETION of this project by the Contractor awarded the Agreement, I, the undersigned, a duly represented ag ent of Select Actuarial Services Company, hereby acknowledge and declare that the before-mentioned company was the prime contractor for the Ag reement known as actuarial services that was entered into on the 1218120 (date) between the firm I represent and the City of Kent. I declare that I complied fully with all of the requirements and obligations as outlined in the City of Kent Administrative Policy L2 and the Declaration City of Kent Equal Employment Opportunity Policy that was part of the before-mentioned Agreement. Laura Sprouse, FCAS, MAAA By For: SAS, LLC doing business as Select Actuarial Services Tirte: Partner & Consulting Actuary Date: 12lgl2o EEO COMPLIANCE DOCUMENTS - 3 Proposal for Actuarial Services The City of Kent, Washington SELECT ACTUARIAL SERVICES LAURA SPROUSE, FCAS, MAAA 615-620-7584 LAURA.SPROUSE@SELECTACTUARIAL.COM The City of Kent, Washington Section 1 Proposal Section 2 Qualifications Section 3 Experience Section 4 Cost Proposal Table of Contents The City of Kent, Washington Proposal Select Actuarial Services understands that The City of Kent, Washington desires actuarial consulting services to assist in the management of its workers compensation and liability coverages. The City increased its self-insured retentions for both workers compensation and liability at the last renewal, and needs a new forecast for 2021 and 2022 at the new SIR levels, as well an allocation of costs by division. Scope of Work The City’s first priority is to have an allocation of its current budget for workers compensation and liability, to be completed before year end. Then, using data as of December 31, 2020 we will perform a loss forecast for 2021 and 2022 projecting losses at the new SIR levels. This study will also include an estimate of the outstanding losses for historical periods as of December 31, 2020. Thereafter, we expect to perform the annual actuarial study as of June 30 of each year, beginning with June 30, 2021. This study will focus on the forecast for the upcoming two fiscal years. This study will provide a midyear look at the required reserves for claims incurred through June 30, 2021, and also a projection of the estimated outstanding losses as of December 31, 2021. The allocation study which provides the City with the budget numbers by Division will be performed at this time. Finally, beginning with December 31, 2021, we expect to perform a reserve update which will provide the City with estimates of outstanding losses for its year end financials. This will not be of the same scope as the June studies. We will review the loss experience from June 30 to December 31 to see how it compares to expectations from the June 30 actuarial study. If losses deviate significantly from expected, we will make targeted adjustments to the ultimate losses and then subtract the paid losses to derive an estimate of the outstanding losses as of December 31, 2021. Methods and Assumptions The first objective of the December 31, 2020 study will be to provide a forecast of ultimate losses for the next two fiscal years. This study will rely on Kent’s historical losses, developed to ultimate and related to the underlying exposures. Losses and exposures will be adjusted for trend. Typically, a small percentage of claims make up a large percentage of the total losses. By modelling the frequency and severity of large claims separately from small claims, we can provide a better forecast of experience at higher layers. This method also allows us to estimate the losses at a range of retentions and deductibles or other program features such as corridor deductibles. The actuarial central estimate (usually the expected losses) and a range of percentiles can be estimated using this modelling technique. The second objective of this study will be to estimate the ultimate losses for historical accident years through December 31, 2020. We will build loss development triangles based on Kent’s data, and where that data is sparse, we will supplement with industry-based benchmark. We will utilize standard Section 1 Page 1 The City of Kent, Washington actuarial methods such as the reported and paid loss development methods and the reported and paid Bornhuetter-Ferguson methods. Our methods are adjusted to reflect the per occurrence retentions for each line of business for each policy year. Subtracting the amount of reported and paid losses as of December 30, 2020, will give us estimate of the incurred but not reported (IBNR) reserves and outstanding losses. We will also show the forecast and outstanding losses at a range of percentiles, including the 75th percentile and the 90th percentile. Estimated claim counts and frequency and severity calculations will be included in our analysis along with projections of paid and reported losses to assist with the monitoring of losses as they develop throughout the year. Future June 30 studies will be of this same scope. Allocation Study The City desires assistance in allocating the forecast losses to department for both workers compensation and liability. Select Actuarial Services will work with the City to develop and design and allocation method that meets the City’s objectives for cost sharing. We will base the allocation of reported loss data (paid + case reserves) for the last three to five years, as well as the estimated hours worked (or other exposure measure) for each department. Reserve update as of December 31, 2021 This review is smaller in scope than the annual study. We will focus on changes in experience since the prior report as of June 30, 2021. Where reported losses deviate significantly from expected values, we may make adjustments to the ultimate losses for those years. Then, subtracting the paid losses, we can provide the outstanding losses or required reserves as of December 31, 2021. Results You Can Use – Deliverables and Presentation The results of the analyses will be presented first in draft form for review, followed by opportunity for discussion, and then issuance of the final written report. Each written report will contain an Executive Summary outlining the assumptions on which the analysis is based and the conclusions reached. The format of the Executive Summary will be accessible to individuals who are not expert in the insurance field. The balance of the written report will document sources of data, material assumptions, and methods used in sufficient detail for your auditors or another actuary to evaluate the work performed and the conclusions reached. If needed, we will consult with the auditors to assist them in their review of our calculations. Technical review represents only the first step in the assignment. Our conclusions will be clearly presented to you, as well as to auditors and other suppliers. We will be able to explain actuarial concepts in a concise, non-technical manner appropriate to the level of sophistication of the particular audience, without reliance upon insurance industry jargon. Our presentation of the results will focus on overall funding adequacy, trends in experience, projections of future losses and funding recommendations, rather than on the technical actuarial methodology employed to reach the conclusions. Page 2 The City of Kent, Washington Performance Schedule After receiving the necessary data, we will need about four weeks to develop a draft analysis for review. We will then schedule a discussion to go over the draft and ensure that we have properly reflected Kent’s exposures. Barring major changes following that discussion, final signed and bound copies of our reports will be delivered at your request. A typical project timeline is shown below. Week 1 Review and compile data Weeks 2-3 Analysis Week 4 Send draft report Week 5 Meeting or teleconference to present findings Week 6 Make revisions if necessary, review with client, finalize report Page 3 The City of Kent, Washington Qualifications Overview SAS, LLC is a limited liability company, doing business as Select Actuarial Services. The firm was founded on February 1, 1999 and is co-owned by seven partners, four of whom are founding members. We are a Certified Woman Owned Business certified in our home state of Tennessee. From our Nashville office we serve clients across the country from New Hampshire to Hawaii as well as several international clients in Bermuda and the Cayman Islands. We have provided actuarial consulting services to King County, Washington since 2012. We are an independent consulting firm providing expert, professional casualty actuarial services necessary to the sound management and administration of risk management and insurance programs. We serve a vital role in helping organizations measure their cost of risk, and, ultimately, achieve their risk management and business objectives. We provide a full range of actuarial expertise for lines of coverage including workers compensation, general liability, automobile liability, property, medical malpractice, public officials’ liability, law enforcement liability, trade credit, management risk, product liability, and many more. Our staff is entrenched in the actuarial profession. Our Chief Manager, Mary Frances Miller, is the Past President of the Casualty Actuarial Society and the Past President of the American Academy of Actuaries. Several of our actuaries are on the CAS exam question writing and grading teams. We frequently speak on actuarial topics at risk management meetings and conferences across the country. Select Actuarial Services currently has over 200 clients located all across the United States, most of whom require the same type of analyses that is being requested by The City of Kent. Client retention exceeds 90%, and we have worked with many of our clients for more than 20 years. Our colleagues have worked with numerous self-insureds in the public sector and public sector pools, and we understand how the issues facing these clients differ from those of the private sector. Select Actuarial Services establishes long-term client relationships, providing experienced and dedicated professionals who understand the client’s actuarial consulting needs. We strive to establish open communication right from engagement to allow us to customize the analysis in a way that the client understands…clear and straightforward. The result of this partnership approach is a flexible, productive client relationship where actuarial services do not operate in a vacuum, but rather are an integral part of the risk management process. We are a team-oriented company, with each member prepared to help out with making sure the clients get what they need, when they need it. Over 75% of our projects, including both public and private clients, include analysis similar to those required by Kent. For a good number of these clients we also perform retention and premium allocation studies. Other studies we perform include deductible relativity studies, captive and pool feasibility Section 2 Page 4 The City of Kent, Washington studies, merger and acquisition due diligence, collateral requirement reviews, rate filing reviews, and benchmarking studies. Credentials and Qualifications All credentialed actuaries on staff meet the annual continuing education requirements of the American Academy of Actuaries, which requires thirty hours of education each year. All of Select’s actuarial studies meet applicable American Academy of Actuaries Standards of Practice. Select’s credentialed actuaries meet the Academy’s qualification standards for statements of actuarial opinion and in addition, our internal quality control standards require a thorough peer review by a second credentialed actuary prior to the release of any significant findings. Seminars we attend for continuing education often have topics that relate directly to the specific needs of public entities. We are active in many professional associations and organizations and attend conferences both locally and across the country including: The Public Risk Management Association The Arizona Public Risk Management Association The Tennessee Public Risk Management Association The Colorado Public Risk Management Association The Risk Management Society Self-Insurance Institute of America The National Council of Self Insurers The Association of Governmental Risk Pools (QEI Patron Member) American Society for Healthcare Risk Management The University Risk Management & Insurance Association Tennessee Self Insurers Association Other state captive associations and state risk management groups Qualifications Our firm’s colleagues have over 130 years of combined property/casualty actuarial experience. Our staff consists of Seven Partners - four of which are founding members Five Fellows of the Casualty Actuarial Society One Associate of the Casualty Actuarial Society Six members of the American Academy of Actuaries Four actuarial analysts Page 5 The City of Kent, Washington The City of Kent Team Laura Sprouse will be your lead consultant and actuary. Laura is a founding Partner of Select and is a Fellow of the Casualty Actuarial Society and a Member of the American Academy of Actuaries. Laura will be supported by Savannah Streeter. Laura T. Sprouse, FCAS, MAAA Laura is one of the founding members of Select Actuarial Services. She has over 25 years of property casualty consulting experience with self-insured entities including corporations, governmental entities, risk pools and captive insurance companies. She provides both reserving and loss forecasting services for a variety of lines of business including automobile liability, auto physical damage, general liability, hospital and professional liability, E&O, property, and workers compensation. Laura’s clients appreciate the straightforward way she communicates the results of the actuarial studies, both in written form and in presentations to management. Credentials & Education Fellow of the Casualty Actuarial Society Member of the American Academy of Actuaries Casualty Actuarial Society Examination Committee Vanderbilt University, M.S in Mathematics Centre College, B.A in Mathematics Prior Experience Actuarial consultant for Sedgwick Actuarial Services Mathematics Instructor, Volunteer State Community College Page 6 The City of Kent, Washington Savannah Streeter, Actuarial Analyst Savannah assists in providing professional actuarial consulting services to a wide variety of clients. Her experience includes reserve analysis and loss forecasting in workers compensation, automobile liability, general liability, and property. Savannah began her career with Select in 2017 after two summers of internship at the firm. Savannah is a native of Lynwood, Washington. Education Completed four examinations towards membership in the Casualty Actuarial Society Completed CAS Online Course 1: Risk Management and Insurance Operations and CAS Online Course 2: Insurance Accounting, Coverage Analysis, Insurance Law, and Insurance Regulation Qualified for Validation by Educational Experience in Economics and Corporate Finance Bachelor of Arts in Mathematics with a concentration in Actuarial Science and Minors in Economics and Business Administration from Belmont University Received the 2017 Robert E. Watson Scholarship Award for having the highest scholastic record of her undergraduate class, graduating with a quality point average of 4.0 from Belmont University Page 7 The City of Kent, Washington Public Entity Experience Select Actuarial Services has been providing the services being requested by The City of Kent to public entities across the country for over 21 years. We have clients from New Hampshire to Hawaii and serve entities of all sizes from large cities to small counties as well as many governmental risk pools. A few large governmental entities that we work with include King County (Seattle), Washington, Davidson County (Nashville), Tennessee, and Maricopa County (Phoenix), Arizona. Our experience and expertise make us well qualified to meet the requirements needed for this opportunity. The following page is a sample of the public entities that we work with. We are happy to provide you with any additional information if it is helpful with your decision. Section 3 Page 8 The City of Kent, Washington CLIENTS ACROSS THE COUNTRY Select Actuarial Services has governmental and municipal clients across the nation. Below is a sample listing of some of our public entity clients. American Red Cross Athens-Clarke County, Georgia City of Broken Arrow, Oklahoma City of Beaverton, Oregon Blount County, Tennessee City of Cambridge, Massachusetts Central Arizona Project Cherry Creek Schools, Colorado City of Clarksville, Tennessee Clarksville-Montgomery County Schools, Tennessee Colorado Intergovernmental Risk Sharing Authority (CIRSA) Colorado School Districts Self Insurance Pool Colorado Special Districts Pool (CSDP) City of Colorado Springs, Colorado Counties of Ohio Risk Sharing Authority County Roads Association, Michigan DFW Airport Authority Duval County Schools, Florida City of Edmond, Oklahoma Excellus/Blue Cross Blue Shield of New York City of Franklin, Tennessee Georgia School Boards Association City of Grand Junction, Colorado City of Grants Pass, Oregon Jefferson County, Colorado City of Johnson City, Tennessee State of Kansas King County, Washington Lane County, Oregon Larimer County, Colorado Louisiana Sherriff’s Risk Purchasing Group Marion County, Oregon Metropolitan Government of Nashville and Davidson County, Tennessee State of Michigan Middle Cities Worker’s Compensation Fund, Michigan City of Midwest City, Oklahoma Monroe County, New York Montgomery County, Tennessee Montgomery County Schools, Tennessee City of Moore, Oklahoma Nebraska Association of School Boards City of Oklahoma City, Oklahoma Oklahoma Municipal Assurance Group Oklahoma Schools Insurance Group City of Owasso, Oklahoma Palm Beach County Schools, Florida State of Pennsylvania Roanoke County, Virginia (including Roanoke Schools) Rockingham County, New Hampshire City of Roseburg, Oregon Rutherford County, Tennessee City of Salem, Oregon Schoharie Area Schools, New York Schools of Ohio Risk Sharing Authority City of Shreveport, Louisiana State of Tennessee Sullivan County, Tennessee Town of Gilbert, Arizona Town of Smyrna, Tennessee University of Rochester, New York Virginia Association of Counties Warren County, Tennessee City of Westminster, Colorado West Virginia Association of Counties Page 9 The City of Kent, Washington Cost Proposal We propose the following fee schedule for The City of Kent, Washington. This is an all-inclusive fee and we will never bill for phone calls, emails or any other discussion about your report or our services. We do not bill by the hour and you will never be billed for phone calls, emails or any other discussion regarding your study. Our fee also includes one annual visit with The City to go over our report and answer any questions that you have. During Covid-19, we will meet with The City of Kent in person when all parties feel safe and comfortable to do so. We can always meet via video conference or conference call. With Select, you are a business partner, not a client number. The first table shows the pricing for the initial actuarial studies to begin immediately. Initial Studies Fees Allocation study for liability and workers compensation (Fall 2020) $2,000 Reserve evaluation as of December 30, 2021 and loss forecast for 2021-2022 liability and workers compensation $6,000 Total $8,000 The next table shows the expected annual engagements beginning June 30, 2021. Future Annual Studies Annual Fee Reserve evaluation as of June 30, 2021 and loss forecast for 2022-2023 liability and workers compensation $6,000 Allocation study for liability and workers compensation $2,000 Reserve update as pf December 31, 2021 $2,000 Total as of 2/15/22 $10,000 Our project fee for the scope of services quoted is all-inclusive and we will not exceed this cost for the services covered in this proposal. There are times when The City may ask us to do an ad-hoc report or Section 4 Page 10 The City of Kent, Washington other project not within these parameters. If so, we will agree on a fee prior to beginning any work. Hourly rates for these projects will be $250 per hour. We expect the proposed fees to remain consistent in the coming years with small adjustments for inflation. We will always agree to our fee structure with The City prior to beginning any work. Transition to Select Actuarial Services Each actuary approaches a new project somewhat differently. A change in actuary should not, however, in and of itself have an effect on the results. The transition to Select Actuarial Services is simplified because our analyses always examine actual experience relative to expectations. The first step in our transition process will be to review the prior reports to ensure that we thoroughly understand the previous actuary’s assumptions and calculations and that we can reconcile the data to the actuary’s analysis. Should there be aspects of the prior report that are not clear, we will expect to contact the prior actuary for clarification. We normally conduct such contacts via email, both to provide documentation on the contact and to allow the other actuary time to review the prior report before responding. The City of Kent will always be copied on all such communications. We look forward to working with you and The City of Kent’s risk management team. Page 11 12/07/2020 First Ins Partners 110 Mathis Dr. Suite 105 Dickson TN 37055 Pamela Stanford (Rep) (615) 446-2814 pstanford@southpointrisk.com SAS LLC DBA SELECT ACTUARIAL SERVICES 28 WHITE BRIDGE ROAD, SUITE 205 NASHVILLE TN 37205 Hanover American Insurance Company 36064 Houston Casualty Company CL2012939126 A EMPLOYEE DISHONESTY OZ5D811719 01/29/2020 01/29/2021 1,000,000 300,000 10,000 1,000,000 2,000,000 2,000,000 EMPLY DISHONESTY 50,000 A OZ5D811719 01/29/2020 01/29/2021 1,000,000 A OZ5D811719 01/29/2020 01/29/2021 2,000,000 2,000,000 B PROFESSIONAL LIABILITY POLICY H720-114809 02/01/2020 02/01/2021 EACH CLAIM LIMIT $2,000,000 AGGREGATE LIMIT $2,000,000 DEDUCTIBLE $10,000 Actuarial Services Certificate Holder is included as an additional insured applicable to general liability coverage on an automatic status when required in a written contract, agreement, or permit with the insured per broadening endorsement #391-1006(8-16) attached. The City of Kent Washington Attn: Chris Hills 220 Fourth Avenue South Kent WA 98032 SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN ACCORDANCE WITH THE POLICY PROVISIONS. INSURER(S) AFFORDING COVERAGE INSURER F : INSURER E : INSURER D : INSURER C : INSURER B : INSURER A : NAIC # NAME:CONTACT (A/C, No):FAX E-MAILADDRESS: PRODUCER (A/C, No, Ext):PHONE INSURED REVISION NUMBER:CERTIFICATE NUMBER:COVERAGES IMPORTANT: If the certificate holder is an ADDITIONAL INSURED, the policy(ies) must have ADDITIONAL INSURED provisions or be endorsed. If SUBROGATION IS WAIVED, subject to the terms and conditions of the policy, certain policies may require an endorsement. A statement on this certificate does not confer rights to the certificate holder in lieu of such endorsement(s). THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND, EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S), AUTHORIZED REPRESENTATIVE OR PRODUCER, AND THE CERTIFICATE HOLDER. OTHER: (Per accident) (Ea accident) $ $ N / A SUBR WVD ADDL INSD THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD INDICATED. NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN, THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS, EXCLUSIONS AND CONDITIONS OF SUCH POLICIES. LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS. $ $ $ $PROPERTY DAMAGE BODILY INJURY (Per accident) BODILY INJURY (Per person) COMBINED SINGLE LIMIT AUTOS ONLY AUTOSAUTOS ONLY NON-OWNED SCHEDULEDOWNED ANY AUTO AUTOMOBILE LIABILITY Y / N WORKERS COMPENSATION AND EMPLOYERS' LIABILITY OFFICER/MEMBER EXCLUDED? (Mandatory in NH) DESCRIPTION OF OPERATIONS below If yes, describe under ANY PROPRIETOR/PARTNER/EXECUTIVE $ $ $ E.L. DISEASE - POLICY LIMIT E.L. DISEASE - EA EMPLOYEE E.L. EACH ACCIDENT EROTH-STATUTEPER LIMITS(MM/DD/YYYY)POLICY EXP(MM/DD/YYYY)POLICY EFFPOLICY NUMBERTYPE OF INSURANCELTRINSR DESCRIPTION OF OPERATIONS / LOCATIONS / VEHICLES (ACORD 101, Additional Remarks Schedule, may be attached if more space is required) EXCESS LIAB UMBRELLA LIAB $EACH OCCURRENCE $AGGREGATE $ OCCUR CLAIMS-MADE DED RETENTION $ $PRODUCTS - COMP/OP AGG $GENERAL AGGREGATE $PERSONAL & ADV INJURY $MED EXP (Any one person) $EACH OCCURRENCE DAMAGE TO RENTED $PREMISES (Ea occurrence) COMMERCIAL GENERAL LIABILITY CLAIMS-MADE OCCUR GEN'L AGGREGATE LIMIT APPLIES PER: POLICY PRO-JECT LOC CERTIFICATE OF LIABILITY INSURANCE DATE (MM/DD/YYYY) CANCELLATION AUTHORIZED REPRESENTATIVE ACORD 25 (2016/03) © 1988-2015 ACORD CORPORATION. All rights reserved. CERTIFICATE HOLDER The ACORD name and logo are registered marks of ACORD HIRED AUTOS ONLY