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HomeMy WebLinkAboutResolutions - 1983.11.02 - 11708Miscellaneous Resolution $3311 November 3, 1983 BY: PersonneL.CoMmittee, John J. McDonald, Chairperson IN RE; REQUEST FOR RETENTION OF FRINGE BENEFIT CONSULTANT TO THE OAKLAND COUNTY WARD OF COMMISSIONERS Mr. Chairperson, Ladies andGentlemen: WHEREAS the County is currently reviewing the fringe benefits of County employees through a joint committee comprised of representatives of the Departments of Personnel, Central Services and Management and Budget as well as the Board of Commissioners Office of Program Evaluation and Operations Analysis; and WHEREAS the County is desirous of implementing ,a revised employee benefits package which better meets the needs of County employees while doing so on a more cost effective basis; and WHEREAS the future cost implications of maintaining the present fringe benefit package or adopting a revised plan are of significant consequence requiring the services of an outside consulting firm that specializes in this area of expertise; and WHEREAS several consulting firms, in response to requests from the joint fringe benefit review committee, have submitted proposals to undertake a comprehensive review of the plan changes being considered by the County in the areas of group life insurance, sick leave/income continuation insurance and annual leave benefits, to estimate the cost implications of proposed chanes, to provide recommendations for alternative plan designs with associated costs, and, if appropriate, to assist the County in the preparation of group insurance bid specifications as well as to analyze competitive group insurance proposals; and WHEREAS the several proposals have been reviewed by the joint fringe benefit review committee which recommends the selection of William M. Mercer, Incorporated, at a cost up to $22,000. NOW THEREFORE BE IT RESOLVED that the Board of Commissioners authorize the selection of the William M. Mercer Corporation to provide the aforementioned consulting services for a fee not to exceed $22,000, BE IT FURTHER RESOLVED that the County Executive be and hereby is authorized and directed, after approval by Corporation Counsel, to execute a contract with William M. Mercer, Incorporated of Detroit, Michigan on behalf of the County of Oakland. Mr. Chairperson, on behalf of the Personnel Committee, I move the adoption of the foregoing resolution. PERSONNEL COMMITTEE tz.71' Ea I NER6Y APPROVE THE ForFGOING RESOLUTION _ Dee e, Dar7iel Mtn-ph Ouniy 0- Requisition Number Contract Number PSC ACCOUNT NUMBER BUYER CONTRACT DANIEL T. MURPHY—OAKLAND COUNTY EXECUTIVE DEPARTMENT OF MANAGEMENT AND BUDGET Purchasing Division PROFESSIONAL SERVICES CONTRACT THIS AGREEMENT, made this day of , 1983, between the COUNTY OF OAKLAND, a Michigan Constitutional Corporation, hereinafter called "County," and WILLIAM M. MERCER, Incorporated, hereinafter called "Contractor." WITNESSETH: For and in consideration of the mutual covenants and agreements herein contained, it is agreed by and between the parties hereto that the County shall retain Contractor as an Independent contractor, with the parties agreeing to the following teLals and conditions: The duties of the Contractor shall be: 1. To provide consulting services to Oakland County to assist with restructuring the group life, disability income/sick leave plans and annual leave program, as defined in the attached proposal dated October 11, 1983 prepared by William M. Mercer, Incorporated. 2. The Contractor further shall provide consulting services, if requested by the County, to negotiate new underwriting arrangements with existing insurance carriers or to obtain competitive proposals from insurance companies or administrators including assisting in preparation of group insurance bid specifications and analyzing competitive group insurance proposals in accordance with duties defined in a supplementary agreement of duties which shall serve as an addendum to this professional services contract. 3. Additional duties of the Contractor shall be as determined by the County fringe benefit review joint committee comprised of representatives of the Departments of Personnel, Central Services, and Management & Budget and the Board of Commissioners Office of Program Evalaution and Operations Analysis. 4. The Contractor shall not engage in any activity or'enterprise or assume any employment or ac-cept any position which may conflict with the duties as outlined in this contract. 5. The Contractor agrees to conduct itself at all times with decorum and propriety commensurate with the dignity of the undertaking. 6. The Contractor shall report to the joint fringe benefit review committee described above, with the Employee Relations Division, Kenneth Vinstra, Manager, serving as liaison with the contractor. NON-DISCRIMINATION In connection with the performance of Work under this Contract, the Contractor agrees not to discriminate against any employee or applicant for employment because of sex, race, religion, color, national origin, or handicap. The aforesaid provision shall include, but not to be limited to the following: recruitment or recruitment advertising; employment, upgrading, demotion or transfer; layoff and selection for training, including apprenticeship, in accordance with rules and regulations promulgated by the Federal (Compliance Responsibility for Equal Employment Opportunity - Chapter 60, 60-1, 4, No. 1-7) and State (Standards and Procedures for Executive Directive 1975-6, Section II-C, and V-A&B) agencies and related Federal and State Laws and Regulations. A fv\ ER October 11, 1983 Mr. Thomas R. Eaton Labor Relations Department of Personnel County of Oakland 1200 North Telegraph Pontiac, Michigan 48053 Dear Tom: As a result of our recent meeting with you and your associates, William M. Mercer, Incorporated would very much welcome the opportu- nity to provide professional consulting services to Oakland County, Before discussing how Mercer's consulting services might be of value, a brief background on the qualifications of Mercer and our Detroit office is appropriate. About William M. Mercer, Incorporated William M. Mercer, incorporated is the world's largest independent employee benefit consulting firm with more than 80 offices through- out the world. We are a wholly-owned subsidiary of Mirsh & McLennan Companies. The Detroit, Michigan office is within thdr Central Region which encompasses 19 full service offices reaching from Philadelphia to Dallas and from Detroit to Tampa. The Detroit Office has a large staff of professional consultants, actuaries, attorneys and support personnel. We provide advice to employers on almost all aspects of their relationship with employees and specialize in the design, ad- ministration, communications and cost analysis of employee benefit programs. (See attached partial list of services). Mercer's De- troit Office has an excellent reputation and has served a number of prestigious clients for over sixty years. Our clientele range in size from very small employers to large international companies and institutions employing thousands of people (See attached partial list of clients). As professional consultants and actuaries, we are independent of any insurance company, financial institution, third party administrator, investment management firm, or other funding organization. Our sole function is to directly represent and serve our clients needs and best interests. This enables us to render objective advice and ser- vice to our clients. A M8rsh & McLennan Cco-ripanv 400 Renal5sance Center, Suite BOO 9 Detroit, MI 48243 * 313 259-5050 _ William M. Mercer, Incorporated Mr. Thomas R. Eaton October 11, 1983 Page 2 Services to be Provided Our discussions, to date, indicate that Oakland County is in the process of a.study directed toward restructuring the group life, disability income/sick leave plans and annual leave program. We un- derstand that the overall objectives for restructuring these plans is to provide similar benefits to employees on a more cost effec- tive basis to the County, and to determine if the alternative plan designs the County has developed represent feasible, cost effective options to the current plan designs. The overall strategy involves a review and analysis of the group life, disability income/sick leave plans and annual leave program and provide specific comments and recommendations as to the feasi- bility and financial practicality and funding requirements of the alternative plans, and suggest any necessary modifications to the alternative plans to achieve the County's overall objectives. As a result of the above, we anticipate providing the following necessary services: 1. Mercer would review the proposed group term life insurance plan and identify the relative variances in the plan design, compared to the current plan, that may be experienced by active employees and future retirees. 2. Mercer would review and analyze the costs of the current group term and contributory permanent insurance plan to determine the effect on the current rate structure of terminating the permanent insurance and providing non-contributory term insurance based on the 1.5 times the employee's annual earnings. 3. Mercer would assist the County in reviewing the available perma- nent insurance termination options to ensure that the most favor- able options, including establishing an optional group term life plan, are available to the employee upon termination of the County sponsored permanent insurance plan. 4. Mercer will review the proposed group term life plan and recom- mend the necessary changes to ensure continuity of post retire- ment benefits. This will include our recommendations with res- pect to recognizing post retirement liabilities and their atten- dant cost on a pre-funded or current accounting basis. Oakland County Purchas WITNESSES 1. The County agrees that it will pay to the Contractor only documented hourly fees and out-of-pocket expenses as billed by the Contractor, with the total charges not to exceed twenty-two thousand (S22,000.00) dollars for all work described above as duties to be performed by the contractor. 2. The County reserves the right to terminate this Contract by letter to the Contractor, effective immediately, when the Contractor has breached any of the terms and conditions herein, or has become so incapacitated, as to render performance of necessary contractual services ineffective. 3. The Contractor shall have the right to terminate this Contract and all duties and obligations herein created upon written notice to the County. 4: Upon receipt of notice to teLminate William M. Mercer, IncorPorated will cease further work on behalf of the County. The County will be responsible for and shall pay the Contractor the amount of all hourly fees and expenses incurred in accordance with this agreement by the Contractor prior to receipt of such notice. IT IS MUTALLY AGREED AND UNDERSTOOD: 1. That the relationship of Contractor to the County is and shall continue to be that of an independent contractor; and no liability or benefits such as, but not limited to, Worker's Compensation benefits, retirement and pension benefits, or insurance benefits, or such other rights or liabilities arising out of a contract of hire or emplover-employee relationship shall arise or accure to either party as a result of this agreement. 2. The Contractor, as an independent contractor, shall save and hold the County of Oakland harmless in any actions related to his/her professional work practice. 3. This Contract shall become effective on the day and date first above written, and shall terminate upon completion of the duties described to be perfotmed by the Contractor. IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the respective dates hereunder indicated. WITNESS: COUNTY OF OAKLAND, a Michigan Constitutional Corporation BY: (Date) James B. Dunkel, Jr. Glen Dick Louis A. MacKenzie James M. Brennan (Date) (Date) (Date) (Date WILLIAM M. MERCER, Ineotporated BY: Arvin L. Heilman TiraTJT (Date) William M. Mercer, incorporated Mr. Thomas R. Eaton October 11, 1983 Page 3 5. Mercer would review and compare the benefit levels of the proposed disability income/sick leave plan to the current plan and quantify the variances in benefits that may result for short and longer term disabilities, and suggest necessary modifications to provide ade- quate income protection for County employees. 6. Mercer would analyze the proposed disability income/sick leave benefit plan and determine the probable costs associated with a non-accumulative sick leave plan and the supplemental short term disability plan. This will include estimating the funding re- quirements for the non-accumulative sick leave plan, and the most appropriate funding alternatives and administration for the short term disability plan. 7. Mercer would review the proposed Long Term Disability plan and analyze the appropriateness of the elimination period, benefit amounts and durations, and benefit offsets and as necessary, sug- gest plan design options that are proven to be cost effective. We will also recommend suitable employer and employee contribu- tions to ensure adequate plan participation. 8. Mercer would assist the County in determining the costs and fund- ing requirements if the unlimited Annual Leave days for employees classified as no overtime", were to be capped at three times the annual accrual rate. This assumes the County will freeze each employee's current accruals of Annual Leave Time. 9. Mercer will prepare a written report that will provide the County with our recommendations and comments in order to assist Oakland County in determining the feasibility and economic practicality of the alternative group life, disability income/sick leave and annual leave plans. William M. Mercer, Incorporated Mr. Thomas R. Eaton October 11, 1933 Page 5 If necessary, we would be pleased to assist the County in the prepa- ration of group insurance bid specifications and analyzing competi- tive group insurance proposals. At that point, we would prepare a proposal detailing the services we would provide for a project of this type. Consulting Team It is our practice to develop teams for specific consulting projects whose members have experience and expertise particularly suited to our clients' needs. I will serve as the managing consultant for the proposed assignments with overall responsibility for co-ordinating the development and delivery of the services discussed. I will be assisted by Paul Arthur. Fees Our normal method of compensation as consultants and actuaries is on a fee for service basis. We strive to make the remuneration for our services commensurate with their value to our client, basing it pri- marily on time spent by the various members of the firm, out-of-pocket expenses incurred and results obtained. The fees are billed period- ically (normally monthly during an active project). We endeavor to establish fees which are competitive with those charged by similar firms for comparable services. We also maintain a divers- ity of staff so that employees with appropriate experience and skill levels complete assignments at the lowest hourly rate commensurate with efficient service. Each member of our staff keeps strict account of the time spent on each client's work, thereby permitting us to ren- der accurate statements. To assist clients in estimating the costs of our services, estimates can be provided for individual projects when the terms of reference are reasonably well defined. However, these are estimates only and the eventual fee will be based on the services rendered. We make every effort to recognize and advise clients of changes in circum- stances which might materially increase fees beyond a preliminary estimate. Based on projects of similar size and complexity, we estimate our fees for completing the projects described above would be $9,800 to $11,000. William M. Mercer, Incorporated Mr. Thomas R. Eaton October 11, 1983 Page 4 Project Data In order for us to complete the initial assignment, it is essential we are able to review the following data: • Complete employee census information, including ages, sex, insurance amounts, accumulated sick leave, and years of service. • Claim experience for the group life and short term dis- ability insurance plans. o Utilization history for the sick leave plan. o Salary and wage levels. • Accrued Annual Leave Days for currently eligible employees. • Copy of current plan documents. The above list of data is not all inconclusive, but is the minimum we require to begin work on this assignment. We would prefer at least three or more years of the plan financial data noted above. Once we begin the project, we may require additional data for the plans. Project Timing Once we receive all the necessary data, we would anticipate the pro- ject would take eight (8) to ten (10) weeks to complete. Of course, we will make every attempt to advise you, in advan,q9,, of any circum- stances which may delay completion of the project. ' The initial assignment will not include any competitive bidding among insurance carriers, selection of new carrier(s) or recommendation and implementation of the group life, short term disability, or proposed Long Term Disability plans. Only after the initial assignment has been completed, and the County has determined the appropriate benefit structure to implement, can we reasonably determine whether the next step should be to negotiate a new underwriting arrangement with one of the County's existing car- riers, or obtain competitive proposals from a number of insurance companies or administrators. Wn M. 3.Aercei, incurpcuated Mr. Thomas R. Eaton October 11, 1983 Page 5 If necesSary, we would be pleased to assist the County in the prepa- ration of group insurance bid specifications and analyzing competi- tive group insurance proposals. At that point, we would prepare a proposal detailing the services we would provide for a project of this type. Consulting Team It is our practice to develop teams for specific consulting projects whose members have experience and expertise particularly suited to our clients' needs. I will serve as the managing consultant for the proposed assignments with overall responsibility for co-ordinating the development and delivery of the services discussed. I will be assisted by Paul Arthur. Fees Our normal method of compensation as consultants and actuaries is on a fee for service basis. We strive to make the remuneration for our services commensurate with their value to our client, basing it pri- marily on time spent by the various members of the firm, out-of-pocket expenses incurred and results obtained. The fees are billed period- ically (normally monthly during an active project). We endeavor to establish fees which are competitive with those charged by similar firms for comparable services. We also maintain a divers- ity of staff so that employees with appropriate experience and skill levels complete assignments at the lowest hourly rate commensurate with efficient service. Each member of our staff keeps strict account of the time spent on each client's work, thereby permitting us to ren- der accurate statements. To assist clients in estimating the costs of our services, estimates can be provided for individual projects when the terms of reference are reasonably well defined. However, these are estimates only and the eventual fee will be based on the services rendered, We make every effort to recognize and advise clients of changes in circum- stances which might materially increase fees beyond a preliminary estimate. Based on projects of similar size and complexity, we estimate our fees for completing the projects described above would be $9,800 to $11,000. FISCAL NOTE BY: FINANCE COMMITTEE, DR. C. WILLIAM CADDELL, CHAIRPERSON IN RE: REQUEST FOR RETENTION OF FRINGE BENEFIT CONSULTANT TO THE OAKLAND COUNTY BOARD OF COMMISSIONERS Mr. Chairperson, Ladies and Gentlemen: Pursuant to Rule XI-C of this Board, the Finance Committee has re- viewed the aforementioned resolution and finds $22,000 available in the 1983 Contingency Account for said purpose. Further, the Board of Commissioners appropriates $22,000 from the 1983 Contingency account and transfers said funds to the 1983 County Executive's -Professional Services line-item as follows: 990-02-00-9990 Contingency 111-01-00-3128 Professional Services $(22,000) 22,000 -0- FINANCE COMMITTEE #8331 1 November 3, 1983 3rd day of November 19 83 ALLEN Counfy Clerk/Register of Deeds Moved by McDonald supported by Foley the resolution be adopted. AYES: Nelson, Page, Pernick, Price, Rewold, Wilcox,' Aaron, Calandro, Doyon, Foley, Gosling, Hobart, Jackson, R. Kuhn, S. Kuhn, Lanni, Law, McConnell, McDonald, McPherson, Moffitt, Moore. (22) NAYS: None. (0) A sufficient majority having VOted therefor, the resolution was adopted. STATE OF MICHIGAN) COUNTY OF OAKLAND) I, Lynn D. Allen, Clerk of the County of Oakland and having a seal, do hereby certify that 1 have compared the annexed copy of Miscellaneous Resolution #83311 .adopted by the Oakland County Board of Commissioners at their meeting held on November 3, 1983 with the orginial record thereof now remaining in my office, and that it is a true and correct transcript therefrom, and of the whole thereof. In Testimony Whereof, 1 have hereunto set my hand and affixed the seal of said County at Pontiac, Michigan this