R-03-11-25-12B1 - 11/25/2003RESOLUTION NO. R -03-11-25-12B 1
WHEREAS, the City of Round Rock desires to retain professional
consulting services regarding the City's benefit plans, and
WHEREAS, Watson Wyatt & Company has submitted an Agreement for
Consulting Services - Advanced Benefits Solutions Agreement
("Agreement") to provide said services, and
WHEREAS, the City Council desires to enter into said Agreement
with Watson Wyatt & Company, Now Therefore
BE IT RESOLVED BY THE COUNCIL OF THE CITY OF ROUND ROCK, TEXAS,
That the Mayor is hereby authorized and directed to execute on
behalf of the .City an Agreement for Consulting Services - Advanced
Benefits Solutions Agreement with Watson Wyatt & Company regarding the
City's benefit plans, a copy of said Agreement being attached hereto as
Exhibit "A" and incorporated herein for all purposes.
The City Council hereby finds and declares that written notice of
the date, hour, place and subject of the meeting at which this
Resolution was adopted was posted and that such meeting was open to the
public as required by law at all times during which this Resolution and
the subject matter hereof were discussed, considered and formally acted
upon, all as required by the Open Meetings Act, Chapter 551, Texas
Government Code, as amended.
RESOLVED this 25th day of November, 2003.
AT ' T :•
NYLE P`ie`r LL, ayor
City o Round Rock, Texas
CHRISTINE R. MARTINEZ, City Secreta
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CITY OF ROUND ROCK
AGREEMENT FOR CONSULTING SERVICES
WITH WATSON WYATT & COMPANY
ADVANCED BENEFITS SOLUTIONS AGREEMENT
THIS AGREEMENT is made and entered into on this the day of the month of
2003 by and between the City of Round Rock, a Texas home -rule
municipal corporation, whose offices are located at 221 East Main Street, Round Rock, Texas
78664-5299 (hereinafter referred to as "City"), and Watson Wyatt & Company, whose offices are
located at 2121 San Jacinto Street, Suite 2400, Dallas, Texas 75201-2772 (hereinafter referred to as
the "Consultant").
RECITALS:
WHEREAS, City sponsors various health and welfare plans (hereinafter referred to as the
"Plans") as employee benefits for its employees; and
WHEREAS, City desires to contract for Consultant's assistance in providing advisory
services and reports to City in connection with the Plans; and
WHEREAS, the parties desire to enter into this Advanced Benefits Solutions Agreement to
set forth in writing their respective rights, duties and obligations hereunder;
NOW, THEREFORE, WITNESSETH that for and in consideration of the mutual promises
contained herein and other good and valuable consideration, the sufficiency and receipt of which are
hereby acknowledged, it is mutually agreed between the parties as follows:
1.01 EFFECTIVE DATE, DURATION, AND TERM
This Agreement shall be effective on the date this Agreement has been signed by every party
hereto, and shall remain in full force and effect unless and until it expires by operation of the term
indicated herein, or is terminated or extended as provided herein.
The term of this Agreement shall be for two (2) years commencing on the effective date of
this Agreement.
1.02 PAYMENT
In consideration for the professional services to be performed by Consultant which are recited
herein, City agrees to pay Consultant as follows:
A. Professional Fees
Six Thousand Five Hundred and No/100 Dollars ($6,500.00) per month, for the term
of this Agreement.
It is the practice of Consultant to accept commissions from group insurance products
for which they are involved in the ongoing management of such products. All
commissions received shall be used to offset Professional Fees. The actual
commissions received shall be documented on invoices sent to City as part of
Consultant's standard billing practice.
B. Office Administration and Technology Charges
Seven percent (7%) of Professional Fees.
C. Reimbursable Expenses
Reimbursement at actual cost for the following expenses that are directly attributable
to authorized work performed under this Agreement:
1. travel expenses other than normal commuting, including airfares, rental
vehicles, and highway mileage in company or personal vehicles at $0.3 1 cents
per mile, provided that all travel is first approved by City prior to Consultant
incurring travel expenses;
2. meals, not to exceed City's travel per diem;
3. lodging;
4. telephone, fax, online and telegraph charges;
5. postage and courier services;
6. photocopying, printing and materials reproduction charges; and
7. computer services.
D. Miscellaneous Charges
In addition to all fees, costs, and charges recited in this section, City shall be
responsible for all sales and excise taxes and related interest and penalties, if any, that
are or may be applicable for the services provided under this Agreement and that are
required to be collected by Consultant or paid by Consultant to any taxing authority,
except in instances when fines or penalties are due to the negligence or failure of
Consultant to adequately or timely perform services pursuant to this Agreement.
City reserves the right to review Consultant's work at any time, including at the end of any
deliverable or phase, and may elect to terminate with or without cause or may elect to continue with
the next deliverable or phase.
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1.03 TERMS OF PAYMENT
To receive payment, Consultant shall prepare and submit a series of monthly invoices. Each
invoice shall state and detail the deliverable(s) accomplished, along with documentation for each
deliverable, and shall state the percent completion of the work accomplished during that particular
billing period.
1.04 PROMPT PAYMENT POLICY
In accordance with Chapter 2251, V.T.C.A., Texas Government Code, payment to Consultant
will be made within thirty (30) days of the day on which City receives the performance and/or
deliverables, or within thirty (30) days of the day on which the performance of services was
complete, or within thirty (30) days of the day on which City receives a correct invoice for the
performance and/or deliverables or services, whichever is later. Consultant may charge a late fee (fee
shall not be greater than that which is permitted by Texas law) for payments not made in accordance
with this prompt payment policy; however, this policy does not apply to payments made by City in
the event:
A. there is a bona fide dispute between City and Consultant concerning the services
performed that causes the payment to be late; or
B. the terms of a federal contract, grant, regulation, or statute prevent City from making
a timely payment with federal funds; or
C. there is a bona fide dispute between Consultant and a subcontractor or between a
subcontractor and its supplier concerning the services performed which causes the
payment to be late; or
D. the invoice is not mailed to City in strict accordance with instructions, if any, on any
purchase order, or this Agreement or other such contractual agreement.
1.05 RESPONSIBILITIES OF CONSULTANT - OBJECTIVES, DELIVERABLES, AND
SCOPE OF WORK
Program Planning
A. Annually, assist in developing goals and objectives.
B. Quarterly, meet to accomplish the following:
1. Review toward established goals and objectives;
2. Review status of any special projects;
3. Review claim reports and results (experience and utilization);
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4. Provide administrative update (reports, costs, accruals); and
5. Provide recommendations, as necessary.
C. Develop standard reporting formats.
D. Create financial overview, including the following:
1. Claims experience by coverage class, company, location, and plan type;
2. Claims cost by major expense category;
3. Effectiveness of managed care programs and savings; and
4. Plan administrative expenses.
E. Prepare annual stewardship report to summarize performance and plans for the
coming year.
Plan Design and Pricing
A. Perform evaluation of current benefit program costs, with comparisons to alternate
programs.
B. Calculate required reserve for claims incurred but not reported (IBNR) for self-
insured Plans.
C. Calculate COBRA rates and premium -equivalent rates for self-insured Plans.
D. Model effect of potential Plan changes on company and participant contributions.
E. Assist City in development of employee option prices/cost sharing.
F. Develop annual benefits budget.
G. Conduct post -enrollment reconciliation.
H. Identify trends and develop recommendations to avert risks and improve Plan
performance.
I. Provide overview of industry trends, recent or pending legislation and compliance
issues.
J. Respond to ad hoc inquiries from City's human resource representatives.
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Vendor Management
A. Perform quarterly assessments of vendors reporting and customer service practices.
B. Answer day-to-day questions from City human resources representatives regarding
vendor management issues.
C. Evaluate performance of current vendors.
D. Establish/negotiate vendor performance goals.
E. Review status of vendor performance standards, and make required quarterly reports.
F. Conduct vendor service meetings.
G. Review funding arrangements annually.
H. Analyze and review all insurance/vendor contracts and make recommendations
(performance guarantees, vendor/client liability, fiduciary responsibility).
I. Provide renewal assistance, including the following:
1. Obtain initial renewal offers from current vendors;
2. Engage in negotiations with vendors on renewal rates and performance
guarantees;
3. Investigate Plan design recommendations, as needed;
4. Prepare reports outlining financial impact of renewal; and
5. Prepare communications to carriers/vendors.
J. Assist with Plan administration/claims issues, including the following:
1. Claims problems;
2. Eligibility issues; and
3. Premium/fee payment issues.
K. The parties agree that the work associated with a change in the medical Plan vendors
(third -party administrator and/or health care network) shall be performed by
Consultant not more than one time during the two-year term of this Agreement.
L. The parties acknowledge and agree that vendor selection for other group insurance
products (medical reinsurance, dental, vision, life insurance, and disability) is
herewith included.
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Compliance
A. Prepare Form 5500 and related schedules.
B. Perform non-discrimination testing as required by IRC Sections 125, 129, and
105(h).
C. Prepare Summary Annual Reports.
D. Review existing Plan documents annually.
E. Prepare amendments to Plan documents, as needed.
F. Assist in technical review of Summary Plan Description(s).
G. Assist in technical review of Summary Material Modifications.
H. Review employee communication materials for technical accuracy, including the
following:
1. Graphical presentations;
2. Employee newsletters; and
3. Enrollment communications for open enrollment and new hires.
I. Respond to ad hoc compliance questions from City's human resources
representatives.
J. The parties acknowledge and agree that assistance with resolution of Plan
administration issues does not include Consultant having direct contact with
employees of City.
1.06 RESPONSIBILITIES OF CITY
A. City acknowledges its understanding that the responsibilities for administering the
Plans and for carrying out provisions of the Plans rest with the Plan Administrators,
as that term is defined in the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"); and City acknowledges that Consultant shall not serve as the
Plan Administrator but shall, subject to direction from City, perform services as are
enumerated in this Agreement.
B. City acknowledges that it retains complete and final discretionary authority,
responsibility, and control regarding policy, interpretations, practices, procedures,
administration and compliance of Plans; City recognizes that Consultant is not a
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fiduciary, as defined in ERISA, under this Agreement, and that Consultant shall not
perform any service which would cause it to be a fiduciary of any Plan; and City
acknowledges that it is the Plan Sponsor, Plan Administrator, and Named Fiduciary
as those terms are defined in ERISA.
C. City acknowledges and agrees that nothing contained in this Agreement shall be
construed so as to obligate Consultant in any way with respect to any state, federal
or other filings due on or before the effective date of this Agreement. If City requests
that Consultant prepare and complete delinquent filings, City acknowledges that such
services would be outside of the scope of services of this Agreement and payment for
same would be on terms and conditions negotiated by the parties separate and apart
from this Agreement.
D. City acknowledges that this Agreement shall not be deemed a contract of insurance
under any laws or regulations; City acknowledges its understanding that Consultant
does not insure, guarantee or underwrite the liability of City under the Plans; and City
acknowledges that City has total fiduciary responsibility under the Plans and has
responsibility for all expenses incidental to the Plans.
E. City acknowledges its understanding that Consultant is not a law firm and is not
authorized to provide nor engaged in providing legal services; City acknowledges
that matters for which Consultant may advise City might involve the application of
federal, state, local, and in some instances foreign laws; and City acknowledges that
Consultant has disclaimed any responsibility for advising City concerning the proper
legal interpretation or application of laws affecting the matters for which City has
engaged Consultant.
F. City shall maintain current and accurate eligibility and coverage records for the Plans,
verify participant eligibility, and submit information timely at Consultant's request.
G. City shall resolve all Plan ambiguities and disputes relating to the Plan eligibility of
a Plan participant, Plan coverage, or any other Plan interpretation questions.
H. City shall provide Consultant with copies of any minor revisions, changes or
amendments to the Plans within fifteen (15) working days of the effective date of
such changes. However, for any proposed amendments to the Plans which would
have a material impact on the services to be provided under this Agreement, City
agrees to provide Consultant with copies of such proposed amendments to the Plans
at least ninety (90) days prior to their adoption. If it is determined that any such Plan
amendments materially impact the services to be provided hereunder, then Consultant
shall notify City within sixty (60) days following receipt of the amendments of any
impact such changes would have on the services to be provided under this
Agreement. The parties agree to then enter into good faith negotiations regarding any
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changes to this Agreement necessitated by the Plan amendments. In the event the
parties are unable to agree as to any such changes, then either party may be eligible
to terminate this Agreement in accordance with applicable provisions herein.
City shall provide and timely distribute all notices and information required to be
given to Plan participants, maintain and operate the Plans in accordance with
applicable federal and state laws, maintain all recordkeeping, and file all forms
relative thereto pursuant to any federal, state or local law unless this Agreement
specifically assigns such duties to Consultant.
J. City shall pay all taxes, licenses, and fees levied, if any, by any local, state, or federal
authority in connection with the Plans.
K. City warrants and represents that the only entities that participate, or who will
participate, in the Plans are in City's "control group" as that term is used in ERISA.
L. City shall maintain responsibility for the accuracy and timeliness of all Plan records,
and shall act as the sole authority to communicate with Plan participants.
M. City shall maintain any fidelity bond or other insurance as may be required by state
or federal law for the protection of the Plans and Plan participants.
N. City shall timely provide Consultant with such information as Consultant may
reasonably require for it to perform services under this Agreement; and City shall
deliver such information to Consultant within reasonable time frames.
O. City shall pay Consultant's reasonable attorneys' fees incurred by Consultant in
responding to any subpoena or other legal process that may be issued to Consultant
or any of its officers, directors or employees in connection with litigation or legal
proceedings to which City is a party and which proceedings seek production of
documents or testimony relating to any of City's employee compensation and benefit
Plans or services performed pursuant to this Agreement.
1.07 NON APPROPRIATION
This Agreement is a commitment of City's current revenues only. It is understood and agreed
that City shall have the right to terminate this Agreement at the end of any City fiscal year if the
governing body of City does not appropriate funds sufficient to purchase the services as determined
by City's budget for the fiscal year in question. City may effect such termination by giving
Consultant a written notice of termination at the end of its then current fiscal year.
1.08 INDEPENDENT CONTRACTOR STATUS
Consultant is an independent contractor, not City's employee. Consultant's employees or
subcontractors are not City's employees. This Agreement does not create a partnership relationship.
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Neither party has authority to enter into contracts as agent for the other party. Consultant and City
agree to the following rights consistent with an independent contractor relationship:
A. Consultant has the right to perform services for others during the term hereof.
B. Consultant has the sole right to control and direct the means, manner and method by
which services required by this Agreement will be performed.
C. Consultant has the right to hire assistants as subcontractors, or to use employees to
provide the services required by this Agreement.
D. Consultant or Consultant's employees or subcontractors shall perform the services
required by this Agreement. City shall not hire, supervise, or pay any assistants to
help Consultant.
E. Neither Consultant nor Consultant's employees or subcontractors shall receive any
training from City in the skills necessary to perform the services required by this
Agreement.
F. City shall not require Consultant or Consultant's employees or subcontractors to
devote full time to performing the services required by this Agreement.
G. Neither Consultant nor Consultant's employees or subcontractors are eligible to
participate in any employee pension, health, vacation pay, sick pay, or other fringe
benefit plan of City.
1.09 DESIGNATION OF AUTHORIZED REPRESENTATIVES
City represents and warrants that it has the authority to act on behalf of the Plans under this
Agreement. City shall from time to time designate in writing one or more of its employees who shall
be authorized to provide instructions to Consultant under this Agreement.
City at this time hereby designates the following City employee as its authorized
representative: Linda Gunther
1.10 PROPRIETARY DATA
A. During the term of this Agreement, each party shall use the information furnished to
it solely for the purpose of performing their respective obligations under the
Agreement. During the term of this Agreement, and for five (5) years thereafter,
neither party shall disclose such information to any person other than to its directors,
officers, employees, lenders, counsel, representatives or affiliates, if any, who require
the information ("Representatives"), or for any purpose other than as set forth above.
If a party desires to disclose the information furnished to it under this Agreement to
a Representative, that party shall first inform the Representative of the confidential
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nature of the information and of the requirement that it not be used for purposes other
than as set forth above. In any event, and without limiting the preceding obligation,
the party receiving the information shall be and remains legally responsible for any
breach of this Agreement, and shall reasonably safeguard the information from
unauthorized use or disclosure by its Representatives. Except as may be required by
applicable law, regulation or stock exchange rules, without the prior written consent
of the party supplying the information, the party receiving the information will not,
and will not permit its Representatives to, disclose to any person either the fact that
the information has been made available to that party, or that the party has inspected
any portion of the information. If a party who has received the information is
requested or required (by oral questions, interrogatories, requests for information or
documents, subpoena, civil investigative demand or similar process) to disclose any
information, that party, to the extent it may legally do so, will promptly notify the
other party of such request or requirement so that the other party may seek an
appropriate protective order. To the extent the other party is unable to obtain a
protective order and the party receiving the information is legally compelled to
disclose information, the party receiving the information may disclose such of the
information to the party compelling disclosure as is required by law.
B. For the purposes of this agreement, confidential information shall not include: (1)
information that is, or comes, within the public domain through no fault of either
party; (2) information learned by either party from third parties; or (3) information
known to, or disclosed by, either party independent of this Agreement.
C. All records maintained by Consultant under this Agreement are exclusively the
property of City. If, upon termination, City requests a change in the format or content
of the records maintained by Consultant, then City shall be responsible for payment
of any reasonable costs associated with such changes. If City becomes aware of any
breach of this section or other conditions under which such system, documentation
or other information or any part thereof is lost or comes into possession of an
unauthorized person, firm or organization, City shall promptly notify Consultant and
provide Consultant with information regarding such breach or improper possession
and take reasonable action as necessary to recover the system, documentation or other
information or any part thereof at the request and cost of Consultant . The obligations
of City and Consultant under this section shall survive the termination of this
Agreement.
1.11 WARRANTIES
Consultant warrants that all services performed under this Agreement shall be performed
consistent with generally prevailing professional or industry standards. City's remedy for breach
of the above warranty shall be the satisfactory re -performance of Consultant's services or as
otherwise provided for herein.
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1.12 INDEMNIFICATION; LIMITATION OF LIABILITY
A. City acknowledges that the obligations and duties of Consultant with respect to the
Plans shall be those specifically listed in this Agreement, and Consultant shall not
have any other obligation, duty, responsibility or liability with respect to any other
aspect of the operation or administration of the Plans. Consultant has no contractual
obligation with the Plans or their sponsor or participants, and neither the Plans nor
their sponsors or participants shall be third party beneficiaries of this Agreement.
Consultant shall have no liability to City for damage suffered by City or a Plan in
connection with the services provided by Consultant under this Agreement unless
such damage is due to the negligence or willful misconduct of Consultant in the
performance of such services. Any such liability shall be limited solely to providing
corrective reports or services and monetary damages; provided, however, that
Consultant's liability for monetary damages with respect to any Plan or all Plans in
the aggregate, shall in no event exceed the amount of fees received by Consultant
from City pursuant to this Agreement for the twelve (12) consecutive months
immediately preceding the month during which the event (or, if liability is related to
a series of events, the first event in such series) occurs which gives rise to such
liability.
B. Each party shall indemnify the other, and hold each other harmless, from any and all
loss, damage, penalty, liability, cost and expense, including without limitation
reasonable attorney's fees and disbursement that may be incurred by, imposed upon,
or asserted by reason of any claim, regulatory proceeding, or litigation arising from
any act done or omitted to be done by any individual or person with respect to the
Plan or trust, excepting only any loss, damage, penalty, liability, cost or expenses
resulting from negligence or willful misconduct.
C. In the event that Consultant is retained to provide nondiscrimination testing for any
of the Plans, Consultant shall have no liability for correcting data compiled by or
relied upon by City or the Plans that is necessary for Consultant's performance of
such nondiscrimination testing and that is determined by Consultant to be inaccurate,
unless such inaccuracy is due to the negligence or willful misconduct of Consultant
in the performance of such duties. Consultant assumes no responsibility for records,
reports, or testing generated or performed by persons other than Consultant for
periods prior to the effective date of this Agreement.
D. The parties agree that in no event shall they be liable to the other for any incidental,
indirect, special, punitive, consequential or similar damages of any kind including
without limitation loss of profits, loss of business or interruptions of business,
whether such liabilities are predicated on contract, tort, strict liability or any other
legal theory.
E. City agrees that Consultant shall have no responsibility or liability with respect to the
Plans' compliance in form or in operation with any of the requirements of the
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Internal Revenue Code or ERISA, other than those duties expressly performed by
Consultant under this agreement.
F. The parties agree that the provisions of this section shall survive the termination of
this Agreement.
1.13 ASSIGNMENT AND DELEGATION
Neither party may assign any rights or delegate any duties under this Agreement without the
other party's prior written approval, which approval shall not be unreasonably withheld.
1.14 DISPUTE RESOLUTION
If a dispute arises under this Agreement, the parties agree to first try to resolve the dispute
with the help of a mutually selected mediator. If the parties cannot agree on a mediator, City and
Consultant shall each select a mediator and the two mediators shall agree upon a third mediator. Any
costs and fees, other than attorney fees, associated with the mediation shall be shared equally by the
parties.
City and Consultant hereby expressly agree that no claims or disputes between the parties
arising out of or relating to this Agreement or a breach thereof shall be decided by any arbitration
proceeding, including without limitation, any proceeding under the Federal Arbitration Act (9 USC
Section 1-14) or any applicable state arbitration statute.
1.15 TERMINATION
A. This Agreement may be terminated as follows:
1. By either party:
a. At any time, without penalty and with or without cause, with not less
than sixty (60) days' written notice to the other party.
b. Due to a material breach or default of the other party in the
performance of its responsibilities and obligations under this
Agreement, provided such material breach is not cured within thirty
(30) days from the date of written notice of such breach or default,
unless immediate termination is permitted under paragraphs c. or d.
immediately below.
c. In the event the other party shall become insolvent, make a general
assignment for the benefit of creditors, suffer or permit the
appointment of a receiver for its business or assets, become subject
to any proceeding under any bankruptcy or insolvency law whether
domestic or foreign, or become liquidated, voluntarily or otherwise.
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d. In the event the other party fails to substantially comply with the
limitations of use set forth in Section 1.10.
2. By Consultant if City fails to pay the undisputed portion of invoices upon
proper presentation for payment and in accordance with applicable portions
of this Agreement dealing with charges and payment.
B. Upon termination of this Agreement, Consultant shall return all documents,
information and data relating to the Plans of City. Consultant may not retain input
or output materials or the Plans' data files without City's express written permission.
Consultant agrees not to disclose such data to any third party unless otherwise
directed by City or as required by law.
C. Save and except for those sums due and payable, or which may later be determined
to be due and payable pursuant to applicable provisions governing termination,
should this Agreement be terminated by either party:
1. If terminated by City, Consultant shall discontinue all services in connection
with the performance of this Agreement and shall proceed to cancel all
existing orders and agreements insofar as such orders or agreements are
chargeable to this Agreement. Within thirty (30) days after receipt of notice
of termination, Consultant shall submit an invoice showing in detail the
satisfactorily performed services under this Agreement to the date of
termination. City shall pay Consultant that portion of the prescribed
undisputed charges. Termination of this Agreement shall not relieve
Consultant of any obligations or liabilities occurring prior to termination.
2. If terminated by Consultant, Consultant shall discontinue all services in
connection with this Agreement and shall terminate all existing orders and
agreements insofar as such orders and agreements are chargeable to this
Agreement. Within thirty (30) days of date of termination, Consultant shall
submit an invoice showing in detail the satisfactorily performed services
under this Agreement to the date of termination. City shall pay Consultant
that portion of the prescribed undisputed charges. Termination of this
Agreement shall not relieve Consultant of any obligations or liabilities
occurring prior to termination.
D. The parties acknowledge and agree that Consultant shall not be entitled to
compensation for services it would have performed under the remaining term of this
Agreement except as provided above.
1.16 LOCAL, STATE AND FEDERAL TAXES
Consultant shall pay all income taxes, and FICA (Social Security and Medicare taxes)
incurred while performing services under this Agreement. City will not do the following:
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A. Withhold FICA from Consultant's payments or make FICA payments on
Consultant's behalf;
B. Make state and/or federal unemployment compensation contributions on Consultant's
behalf; or
C. Withhold state or federal income tax from Consultant's payments.
1.17 NOTICES
All notices and other communications in connection with this Agreement shall be in writing
and shall be considered given as follows:
A. When delivered personally to recipient's address as stated herein.
B. Three (3) days after being deposited in the United States mail, with postage prepaid
to recipient's address as stated herein.
Notice to Consultant:
Watson Wyatt & Company
2121 San Jacinto Street
Suite 2400
Dallas, TX 75201-2772
Notice to City:
City of Round Rock
Attention: City Manager
221 East Main Street
Round Rock, TX 78664
AND TO General Counsel
Watson Wyatt & Company
1717 H Street, N.W.
Washington D.C. 20006
AND TO City of Round Rock
Attention: City Attorney
309 East Main Street
Round Rock, TX 78664
Nothing contained in this section shall be construed to restrict the transmission of routine
communications between representatives of City and Consultant.
1.18 APPLICABLE LAW
The laws of the State of Texas shall govern this Agreement. Venue shall lie in Williamson
County, Texas.
1.19 ENTIRE AGREEMENT
This is the entire and exclusive Agreement between Consultant and City, and it supersedes
all prior agreements and communications, oral and/or written, between the parties in relation to the
subject matter of this Agreement. Both parties acknowledge that they have read this Agreement and
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existing attachments, and that they understand it and agree to be bound by its terms and conditions.
The parties further agree that any attachments and exhibits hereto are hereby incorporated by
reference and made a part of this Agreement.
1.20 SEVERABILITY
The invalidity, illegality, or unenforceability of any provision of this Agreement or the
occurrence of any event rendering any portion or provision of this Agreement void shall in no way
affect the validity or enforceability of any other portion or provision of this Agreement. Any void
provision shall be deemed severed from this Agreement, and the balance of this Agreement shall be
construed and enforced as if this Agreement did not contain the particular portion or provision held
to be void. The parties further agree to amend this Agreement to replace any stricken provision with
a valid provision that comes as close as possible to the intent of the stricken provision. The
provisions of this section shall not prevent this entire Agreement from being void should a provision
which is of the essence of this Agreement be determined void.
1.21 FORCE MAJEURE
Neither party shall be liable for failure to perform its obligations hereunder where such
failure results from acts of God, fires, storms, accidents, actions and decrees of governmental bodies,
or other such events beyond its reasonable control. The party who has been so affected shall
promptly give notice to the other party, and shall then use its best efforts to timely resume
performance.
1.22 MISCELLANEOUS
A. Any waiver by either party of any requirement of this Agreement shall not be deemed
to be a continuing waiver nor a waiver of any other requirement hereof.
B. Any remedies of either party are cumulative, and exercise by a party of one remedy
shall not preclude the party from exercising any other remedy it may have at law or
hereunder.
C. This Agreement is for the mutual and exclusive benefit of Consultant and City and
shall not be deemed to be for the direct or indirect benefit of clients or customers of
Consultant or City, including the Plans. Clients or customers of Consultant and City,
including the Plans, shall not be deemed to be third party beneficiaries of this
Agreement nor to have any other contractual relationship with Consultant or City by
reason of this Agreement.
IN WITNESS WHEREOF, City and Consultant have executed this Agreement on the dates
indicated below.
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CITY OF ROUND ROCK, TEXAS
By:
Nyle Maxwell, Mayor
Date Signed:
ATTEST:
By:
Christine R. Martinez, City Secretary
WATSON WYATT & COMPANY
By:
Printed Name:
Title:
Date Signed:
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DATE: November 20, 2003
SUBJECT: City Council Meeting - November 25, 2003
ITEM: 12.B.1. Consider a resolution authorizing the Mayor to execute an
Agreement for Consulting Services - Advanced Benefits
Solutions Agreement with Watson Wyatt & Company.
Resource: Teresa S. Bledsoe, Human Resources Director
History: Watson Wyatt & Company(WWW) currently provides professional
consulting services to the City for insurance advisory consulting, and
insurance reporting information. A review and analysis of our current
health and supplementary benefit plans were also conducted.
Funding:
Cost: 81,000plus expenses not to exceed $90,000. WWW has
agreed that amount will not exceed actual cost of service
provided plus expenses.
Source of funds: General Fund - Health Pian
Utility Fund - Health Plan
Outside Resources: N/A
Impact/Benefit: The information presented by WWW provides us guidance in
developing plan designs, cost curtailment, vendor management and
other information for managing our health plan. This agreement
maintains a formal agent -of -record whose general focus is to make
every effort to minimize the cost of the City's employee benefit
program without sacrificing the quality of the plan. This agreement
enables us to:
• Take a more strategic approach to managing the benefits programs
• Improve cost management and employee satisfaction with the benefit
programs
• Allow for ease and fluidity of future changes/modifications to the benefit
program
• Access pertinent information impacting employee benefits
• Reduce burden for administrative and operational staff regarding benefit
programs.
Public Comment: N/A
Sponsor: N/A
Executed
Document
Follows
CITY OF ROUND ROCK
AGREEMENT FOR CONSULTING SERVICES
WITH WATSON WYATT & COMPANY
ADVANCED BENEFITS SOLUTIONS AGREEMENT
THIS AG EEMENT is made and entered into on this the Q&5 - day of the month of
, 2003 by and between the City of Round Rock, a Texas home -rule
municipal corporation, whose offices are located at 221 East Main Street, Round Rock, Texas
78664-5299 (hereinafter referred to as "City"), and Watson Wyatt & Company, whose offices are
located at 2121 San Jacinto Street, Suite 2400, Dallas, Texas 75201-2772 (hereinafter referred to as
the "Consultant").
RECITALS:
WHEREAS, City sponsors various health and welfare plans (hereinafter referred to as the
"Plans") as employee benefits for its employees; and
WHEREAS, City desires to contract for Consultant's assistance in providing advisory
services and reports to City in connection with the Plans; and
WHEREAS, the parties desire to enter into this Advanced Benefits Solutions Agreement to
set forth in writing their respective rights, duties and obligations hereunder;
NOW, THEREFORE, WITNESSETH that for and in consideration of the mutual promises
contained herein and other good and valuable consideration, the sufficiency and receipt ofwhich are
hereby acknowledged, it is mutually agreed between the parties as follows:
1.01 EFFECTIVE DATE, DURATION, AND TERM
This Agreement shall be effective on the date this Agreement has been signed by every party
hereto, and shall remain in full force and effect unless and until it expires by operation of the term
indicated herein, or is terminated or extended as provided herein.
The term of this Agreement shall be for two (2) years commencing on the effective date of
this Agreement.
1.02 PAYMENT
In consideration for the professional services to be performed by Consultant which are recited
herein, City agrees to pay Consultant as follows:
-o3-/ as-iaa�
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v.
A. Professional Fees
Six Thousand Five Hundred and No/100 Dollars ($6,500.00) per month, for the term
of this Agreement.
It is the practice of Consultant to accept commissions from group insurance products
for which they are involved in the ongoing management of such products. All
commissions received shall be used to offset Professional Fees. The actual
commissions received shall be documented on invoices sent to City as part of
Consultant's standard billing practice.
B. Office Administration and Technology Charges
Seven percent (7%) of Professional Fees.
C. Reimbursable Expenses
Reimbursement at actual cost for the following expenses that are directly attributable
to authorized work performed under this Agreement:
1. travel expenses other than normal commuting, including airfares, rental
vehicles, and highway mileage in company or personal vehicles at $0.31 cents
per mile, provided that all travel is first approved by City prior to Consultant
incurring travel expenses;
2. meals, not to exceed City's travel per diem;
3. lodging;
4. telephone, fax, online and telegraph charges;
5. postage and courier services;
6. photocopying, printing and materials reproduction charges; and
7. computer services.
D. Miscellaneous Charges
In addition to all fees, costs, and charges recited in this section, City shall be
responsible for all sales and excise taxes and related interest and penalties, if any, that
are or may be applicable for the services provided under this Agreement and that are
required to be collected by Consultant or paid by Consultant to any taxing authority,
except in instances when fines or penalties are due to the negligence or failure of
Consultant to adequately or timely perform services pursuant to this Agreement.
City reserves the right to review Consultant's work at any time, including at the end of any
deliverable or phase, and may elect to terminate with or without cause or may elect to continue with
the next deliverable or phase.
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1.03 TERMS OF PAYMENT
To receive payment, Consultant shall prepare and submit a series of monthly invoices. Each
invoice shall state and detail the deliverable(s) accomplished, along with documentation for each
deliverable, and shall state the percent completion of the work accomplished during that particular
billing period.
1.04 PROMPT PAYMENT POLICY
In accordance with Chapter 2251, V.T.C.A., Texas Government Code, payment to Consultant
will be made within thirty (30) days of the day on which City receives the performance and/or
deliverables, or within thirty (30) days of the day on which the performance of services was
complete, or within thirty (30) days of the day on which City receives a correct invoice for the
performance and/or deliverables or services, whichever is later. Consultant may charge a late fee (fee
shall not be greater than that which is permitted by Texas law) for payments not made in accordance
with this prompt payment policy; however, this policy does not apply to payments made by City in
the event:
A. there is a bona fide dispute between City and Consultant concerning the services
performed that causes the payment to be late; or
B. the terms of a federal contract, grant, regulation, or statute prevent City from making
a timely payment with federal funds; or
C. there is a bona fide dispute between Consultant and a subcontractor or between a
subcontractor and its supplier concerning the services performed which causes the
payment to be late; or
D. the invoice is not mailed to City in strict accordance with instructions, if any, on any
purchase order, or this Agreement or other such contractual agreement.
1.05 RESPONSIBILITIES OF CONSULTANT - OBJECTIVES, DELIVERABLES, AND
SCOPE OF WORK
Program Planning
A. Annually, assist in developing goals and objectives.
B. Quarterly, meet to accomplish the following:
1. Review toward established goals and objectives;
2. Review status of any special projects;
3. Review claim reports and results (experience and utilization);
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4. Provide administrative update (reports, costs, accruals); and
5. Provide recommendations, as necessary.
C. Develop standard reporting formats.
D. Create financial overview, including the following:
1. Claims experience by coverage class, company, location, and plan type;
2. Claims cost by major expense category;
3. Effectiveness of managed care programs and savings; and
4. Plan administrative expenses.
E. Prepare annual stewardship report to summarize performance and plans for the
coming year.
Plan Design and Pricing
A. Perform evaluation of current benefit program costs, with comparisons to alternate
programs.
B. Calculate required reserve for claims incurred but not reported (IBNR) for self-
insured Plans.
C. Calculate COBRA rates and premium -equivalent rates for self-insured Plans.
D. Model effect of potential Plan changes on company and participant contributions.
E. Assist City in development of employee option prices/cost sharing.
F. Develop annual benefits budget.
G. Conduct post -enrollment reconciliation.
H. Identify trends and develop recommendations to avert risks and improve Plan
performance.
I. Provide overview of industry trends, recent or pending legislation and compliance
issues.
J. Respond to ad hoc inquiries from City's human resource representatives.
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Vendor Management
A. Perform quarterly assessments of vendors reporting and customer service practices.
B. Answer day-to-day questions from City human resources representatives regarding
vendor management issues.
C. Evaluate performance of current vendors.
D. Establish/negotiate vendor performance goals.
E. Review status of vendor performance standards, and make required quarterly reports.
F. Conduct vendor service meetings.
G. Review funding arrangements annually.
H. Analyze and review all insurance/vendor contracts and make recommendations
(performance guarantees, vendor/client liability, fiduciary responsibility).
I. Provide renewal assistance, including the following:
1. Obtain initial renewal offers from current vendors;
2. Engage in negotiations with vendors on renewal rates and performance
guarantees;
3. Investigate Plan design recommendations, as needed;
4. Prepare reports outlining financial impact of renewal; and
5. Prepare communications to carriers/vendors.
J. Assist with Plan administration/claims issues, including the following:
1. Claims problems;
2. Eligibility issues; and
3. Premium/fee payment issues.
K. The parties agree that the work associated with a change in the medical Plan vendors
(third -party administrator and/or health care network) shall be performed by
Consultant not more than one time during the two-year term of this Agreement.
L. The parties acknowledge and agree that vendor selection for other group insurance
products (medical reinsurance, dental, vision, life insurance, and disability) is
herewith included.
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Compliance
A. Prepare Form 5500 and related schedules.
B. Perform non-discrimination testing as required by IRC Sections 125, 129, and
105(h).
C. Prepare Summary Annual Reports.
D. Review existing Plan documents annually.
E. Prepare amendments to Plan documents, as needed.
F. Assist in technical review of Summary Plan Description(s).
G. Assist in technical review of Summary Material Modifications.
H. Review employee communication materials for technical accuracy, including the
following:
1. Graphical presentations;
2. Employee newsletters; and
3. Enrollment communications for open enrollment and new hires.
I. Respond to ad hoc compliance questions from City's human resources
representatives.
J. The parties acknowledge and agree that assistance with resolution of Plan
administration issues does not include Consultant having direct contact with
employees of City.
1.06 RESPONSIBILITIES OF CITY
A. City acknowledges its understanding that the responsibilities for administering the
Plans and for carrying out provisions of the Plans rest with the Plan Administrators,
as that term is defined in the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"); and City acknowledges that Consultant shall not serve as the
Plan Administrator but shall, subject to direction from City, perform services as are
enumerated in this Agreement.
B. City acknowledges that it retains complete and final discretionary authority,
responsibility, and control regarding policy, interpretations, practices, procedures,
administration and compliance of Plans; City recognizes that Consultant is not a
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fiduciary, as defined in ERISA, under this Agreement, and that Consultant shall not
perform any service which would cause it to be a fiduciary of any Plan; and City
acknowledges that it is the Plan Sponsor, Plan Administrator, and Named Fiduciary
as those terms are defined in ERISA.
C. City acknowledges and agrees that nothing contained in this Agreement shall be
construed so as to obligate Consultant in any way with respect to any state, federal
or other filings due on or before the effective date of this Agreement. If City requests
that Consultant prepare and complete delinquent filings, City acknowledges that such
services would be outside of the scope of services of this Agreement and payment for
same would be on terms and conditions negotiated by the parties separate and apart
from this Agreement.
D. City acknowledges that this Agreement shall not be deemed a contract of insurance
under any laws or regulations; City acknowledges its understanding that Consultant
does not insure, guarantee or underwrite the liability of City under the Plans; and City
acknowledges that City has total fiduciary responsibility under the Plans and has
responsibility for all expenses incidental to the Plans.
E. City acknowledges its understanding that Consultant is not a law firm and is not
authorized to provide nor engaged in providing legal services; City acknowledges
that matters for which Consultant may advise City might involve the application of
federal, state, local, and in some instances foreign laws; and City acknowledges that
Consultant has disclaimed any responsibility for advising City concerning the proper
legal interpretation or application of laws affecting the matters for which City has
engaged Consultant.
F. City shall maintain current and accurate eligibility and coverage records for the Plans,
verify participant eligibility, and submit information timely at Consultant's request.
G. City shall resolve all Plan ambiguities and disputes relating to the Plan eligibility of
a Plan participant, Plan coverage, or any other Plan interpretation questions.
H. City shall provide Consultant with copies of any minor revisions, changes or
amendments to the Plans within fifteen (15) working days of the effective date of
such changes. However, for any proposed amendments to the Plans which would
have a material impact on the services to be provided under this Agreement, City
agrees to provide Consultant with copies of such proposed amendments to the Plans
at least ninety (90) days prior to their adoption. If it is determined that any such Plan
amendments materially impact the services to be provided hereunder, then Consultant
shall notify City within sixty (60) days following receipt of the amendments of any
impact such changes would have on the services to be provided under this
Agreement. The parties agree to then enter into good faith negotiations regarding any
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changes to this Agreement necessitated by the Plan amendments. In the event the
parties are unable to agree as to any such changes, then either party may be eligible
to terminate this Agreement in accordance with applicable provisions herein.
City shall provide and timely distribute all notices and information required to be
given to Plan participants, maintain and operate the Plans in accordance with
applicable federal and state laws, maintain all recordkeeping, and file all forms
relative thereto pursuant to any federal, state or local law unless this Agreement
specifically assigns such duties to Consultant.
J. City shall pay all taxes, licenses, and fees levied, if any, by any local, state, or federal
authority in connection with the Plans.
K. City warrants and represents that the only entities that participate, or who will
participate, in the Plans are in City's "control group" as that term is used in ERISA.
L. City shall maintain responsibility for the accuracy and timeliness of all Plan records,
and shall act as the sole authority to communicate with Plan participants.
M. City shall maintain any fidelity bond or other insurance as may be required by state
or federal law for the protection of the Plans and Plan participants.
N. City shall timely provide Consultant with such information as Consultant may
reasonably require for it to perform services under this Agreement; and City shall
deliver such information to Consultant within reasonable time frames.
O. City shall pay Consultant's reasonable attorneys' fees incurred by Consultant in
responding to any subpoena or other legal process that may be issued to Consultant
or any of its officers, directors or employees in connection with litigation or legal
proceedings to which City is a party and which proceedings seek production of
documents or testimony relating to any of City's employee compensation and benefit
Plans or services performed pursuant to this Agreement.
1.07 NON -APPROPRIATION
This Agreement is a commitment of City's current revenues only. It is understood and agreed
that City shall have the right to terminate this Agreement at the end of any City fiscal year if the
governing body of City does not appropriate funds sufficient to purchase the services as determined
by City's budget for the fiscal year in question. City may effect such termination by giving
Consultant a written notice of termination at the end of its then current fiscal year.
1.08 INDEPENDENT CONTRACTOR STATUS
Consultant is an independent contractor, not City's employee. Consultant's employees or
subcontractors are not City's employees. This Agreement does not create a partnership relationship.
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Neither party has authority to enter into contracts as agent for the other party. Consultant and City
agree to the following rights consistent with an independent contractor relationship:
A. Consultant has the right to perform services for others during the term hereof.
B. Consultant has the sole right to control and direct the means, manner and method by
which services required by this Agreement will be performed.
C. Consultant has the right to hire assistants as subcontractors, or to use employees to
provide the services required by this Agreement.
D. Consultant or Consultant's employees or subcontractors shall perform the services
required by this Agreement. City shall not hire, supervise, or pay any assistants to
help Consultant.
E. Neither Consultant nor Consultant's employees or subcontractors shall receive any
training from City in the skills necessary to perform the services required by this
Agreement.
F. City shall not require Consultant or Consultant's employees or subcontractors to
devote full time to performing the services required by this Agreement.
G. Neither Consultant nor Consultant's employees or subcontractors are eligible to
participate in any employee pension, health, vacation pay, sick pay, or other fringe
benefit plan of City.
1.09 DESIGNATION OF AUTHORIZED REPRESENTATIVES
City represents and warrants that it has the authority to act on behalf of the Plans under this
Agreement. City shall from time to time designate in writing one or more of its employees who shall
be authorized to provide instructions to Consultant under this Agreement.
City at this time hereby designates the following City employee as its authorized
representative: Linda Gunther
1.10 PROPRIETARY DATA
A. During the term of this Agreement, each party shall use the information furnished to
it solely for the purpose of performing their respective obligations under the
Agreement. During the term of this Agreement, and for five (5) years thereafter,
neither party shall disclose such information to any person other than to its directors,
officers, employees, lenders, counsel, representatives or affiliates, if any, who require
the information ("Representatives"), or for any purpose other than as set forth above.
If a party desires to disclose the information furnished to it under this Agreement to
a Representative, that party shall first inform the Representative of the confidential
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nature of the information and of the requirement that it not be used for purposes other
than as set forth above. In any event, and without limiting the preceding obligation,
the party receiving the information shall be and remains legally responsible for any
breach of this Agreement, and shall reasonably safeguard the information from
unauthorized use or disclosure by its Representatives. Except as may be required by
applicable law, regulation or stock exchange rules, without the prior written consent
of the party supplying the information, the party receiving the information will not,
and will not permit its Representatives to, disclose to any person either the fact that
the information has been made available to that party, or that the party has inspected
any portion of the information. If a party who has received the information is
requested or required (by oral questions, interrogatories, requests for information or
documents, subpoena, civil investigative demand or similar process) to disclose any
information, that party, to the extent it may legally do so, will promptly notify the
other party of such request or requirement so that the other party may seek an
appropriate protective order. To the extent the other party is unable to obtain a
protective order and the party receiving the information is legally compelled to
disclose information, the party receiving the information may disclose such of the
information to the party compelling disclosure as is required by law.
B. For the purposes of this agreement, confidential information shall not include: (1)
information that is, or comes, within the public domain through no fault of either
party; (2) information learned by either party from third parties; or (3) information
known to, or disclosed by, either party independent of this Agreement.
C. All records maintained by Consultant under this Agreement are exclusively the
property of City. If, upon termination, City requests a change in the format or content
of the records maintained by Consultant, then City shall be responsible for payment
of any reasonable costs associated with such changes. If City becomes aware of any
breach of this section or other conditions under which such system, documentation
or other information or any part thereof is lost or comes into possession of an
unauthorized person, firm or organization, City shall promptly notify Consultant and
provide Consultant with information regarding such breach or improper possession
and take reasonable action as necessary to recover the system, documentation or other
information or any part thereof at the request and cost of Consultant . The obligations
of City and Consultant under this section shall survive the termination of this
Agreement.
1.11 WARRANTIES
Consultant warrants that all services performed under this Agreement shall be performed
consistent with generally prevailing professional or industry standards. City's remedy for breach
of the above warranty shall be the satisfactory re -performance of Consultant's services or as
otherwise provided for herein.
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1.12 INDEMNIFICATION; LIMITATION OF LIABILITY
A. City acknowledges that the obligations and duties of Consultant with respect to the
Plans shall be those specifically listed in this Agreement, and Consultant shall not
have any other obligation, duty, responsibility or liability with respect to any other
aspect of the operation or administration of the Plans. Consultant has no contractual
obligation with the Plans or their sponsor or participants, and neither the Plans nor
their sponsors or participants shall be third party beneficiaries of this Agreement.
Consultant shall have no liability to City for damage suffered by City or a Plan in
connection with the services provided by Consultant under this Agreement unless
such damage is due to the negligence or willful misconduct of Consultant in the
performance of such services. Any such liability shall be limited solely to providing
corrective reports or services and monetary damages; provided, however, that
Consultant's liability for monetary damages with respect to any Plan or all Plans in
the aggregate, shall in no event exceed the amount of fees received by Consultant
from City pursuant to this Agreement for the twelve (12) consecutive months
immediately preceding the month during which the event (or, if liability is related to
a series of events, the first event in such series) occurs which gives rise to such
liability.
B. Each party shall indemnify the other, and hold each other harmless, from any and all
loss, damage, penalty, liability, cost and expense, including without limitation
reasonable attorney's fees and disbursement that may be incurred by, imposed upon,
or asserted by reason of any claim, regulatory proceeding, or litigation arising from
any act done or omitted to be done by any individual or person with respect to the
Plan or trust, excepting only any loss, damage, penalty, liability, cost or expenses
resulting from negligence or willful misconduct.
C. In the event that Consultant is retained to provide nondiscrimination testing for any
of the Plans, Consultant shall have no liability for correcting data compiled by or
relied upon by City or the Plans that is necessary for Consultant's performance of
such nondiscrimination testing and that is determined by Consultant to be inaccurate,
unless such inaccuracy is due to the negligence or willful misconduct of Consultant
in the performance of such duties. Consultant assumes no responsibility for records,
reports, or testing generated or performed by persons other than Consultant for
periods prior to the effective date of this Agreement.
D. The parties agree that in no event shall they be liable to the other for any incidental,
indirect, special, punitive, consequential or similar damages of any kind including
without limitation loss of profits, loss of business or interruptions of business,
whether such liabilities are predicated on contract, tort, strict liability or any other
legal theory.
E. City agrees that Consultant shall have no responsibility or liability with respect to the
Plans' compliance in form or in operation with any of the requirements of the
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Internal Revenue Code or ERISA, other than those duties expressly performed by
Consultant under this agreement.
F. The parties agree that the provisions of this section shall survive the termination of
this Agreement.
1.13 ASSIGNMENT AND DELEGATION
Neither party may assign any rights or delegate any duties under this Agreement without the
other party's prior written approval, which approval shall not be unreasonably withheld.
1.14 DISPUTE RESOLUTION
If a dispute arises under this Agreement, the parties agree to first try to resolve the dispute
with the help of a mutually selected mediator. If the parties cannot agree on a mediator, City and
Consultant shall each select a mediator and the two mediators shall agree upon a third mediator. Any
costs and fees, other than attorney fees, associated with the mediation shall be shared equally by the
parties.
City and Consultant hereby expressly agree that no claims or disputes between the parties
arising out of or relating to this Agreement or a breach thereof shall be decided by any arbitration
proceeding, including without limitation, any proceeding under the Federal Arbitration Act (9 USC
Section 1-14) or any applicable state arbitration statute.
1.15 TERMINATION
A. This Agreement may be terminated as follows:
1. By either party:
a. At any time, without penalty and with or without cause, with not less
than sixty (60) days' written notice to the other party.
b. Due to a material breach or default of the other party in the
performance of its responsibilities and obligations under this
Agreement, provided such material breach is not cured within thirty
(30) days from the date of written notice of such breach or default,
unless immediate termination is permitted under paragraphs c. or d.
immediately below.
c. In the event the other party shall become insolvent, make a general
assignment for the benefit of creditors, suffer or permit the
appointment of a receiver for its business or assets, become subject
to any proceeding under any bankruptcy or insolvency law whether
domestic or foreign, or become liquidated, voluntarily or otherwise.
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d. In the event the other party fails to substantially comply with the
limitations of use set forth in Section 1.10.
2. By Consultant if City fails to pay the undisputed portion of invoices upon
proper presentation for payment and in accordance with applicable portions
of this Agreement dealing with charges and payment.
B. Upon termination of this Agreement, Consultant shall return all documents,
information and data relating to the Plans of City. Consultant may not retain input
or output materials or the Plans' data files without City's express written permission.
Consultant agrees not to disclose such data to any third party unless otherwise
directed by City or as required by law.
C. Save and except for those sums due and payable, or which may later be determined
to be due and payable pursuant to applicable provisions governing termination,
should this Agreement be terminated by either party:
1. If terminated by City, Consultant shall discontinue all services in connection
with the performance of this Agreement and shall proceed to cancel all
existing orders and agreements insofar as such orders or agreements are
chargeable to this Agreement. Within thirty (30) days after receipt of notice
of termination, Consultant shall submit an invoice showing in detail the
satisfactorily performed services under this Agreement to the date of
termination. City shall pay Consultant that portion of the prescribed
undisputed charges. Termination of this Agreement shall not relieve
Consultant of any obligations or liabilities occurring prior to termination.
2. If terminated by Consultant, Consultant shall discontinue all services in
connection with this Agreement and shall terminate all existing orders and
agreements insofar as such orders and agreements are chargeable to this
Agreement. Within thirty (30) days of date of termination, Consultant shall
submit an invoice showing in detail the satisfactorily performed services
under this Agreement to the date of termination. City shall pay Consultant
that portion of the prescribed undisputed charges. Termination of this
Agreement shall not relieve Consultant of any obligations or liabilities
occurring prior to termination.
D. The parties acknowledge and agree that Consultant shall not be entitled to
compensation for services it would have performed under the remaining term of this
Agreement except as provided above.
1.16 LOCAL, STATE AND FEDERAL TAXES
Consultant shall pay all income taxes, and FICA (Social Security and Medicare taxes)
incurred while performing services under this Agreement. City will not do the following:
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A. Withhold FICA from Consultant's payments or make FICA payments on
Consultant's behalf;
B. Make state and/or federal unemployment compensation contributions on Consultant's
behalf; or
C. Withhold state or federal income tax from Consultant's payments.
1.17 NOTICES
All notices and other communications in connection with this Agreement shall be in writing
and shall be considered given as follows:
A. When delivered personally to recipient's address as stated herein.
B. Three (3) days after being deposited in the United States mail, with postage prepaid
to recipient's address as stated herein.
Notice to Consultant:
Watson Wyatt & Company
2121 San Jacinto Street
Suite 2400
Dallas, TX 75201-2772
Notice to City:
City of Round Rock
Attention: City Manager
221 East Main Street
Round Rock, TX 78664
AND TO General Counsel
Watson Wyatt & Company
1717 H Street, N.W.
Washington D.C. 20006
AND TO City of Round Rock
Attention: City Attorney
309 East Main Street
Round Rock, TX 78664
Nothing contained in this section shall be construed to restrict the transmission of routine
communications between representatives of City and Consultant.
1.18 APPLICABLE LAW
The laws of the State of Texas shall govern this Agreement. Venue shall lie in Williamson
County, Texas.
1.19 ENTIRE AGREEMENT
This is the entire and exclusive Agreement between Consultant and City, and it supersedes
all prior agreements and communications, oral and/or written, between the parties in relation to the
subject matter of this Agreement. Both parties acknowledge that they have read this Agreement and
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existing attachments, and that they understand it and agree to be bound by its terms and conditions.
The parties further agree that any attachments and exhibits hereto are hereby incorporated by
reference and made a part of this Agreement.
1.20 SEVERABILITY
The invalidity, illegality, or unenforceability of any provision of this Agreement or the
occurrence of any event rendering any portion or provision of this Agreement void shall in no way
affect the validity or enforceability of any other portion or provision of this Agreement. Any void
provision shall be deemed severed from this Agreement, and the balance of this Agreement shall be
construed and enforced as if this Agreement did not contain the particular portion or provision held
to be void. The parties further agree to amend this Agreement to replace any stricken provision with
a valid provision that comes as close as possible to the intent of the stricken provision. The
provisions of this section shall not prevent this entire Agreement from being void should a provision
which is of the essence of this Agreement be determined void.
1.21 FORCE MAJEURE
Neither party shall be liable for failure to perform its obligations hereunder where such
failure results from acts of God, fires, storms, accidents, actions and decrees ofgovernmental bodies,
or other such events beyond its reasonable control. The party who has been so affected shall
promptly give notice to the other party, and shall then use its best efforts to timely resume
performance.
1.22 MISCELLANEOUS
A. Any waiver by either party of any requirement of this Agreement shall not be deemed
to be a continuing waiver nor a waiver of any other requirement hereof.
B. Any remedies of either party are cumulative, and exercise by a party of one remedy
shall not preclude the party from exercising any other remedy it may have at law or
hereunder.
C. This Agreement is for the mutual and exclusive benefit of Consultant and City and
shall not be deemed to be for the direct or indirect benefit of clients or customers of
Consultant or City, including the Plans. Clients or customers of Consultant and City,
including the Plans, shall not be deemed to be third party beneficiaries of this
Agreement nor to have any other contractual relationship with Consultant or City by
reason of this Agreement.
IN WITNESS WHEREOF, City and Consultant have executed this Agreement on the dates
indicated below.
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CITY OF ROUND ROCK, TEXAS
By:
axwel , Ma or
Date Signed: %x -0/3-�
ATTEST:
By:
Christine R. Martinez, City Secretary
WATSON WYATT & COMPANY
By:
Printed Name.
Title:
Date Signed: .7!k