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Analysis The actuarial study should be conducted at a time to coincide with the County's annual budget preparation process to assure adequate, though not excessive, funding of the self-insurance program. Because Coopers & Lybrand conducted the first such report, they maintain the background data required for the update. County staff will be responsible for providing updated information on losses and exposures since the last study, but much of the data collection has already been accomplished. At this time, Siver as well as County staff recommends that we proceed with Coopers & Lybrand for the 1989-90 update without a formal request for proposal (RFP) process. The time required for an RFP would extend until mid-June the County's receipt of the actuarial report. Such a timeframe would make early budget planning most difficult. As referenced in the attached Coopers & Lybrand letter, they can have a draft report available within four to six weeks of receipt of our updated data, making that schedule more realistic for budget purposes. As for costs, Coopers & Lybrand's proposed fee of $8,000 to $10,000 represents the current costs for actuarial updates, according to Siver staff. At the time the initial study was done, renewal costs were estimated at no more than $5,000. Since that time, however, actuarial firms have raised their fees and without a renewal provision in the initial agreement, the County is now faced with the higher than expected costs. While the County might find through an RFP process some actuarial firms who would propose higher fees, it is doubtful that any would be lower. Coupled with the additional time to assemble anew all the data Coopers & Lybrand already has on file, and the RFP timeframe itself, it is most advantageous to work with Coopers & Lybrand once again. While staff recommends a one-time renewal with Coopers & Lybrand as a continuation of previous work, we also recommend that the county -prepare an RFP'for the upcoming fiscal year. By doing so well in advance of the actual need, we can be prepared to begin the annual update well in advance, and we can include in the RFP the annual renewal rates in order to lock -in costs on a three-year basis. Recommendation Because of the critical timing involved, staff recommends the Board ::. authorize Coopers & Lybrand to prepare the actuarial update for the self-insurance fund at a cost not to exceed $10,600.00, with :;,i;-;;; ...* the understanding that a request for proposals will be issued for upcoming fiscal year. Administrator Chandler explained that since last year was our first year being self insured, there are some distinct advantages to us by having Coopers -Lybrand do the second actuarial study, but Chairman Eggert pointed out tha.t it would.be at twice the cost. 31 BOOK ®�� MAR 2 1 _