CC SR 20210202 I - Shuster Advisory Group Amendment 1 Retirement Consulting
CITY COUNCIL MEETING DATE: 02/02/2021
AGENDA REPORT AGENDA HEADING: Consent Calendar
AGENDA TITLE:
Consideration and possible action to authorize Amendment No. 1 to the professional
services agreement with Shuster Advisory Group, LLC (formerly, SFG Retirement Plan
Consulting, LLC) for financial and retirement planning consulting services.
RECOMMENDED COUNCIL ACTION:
(1) Authorize the Mayor and City Clerk to execute Amendment No. 1 to the
professional services agreement with Shuster Advisory Group, LLC to (a) reflect
the change in consultant’s name; (b) amend the Scope of Services; and (c)
amend the Schedule of Compensation to reflect that payment will now be a flat
fee rather than based on the value of plan assets.
FISCAL IMPACT: None. As with the original contract, there are no costs to the City and
no additional costs to the retirement plan employee participants . The
fees specified will be deducted from the plan assets.
Amount Budgeted: N/A
Additional Appropriation: N/A
Account Number(s): N/A
ORIGINATED BY: Vina Ramos, Deputy Director of Finance
REVIEWED BY: Trang Nguyen, Director of Finance
APPROVED BY: Ara Mihranian, AICP, City Manager
ATTACHED SUPPORTING DOCUMENTS:
A. Amendment No. 1 to Professional Services Agreement with Shuster
Advisory Group, LLC (page A-1)
B. Professional Services Agreement with SFG Retirement Plan Consulting,
LLC (page B-1)
C. October 15, 2019 staff report on an analysis performed on the City’s
retirement plans (page C-1)
BACKGROUND AND DISCUSSION:
On December 13, 2019, the City entered into a three-year agreement with SFG
Retirement Plan Consulting, LLC (SFG) for retirement plan consulting services
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(Attachment B). At no cost to the City and no additional costs to the retirement plan
employee participants, SFG provides certain fiduciary and non-fiduciary services
relating to the City’s § 457 Deferred Compensation Plan, § 401 Money Purchase Plan
and Trust Plan, and Retiree Health Saving Plan. Since 2019, SFG has implemented
new contracts with the City’s employer-sponsored deferred compensation plan provider,
which resulted in lower fees and added investment options for participants. For more
information, the City Council received and filed a report on an analysis related to the
City’s retirement plan administered through ICMA-RC (Attachment C).
On August 27, 2020, SFG filed an Amendment to Articles of Organization of a Limited
Liability Company with the California Secretary of State to change its name from SFG
Retirement Plan Consulting, LLC to Shuster Advisory Group, LLC.
On January 12, 2021, Shuster Advisory Group submitted a request to amend the
contract to (a) reflect the change in consultant’s name; (b) amend the Scope of
Services; and (c) amend the Schedule of Compensation to reflect that payment will now
be a flat fee rather than based on the value of plan assets. The proposed amendment to
the Scope of Services includes limitations on the fiduciary and non-fiduciary services
and requires that the consultant take reasonable steps to protect private participant
information and plan investment data. The proposed amendment to the Schedule of
Compensation will result in an annual flat fee of $22,000 rather than based on the value
of the assets. The proposed amendment is estimated to further reduce fees for the plan
participants. As with the original contract, there are no costs to the City and no
additional costs to the retirement plan employee participants. The fees specified will be
deducted from the plan assets.
ALTERNATIVES:
In addition to the Staff recommendation, the following alternative actions are available
for the City Council’s consideration:
1. Do not authorize the Mayor and City Clerk to execute Amendment No. 1 to
the professional services agreement.
2. Take other action, as deemed appropriate.
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AMENDMENT NO. 1
TO AGREEMENT FOR CONTRACTUAL SERVICES
THIS AMENDMENT TO THE AGREEMENT FOR CONTRACTUAL SERVICES
(“Amendment No. 1”) by and between the CITY OF RANCHO PALOS VERDES (“City”) and
SHUSTER ADVISORY GROUP, LLC, a California limited liability company (“Consultant”)
is effective as of _________________________, 2021.
RECITALS
A. City and Consultant, under the name SFG Retirement Plan Consulting, LLC,
entered into that certain Agreement for Contractual Services dated December 13, 2019
(“Agreement”) whereby Consultant agreed to provide certain fiduciary and non-fiduciary services
relating to the City’s § 457 Deferred Compensation Plan, § 401 Money Purchase Plan and Trust
Plan, and Retiree Health Saving Plan (the “Services”) for three years.
B. On August 27, 2020, Consultant filed an Amendment to Articles of Organization
of a Limited Liability Company with the California Secretary of State to change Consultant’s name
from SFG Retirement Plan Consulting, LLC to Shuster Advisory Group, LLC.
C. City and Consultant now desire to amend the Agreement to (1) reflect the change
in Consultant’s name, (2) amend the Scope of Services, and (3) amend the Schedule of
Compensation to reflect that payment will now be a flat fee rather than based on the value of the
assets.
TERMS
1. Contract Changes. The Agreement is amended as provided herein. Deleted text is
indicated in strikethrough and added text in bold italics.
(a) Section 4.3, Contract Officer, is hereby amended as follows:
“The Contract Officer shall be Angelina GarciaTrang Nguyen, Finance
Director, or such person as may be designated by the City Manager. It shall
be the Consultant’s responsibility to assure that the Contract Officer is kept
informed of the progress of the performance of the services and the
Consultant shall refer any decisions which must be made by City to the
Contract Officer. Unless otherwise specified herein, any approval of City
required hereunder shall mean the approval of the Contract Officer. The
Contract Officer shall have authority, if specified in writing by the City
Manager, to sign all documents on behalf of the City required hereunder to
carry out the terms of this Agreement.”
(b) Section I.A., Fiduciary Services, of Exhibit “A”, Scope of
Services, is hereby amended to add Paragraph 6 as follows:
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“6. Limitations on Fiduciary Services. Consultant shall not be
responsible or liable for the recommendations of or services rendered by
anyone other than Consultant. Consultant’s ability to perform the
Fiduciary Services is contingent upon the rules, policies, processes, and
responsiveness to Consultant’s requests for information of the City, Plan
Sponsor, Record Keeper(s), and/or Third-Party Administrator(s).”
(c) Section I.B., Non-Fiduciary Services, of Exhibit “A”, Scope of
Services, is hereby amended to add Paragraph 11 as follows:
“11. Limitation on Non-Fiduciary Services. Consultant shall not be
responsible or liable for the recommendations of or services rendered by
anyone other than Consultant. Consultant and City will work together to
determine mutually agreed upon dates for the Non-Fiduciary Services.
Consultant’s ability to perform the Non-Fiduciary Services is contingent
upon the rules, policies, processes, and responsiveness to Consultant’s
requests for information of the City, Plan Sponsor, Record Keeper(s),
and/or Third-Party Administrator(s).”
(d) Paragraph 12 of Section I.C., Consulting & Co-Fiduciary
Acknowledgments, of Exhibit “A”, Scope of Services, is hereby amended as
follows:
“City acknowledges that Consultant has no responsibility to provide any
services related to the following types of assets: employer securities; real
estate (except for real estate funds and publicly traded REITs); stock
brokerage accounts or mutual fund windows; in-plan retirement income
annuity products; participant loans; non-publicly traded partnership
interests; other non-publicly traded securities (other than collective trusts
and similar vehicles); or other hard-to-value securities or assets. Such assets
(except for real estate funds, publicly traded REITs, and collective trusts
and similar vehicles) shall be referred to collectively as “Excluded Assets.”
The Excluded Assets shall be disregarded in determining the Fees payable
to Consultant pursuant to Section 3.3 and Exhibit C of this Agreement, and
the Fees shall be calculated only on the remaining assets (the “Included
Assets”).”
(e) Section I.C., Consulting & Co-Fiduciary Acknowledgments, of
Exhibit “A”, Scope of Services, is hereby amended to add Paragraph 16 as
follows:
“Consultant shall take reasonable steps to protect private participant
information and Plan investment data in its possession. Consultant is not
responsible for the assessment of systems and procedures of third parties
for the protection of Plan and participant data. Consultant is not
responsible for the actions or failures to act by the City, other service
providers, or Plan participants relating to protection of data. Consultant
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shall have no liability in the event of a data breach or a violation of Plan
participant privacy rights (under the California Consumer Privacy Act or
otherwise) arising from any cause whatsoever.”
(f) Section V of Exhibit “A”, Scope of Services, is hereby amended
to read as follows:
“V. Consultant will utilize the following personnel to accomplish the Services:
A. Mark Shuster, Managing Member
B. JoAnn Parrino, Partner
C. Other supporting personnel of Shuster Advisory Group, LLC SFG
Retirement Plan Consulting, LLC, including but not limited to:
i. Relationship/Case Manager
ii. Investment Analyst
iii. Compliance Manager/Director
iv. Controller”
(g) Section I.C. of Exhibit “C”, Schedule of Compensation, is
hereby deleted in its entirety and replaced with the following:
“C. Consultant’s Advisory Services Fee Schedule shall be as follows:
Effective January 1, 2021, the annual fee for Services for the Plans shall total
$22,000 and be payable monthly ($1,833.33 per month). Fees shall be deducted
from Plan assets and will be paid to Consultant by the record keeper
(1) The annual fee specific to the § 457(b) and § 401(a) plans shall be
$18,200, payable monthly ($1,516.67 per month), and collected pro-rata
based on Plan assets from both the § 457(b) and § 401(a) plans.
(2) The annual fee specific to the Retiree Health Savings (“RHS”) Plan shall
be $3,800 and payable monthly ($316.67 per month).
Depending on the total assets in the respective plans, Consultant and
ICMA may adjust the division of the total $22,000 annual fee for the
Services between the annual fees specific to the § 457(b) and § 401(a)
plans, on one hand, and the annual fees specific to the RHS Plan, on the
other. Adjustments may be made only once per year and if adjusted, the
total annual fee shall not exceed $22,000.”
(h) Section I.F. of Exhibit “C”, Schedule of Compensation, is hereby
amended as follows:
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“All fees are payable to “Shuster Advisory Group, LLC SFG Retirement
Plan Consulting, LLC”
2. Continuing Effect of Agreement. Except as amended by this Amendment No. 1,
all provisions of the Agreement shall remain unchanged and in full force and effect. From and
after the date of this Amendment No. 1, whenever the term “Agreement” appears in the Agreement,
it shall mean the Agreement, as amended by this Amendment No. 1 to the Agreement.
3. Affirmation of Agreement; Warranty Re Absence of Defaults. City and
Consultant each ratify and reaffirm each and every one of the respective rights and obligations
arising under the Agreement. Each party represents and warrants to the other that there have been
no written or oral modifications to the Agreement other than as provided herein. Each party
represents and warrants to the other that the Agreement is currently an effective, valid, and binding
obligation.
Consultant represents and warrants to City that, as of the date of this Amendment No. 1,
City is not in default of any material term of the Agreement and that there have been no events
that, with the passing of time or the giving of notice, or both, would constitute a material default
under the Agreement.
City represents and warrants to Consultant that, as of the date of this Amendment No. 1,
Consultant is not in default of any material term of the Agreement and that there have been no
events that, with the passing of time or the giving of notice, or both, would constitute a material
default under the Agreement.
4. Adequate Consideration. The parties hereto irrevocably stipulate and agree that
they have each received adequate and independent consideration for the performance of th e
obligations they have undertaken pursuant to this Amendment No. 1.
5. Authority. The persons executing this Amendment No. 1 on behalf of the parties
hereto warrant that (i) such party is duly organized and existing, (ii) they are duly authorized to
execute and deliver this Amendment No. 1 on behalf of said party, (iii) by so executing this
Amendment No. 1, such party is formally bound to the provisions of this Amendment No. 1, and
(iv) the entering into this Amendment No. 1 does not violate any provision of any other agreement
to which said party is bound.
[SIGNATURES ON FOLLOWING PAGE]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date
and year first-above written.
CITY:
CITY OF RANCHO PALOS VERDES, a
municipal corporation
____________________________________
Eric Alegria, Mayor
ATTEST:
_________________________________
Emily Colborn, City Clerk
APPROVED AS TO FORM:
ALESHIRE & WYNDER, LLP
_________________________________
William W. Wynder, City Attorney
CONSULTANT:
SHUSTER ADVISORY GROUP, LLC, a
California limited liability company
By: ________________________________
Name: Mark Shuster
Title: Managing Member
By: ________________________________
Name: JoAnn Parrino
Title: Partner / Chief Sales Officer
Address: 225 South Lake Avenue, Suite 600
Pasadena, CA 91101
Two corporate officer signatures required when Consultant is a corporation, with one signature required from
each of the following groups: 1) Chairman of the Board, President or any Vice President; and 2) Secretary, any
Assistant Secretary, Chief Financial Officer or any Assistant Treasurer. CONSULTANT’S SIGNATURES
SHALL BE DULY NOTARIZED, AND APPROPRIATE ATTESTATIONS SHALL BE INCLUDED AS
MAY BE REQUIRED BY THE BYLAWS, ARTICLES OF INCORPORATION, OR OTHER RULES OR
REGULATIONS APPLICABLE TO CONSULTANT’S BUSINESS ENTITY.
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01203.0007/692280.2
CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT
STATE OF CALIFORNIA
COUNTY OF LOS ANGELES
On __________, 2021 before me, ________________, personally appeared ________________, proved to me on the
basis of satisfactory evidence to be the person(s) whose names(s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by
his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted,
executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true
and correct.
WITNESS my hand and official seal.
Signature: _____________________________________
OPTIONAL
Though the data below is not required by law, it may prove valuable to persons relying on the document and could
prevent fraudulent reattachment of this form.
CAPACITY CLAIMED BY SIGNER DESCRIPTION OF ATTACHED DOCUMENT
INDIVIDUAL
CORPORATE OFFICER
_______________________________
TITLE(S)
PARTNER(S) LIMITED
GENERAL
ATTORNEY-IN-FACT
TRUSTEE(S)
GUARDIAN/CONSERVATOR
OTHER_______________________________
______________________________________
SIGNER IS REPRESENTING:
(NAME OF PERSON(S) OR ENTITY(IES))
_____________________________________________
_____________________________________________
___________________________________
TITLE OR TYPE OF DOCUMENT
___________________________________
NUMBER OF PAGES
___________________________________
DATE OF DOCUMENT
___________________________________
SIGNER(S) OTHER THAN NAMED ABOVE
A notary public or other officer completing this certificate verifies only the identity of the individual who signed the
document to which this certificate is attached, and not the truthfulness, accuracy or validity of that document.
A-6
01203.0007/692280.2
CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT
STATE OF CALIFORNIA
COUNTY OF LOS ANGELES
On __________, 2021 before me, ________________, personally appeared ________________, proved to me on the
basis of satisfactory evidence to be the person(s) whose names(s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by
his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted,
executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true
and correct.
WITNESS my hand and official seal.
Signature: _____________________________________
OPTIONAL
Though the data below is not required by law, it may prove valuable to persons relying on the document and could
prevent fraudulent reattachment of this form.
CAPACITY CLAIMED BY SIGNER DESCRIPTION OF ATTACHED DOCUMENT
INDIVIDUAL
CORPORATE OFFICER
_______________________________
TITLE(S)
PARTNER(S) LIMITED
GENERAL
ATTORNEY-IN-FACT
TRUSTEE(S)
GUARDIAN/CONSERVATOR
OTHER_______________________________
______________________________________
SIGNER IS REPRESENTING:
(NAME OF PERSON(S) OR ENTITY(IES))
_____________________________________________
_____________________________________________
___________________________________
TITLE OR TYPE OF DOCUMENT
___________________________________
NUMBER OF PAGES
___________________________________
DATE OF DOCUMENT
___________________________________
SIGNER(S) OTHER THAN NAMED ABOVE
A notary public or other officer completing this certificate verifies only the identity of the individual who signed the
document to which this certificate is attached, and not the truthfulness, accuracy or validity of that document.
A-7
CONTRACT SERVICES AGREEMENT
By and Between
CITY OF RANCHO PALOS VERDES
and
SFG RETIREMENT PLAN CONSULTING, LLC
01135 0001/559520 1 1
B-1
AGREEMENT FOR CONTRACT SERVICES
BETWEEN THE CITY OF RANCHO PALOS VERDES AND
SFG RETIREMENT PLAN CONSULTING, LLC
THIS AGREEMENT FOR CONTRACT SERVICES (herein "Agreement") is made and
entered into this 13 day of 2019 by and between the City of Rancho Palos Verdes, a
California municipal corporation ("City") and SFG Retirement Plan Consulting, LLC, a limited
liability company ("Consultant") City and Consultant may be referred to, individually or
collectively, as "Party" or"Parties "
RECITALS
A City has sought, by issuance of a Request for Proposals or Invitation for Bids, the
performance of the services defined and described particularly in Article 1 of this Agreement
B Consultant, following submission of a proposal or bid for the performance of the
services defined and described particularly in Article 1 of this Agreement, was selected by the
City to perform those services
C Pursuant to the City of Rancho Palos Verdes Municipal Code, City has authority
to enter into and execute this Agreement
D The Parties desire to formalize the selection of Consultant for performance of
those services defined and described particularly in Article 1 of this Agreement and desire that
the terms of that performance be as particularly defined and described herein
OPERATIVE PROVISIONS
NOW, THEREFORE, in consideration of the mutual promises and covenants made by
the Parties and contained herein and other consideration, the value and adequacy of which are
hereby acknowledged, the parties agree as follows
ARTICLE 1. SERVICES OF CONSULTANT
1 1 Scope of Services
In compliance with all terms and conditions of this Agreement, the Consultant shall
provide those services specified in the "Scope of Services" attached hereto as Exhibit "A" and
incorporated herein by this reference, which may be referred to herein as the "services" or
work" hereunder As a material inducement to the City entering into this Agreement, Consultant
represents and warrants that it has the qualifications, experience, and facilities necessary to
properly perform the services required under this Agreement in a thorough, competent, and
professional manner, and is experienced in performing the work and services contemplated
herein Consultant shall at all times faithfully, competently and to the best of its ability,
experience and talent, perform all services described herein Consultant covenants that it shall
follow the highest professional standards in performing the work and services required hereunder
and that all materials will be both of good quality as well as fit for the purpose intended For
purposes of this Agreement, the phrase "highest professional standards" shall mean those
01135 0001/559520 1 B-2
standards of practice recognized by one or more first-class firms performing similar work under
similar circumstances
1 2 Consultant's Proposal
The Scope of Services shall include the Consultant's scope of work or bid which shall be
incorporated herein by this reference as though fully set forth herein In the event of any
inconsistency between the terms of such proposal and this Agreement, the terms of this
Agreement shall govern
1 3 Compliance with Law
Consultant shall keep itself informed concerning, and shall render all services hereunder
in accordance with, all ordinances, resolutions, statutes, rules, and regulations of the City and any
Federal, State or local governmental entity having jurisdiction in effect at the time service is
rendered
1.4 California Labor Law.
If the Scope of Services includes any "public work" or "maintenance work," as those
terms are defined in California Labor Code section 1720 et seq and California Code of
Regulations, Title 8, Section 16000 et seq , and if the total compensation is $1,000 or more,
Consultant shall pay prevailing wages for such work and comply with the requirements in
California Labor Code section 1770 et seg and 1810 et seq , and all other applicable laws,
including the following requirements
a) Public Work The Parties acknowledge that some or all of the work to be
performed under this Agreement is a "public work" as defined in Labor Code Section 1720 and
that this Agreement is therefore subject to the requirements of Division 2, Part 7, Chapter 1
commencing with Section 1720) of the California Labor Code relating to public works contracts
and the rules and regulations established by the Department of Industrial Relations ("DIR")
implementing such statutes The work performed under this Agreement is subject to compliance
monitoring and enforcement by the DIR Consultant shall post job site notices, as prescribed by
regulation
b) Prevailing Wages Consultant shall pay prevailing wages to the extent
required by Labor Code Section 1771 Pursuant to Labor Code Section 1773 2, copies of the
prevailing rate of per diem wages are on file at City Hall and will be made available to any
interested party on request By initiating any work under this Agreement, Consultant
acknowledges receipt of a copy of the Department of Industrial Relations (DIR) determination of
the prevailing rate of per diem wages, and Consultant shall post a copy of the same at each job
site where work is performed under this Agreement
c) Penalty for Failure to Pay Prevailing Wages Consultant shall comply with
and be bound by the provisions of Labor Code Sections 1774 and 1775 concerning the payment
of prevailing rates of wages to workers and the penalties for failure to pay prevailing wages The
Consultant shall, as a penalty to the City, forfeit two hundred dollars ($200) for each calendar
01135 0001/559520 1 2 B-3
day, or portion thereof, for each worker paid less than the prevailing rates as determined by the
DIR for the work or craft in which the worker is employed for any public work done pursuant to
this Agreement by Consultant or by any subcontractor
d) Payroll Records Consultant shall comply with and be bound by the
provisions of Labor Code Section 1776, which requires Consultant and each subconsultant to
keep accurate payroll records and verify such records in writing under penalty of perjury, as
specified in Section 1776, certify and make such payroll records available for inspection as
provided by Section 1776, and inform the City of the location of the records
e) Apprentices Consultant shall comply with and be bound by the provisions
of Labor Code Sections 1777 5, 1777 6, and 1777 7 and California Code of Regulations Title 8,
Section 200 et seq concerning the employment of apprentices on public works projects
Consultant shall be responsible for compliance with these aforementioned Sections for all
apprenticeable occupations Prior to commencing work under this Agreement, Consultant shall
provide City with a copy of the information submitted to any applicable apprenticeship program
Within sixty (60) days after concluding work pursuant to this Agreement, Consultant and each of
its subconsultants shall submit to the City a verified statement of the journeyman and apprentice
hours performed under this Agreement
f) Eight-Hour Work Day Consultant acknowledges that eight (8) hours labor
constitutes a legal day's work Consultant shall comply with and be bound by Labor Code
Section 1810
g) Penalties for Excess Hours Consultant shall comply with and be bound by
the provisions of Labor Code Section 1813 concerning penalties for workers who work excess
hours The Consultant shall, as a penalty to the City, forfeit twenty-five dollars ($25) for each
worker employed in the performance of this Agreement by the Consultant or by any
subcontractor for each calendar day during which such worker is required or permitted to work
more than eight (8) hours in any one calendar day and forty (40) hours in any one calendar week
in violation of the provisions of Division 2, Part 7, Chapter 1, Article 3 of the Labor Code
Pursuant to Labor Code section 1815, work performed by employees of Consultant in excess of
eight (8) hours per day, and forty (40) hours during any one week shall be permitted upon public
work upon compensation for all hours worked in excess of 8 hours per day at not less than one
and one-half(1'/2) times the basic rate of pay
h) Workers' Compensation California Labor Code Sections 1860 and 3700
provide that every employer will be required to secure the payment of compensation to its
employees if it has employees In accordance with the provisions of California Labor Code
Section 1861, Consultant certifies as follows
I am aware of the provisions of Section 3700 of the Labor Code which require
every employer to be insured against liability for workers' compensation or to
undertake self-insurance in accordance with the provisions of that code, and I will
comply with such provisions before commencing the performance of the work of
this contract "
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Consultant's Authorized Initials 9
i) Consultant's Responsibility for Subcontractors For every subcontractor
who will perform work under this Agreement, Consultant shall be responsible for such
subcontractor's compliance with Division 2, Part 7, Chapter 1 (commencing with Section 1720)
of the California Labor Code, and shall make such compliance a requirement in any contract
with any subcontractor for work under this Agreement Consultant shall be required to take all
actions necessary to enforce such contractual provisions and ensure subcontractor's compliance,
including without limitation, conducting a review of the certified payroll records of the
subcontractor on a periodic basis or upon becoming aware of the failure of the subcontractor to
pay his or her workers the specified prevailing rate of wages Consultant shall diligently take
corrective action to halt or rectify any such failure by any subcontractor
1 5 Licenses, Permits, Fees and Assessments
Consultant shall obtain at its sole cost and expense such licenses, permits and approvals
as may be required by law for the performance of the services required by this Agreement
Consultant shall have the sole obligation to pay for any fees, assessments and taxes, plus
applicable penalties and interest, which may be imposed by law and anse from or are necessary
for the Consultant's performance of the services required by this Agreement, and shall
indemnify, defend and hold harmless City, its officers, employees or agents of City, against any
such fees, assessments, taxes, penalties or interest levied, assessed or imposed against City
hereunder
1 6 Familiarity with Work.
By executing this Agreement, Consultant warrants that Consultant (i) has thoroughly
investigated and considered the scope of services to be performed, (u) has carefully considered
how the services should be performed, and (iii) fully understands the facilities, difficulties and
restrictions attending performance of the services under this Agreement If the services involve
work upon any site, Consultant warrants that Consultant has or will investigate the site and is or
will be fully acquainted with the conditions there existing, prior to commencement of services
hereunder Should the Consultant discover any latent or unknown conditions, which will
matenally affect the performance of the services hereunder, Consultant shall immediately inform
the City of such fact and shall not proceed except at Consultant's risk until written instructions
are received from the Contract Officer
1 7 Care ofWork
The Consultant shall adopt reasonable methods during the life of the Agreement to
furnish continuous protection to the work, and the equipment, materials, papers, documents,
plans, studies and/or other components thereof to prevent losses or damages, and shall be
responsible for all such damages, to persons or property, until acceptance of the work by City,
except such losses or damages as may be caused by City's own negligence
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B-5
1 8 Further Responsibilities of Parties
Both parties agree to use reasonable care and diligence to perform their respective
obligations under this Agreement Both parties agree to act in good faith to execute all
instruments, prepare all documents and take all actions as may be reasonably necessary to carry
out the purposes of this Agreement Unless hereafter specified, neither party shall be responsible
for the service of the other
1 9 Additional Services.
City shall have the right at any time during the performance of the services, without
invalidating this Agreement, to order extra work beyond that specified in the Scope of Services
or make changes by altering, adding to or deducting from said work No such extra work may be
undertaken unless a written order is first given by the Contract Officer to the Consultant,
incorporating therein any adjustment in (i) the Contract Sum for the actual costs of the extra
work, and/or (ii) the time to perform this Agreement, which said adjustments are subject to the
written approval of the Consultant Any increase in compensation of up to ten percent (10%) of
the Contract Sum or $25,000, whichever is less, or, in the time to perform of up to one hundred
eighty (180) days, may be approved by the Contract Officer Any greater increases, taken either
separately or cumulatively, must be approved by the City Council It is expressly understood by
Consultant that the provisions of this Section shall not apply to services specifically set forth in
the Scope of Services Consultant hereby acknowledges that it accepts the risk that the services to
be provided pursuant to the Scope of Services may be more costly or time consuming than
Consultant anticipates and that Consultant shall not be entitled to additional compensation
therefor City may in its sole and absolute discretion have similar work done by other
Consultants No claims for an increase in the Contract Sum or time for performance shall be
valid unless the procedures established in this Section are followed
1 10 Special Requirements
Additional terms and conditions of this Agreement, if any, which are made a part hereof
are set forth in the "Special Requirements" attached hereto as Exhibit "B" and incorporated
herein by this reference In the event of a conflict between the provisions of Exhibit "B" and any
other provisions of this Agreement, the provisions of Exhibit"B" shall govern
ARTICLE 2. COMPENSATION AND METHOD OF PAYMENT
2 1 Contract Sum.
Subject to any limitations set forth in this Agreement, City agrees to pay Consultant the
amounts specified in the "Schedule of Compensation" attached hereto as Exhibit "C" and
incorporated herein by this reference The total compensation, including reimbursement for
actual expenses, shall not exceed L2CO Dollars ($0 )
the "Contract Sum"), unless additional compensation is approved pursuant to Section 1 9
01135 0001/5595201 5 B-6
2 2 Method of Compensation
The method of compensation may include (i) a lump sum payment upon completion, (ii)
payment in accordance with specified tasks or the percentage of completion of the services, less
contract retention, (iii) payment for time and materials based upon the Consultant's rates as
specified in the Schedule of Compensation, provided that (a) time estimates are provided for the
performance of sub tasks, (b) contract retention is maintained, and (c) the Contract Sum is not
exceeded, or(iv) such other methods as may be specified in the Schedule of Compensation
2.3 Reimbursable Expenses.
Compensation may include reimbursement for actual and necessary expenditures for
reproduction costs, telephone expenses, and travel expenses approved by the Contract Officer in
advance, or actual subcontractor expenses of an approved subcontractor pursuant to Section 4 5,
and only if specified in the Schedule of Compensation The Contract Sum shall include the
attendance of Consultant at all project meetings reasonably deemed necessary by the City
Coordination of the performance of the work with City is a critical component of the services If
Consultant is required to attend additional meetings to facilitate such coordination, Consultant
shall not be entitled to any additional compensation for attending said meetings
2.4 Invoices
Each month Consultant shall furnish to City an original invoice for all work performed
and expenses incurred during the preceding month in a form approved by City's Director of
Finance By submitting an invoice for payment under this Agreement, Consultant is certifying
compliance with all provisions of the Agreement The invoice shall contain all information
specified in Exhibit "C", and shall detail charges for all necessary and actual expenses by the
following categories labor (by sub-category), travel, materials, equipment, supplies, and sub-
contractor contracts Sub-contractor charges shall also be detailed by such categories Consultant
shall not invoice City for any duplicate services performed by more than one person
City shall independently review each invoice submitted by the Consultant to determine
whether the work performed and expenses incurred are in compliance with the provisions of this
Agreement Except as to any charges for work performed or expenses incurred by Consultant
which are disputed by City, or as provided in Section 7 3, City will use its best efforts to cause
Consultant to be paid within forty-five (45) days of receipt of Consultant's correct and
undisputed invoice, however, Consultant acknowledges and agrees that due to City warrant run
procedures, the City cannot guarantee that payment will occur within this time period In the
event any charges or expenses are disputed by City, the original invoice shall be returned by City
to Consultant for correction and resubmission Review and payment by City for any invoice
provided by the Consultant shall not constitute a waiver of any rights or remedies provided
herein or any applicable law
2 5 Waiver.
Payment to Consultant for work performed pursuant to this Agreement shall not be
deemed to waive any defects in work performed by Consultant
01135 0001/559520 1 6 B-7
ARTICLE 3. PERFORMANCE SCHEDULE
3 1 Time of Essence.
Time is of the essence in the performance of this Agreement
3 2 Schedule of Performance
Consultant shall commence the services pursuant to this Agreement upon receipt of a
written notice to proceed and shall perform all services within the time period(s) established in
the "Schedule of Performance" attached hereto as Exhibit "D" and incorporated herein by this
reference When requested by the Consultant, extensions to the time period(s) specified in the
Schedule of Performance may be approved in writing by the Contract Officer but not exceeding
one hundred eighty (180) days cumulatively
3 3 Force Maieure.
The time period(s) specified in the Schedule of Performance for performance of the
services rendered pursuant to this Agreement shall be extended because of any delays due to
unforeseeable causes beyond the control and without the fault or negligence of the Consultant,
including, but not restricted to, acts of God or of the public enemy, unusually severe weather,
fires, earthquakes, floods, epidemics, quarantine restrictions, riots, strikes, freight embargoes,
wars, litigation, and/or acts of any governmental agency, including the City, if the Consultant
shall within ten (10) days of the commencement of such delay notify the Contract Officer in
writing of the causes of the delay The Contract Officer shall ascertain the facts and the extent of
delay, and extend the time for performing the services for the period of the enforced delay when
and if in the judgment of the Contract Officer such delay is justified The Contract Officer's
determination shall be final and conclusive upon the parties to this Agreement In no event shall
Consultant be entitled to recover damages against the City for any delay in the performance of
this Agreement, however caused, Consultant's sole remedy being extension of the Agreement
pursuant to this Section
3 4 Term.
Unless earlier terminated in accordance with Article 7 of this Agreement, this Agreement
shall continue in full force and effect until completion of the services but not exceeding three (3)
years from the date hereof, except as otherwise provided in the Schedule of Performance (Exhibit
D»)
ARTICLE 4 COORDINATION OF WORK
4 1 Representatives and Personnel of Consultant
The following principals of Consultant ("Principals") are hereby designated as being the
principals and representatives of Consultant authorized to act in its behalf with respect to the
work specified herein and make all decisions in connection therewith
011350001/559520 1 7 B-8
Mark Shuster Managing Member
Name) Title)
It is expressly understood that the experience, knowledge, capability and reputation of the
foregoing principals were a substantial inducement for City to enter into this Agreement
Therefore, the foregoing principals shall be responsible during the term of this Agreement for
directing all activities of Consultant and devoting sufficient time to personally supervise the
services hereunder All personnel of Consultant, and any authorized agents, shall at all times be
under the exclusive direction and control of the Principals For purposes of this Agreement, the
foregoing Principals may not be replaced nor may their responsibilities be substantially reduced
by Consultant without the express written approval of City Additionally, Consultant shall utilize
only competent personnel to perform services pursuant to this Agreement Consultant shall make
every reasonable effort to maintain the stability and continuity of Consultant's staff and
subcontractors, if any, assigned to perform the services required under this Agreement
Consultant shall notify City of any changes in Consultant's staff and subcontractors, if any,
assigned to perform the services required under this Agreement, prior to and during any such
performance
4 2 Status of Consultant
Consultant shall have no authority to bind City in any manner, or to incur any obligation,
debt or liability of any kind on behalf of or against City, whether by contract or otherwise, unless
such authority is expressly conferred under this Agreement or is otherwise expressly conferred in
writing by City Consultant shall not at any time or in any manner represent that Consultant or
any of Consultant's officers, employees, or agents are in any manner officials, officers,
employees or agents of City Neither Consultant, nor any of Consultant's officers, employees or
agents, shall obtain any rights to retirement, health care or any other benefits which may
otherwise accrue to City's employees Consultant expressly waives any claim Consultant may
have to any such rights
4 3 Contract Officer.
The Contract Officer shall be Angelina Garcia, Finance Director, or such person as may
be designated by the City Manager It shall be the Consultant's responsibility to assure that the
Contract Officer is kept informed of the progress of the performance of the services and the
Consultant shall refer any decisions which must be made by City to the Contract Officer Unless
otherwise specified herein, any approval of City required hereunder shall mean the approval of
the Contract Officer The Contract Officer shall have authority, if specified in writing by the City
Manager, to sign all documents on behalf of the City required hereunder to carry out the terms of
this Agreement
4 4 Independent Consultant.
Neither the City nor any of its employees shall have any control over the manner, mode or
means by which Consultant, its agents or employees, perform the services required herein, except
as otherwise set forth herein City shall have no voice in the selection, discharge, supervision or
01 135 0001/559520 I 8 B-9
control of Consultant's employees, servants, representatives or agents, or in fixing their number,
compensation or hours of service Consultant shall perform all services required herein as an
independent contractor of City and shall remain at all times as to City a wholly independent
contractor with only such obligations as are consistent with that role Consultant shall not at any
time or in any manner represent that it or any of its agents or employees are agents or employees
of City City shall not in any way or for any purpose become or be deemed to be a partner of
Consultant in its business or otherwise or a joint venturer or a member of any point enterprise
with Consultant
4 5 Prohibition Against Subcontracting or Assignment
The experience, knowledge, capability and reputation of Consultant, its principals and
employees were a substantial inducement for the City to enter into this Agreement Therefore,
Consultant shall not contract with any other entity to perform in whole or in part the services
required hereunder without the express written approval of the City In addition, neither this
Agreement nor any interest herein may be transferred, assigned, conveyed, hypothecated or
encumbered voluntarily or by operation of law, whether for the benefit of creditors or otherwise,
without the prior written approval of City Transfers restricted hereunder shall include the
transfer to any person or group of persons acting in concert of more than twenty five percent
25%) of the present ownership and/or control of Consultant, taking all transfers into account on
a cumulative basis In the event of any such unapproved transfer, including any bankruptcy
proceeding, this Agreement shall be void No approved transfer shall release the Consultant or
any surety of Consultant of any liability hereunder without the express consent of City
ARTICLE 5. INSURANCE AND INDEMNIFICATION
5 1 Insurance Coverages
Without limiting Consultant's indemnification of City, and prior to commencement of
any services under this Agreement, Consultant shall obtain, provide and maintain at its own
expense during the term of this Agreement, policies of insurance of the type and amounts
described below and in a form satisfactory to City
a) General liability insurance Consultant shall maintain commercial general
liability insurance with coverage at least as broad as Insurance Services Office form CG 00 01, in
an amount not less than $1,000,000 per occurrence, $2,000,000 general aggregate, for bodily
injury, personal injury, and property damage The policy must include contractual liability that
has not been amended Any endorsement restricting standard ISO "insured contract" language
will not be accepted
b) Automobile liability insurance Consultant shall maintain automobile
insurance at least as broad as Insurance Services Office form CA 00 01 covering bodily injury
and property damage for all activities of the Consultant arising out of or in connection with
Services to be performed under this Agreement, including coverage for any owned, hired, non-
owned or rented vehicles, in an amount not less than $1,000,000 combined single limit for each
accident
01135 0001/559520 1 9 B-10
c) Professional liability (errors & omissions) insurance Consultant shall
maintain professional liability insurance that covers the Services to be performed in connection
with this Agreement, in the minimum amount of$1,000,000 per claim and in the aggregate Any
policy inception date, continuity date, or retroactive date must be before the effective date of this
Agreement and Consultant agrees to maintain continuous coverage through a period no less than
three (3) years after completion of the services required by this Agreement
d) Workers' compensation insurance Consultant shall maintain Workers'
Compensation Insurance (Statutory Limits) and Employer's Liability Insurance (with limits of at
least$1,000,000)
e) Subcontractors Consultant shall include all subcontractors as insureds
under its policies or shall furnish separate certificates and certified endorsements for each
subcontractor All coverages for subcontractors shall include all of the requirements stated
herein
f) Additional Insurance Policies of such other insurance, as may be required
in the Special Requirements in Exhibit "B"
5 2 General Insurance Requirements
a) Proof of insurance Consultant shall provide certificates of insurance to
City as evidence of the insurance coverage required herein, along with a waiver of subrogation
endorsement for workers' compensation Insurance certificates and endorsements must be
approved by City's Risk Manager prior to commencement of performance Current certification
of insurance shall be kept on file with City at all times during the term of this Agreement City
reserves the right to require complete, certified copies of all required insurance policies, at any
time
b) Duration of coverage Consultant shall procure and maintain for the
duration of this Agreement insurance against claims for injuries to persons or damages to
property, which may arise from or in connection with the performance of the Services hereunder
by Consultant, its agents, representatives, employees or subconsultants
c) Pnmary/noncontributing Coverage provided by Consultant shall be
primary and any insurance or self-insurance procured or maintained by City shall not be required
to contribute with it The limits of insurance required herein may be satisfied by a combination of
primary and umbrella or excess insurance Any umbrella or excess insurance shall contain or be
endorsed to contain a provision that such coverage shall also apply on a primary and non-
contributory basis for the benefit of City before the City's own insurance or self-insurance shall
be called upon to protect it as a named insured
d) City's rights of enforcement In the event any policy of insurance required
under this Agreement does not comply with these specifications or is canceled and not replaced,
City has the right but not the duty to obtain the insurance it deems necessary and any premium
paid by City will be promptly reimbursed by Consultant or City will withhold amounts sufficient
to pay premium from Consultant payments In the alternative, City may cancel this Agreement
01135 0001/559520 1 10 B-11
e) Acceptable insurers All insurance policies shall be issued by an insurance
company currently authorized by the Insurance Commissioner to transact business of insurance
or that is on the List of Approved Surplus Line Insurers in the State of California, with an
assigned policyholders' Rating of A- (or higher) and Financial Size Category Class VI (or larger)
in accordance with the latest edition of Best's Key Rating Guide, unless otherwise approved by
the City's Risk Manager
f) Waiver of subrogation All insurance coverage maintained or procured
pursuant to this agreement shall be endorsed to waive subrogation against City, its elected or
appointed officers, agents, officials, employees and volunteers or shall specifically allow
Consultant or others providing insurance evidence in compliance with these specifications to
waive their right of recovery prior to a loss Consultant hereby waives its own right of recovery
against City, and shall require similar written express waivers and insurance clauses from each of
its subconsultants
g) Enforcement of contract provisions (non-estoppel) Consultant
acknowledges and agrees that any actual or alleged failure on the part of the City to inform
Consultant of non-compliance with any requirement imposes no additional obligations on the
City nor does it waive any rights hereunder
h) Requirements not limiting Requirements of specific coverage features or
limits contained in this section are not intended as a limitation on coverage, limits or other
requirements, or a waiver of any coverage normally provided by any insurance Specific
reference to a given coverage feature is for purposes of clarification only as it pertains to a given
issue and is not intended by any party or insured to be all inclusive, or to the exclusion of other
coverage, or a waiver of any type If the Consultant maintains higher limits than the minimums
shown above, the City requires and shall be entitled to coverage for the higher limits maintained
by the Consultant Any available insurance proceeds in excess of the specified minimum limits of
insurance and coverage shall be available to the City
i) Notice of cancellation Consultant agrees to oblige its insurance agent or
broker and insurers to provide to City with a thirty (30) day notice of cancellation (except for
nonpayment for which a ten (10) day notice is required) or nonrenewal of coverage for each
required coverage
l) Additional insured status General liability policies shall provide or be
endorsed to provide that City and its officers, officials, employees, and agents, and volunteers
shall be additional insureds under such policies This provision shall also apply to any
excess/umbrella liability policies
k) Prohibition of undisclosed coverage limitations None of the coverages
required herein will be in compliance with these requirements if they include any limiting
endorsement of any kind that has not been first submitted to City and approved of in writing
1) Separation of insureds A severability of interests provision must apply for
all additional insureds ensuring that Consultant's insurance shall apply separately to each insured
011350001/559520 1 11 B-12
against whom claim is made or suit is brought, except with respect to the insurer's limits of
liability The policy(ies) shall not contain any cross-liability exclusions
m) Pass through clause Consultant agrees to ensure that its subconsultants,
subcontractors, and any other party involved with the project who is brought onto or involved in
the project by Consultant, provide the same minimum insurance coverage and endorsements
required of Consultant Consultant agrees to monitor and review all such coverage and assumes
all responsibility for ensuring that such coverage is provided in conformity with the requirements
of this section Consultant agrees that upon request, all agreements with consultants,
subcontractors, and others engaged in the project will be submitted to City for review
n) Agency's right to revise specifications The City reserves the right at any
time during the term of the contract to change the amounts and types of insurance required by
giving the Consultant ninety (90) days advance written notice of such change If such change
results in substantial additional cost to the Consultant, the City and Consultant may renegotiate
Consultant's compensation
o) Self-insured retentions Any self-insured retentions must be declared to
and approved by City City reserves the right to require that self-insured retentions be eliminated,
lowered, or replaced by a deductible Self-insurance will not be considered to comply with these
specifications unless approved by City
p) Timely notice of claims Consultant shall give City prompt and timely
notice of claims made or suits instituted that arise out of or result from Consultant's performance
under this Agreement, and that involve or may involve coverage under any of the required
liability policies
q) Additional insurance Consultant shall also procure and maintain, at its
own cost and expense, any additional kinds of insurance, which in its own judgment may be
necessary for its proper protection and prosecution of the work
5.3 Indemnification.
To the full extent permitted by law, Consultant agrees to indemnify, defend and hold
harmless the City, its officers, employees and agents ("Indemnified Parties") against, and will
hold and save them and each of them harmless from, any and all actions, either judicial,
administrative, arbitration or regulatory claims, damages to persons or property, losses, costs,
penalties, obligations, errors, omissions or liabilities whether actual or threatened (herein "claims
or liabilities") that may be asserted or claimed by any person, firm or entity arising out of or in
connection with the negligent performance of the work, operations or activities provided herein
of Consultant, its officers, employees, agents, subcontractors, or invitees, or any individual or
entity for which Consultant is legally liable ("indemnitors"), or arising from Consultant's or
indemnitors' reckless or willful misconduct, or arising from Consultant's or indemnitors'
negligent performance of or failure to perform any term, provision, covenant or condition of this
Agreement, and in connection therewith
01135 0001/559520 1 12 B-13
a) Consultant will defend any action or actions filed in connection with any
of said claims or liabilities and will pay all costs and expenses, including legal costs and
attorneys' fees incurred in connection therewith,
b) Consultant will promptly pay any judgment rendered against the City, its
officers, agents or employees for any such claims or liabilities arising out of or in connection
with the negligent performance of or failure to perform such work, operations or activities of
Consultant hereunder, and Consultant agrees to save and hold the City, its officers, agents, and
employees harmless therefrom,
c) In the event the City, its officers, agents or employees is made a party to
any action or proceeding filed or prosecuted against Consultant for such damages or other claims
arising out of or in connection with the negligent performance of or failure to perform the work,
operation or activities of Consultant hereunder, Consultant agrees to pay to the City, its officers,
agents or employees, any and all costs and expenses incurred by the City, its officers, agents or
employees in such action or proceeding, including but not limited to, legal costs and attorneys'
fees
Consultant shall incorporate similar indemnity agreements with its subcontractors and if
it fails to do so Consultant shall be fully responsible to indemnify City hereunder therefore, and
failure of City to monitor compliance with these provisions shall not be a waiver hereof This
indemnification includes claims or liabilities arising from any negligent or wrongful act, error or
omission, or reckless or willful misconduct of Consultant in the performance of professional
services hereunder The provisions of this Section do not apply to claims or liabilities occurring
as a result of City's sole negligence or willful acts or omissions, but, to the fullest extent
permitted by law, shall apply to claims and liabilities resulting in part from City's negligence,
except that design professionals' indemnity hereunder shall be limited to claims and liabilities
arising out of the negligence, recklessness or willful misconduct of the design professional The
indemnity obligation shall be binding on successors and assigns of Consultant and shall survive
termination of this Agreement
ARTICLE 6 RECORDS, REPORTS,AND RELEASE OF INFORMATION
6.1 Records
Consultant shall keep, and require subcontractors to keep, such ledgers, books of
accounts, invoices, vouchers, canceled checks, reports, studies or other documents relating to the
disbursements charged to City and services performed hereunder (the "books and records"), as
shall be necessary to perform the services required by this Agreement and enable the Contract
Officer to evaluate the performance of such services Any and all such documents shall be
maintained in accordance with generally accepted accounting principles and shall be complete
and detailed The Contract Officer shall have full and free access to such books and records at all
times during normal business hours of City, including the right to inspect, copy, audit and make
records and transcripts from such records Such records shall be maintained for a period of three
3) years following completion of the services hereunder, and the City shall have access to such
records in the event any audit is required In the event of dissolution of Consultant's business,
custody of the books and records may be given to City, and access shall be provided by
Consultant's successor in interest Notwithstanding the above, the Consultant shall fully
01135 0001/559520 1 13 B-14
cooperate with the City in providing access to the books and records if a public records request is
made and disclosure is required by law including but not limited to the California Public Records
Act
6 2 Reports.
Consultant shall periodically prepare and submit to the Contract Officer such reports
concerning the performance of the services required by this Agreement as the Contract Officer
shall require Consultant hereby acknowledges that the City is greatly concerned about the cost of
work and services to be performed pursuant to this Agreement For this reason, Consultant agrees
that if Consultant becomes aware of any facts, circumstances, techniques, or events that may or
will materially increase or decrease the cost of the work or services contemplated herein or, if
Consultant is providing design services, the cost of the project being designed, Consultant shall
promptly notify the Contract Officer of said fact, circumstance, technique or event and the
estimated increased or decreased cost related thereto and, if Consultant is providing design
services, the estimated increased or decreased cost estimate for the project being designed
6.3 Ownership of Documents.
All drawings, specifications, maps, designs, photographs, studies, surveys, data, notes,
computer files, reports, records, documents and other materials (the "documents and materials")
prepared by Consultant, its employees, subcontractors and agents in the performance of this
Agreement shall be the property of City and shall be delivered to City upon request of the
Contract Officer or upon the termination of this Agreement, and Consultant shall have no claim
for further employment or additional compensation as a result of the exercise by City of its full
rights of ownership use, reuse, or assignment of the documents and materials hereunder Any use,
reuse or assignment of such completed documents for other projects and/or use of uncompleted
documents without specific written authorization by the Consultant will be at the City's sole risk
and without liability to Consultant, and Consultant's guarantee and warranties shall not extend to
such use, reuse or assignment Consultant may retain copies of such documents for its own use
Consultant shall have the right to use the concepts embodied therein All subcontractors shall
provide for assignment to City of any documents or materials prepared by them, and in the event
Consultant fails to secure such assignment, Consultant shall indemnify City for all damages
resulting therefrom Moreover, Consultant with respect to any documents and materials that may
qualify as "works made for hire" as defined in 17 U S C § 101, such documents and materials
are hereby deemed "works made for hire" for the City
6.4 Confidentiality and Release of Information
a) All information gained or work product produced by Consultant in
performance of this Agreement shall be considered confidential, unless such information is in the
public domain or already known to Consultant Consultant shall not release or disclose any such
information or work product to persons or entities other than City without prior written
authorization from the Contract Officer
b) Consultant, its officers, employees, agents or subcontractors, shall not,
without prior written authorization from the Contract Officer or unless requested by the City
01135 0001/559520 1 14 B-15
Attorney, voluntarily provide documents, declarations, letters of support, testimony at
depositions, response to interrogatories or other information concerning the work performed
under this Agreement Response to a subpoena or court order shall not be considered "voluntary"
provided Consultant gives City notice of such court order or subpoena
c) If Consultant, or any officer, employee, agent or subcontractor of
Consultant, provides any information or work product in violation of this Agreement, then City
shall have the right to reimbursement and indemnity from Consultant for any damages, costs and
fees, including attorney's fees, caused by or incurred as a result of Consultant's conduct
d) Consultant shall promptly notify City should Consultant, its officers,
employees, agents or subcontractors be served with any summons, complaint, subpoena, notice
of deposition, request for documents, interrogatories, request for admissions or other discovery
request, court order or subpoena from any party regarding this Agreement and the work
performed there under City retains the nght, but has no obligation, to represent Consultant or be
present at any deposition, hearing or similar proceeding Consultant agrees to cooperate fully
with City and to provide City with the opportunity to review any response to discovery requests
provided by Consultant However, this right to review any such response does not imply or mean
the right by City to control, direct, or rewrite said response
ARTICLE 7 ENFORCEMENT OF AGREEMENT AND TERMINATION
7.1 California Law.
This Agreement shall be interpreted, construed and governed both as to validity and to
performance of the parties in accordance with the laws of the State of California Legal actions
concerning any dispute, claim or matter arising out of or in relation to this Agreement shall be
instituted in the Superior Court of the County of Los Angeles, State of California, or any other
appropriate court in such county, and Consultant covenants and agrees to submit to the personal
jurisdiction of such court in the event of such action In the event of litigation in a U S District
Court, venue shall lie exclusively in the Central District of California, in the County of Los
Angeles, State of California
7.2 Disputes, Default.
In the event that Consultant is in default under the terms of this Agreement, the City shall
not have any obligation or duty to continue compensating Consultant for any work performed
after the date of default Instead, the City may give notice to Consultant of the default and the
reasons for the default The notice shall include the timeframe in which Consultant may cure the
default This timeframe is presumptively thirty (30) days, but may be extended, though not
reduced, if circumstances warrant During the period of time that Consultant is in default, the
City shall hold all invoices and shall, when the default is cured, proceed with payment on the
invoices In the alternative, the City may, in its sole discretion, elect to pay some or all of the
outstanding invoices during the period of default If Consultant does not cure the default, the City
may take necessary steps to terminate this Agreement under this Article Any failure on the part
of the City to give notice of the Consultant's default shall not be deemed to result in a waiver of
the City's legal rights or any rights arising out of any provision of this Agreement
01135 0001/559520 1 15 B-16
7 3 Retention of Funds
Consultant hereby authorizes City to deduct from any amount payable to Consultant
whether or not arising out of this Agreement) (i) any amounts the payment of which may be in
dispute hereunder or which are necessary to compensate City for any losses, costs, liabilities, or
damages suffered by City, and (u) all amounts for which City may be liable to third parties, by
reason of Consultant's acts or omissions in performing or failing to perform Consultant's
obligation under this Agreement In the event that any claim is made by a third party, the amount
or validity of which is disputed by Consultant, or any indebtedness shall exist which shall appear
to be the basis for a claim of lien, City may withhold from any payment due, without liability for
interest because of such withholding, an amount sufficient to cover such claim The failure of
City to exercise such right to deduct or to withhold shall not, however, affect the obligations of
the Consultant to insure, indemnify, and protect City as elsewhere provided herein
7.4 Waiver
Waiver by any party to this Agreement of any term, condition, or covenant of this
Agreement shall not constitute a waiver of any other term, condition, or covenant Waiver by any
party of any breach of the provisions of this Agreement shall not constitute a waiver of any other
provision or a waiver of any subsequent breach or violation of any provision of this Agreement
Acceptance by City of any work or services by Consultant shall not constitute a waiver of any of
the provisions of this Agreement No delay or omission in the exercise of any right or remedy by
a non-defaulting party on any default shall impair such right or remedy or be construed as a
waiver Any waiver by either party of any default must be in writing and shall not be a waiver of
any other default concerning the same or any other provision of this Agreement
7 5 Rights and Remedies are Cumulative
Except with respect to rights and remedies expressly declared to be exclusive in this
Agreement, the rights and remedies of the parties are cumulative and the exercise by either party
of one or more of such rights or remedies shall not preclude the exercise by it, at the same or
different times, of any other rights or remedies for the same default or any other default by the
other party
7 6 Legal Action
In addition to any other rights or remedies, either party may take legal action, in law or in
equity, to cure, correct or remedy any default, to recover damages for any default, to compel
specific performance of this Agreement, to obtain declaratory or injunctive relief, or to obtain
any other remedy consistent with the purposes of this Agreement Notwithstanding any contrary
provision herein, Consultant shall file a statutory claim pursuant to Government Code Sections
905 et seq and 910 et seq , in order to pursue a legal action under this Agreement
7 7 Termination Prior to Expiration of Term
This Section shall govern any termination of this Contract except as specifically provided
in the following Section for termination for cause The City reserves the right to terminate this
011350001/559520 1 16 B-17
Contract at any time, with or without cause, upon thirty (30) days' written notice to Consultant,
except that where termination is due to the fault of the Consultant, the period of notice may be
such shorter time as may be determined by the Contract Officer In addition, the Consultant
reserves the right to terminate this Contract at any time, with or without cause, upon sixty (60)
days' written notice to City, except that where termination is due to the fault of the City, the
period of notice may be such shorter time as the Consultant may determine Upon receipt of any
notice of termination, Consultant shall immediately cease all services hereunder except such as
may be specifically approved by the Contract Officer Except where the Consultant has initiated
termination, the Consultant shall be entitled to compensation for all services rendered prior to the
effective date of the notice of termination and for any services authorized by the Contract Officer
thereafter in accordance with the Schedule of Compensation or such as may be approved by the
Contract Officer, except as provided in Section 7 3 In the event the Consultant has initiated
termination, the Consultant shall be entitled to compensation only for the reasonable value of the
work product actually produced hereunder In the event of termination without cause pursuant to
this Section, the terminating party need not provide the non-terminating party with the
opportunity to cure pursuant to Section 7 2
7 8 Termination for Default of Consultant
If termination is due to the failure of the Consultant to fulfill its obligations under this
Agreement, City may, after compliance with the provisions of Section 7 2, take over the work
and prosecute the same to completion by contract or otherwise, and the Consultant shall be liable
to the extent that the total cost for completion of the services required hereunder exceeds the
compensation herein stipulated (provided that the City shall use reasonable efforts to mitigate
such damages), and City may withhold any payments to the Consultant for the purpose of set-off
or partial payment of the amounts owed the City as previously stated
7 9 Attorneys' Fees
If either party to this Agreement is required to initiate or defend or made a party to any
action or proceeding in any way connected with this Agreement, the prevailing party in such
action or proceeding, in addition to any other relief which may be granted, whether legal or
equitable, shall be entitled to reasonable attorney's fees Attorney's fees shall include attorney's
fees on any appeal, and in addition a party entitled to attorney's fees shall be entitled to all other
reasonable costs for investigating such action, taking depositions and discovery and all other
necessary costs the court allows which are incurred in such litigation All such fees shall be
deemed to have accrued on commencement of such action and shall be enforceable whether or
not such action is prosecuted to judgment
ARTICLE 8 CITY OFFICERS AND EMPLOYEES NON-DISCRIMINATION
8.1 Non-liability of City Officers and Employees
No officer or employee of the City shall be personally liable to the Consultant, or any
successor in interest, in the event of any default or breach by the City or for any amount which
may become due to the Consultant or to its successor, or for breach of any obligation of the terms
of this Agreement
01135 0001/559520 1 17 B-18
8 2 Conflict of Interest
Consultant covenants that neither it, nor any officer or principal of its firm, has or shall
acquire any interest, directly or indirectly, which would conflict in any manner with the interests
of City or which would in any way hinder Consultant's performance of services under this
Agreement Consultant further covenants that in the performance of this Agreement, no person
having any such interest shall be employed by it as an officer, employee, agent or subcontractor
without the express written consent of the Contract Officer Consultant agrees to at all times
avoid conflicts of interest or the appearance of any conflicts of interest with the interests of City
in the performance of this Agreement
No officer or employee of the City shall have any financial interest, direct or indirect, in
this Agreement nor shall any such officer or employee participate in any decision relating to the
Agreement which affects her/his financial interest or the financial interest of any corporation,
partnership or association in which (s)he is, directly or indirectly, interested, in violation of any
State statute or regulation The Consultant warrants that it has not paid or given and will not pay
or give any third party any money or other consideration for obtaining this Agreement
8 3 Covenant Against Discrimination
Consultant covenants that, by and for itself, its heirs, executors, assigns, and all persons
claiming under or through them, that there shall be no discrimination against or segregation of,
any person or group of persons on account of race, color, creed, religion, sex, gender, sexual
orientation, marital status, national origin, ancestry or other protected class in the performance of
this Agreement Consultant shall take affirmative action to insure that applicants are employed
and that employees are treated during employment without regard to their race, color, creed,
religion, sex, gender, sexual orientation, marital status, national origin, ancestry or other
protected class
8 4 Unauthorized Aliens
Consultant hereby promises and agrees to comply with all of the provisions of the Federal
Immigration and Nationality Act, 8 U S C § 1101 et seq , as amended, and in connection
therewith, shall not employ unauthorized aliens as defined therein Should Consultant so employ
such unauthorized aliens for the performance of work and/or services covered by this Agreement,
and should any liability or sanctions be imposed against City for such use of unauthorized aliens,
Consultant hereby agrees to and shall reimburse City for the cost of all such liabilities or
sanctions imposed, together with any and all costs, including attorneys' fees, incurred by City
ARTICLE 9. MISCELLANEOUS PROVISIONS
91 Notices
Any notice, demand, request, document, consent, approval, or communication either party
desires or is required to give to the other party or any other person shall be in writing and either
served personally or sent by prepaid, first-class mail, in the case of the City, to the City Manager
and to the attention of the Contract Officer (with her/his name and City title), City of Rancho
01135 0001/559520 1 18 B-19
Palos Verdes, 30940 Hawthorne Blvd, Rancho Palos Verdes, California 90275 and in the case of
the Consultant, to the person(s) at the address designated on the execution page of this
Agreement Either party may change its address by notifying the other party of the change of
address in writing Notice shall be deemed communicated at the time personally delivered or in
seventy-two (72) hours from the time of mailing if mailed as provided in this Section
9 2 Interpretation
The terms of this Agreement shall be construed in accordance with the meaning of the
language used and shall not be construed for or against either party by reason of the authorship of
this Agreement or any other rule of construction which might otherwise apply
9.3 Counterparts
This Agreement may be executed in counterparts, each of which shall be deemed to be an
original, and such counterparts shall constitute one and the same instrument
9 4 Integration; Amendment.
This Agreement including the attachments hereto is the entire, complete and exclusive
expression of the understanding of the parties It is understood that there are no oral agreements
between the parties hereto affecting this Agreement and this Agreement supersedes and cancels
any and all previous negotiations, arrangements, agreements and understandings, if any, between
the parties, and none shall be used to interpret this Agreement No amendment to or modification
of this Agreement shall be valid unless made in writing and approved by the Consultant and by
the City Council The parties agree that this requirement for written modifications cannot be
waived and that any attempted waiver shall be void
9 5 Severability.
In the event that any one or more of the phrases, sentences, clauses, paragraphs, or
sections contained in this Agreement shall be declared invalid or unenforceable by a valid
judgment or decree of a court of competent jurisdiction, such invalidity or unenforceability shall
not affect any of the remaining phrases, sentences, clauses, paragraphs, or sections of this
Agreement which are hereby declared as severable and shall be interpreted to carry out the intent
of the parties hereunder unless the invalid provision is so material that its invalidity deprives
either party of the basic benefit of their bargain or renders this Agreement meaningless
9 6 Warranty & Representation of Non-Collusion
No official, officer, or employee of City has any financial interest, direct or indirect, in
this Agreement, nor shall any official, officer, or employee of City participate in any decision
relating to this Agreement which may affect his/her financial interest or the financial interest of
any corporation, partnership, or association in which (s)he is directly or indirectly interested, or
in violation of any corporation, partnership, or association in which (s)he is directly or indirectly
interested, or in violation of any State or municipal statute or regulation The determination of
financial interest" shall be consistent with State law and shall not include interests found to be
011350001/559520 1 19 B-20
remote" or "noninterests" pursuant to Government Code Sections 1091 or 1091 5 Consultant
warrants and represents that it has not paid or given, and will not pay or give, to any third party
including, but not limited to, any City official, officer, or employee, any money, consideration, or
other thing of value as a result or consequence of obtaining or being awarded any agreement
Consultant further warrants and represents that (s)he/it has not engaged in any act(s),
omission(s), or other conduct or collusion that would result in the payment of any money,
consideration, or other thing of value to any third party including, but not limited to, any City
official, officer, or employee, as a result of consequence of obtaining or being awarded any
agreement Consultant is aware of and understands that any such act(s), omission(s) or other
conduct resulting in such payment of money, consideration, or other thing of value will render
this Agreement void and of no force or effect
Consultant's Authorized Initials .el,
9 7 Corporate Authority
The persons executing this Agreement on behalf of the parties hereto warrant that (i) such
party is duly organized and existing, (ii) they are duly authorized to execute and deliver this
Agreement on behalf of said party, (iii) by so executing this Agreement, such party is formally
bound to the provisions of this Agreement, and (iv) that entering into this Agreement does not
violate any provision of any other Agreement to which said party is bound This Agreement shall
be binding upon the heirs, executors, administrators, successors and assigns of the parties
SIGNATURES ON FOLLOWING PAGE]
01135 0001/559520 1 20 B-21
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the date and year first-above written
CITY:
CITY OF RANCHO PALOS VERDES, a
municipal corporation
Aare
islikTiVI
Duhovic, ayor
ATTEST. \
g /L-
Emily ' born, C'Clerk
APPROVED AS TO FORM.
ALESHIRE & WYNDER, LLP
tO
Wi ham Wyynnd" ity Attorney
CONSULTANT.
SFG RETIREMENT LAN, LLC
By
Name Mark Shu er
Title Managing Mem r
By of1/k40
Name JoAnn Parrino
Title Partner
Address 225 South lake Avenue, Suite 600
Pasadena, CA 91101
Two corporate officer signatures required when Consultant is a corporation,with one signature required
from each of the following groups 1)Chairman of the Board,President or any Vice President, and 2)
Secretary,any Assistant Secretary,Chief Financial Officer or any Assistant Treasurer CONSULTANT'S
SIGNATURES SHALL BE DULY NOTARIZED,AND APPROPRIATE ATTESTATIONS SHALL BE
INCLUDED AS MAY BE REQUIRED BY THE BYLAWS,ARTICLES OF INCORPORATION,OR
OTHER RULES OR REGULATIONS APPLICABLE TO CONSULTANT'S BUSINESS ENTITY
011350001/559520 1 21 B-22
CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT
A notary public or other officer completing this certificate verifies only the identity of the individual who signed the
document to which this certificate is attached, and not the truthfulness,accuracy or validity of that document
STATE OF CALIFORNIA
COUNTY OF LOS ANGELES
On //-/3-/cf ,2019 before me, ,,die Su,ffn,personally appeared,(,(CCK SuS ', cproved to me on
the basis of satisfactory evidence to be the person(s)whose names(s)is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies),and that by
his/her/their signature(s)on the instrument the person(s), or the entity upon behalf of which the person(s)acted,
executed the instrument
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is
true and correct
DANIELLE A SMITH
9
WITNESS my hand and official seal
41111%,,,,
J.
NotaryCommiePublicsion•
California
fir % Los AfSelee County
Signature A 1__ _ Mi Comm Ex lree Dec 22_2019
OPTIONAL
Though the data below is not required by law, it may prove valuable to persons relying on the document and could
prevent fraudulent reattachment of this form
CAPACITY CLAIMED BY SIGNER DESCRIPTION OF ATTACHED DOCUMENT
INDIVIDUAL
CORPORATE OFFICER Cv/1*ce.tC t-- SC/.W Ce A7r,c„i- --
TITLE OR TYPE OF DOCUMEN
TITLE(S)
PARTNER(S) LIMITED
GENERAL NUMBER OF PAGES
ATTORNEY-IN-FACT
TRUSTEE(S)
GUARDIAN/CONSERVATOR 1 — / 3 -- /
OTHER DATE OF DOCUMENT
SIGNER IS REPRESENTING
NAME OF PERSON(S)OR ENTITY(IES)) SIGNER(S)OTHER THAN NAMED ABOVE
01135 0001/559520 1 B-23
CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT
A notary public or other officer completing this certificate verifies only the identity of the individual who signed the
document to which this certificate is attached, and not the truthfulness,accuracy or validity of that document
STATE OF CALIFORNIA
COUNTY OF LOS ANGELES
On 1/--/3-/`1 ,2019 before me, v d//c-544t 1k,personally appeared 70cLel i, Acturrbroved to me on
the basis of satisfactory evidence to be the person(s)whose names(s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their authorized capac ty(es),and that by
his/her/their signature(s)on the instrument the person(s), or the entity upon behalf of which the person(s)acted,
executed the instrument
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is
true and correct
DANIELLE R SMITH
221,W,` Commission 12/31079WITNESSmyhandandoffic . u Notary Public•California
P.% Los Angolan County
Signature r/4' Comm2019
OPTIONAL
Though the data below is not required by law, it may prove valuable to persons relying on the document and could
prevent fraudulent reattachment of this form
CAPACITY CLAIMED BY SIGNER DESCRIPTION OF ATTACHED DOCUMENT
INDIVIDUAL
CORPORATE OFFICER on i cc c Ser-VI Cc A Ice u7--
TITLE OR TYPE OF DOCUMENT
TITLE(S)
PARTNER(S) LIMITED
GENERAL NUMBER OF PAGES
ATTORNEY-IN-FACT
TRUSTEE(S)
GUARDIAN/CONSERVATOR 1 1— 1 3 -/ci
OTHER DATE OF DOCUMENT
SIGNER IS REPRESENTING
NAME OF PERSON(S)OR ENTITY(IES)) SIGNER(S)OTHER THAN NAMED ABOVE
01135 0001/559520 1 B-24
EXHIBIT "A"
SCOPE OF SERVICES
I Consultant will provide Fiduciary Services and Non-Fiduciary Services to the City
in relation to the City of Rancho Palos Verdes' § 457 Deferred Compensation Plan,
401 Money Purchase Plan and Trust Plan, and Retiree Health Savings Plan (the
Services"), as follows
A FIDUCIARY SERVICES Consultant shall act as a fiduciary of the Plans (defined
below in paragraph I A 1 below) and as a registered investment Consultant under
the Investment Advisers Act of 1940 and shall provide the following services
hereinafter"Fiduciary Services")
1 Consistent with the City's Investment Policy Statement, as adopted by
City Council resolution and as may be updated annually, Consultant will
select the initial investment options within the City's §457 Deferred
Compensation Plan and §401 Money Purchase Plan and Trust Plan
collectively, the "Plans", "Plan" shall refer to any one of the Plans listed
in this paragraph) Consultant will periodically review the investments
within the Plans and shall be responsible for making additions/deletions
thereto
2 Development of an investment policy statement (IPS) The IPS establishes
the investment policies and objectives for the Plans, and shall set forth the
asset classes and investment categories to be offered under the Plans, as
well as the criteria and standards for selecting and monitoring the
investments The City shall have the ultimate responsibility and authority
to establish such policies and objectives and to review the Investment
Policy Statement annually
3 Prepare and provide to the City quarterly investment advisory reports that
document consistency of fund management and performance to the
guidelines set forth in the IPS and make recommendations to maintain or
remove and replace investment options Such quarterly reports shall show
the scoring methodology, scoring, returns and considerations that are
utilized in reviewing and scoring funds
4 At the request of the Contract Officer, Consultant shall meet with the
Contract Officer as needed to discuss Consultant's reports,
recommendations, and performance of the Services Nevertheless,
Consultant shall also meet with the Contract Officer at least once per 12-
month period to discuss Consultant's reports, recommendations, and
performance of the Services This meeting may be conducted in person or
via webinar Furthermore, in addition to any other reports requested by the
City through its Contract Officer, Consultant shall also provide the
01135 0001/559520 1 A-1 B-25
Contract Officer with the following reports annually or as reasonably
requested by the Contract Officer
a Consultant Fee Benchmarking Report This report shall
include a review of performance of funds and Plan items
More specifically, this report will compare Consultant's
fees and services to a database of industry norms for plan
advisors (including fees charged and services provided) for
plans of similar size
b Consultant Fee Earn Summary As fees are paid from plan
assets and remitted by the Plan Record Keeper, consultant
shall provide a summary of all fees earned and received
during previous twelve (12) months, in lieu of submitting
invoices to City
c Service Plan This report shall include specific named
action items and targeted deliverables
d Plan Cost Analysis This report shall show all
investment, plan and advisor fees This report shall also
show the current interest rate being credited and the net
effect to participants of Plan after fees
e Plan Fee Benchmarking This report shall include a
benchmark of the Plan, investment and advisor fees against
other plans with similar demographics
f Investment Review This report shall show the scoring
methodology, scoring, returns and considerations that are
utilized in reviewing and scoring funds
5 Selection of a qualified default investment alternative ("QDIA") for
participants who fail to make an investment election
B NON-FIDUCIARY SERVICES Consultant will perform the following non-
fiduciary services ("Non-Fiduciary Services")
1 Assist in the education of the participants in the Plans about general
investing principles and the investment alternatives available under the
Plans Consultant will not provide investment advice concerning the
appropriateness of any investment option for a particular participant or
beneficiary under the Plans and will not be acting as an ERISA fiduciary
for purposes of providing educational services
01135 0001/559520 1 A-2 B-26
2 Assist in the group enrollment meetings designed to increase Plans
participation among City employees Consultant will not be acting as a
fiduciary for purposes of providing enrollment support services
3 Distribute periodic newsletters to City with pertinent compliance and Plan
administration information
4 Distribute periodic newsletters to the City for distribution to their
participants with retirement and financial education material
5 Assist City in the transition of record-keepers and/or Plans providers
6 Assist City in their communications with the vendor which shall include
but not be limited to such entities as record-keepers and third-party
administrators
7 Assist City in coordinating employee education meetings
8 Assist City in resolving vendor service issues which shall include but not
be limited to such entities as record-keepers and third-party administrators
9 Provide initial (one-time) RFP services and plan fee negotiations on behalf
of City
10 Provide the City with California Constitution Article 16, Section 17
compliance updates and Fiduciary best practices such as diversification of
plan investments, plan document execution and managing plan expenses
C CONSULTING & CO-FIDUCIARY ACKNOWLEDGMENTS
The City acknowledges the following
The City, as the responsible plan fiduciary for the City's § 457 Deferred
Compensation Plan and § 401 Money Purchase Plan and Trust Plan, has
the authority to designate investment alternatives under the Plans and the
related trust(s), and to enter into an agreement with third parties to assist in
these and related duties
In performing its Fiduciary Services, Consultant is acting as a fiduciary of
the Plans and as a registered investment Consultant under the Investment
Advisor's Act of 1940 In performing the Non-Fiduciary Services,
Consultant is not acting as a fiduciary of the Plans
In performing both Non-Fiduciary Services and Fiduciary Services,
Consultant does not act as, nor has Consultant agreed to assume the duties
of, a trustee or the Plan Administrator, and Consultant has no discretion or
responsibility to interpret the Plan documents, to determine eligibility or
01135 0001/559520 1 A-3 B-27
participation under the Plans, or to take any other action with respect to the
management, administration or any other aspect of the Plans
Consultant will perform the Fiduciary Services described herein in
accordance with the standard of care of the prudent man rule set forth in
ERISA Section 404(a)(1)(B) or comparable state law
Consultant will perform the Non-Fiduciary Services described herein
using reasonable business judgment and shall not be liable for any
liabilities and claims arising thereunder, unless directly arising from
Consultant's intentional misconduct or gross negligence, except as
prescribed and authorized in Section 5 3
Consultant does not provide legal or tax advice
Investments are subject to various market, political, currency, economic,
and business risks, and may not always be profitable As a result,
Consultant does not and cannot guarantee financial results
Consultant may, by reason of performing services for other clients, from
time to time acquire confidential information City acknowledges and
agrees that Consultant is unable to divulge to the City or any other party,
or to act upon, any such confidential information with respect to its
performance of this Agreement
Consultant is entitled to rely upon all information provided to Consultant
whether financial or otherwise) from reputable third parties or by City,
City's representatives or third-party service providers to City, the Plan or
the Consultant, without independent verification City agrees to promptly
notify Consultant in writing of any material change in the financial and
other information provided to Consultant and to promptly provide any
such additional information as may be reasonably requested by Consultant
Consultant will not be responsible for voting (or recommending how to
vote) proxies of any publicly traded securities (including mutual fund
shares) held by the Plan (or its trust) Responsibility for voting proxies of
investments held by the Plans or its trust remain with City (or, if
applicable, the participants of the Plan)
City understands that Consultant (i) may perform other services for other
clients, (ii) may charge a different fee for other clients, and (iii) may give
advice and take action that is different for each client even when
retirement plans are similar
City acknowledges that Consultant has no responsibility to provide any
services related to the following types of assets real estate (except for real
estate funds and publicly traded REITs), stock brokerage accounts or
011350001/559520 1 A-4 B-28
mutual fund windows, participant loans, non-publicly traded partnership
interests, other non-publicly traded securities (other than collective trusts
and similar vehicles), or other hard-to-value securities or assets Such
assets (except for real estate funds, publicly traded REITs, and collective
trusts and similar vehicles) shall be referred to collectively as "Excluded
Assets " The Excluded Assets shall be disregarded in determining the Fees
payable to Consultant pursuant to Section 3 3 and Exhibit C of this
Agreement, and the Fees shall be calculated only on the remaining assets
the "Included Assets")
The Plan and related Trust permit payment of fees out of Plan assets City
has determined that the fees charged by Consultant are reasonable and are
the obligation of the Plan, however, if City desires, it may pay the fees
directly, rather than with Plan assets
City acknowledges receipt and undertakes to review and consider the
disclosures made by Consultant (including in this Agreement, the Form
ADV Part 2 and Consultant Privacy Policy, which is incorporated into this
Agreement and attached in Appendix B of Exhibit A), in particular the
portions related to services, compensation, and potential conflicts of
interest, as well as the remainder of the disclosures concerning, among
other matters, background information such as educational and business
history, business practices such as the types of Consultant services
provided, the methods of securities analysis used, and the like
Further, City consents to electronic delivery (via email or other generally
accepted method) of current and future distributions of Consultant's Form
ADV Part 2 and Privacy Policy Consent to electronic delivery may be
canceled at any time by sending a written request to Consultant
II As part of the Services, Consultant will prepare and deliver the following tangible work
products to the City
A Consultant shall provide such status reports that may be required by the City from
time to time
III In addition to the requirements of Section 6 2 and this Exhibit "A", during performance
of the Services, Consultant will keep the City appraised of the status of performance by
delivering the following status reports
A Consultant shall provide such status reports that may be required by the City from
time to time
IV All work product is subject to review and acceptance by the City, and must be revised by
the Consultant without additional charge to the City until found satisfactory and accepted
by City
V Consultant will utilize the following personnel to accomplish the Services
011350001/559520 I A-5 B-29
A Mark Shuster, Managing Member
B JoAnn Parrino, Partner,
C Other supporting personnel of SFG Retirement Plan Consulting, LLC , including
but not limited to
i Relationship/Case Manager
ii Investment Analyst
in Compliance Manager/Director
iv Controller
01135 0001/559520 1 A-6 B-30
EXHIBIT "B"
SPECIAL REQUIREMENTS
Superseding Contract Boilerplate)
Added text is indicated in bold italics, deleted text is indicated in strrkethfeugh
I Section 1 4(a) "Public Work" is hereby deleted
II Section 2 1, Contract Sum, is amended as follows (strileethr-engh represents deleted language
while bold italics represent new language)
Subject to any limitations set forth in this Agreement, City agrees to pay Consultant
shall be compensated pursuant to and the amounts specified in the "Schedule of
in accordance with the provisions of Exhibit "C",
ate—incorporated herein by this reference The total compensation, including
reimbursement for actual expenses,shall not exceed
Dollars ($ the "Contract Sum"),
III Section 2 4, "Invoices," is hereby deleted
IV Section 3 5, "Term" is amended as follows (sty-ilk represents deleted language while
bold italics represents new language)
Unless earlier terminated in accordance with Article 7 of this Agreement, this
Agreement shall continue in full force and effect commencing on /003 , 2019, until
completion of the services but not exceeding one (1) three (3) years from the date
hereof, except as otherwise provided in the Schedule of Performance (Exhibit "D") "
V Section 5 2(i), "Notice of Cancellation," is amended as follows (str-ikethfetigh represents
deleted language while bold italics represents new language)
Consultant agrees to provide :. :-
toto City with a thirty (30) day notice of cancellation (except for nonpayment for which a
ten (10) day notice is required) or nonrenewal of coverage for each required coverage
Said notice shall be in writing sent via certified mail return receipt requested"
VI Section 6 4(a), "Confidentiality and Release of Information", is amended as follows
stril eugli represents deleted language while bold italics represents new language) to
read
01135 0001/559520 1 B-1 B-31
All information gained or work product produced by Consultant in performance
of this Agreement shall be considered confidential, unless such information is in
the public domain or already known to Consultant Consultant shall not release or
disclose any such information or work product to persons or entities other than
City without prior written authorization from the Contract Officer, except as
required by law"
VII Section 7 2, Disputes, Default, is amended as follows (strikethrotugh represents deleted
language while bold italics represents new language) to read
In the event that Consultant is in default under the terms of this Agreement, the
City shall not have any obligation or duty to continue compensating Consultant
for any work performed after the date of default Instead, the City may give notice
to Consultant of the default and the reasons for the default The notice shall
include the timeframe in which Consultant may cure the default This timeframe
is presumptively thirty (30) days, but may be extended, though not reduced, if
circumstances warrant During the period of time that Consultant is in default, the
City shall hold all invoices and shall, when the default is cured, proceed with
payment on the invoices In the alternative, the City may, in its sole discretion,
elect to pay some or all of the outstanding invoices during the period of default If
Consultant does not cure the default, the City may take necessary steps to
terminate this Agreement under this Article Any failure on the part of the City to
give notice of the Consultant's default shall not be deemed to result in a waiver of
the City's legal rights or any rights arising out of any provision of this
Agreement"
VIII Section 7 3, "Retention of Funds," is hereby deleted
IX Section 7 8, "Termination Prior to Expiration of Term," is amended as follows
strikethrough represents deleted language while bold italics represents new language)
This Section shall govern any termination of this Contract except as specifically
provided in the following Section for termination for cause The City reserves the
right to terminate this Contract at any time, with or without cause, upon thirty (30)
days' written notice to Consultant, except that where termination is due to the
fault of the Consultant, the period of notice may be such shorter time as may be
determined by the Contract Officer In addition, the Consultant reserves the right
to terminate this Contract at any time, with or without cause, upon sixty (60) days'
written notice to City, except that where termination is due to the fault of the City,
the period of notice may be such shorter time as the Consultant may determine
Upon receipt of any notice of termination, Consultant shall immediately cease all
services hereunder except such as may be specifically approved by the Contract
Officer Except where the Consultant has initiated termination, the Consultant
shall be entitled to compensation for all services rendered prior to the effective
date of the notice of termination and for any services authorized by the Contract
Officer thereafter in accordance with the Schedule of Compensation or such as
may be approved by the Contract Officer, except as provided in Section 7 3 In the
01135 0001/559520 1 B-2 B-32
event the Consultant has initiated termination, the Consultant shall be entitled to
compensation only for the reasonable value of the work product actually produced
hereunder In the event of termination without cause pursuant to this Section, the
terminating party need not provide the non-terminating party with the opportunity
to cure pursuant to Section 7 2 "
01135 0001/559520 1 B-3 B-33
EXHIBIT "C"
SCHEDULE OF COMPENSATION
I.Consultant shall be compensated for the Services as follows
A For the provision of Services, Consultant shall be solely compensated by Plan
participants in arrears and on a monthly basis, wherein each monthly period is the
Billing Period " The Billing Period will commence the date that the city and
ICMA, enter into new RHS, 457(b) and 401(a) Recordkeeping Expense Account
Agreements as follows
B Consultant's compensation will be automatically deducted from each Plan
participant's account in the City of Rancho Palos Verdes' §457(b) Deferred
Compensation Plan, §401(a) plan, and Retiree Health Savings plan ("Plan") assets
and directly paid to Consultant by ICMA, pursuant to the applicable
Recordkeeping Expense Account Agreement between City and ICMA
C For purposes of determining and calculating Consultant's compensation, Plan
assets are valued net of Excluded Assets as of the last day of a calendar month,
unless otherwise indicated All fees shall be received in arrears The Consultant's
annual compensation for Services shall be calculated as follows
1) Advisory Services Fee Schedule
a 457(b) and 401(a) Plans As of the conversion date, twenty-five
25) basis points (0 25%) of included Plan assets payable monthly (0 0208% per month) Fees
will be deducted from Plan assets and will be paid to Consultant by the record-keeper
b ii) Retiree Health Savings (RHS) Plan As of the conversion date,
fifteen (15) basis points (0 15%) of included Plan assets payable monthly (0 0125% per month)
Fees will be deducted from Plan assets and will be paid to Consultant by the record-keeper
2) Advisory Services Fees shall be allocated between the 457(b) and 401(a)
Plans, each month, on a pro rata basis, based on Plan assets, net of
Excluded Assets
D Because Consultant is solely and automatically compensated based upon a
participant's participation in the Plan, Payments to Consultant shall automatically
be deducted from each Plan participant's account on a pro-rata basis
E If this Agreement is terminated prior to the end of a Billing Period, Consultant
shall be entitled to a fee that is prorated for the number of days in the Billing
Period prior to the effective date of termination and shall be paid by Plan
participants as provided in Section I(A) of this Exhibit"C"
F All fees are payable to "SFG Retirement Plan Consulting, LLC "
01135 0001/559520 1 C-1 B-34
F Because Consultant is solely and automatically compensated by Plan assets,
Consultant acknowledges and agrees that City shall not be obligated to
compensate Consultant for any Services rendered pursuant to this Agreement and
that Consultant's compensation under this Agreement shall be solely derived from
assets in the Plan as described in this Exhibit"C "
II A retention of ten percent (10%) shall be held from each payment as a contract
retention to be paid as part of the final payment upon satisfactory completion of
services NOT APPLICABLE
III Within the budgeted amounts for each Task, and with the approval of the Contract
Officer, funds may be shifted from one Task subbudget to another so long as the
Contract Sum is not exceeded per Section 21, unless Additional Services are
approved per Section 1 9.NOT APPLICABLE
IV. The City will compensate Consultant for the Services performed upon submission of
a valid invoice Each invoice is to include. NOT APPLICABLE
A Line items for all personnel describing the work performed, the number of hours
worked, and the hourly rate
B Line items for all materials and equipment properly charged to the Services
C Line items for all other approved reimbursable expenses claimed, with supporting
documentation
D Line items for all approved subcontractor labor, supplies, equipment, materials,
and travel properly charged to the Services
V The total compensation for the Services shall not exceed the Contract Sum as
provided in Section 2 1 of this Agreement
VI The Consultant's billing rates for all personnel are attached as Exhibit C-1 NOT
APPLICABLE
01135 0001/559520 1 C-2 B-35
EXHIBIT "D"
SCHEDULE OF PERFORMANCE
I.Consultant shall perform all services timely in accordance with a schedule
developed in conjunction with the City.
II Consultant shall deliver the following tangible work products to the City by the
following dates.
A Consultant shall deliver such tangible work product as may be required from
time to time by the City.
III The Contract Officer may approve extensions for performance of the services in
accordance with Section 3 2
01135 0001/559520 1 D-1 B-36
RANCHO PALOS VERDES CITY COUNCIL MEETING DATE: 10/15/2019
AGENDA REPORT AGENDA HEADING: Consent Calendar
AGENDA DESCRIPTION:
Consideration and possible action to receive and file information related to an analysis
performed on the Rancho Palos Verdes Employee Retirement Plans (457(b), 401(a),
and RHS) administered through ICMA-RC.
RECOMMENDED COUNCIL ACTION:
1. Receive and file the report.
FISCAL IMPACT: None
Amount Budgeted: N/A
Additional Appropriation: N/A
Account Number(s): N/A
ORIGINATED BY: Christopher Browning, Senior Administrative Analyst
REVIEWED BY: Deborah Cullen, Director of Finance
APPROVED BY: Doug Willmore, City Manager
ATTACHED SUPPORTING DOCUMENTS:
A. Investment Broker Contract (page A-1)
B. ICMA-RC updated contract for 457 and 401 plan (page B-1)
C. ICMA-RC updated contract for RHS plan (page C-1)
BACKGROUND AND DISCUSSION:
The City provides an employer-sponsored deferred compensation plan under Section
457(b) and a 401(a) defined contribution plan under the Internal Revenue Code.
Additionally, the City provides a retiree healthcare savings plan (RHS). The 457(b) plan
provides tax benefits to employees who make deposits into the plan for their retirement.
The 401(a) plan provides tax benefit retirement savings for eligible employees. The
RHS plan provides the employees pre-tax savings to be used to reimburse or pay for
qualified medical expenses at retirement on a tax-free basis. As the plan sponsor, the
City has certain fiduciary duties and responsibilities under state law (California State
Constitution, Article XVI Section 17). These duties and responsibilities focus on
ensuring the operation and investment of the public retirement plan is for the exclusive
purpose of providing benefits to participants and beneficiaries.
Specifically, fiduciary responsibilities include:
Investing the assets of the plan;
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Administering the plan; and
Engaging in a prudent process for making all decisions related to the operation of
the plan, including decisions related to the plan's investments and related
services.
Because of the complexity of the investment process and responsibilities, in July Staff
met with SFG Retirement Plan Consulting, LLC (SFGRPC), a retirement plan consulting
firm, to learn more about recent trends affecting the marketplace and laws governing
fiduciary requirements for the operation and investment of the City’s sponsored plans.
After meeting with SFGRPC, Staff determined it would in the best interest of the City
and plan to engage SFGRPC to conduct a request for information (RFI) of the current
plan and a request for proposals (RFP) to leading record keepers, including the
incumbent, ICMA-RC, at no cost to City or plan participants.
Analysis:
The RFI included a review of all contract-related data, including but not limited to:
administrative fees associated with those plans, investment options, asset values, fixed
account interest rates, and additional fees that may be charged by the plans. SFGRPC
identified the fees being charged can be reduced, the investment options can be
improved and the fixed interest credited to participants can be increased by either
moving to another record keeper or negotiating new terms with ICMA-RC. Utilizing the
information obtained through the RFI, SFGRPC conducted an RFP to leading record
keepers to determine whether the incumbent plan fees were competitive and fees
assessed from the investment options were reasonable. In addition, SFGRPC
negotiated new pricing and contract terms with ICMA-RC.
Based on SFGRPC's analysis of the RFP responses, it was determined that the plan
participants would benefit by implementing new contracts with ICMA-RC that will
provide them with lower fees, improved investment lineups selected by SFGRPC and a
higher fixed interest rate. The results of SFGRPC’s RFP and negotiations will reduce
the 457(b) and 401(a) ICMA-RC record-keeping fee by 93% and increase the
guaranteed interest rate (VT Plus) by 0.81%. The RFP results will also reduce the RHS
record-keeping fee by 31%. After incorporating SFGRPC’s consulting fee, the overall
457(b) and 401(a) plan costs will reduce 50% and the RHS costs will reduce 18%. The
new ICMA-RC contracts will also allow participants to select investments from an
improved comprehensive, institutional class investment menu selected by SFGRPC that
includes investment managers such as Vanguard, American Funds, Goldman Sachs,
PIMCO and more.
There is no cost to the City to engage the ongoing services of SFGRPC. SFGRPC’s
fees can be paid by the plan. SFGRPC’s fee for the ongoing services listed is .25%
annually for the 457(b) and 401(a) plans, and 0.15% annually for the RHS plan. All of
the positive results provided for the plans above already take into account and are net
of SFGRPC’s fees. SFGRPC’s Investment Advisory and Service Agreement will not
include a minimum contract period, which is a benefit to the City. The contract may be
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terminated with 60-day notice. Based on SFGRPC’s performance and demonstrated
experience in the RFI and RFP processes, the City is interested in engaging SFGRPC
to provide investment advisory and consulting services for employee plans. SFGRPC
will act as a fiduciary to the plan investments and will implement a due diligence
process for the City to follow and ensure the City is meeting its fiduciary responsibilities.
SFGRPC’s services will include the following:
Investment fiduciary
Fiduciary education and training
Investment policy statement development
Plan conversion support, including custom participant communications
Compliance assistance
Quarterly investment monitoring
In-depth qualitative and quantitative fund analysis
Annual plan demographic review
Participant education strategy and support (including on -site meetings).
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