HomeMy WebLinkAbout10 - PSA for Section 457(b), and 401(a) Deferred Compensation Plan, and Retiree Health Savings Plan Consulting ServicesQ SEW Pp�T
CITY OF
z NEWPORT BEACH
c�<,FORN'P City Council Staff Report
February 28, 2023
Agenda Item No. 10
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: Jason AI -Imam, Finance Director/Treasurer — 949-644-3126,
jalimam@newportbeachca.gov
PREPARED BY: Michael Gomez, Deputy Finance Director,
mgomez@newportbeachca.gov
PHONE: 949-644-3124
TITLE: Award of Professional Services Contract to Benefit Financial
Services Group for Section 457(b), and 401(a) Deferred
Compensation Plan, and Retiree Health Savings Plan Consulting
Services
ABSTRACT:
The City of Newport Beach (City) issued a Request for Proposals (RFP) for consulting
services related to the City's employee deferred compensation plan and retiree health
savings plan for the five-year period ending March 31, 2028. Based on the results of the
competitive selection process, it is recommended that the City enter into a professional
services agreement with Benefit Financial Services Group (BFSG) for consulting
services.
RECOMMENDATIONS:
a) Determine this action is exempt from the California Environmental Quality Act (CEQA)
pursuant to Sections 15060(c)(2) and 15060(c)(3) of the CEQA Guidelines because
this action will not result in a physical change to the environment, directly or indirectly;
b) Approve a five-year Professional Services Agreement with Benefit Financial Services
Group for consulting services for the five-year period ending March 31, 2028, and a
total not -to -exceed amount of $225,000; and
c) Authorize the Mayor and City Clerk to execute the Agreement.
DISCUSSION:
The City has contracted with a consultant to oversee and assist with the City's employee
deferred compensation plan and retiree health savings plan. This includes discretionary
authority over the investments offered to the plan participants. The assets for both plans
total approximately $170 million. Additionally, consultant services include assisting the
City's retirement plan committee in establishing and maintaining fiduciary governance,
conducting cost benchmarking, and managing relationships with the plan's
recordkeepers. BFSG is the current consultant. Its contract is at the end of a five-year
term.
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Award of Professional Services Contract to Benefit Financial Services Group
for Section 457(b), and 401(a) Deferred Compensation Plan, and
Retiree Health Savings Plan Consulting Services
February 28, 2023
Page 2
On September 1, 2022, the City posted a Request for Proposals (RFP) for consulting
services related to the City's employee deferred compensation plan and retiree health
savings plan. Six firms submitted proposals by the RFP due date, including BFSG, Hyas
Group LLC, Fiduciary Experts LLC, Captrust, SageView Advisory Group, and Innovest.
Under the coordination of the Finance Director, proposals were reviewed and ranked by
a three -person selection committee comprised of the Human Resources Director, Deputy
Finance Director, and Senior Budget Analyst. The written technical proposals were
reviewed and ranked by the selection committee before the sealed cost bids were opened
and scored.
All firms met the minimum requirements for their proposals to be evaluated and staff
evaluated and ranked each firm's proposal based on the following criteria:
• Qualifications and experience
• Subject matter expertise
• Ability to deploy and provide services
• Proposal cost
The results of the selection committee's technical score and cost ratio analysis is
summarized in the table below:
Proposer
BFSG
Proposal Score
91.97
H as Group LLC
85.46
Fiduciary Experts LLC
83.33
Ca trust
82.77
Sa eView Advisory Group
82.33
Innovest
76.17
Based on the results of the competitive selection process, it is recommended that the City
enter into a Professional Services Agreement with BFSG for consulting services for the
five-year period ending March 31, 2028.
FISCAL IMPACT:
There is no fiscal impact to the City for this contract. The contract expenses are
considered qualified plan expenses which are paid by plan participants.
ENVIRONMENTAL REVIEW:
Staff recommends the City Council find this action is not subject to the California
Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2) (the activity will not
result in a direct or reasonably foreseeable indirect physical change in the environment)
and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA
Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no
potential for resulting in physical change to the environment, directly or indirectly.
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Award of Professional Services Contract to Benefit Financial Services Group
for Section 457(b), and 401(a) Deferred Compensation Plan, and
Retiree Health Savings Plan Consulting Services
February 28, 2023
Page 3
NOTICING:
The agenda item has been noticed according to the Brown Act (72 hours in advance of
the meeting at which the City Council considers the item).
ATTACHMENT:
Attachment A — Professional Services Agreement
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ATTACHMENT A
PROFESSIONAL SERVICES AGREEMENT
WITH BFSG, LLC FOR
SECTION 457 DEFERRED COMPENSATION PLAN AND RETIREE HEALTH
SAVINGS PLAN CONSULTING SERVICES
THIS PROFESSIONAL SERVICES AGREEMENT ("Agreement") is made and
entered into as of this 28th day of February, 2023 ("Effective Date"), by and between the
CITY OF NEWPORT BEACH, a California municipal corporation and charter city ("City"),
and BFSG, LLC, a Delaware limited liability company ("Consultant"), whose address on
file with the California Secretary of State is 875 3rd Avenue, 28t" Floor, New York, New
York 10022, with a local address of 2040 Main Street, Suite 720, Irvine, California 92614,
and is made with reference to the following:
RECITALS
A. City is a municipal corporation duly organized and validly existing under the laws
of the State of California with the power to carry on its business as it is now being
conducted under the statutes of the State of California and the Charter of City.
B. City desires to engage Consultant to perform Section 457 Deferred Compensation
Plan and Retiree Health Savings Plan consulting services ("Project").
C. Consultant possesses the skill, experience, ability, background, certification and
knowledge to provide the professional services described in this Agreement.
D. City has solicited and received a proposal from Consultant, has reviewed the
previous experience and evaluated the expertise of Consultant, and desires to
retain Consultant to render professional services under the terms and conditions
set forth in this Agreement.
NOW, THEREFORE, it is mutually agreed by and between the undersigned parties
as follows:
1. TERM
The term of this Agreement shall commence on the Effective Date, and shall
terminate on March 31, 2028, unless terminated earlier as set forth herein.
2. SERVICES TO BE PERFORMED
Consultant shall diligently perform all the services described in the Scope of
Services attached hereto as Exhibit A and incorporated herein by reference ("Services"
or "Work"). City may elect to delete certain Services within the Scope of Services at its
sole discretion.
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3. TIME OF PERFORMANCE
3.1 Time is of the essence in the performance of Services under this Agreement
and Consultant shall perform the Services in accordance with the schedule included in
Exhibit A. In the absence of a specific schedule, the Services shall be performed to
completion in a diligent and timely manner. The failure by Consultant to strictly adhere to
the schedule set forth in Exhibit A, if any, or perform the Services in a diligent and timely
manner may result in termination of this Agreement by City.
3.2 Notwithstanding the foregoing, Consultant shall not be responsible for
delays due to causes beyond Consultant's reasonable control. However, in the case of
any such delay in the Services to be provided for the Project, each party hereby agrees
to provide notice within two (2) calendar days of the occurrence causing the delay to the
other party so that all delays can be addressed.
3.3 Consultant shall submit all requests for extensions of time for performance
in writing to the Project Administrator as defined herein not later than ten (10) calendar
days after the start of the condition that purportedly causes a delay. The Project
Administrator shall review all such requests and may grant reasonable time extensions
for unforeseeable delays that are beyond Consultant's control.
3.4 For all time periods not specifically set forth herein, Consultant shall
respond in the most expedient and appropriate manner under the circumstances, by
hand -delivery or mail.
4. COMPENSATION TO CONSULTANT
4.1 City shall pay Consultant for the Services on a time and expense not -to -
exceed basis in accordance with the provisions of this Section and the Schedule of Billing
Rates attached hereto as Exhibit B and incorporated herein by reference. Consultant's
compensation for all Work performed in accordance with this Agreement, including all
reimbursable items and subconsultant fees, shall not exceed Two Hundred Twenty Five
Thousand Dollars and 00/100 ($225,000.00), without prior written authorization from
City. No billing rate changes shall be made during the term of this Agreement without the
prior written approval of City.
4.2 Consultant shall submit monthly invoices to City describing the Work
performed the preceding month. Consultant's bills shall include the name of the person
who performed the Work, a brief description of the Services performed and/or the specific
task in the Scope of Services to which it relates, the date the Services were performed,
the number of hours spent on all Work billed on an hourly basis, and a description of any
reimbursable expenditures. City shall pay Consultant no later than thirty (30) calendar
days after approval of the monthly invoice by City staff.
4.3 City shall reimburse Consultant only for those costs or expenses specifically
identified in Exhibit B to this Agreement or specifically approved in writing in advance by
City.
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4.4 Consultant shall not receive any compensation for Extra Work performed
without the prior written authorization of City. As used herein, "Extra Work" means any
Work that is determined by City to be necessary for the proper completion of the Project,
but which is not included within the Scope of Services and which the parties did not
reasonably anticipate would be necessary at the execution of this Agreement.
Compensation for any authorized Extra Work shall be paid in accordance with the
Schedule of Billing Rates as set forth in Exhibit B.
5. PROJECT MANAGER
5.1 Consultant shall designate a Project Manager, who shall coordinate all
phases of the Project. This Project Manager shall be available to City at all reasonable
times during the Agreement term. Consultant has designated Darren Stewart to be its
Project Manager. Consultant shall not remove or reassign the Project Manager or any
personnel listed in Exhibit A or assign any new or replacement personnel to the Project
without the prior written consent of City. City's approval shall not be unreasonably
withheld with respect to the removal or assignment of non -key personnel.
5.2 Consultant, at the sole discretion of City, shall remove from the Project any
of its personnel assigned to the performance of Services upon written request of City.
Consultant warrants that it will continuously furnish the necessary personnel to complete
the Project on a timely basis as contemplated by this Agreement.
5.3 If Consultant is performing inspection services for City, the Project Manager
and any other assigned staff shall be equipped with a cellular phone to communicate with
City staff. The Project Manager's cellular phone number shall be provided to City.
6. ADMINISTRATION
This Agreement will be administered by the Finance Department. City's Finance
Director or designee shall be the Project Administrator and shall have the authority to act
for City under this Agreement. The Project Administrator shall represent City in all matters
pertaining to the Services to be rendered pursuant to this Agreement.
7. CITY'S RESPONSIBILITIES
To assist Consultant in the execution of its responsibilities under this Agreement,
City agrees to provide access to and upon request of Consultant, one copy of all existing
relevant information on file at City. City will provide all such materials in a timely manner
so as not to cause delays in Consultant's Work schedule.
8. STANDARD OF CARE
8.1 All of the Services shall be performed by Consultant or under Consultant's
supervision. Consultant represents that it possesses the professional and technical
personnel required to perform the Services required by this Agreement, and that it will
perform all Services in a manner commensurate with community professional standards
and with the ordinary degree of skill and care that would be used by other reasonably
BFSG, LLC Page 3
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competent practitioners of the same discipline under similar circumstances. All Services
shall be performed by qualified and experienced personnel who are not employed by City.
By delivery of completed Work, Consultant certifies that the Work conforms to the
requirements of this Agreement, all applicable federal, state and local laws, and legally
recognized professional standards.
8.2 Consultant represents and warrants to City that it has, shall obtain, and shall
keep in full force and effect during the term hereof, at its sole cost and expense, all
licenses, permits, qualifications, insurance and approvals of whatsoever nature that is
legally required of Consultant to practice its profession. Consultant shall maintain a City
of Newport Beach business license during the term of this Agreement.
8.3 Consultant shall not be responsible for delay, nor shall Consultant be
responsible for damages or be in default or deemed to be in default by reason of strikes,
lockouts, accidents, acts of God, or the failure of City to furnish timely information or to
approve or disapprove Consultant's Work promptly, or delay or faulty performance by
City, contractors, or governmental agencies.
9. HOLD HARMLESS
9.1 To the fullest extent permitted by law, Consultant shall indemnify, defend
and hold harmless City, its City Council, boards and commissions, officers, agents,
volunteers and employees (collectively, the "Indemnified Parties") from and against any
and all claims (including, without limitation, claims for bodily injury, death or damage to
property), demands, obligations, damages, actions, causes of action, suits, losses,
judgments, fines, penalties, liabilities, costs and expenses (including, without limitation,
attorneys' fees, disbursements and court costs) of every kind and nature whatsoever
(individually, a Claim; collectively, "Claims"), which may arise from or in any manner relate
(directly or indirectly) to any breach of the terms and conditions of this Agreement, any
Work performed or Services provided under this Agreement including, without limitation,
defects in workmanship or materials or Consultant's presence or activities conducted on
the Project (including the negligent, reckless, and/or willful acts, errors and/or omissions
of Consultant, its principals, officers, agents, employees, vendors, suppliers, consultants,
subcontractors, anyone employed directly or indirectly by any of them or for whose acts
they may be liable, or any or all of them).
9.2 Notwithstanding the foregoing, nothing herein shall be construed to require
Consultant to indemnify the Indemnified Parties from any Claim arising from the sole
negligence or willful misconduct of the Indemnified Parties. Nothing in this indemnity shall
be construed as authorizing any award of attorneys' fees in any action on or to enforce
the terms of this Agreement. This indemnity shall apply to all claims and liability
regardless of whether any insurance policies are applicable. The policy limits do not act
as a limitation upon the amount of indemnification to be provided by Consultant.
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10. INDEPENDENT CONTRACTOR
It is understood that City retains Consultant on an independent contractor basis
and Consultant is not an agent or employee of City. The manner and means of
conducting the Work are under the control of Consultant, except to the extent they are
limited by statute, rule or regulation and the expressed terms of this Agreement. No civil
service status or other right of employment shall accrue to Consultant or its employees.
Nothing in this Agreement shall be deemed to constitute approval for Consultant or any
of Consultant's employees or agents, to be the agents or employees of City. Consultant
shall have the responsibility for and control over the means of performing the Work,
provided that Consultant is in compliance with the terms of this Agreement. Anything in
this Agreement that may appear to give City the right to direct Consultant as to the details
of the performance of the Work or to exercise a measure of control over Consultant shall
mean only that Consultant shall follow the desires of City with respect to the results of the
Services.
11. COOPERATION
Consultant agrees to work closely and cooperate fully with City's designated
Project Administrator and any other agencies that may have jurisdiction or interest in the
Work to be performed. City agrees to cooperate with the Consultant on the Project.
12. CITY POLICY
Consultant shall discuss and review all matters relating to policy and Project
direction with City's Project Administrator in advance of all critical decision points in order
to ensure the Project proceeds in a manner consistent with City goals and policies.
13. PROGRESS
Consultant is responsible for keeping the Project Administrator informed on a
regular basis regarding the status and progress of the Project, activities performed and
planned, and any meetings that have been scheduled or are desired.
14. INSURANCE
Without limiting Consultant's indemnification of City, and prior to commencement
of Work, Consultant shall obtain, provide and maintain at its own expense during the term
of this Agreement or for other periods as specified in this Agreement, policies of insurance
of the type, amounts, terms and conditions described in the Insurance Requirements
attached hereto as Exhibit C, and incorporated herein by reference.
15. PROHIBITION AGAINST ASSIGNMENTS AND TRANSFERS
Except as specifically authorized under this Agreement, the Services to be
provided under this Agreement shall not be assigned, transferred contracted or
subcontracted out without the prior written approval of City. Any of the following shall be
construed as an assignment: The sale, assignment, transfer or other disposition of any
BFSG, LLC Page 5
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of the issued and outstanding capital stock of Consultant, or of the interest of any general
partner or joint venturer or syndicate member or cotenant if Consultant is a partnership or
joint -venture or syndicate or co -tenancy, which shall result in changing the control of
Consultant. Control means fifty percent (50%) or more of the voting power or twenty-five
percent (25%) or more of the assets of the corporation, partnership or joint -venture.
16. SUBCONTRACTING
The subcontractors authorized by City, if any, to perform Work on this Project are
identified in Exhibit A. Consultant shall be fully responsible to City for all acts and
omissions of any subcontractor. Nothing in this Agreement shall create any contractual
relationship between City and any subcontractor nor shall it create any obligation on the
part of City to pay or to see to the payment of any monies due to any such subcontractor
other than as otherwise required by law. City is an intended beneficiary of any Work
performed by the subcontractor for purposes of establishing a duty of care between the
subcontractor and City. Except as specifically authorized herein, the Services to be
provided under this Agreement shall not be otherwise assigned, transferred, contracted
or subcontracted out without the prior written approval of City.
17. OWNERSHIP OF DOCUMENTS
17.1 Each and every report, draft, map, record, plan, document and other writing
produced, including but not limited to, websites, blogs, social media accounts and
applications (hereinafter "Documents"), prepared or caused to be prepared by Consultant,
its officers, employees, agents and subcontractors, in the course of implementing this
Agreement, shall become the exclusive property of City, and City shall have the sole right
to use such materials in its discretion without further compensation to Consultant or any
other party. Additionally, all material posted in cyberspace by Consultant, its officers,
employees, agents and subcontractors, in the course of implementing this Agreement,
shall become the exclusive property of City, and City shall have the sole right to use such
materials in its discretion without further compensation to Consultant or any other party.
Consultant shall, at Consultant's expense, provide such Documents, including all logins
and password information to City upon prior written request.
17.2 Documents, including drawings and specifications, prepared by Consultant
pursuant to this Agreement are not intended or represented to be suitable for reuse by
City or others on any other project. Any use of completed Documents for other projects
and any use of incomplete Documents without specific written authorization from
Consultant will be at City's sole risk and without liability to Consultant. Further, any and
all liability arising out of changes made to Consultant's deliverables under this Agreement
by City or persons other than Consultant is waived against Consultant, and City assumes
full responsibility for such changes unless City has given Consultant prior notice and has
received from Consultant written consent for such changes.
17.3 All written documents shall be transmitted to City in formats compatible with
Microsoft Office and/or viewable with Adobe Acrobat.
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18. CONFIDENTIALITY
All Documents, including drafts, preliminary drawings or plans, notes and
communications that result from the Services in this Agreement, shall be kept confidential
unless City expressly authorizes in writing the release of information.
19. INTELLECTUAL PROPERTY INDEMNITY
Consultant shall defend and indemnify City, its agents, officers, representatives
and employees against any and all liability, including costs, for infringement or alleged
infringement of any United States' letters patent, trademark, or copyright, including costs,
contained in Consultant's Documents provided under this Agreement.
Consultant shall keep records and invoices in connection with the Services to be
performed under this Agreement. Consultant shall maintain complete and accurate
records with respect to the costs incurred under this Agreement and any Services,
expenditures and disbursements charged to City, for a minimum period of three (3) years,
or for any longer period required by law, from the date of final payment to Consultant
under this Agreement. All such records and invoices shall be clearly identifiable.
Consultant shall allow a representative of City to examine, audit and make transcripts or
copies of such records and invoices during regular business hours. Consultant shall allow
inspection of all Work, data, Documents, proceedings and activities related to the
Agreement for a period of three (3) years from the date of final payment to Consultant
under this Agreement.
21. WITHHOLDINGS
City may withhold payment to Consultant of any disputed sums until satisfaction of
the dispute with respect to such payment. Such withholding shall not be deemed to
constitute a failure to pay according to the terms of this Agreement. Consultant shall not
discontinue Work as a result of such withholding. Consultant shall have an immediate
right to appeal to the City Manager or designee with respect to such disputed sums.
Consultant shall be entitled to receive interest on any withheld sums at the rate of return
that City earned on its investments during the time period, from the date of withholding of
any amounts found to have been improperly withheld.
22. ERRORS AND OMISSIONS
In the event of errors or omissions that are due to the negligence or professional
inexperience of Consultant which result in expense to City greater than what would have
resulted if there were not errors or omissions in the Work accomplished by Consultant,
the additional design, construction and/or restoration expense shall be borne by
Consultant. Nothing in this Section is intended to limit City's rights under the law or any
other sections of this Agreement.
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23. CITY'S RIGHT TO EMPLOY OTHER CONSULTANTS
City reserves the right to employ other Consultants in connection with the Project.
24. CONFLICTS OF INTEREST
24.1 Consultant or its employees may be subject to the provisions of the
California Political Reform Act of 1974 (the "Act") and/or Government Code §§ 1090 et
seq., which (1) require such persons to disclose any financial interest that may
foreseeably be materially affected by the Work performed under this Agreement, and (2)
prohibit such persons from making, or participating in making, decisions that will
foreseeably financially affect such interest.
24.2 If subject to the Act and/or Government Code §§ 1090 et seq., Consultant
shall conform to all requirements therein. Failure to do so constitutes a material breach
and is grounds for immediate termination of this Agreement by City. Consultant shall
indemnify and hold harmless City for any and all claims for damages resulting from
Consultant's violation of this Section.
25. NOTICES
25.1 All notices, demands, requests or approvals, including any change in
mailing address, to be given under the terms of this Agreement shall be given in writing,
and conclusively shall be deemed served when delivered personally, or on the third
business day after the deposit thereof in the United States mail, postage prepaid, first-
class mail, addressed as hereinafter provided.
25.2 All notices, demands, requests or approvals from Consultant to City shall
be addressed to City at:
Attn: Finance Director
Finance Department
City of Newport Beach
100 Civic Center Drive
PO Box 1768
Newport Beach, CA 92658
25.3 All notices, demands, requests or approvals from City to Consultant shall
be addressed to Consultant at:
Attn: Darren Stewart
BFSG, LLC
2040 Main Street, Suite 150
Irvine, CA 92614
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26. CLAIMS
Unless a shorter time is specified elsewhere in this Agreement, before making its
final request for payment under this Agreement, Consultant shall submit to City, in writing,
all claims for compensation under or arising out of this Agreement. Consultant's
acceptance of the final payment shall constitute a waiver of all claims for compensation
under or arising out of this Agreement except those previously made in writing and
identified by Consultant in writing as unsettled at the time of its final request for payment.
Consultant and City expressly agree that in addition to any claims filing requirements set
forth in the Agreement, Consultant shall be required to file any claim Consultant may have
against City in strict conformance with the Government Claims Act (Government Code
sections 900 et seq.).
27. TERMINATION
27.1 In the event that either party fails or refuses to perform any of the provisions
of this Agreement at the time and in the manner required, that party shall be deemed in
default in the performance of this Agreement. If such default is not cured within a period
of two (2) calendar days, or if more than two (2) calendar days are reasonably required
to cure the default and the defaulting party fails to give adequate assurance of due
performance within two (2) calendar days after receipt of written notice of default,
specifying the nature of such default and the steps necessary to cure such default, and
thereafter diligently take steps to cure the default, the non -defaulting party may terminate
the Agreement forthwith by giving to the defaulting party written notice thereof.
27.2 Notwithstanding the above provisions, City shall have the right, at its sole
and absolute discretion and without cause, of terminating this Agreement at any time by
giving no less than seven (7) calendar days' prior written notice to Consultant. In the
event of termination under this Section, City shall pay Consultant for Services
satisfactorily performed and costs incurred up to the effective date of termination for which
Consultant has not been previously paid. On the effective date of termination, Consultant
shall deliver to City all reports, Documents and other information developed or
accumulated in the performance of this Agreement, whether in draft or final form.
28. STANDARD PROVISIONS
28.1 Recitals. City and Consultant acknowledge that the above Recitals are true
and correct and are hereby incorporated by reference into this Agreement.
28.2 Compliance with all Laws. Consultant shall, at its own cost and expense,
comply with all statutes, ordinances, regulations and requirements of all governmental
entities, including federal, state, county or municipal, whether now in force or hereinafter
enacted. In addition, all Work prepared by Consultant shall conform to applicable City,
county, state and federal laws, rules, regulations and permit requirements and be subject
to approval of the Project Administrator and City.
28.3 Waiver. A waiver by either party of any breach, of any term, covenant or
condition contained herein shall not be deemed to be a waiver of any subsequent breach
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of the same or any other term, covenant or condition contained herein, whether of the
same or a different character.
28.4 Integrated Contract. This Agreement represents the full and complete
understanding of every kind or nature whatsoever between the parties hereto, and all
preliminary negotiations and agreements of whatsoever kind or nature are merged herein.
No verbal agreement or implied covenant shall be held to vary the provisions herein.
28.5 Conflicts or Inconsistencies. In the event there are any conflicts or
inconsistencies between this Agreement and the Scope of Services or any other
attachments attached hereto, the terms of this Agreement shall govern.
28.6 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 the Agreement or any other rule of
construction which might otherwise apply.
28.7 Amendments. This Agreement may be modified or amended only by a
written document executed by both Consultant and City and approved as to form by the
City Attorney.
28.8 Severability. If any term or portion of this Agreement is held to be invalid,
illegal, or otherwise unenforceable by a court of competent jurisdiction, the remaining
provisions of this Agreement shall continue in full force and effect.
28.9 Controlling Law and Venue. The laws of the State of California shall govern
this Agreement and all matters relating to it and any action brought relating to this
Agreement shall be adjudicated in a court of competent jurisdiction in the County of
Orange, State of California.
28.10 Equal Opportunity Employment. Consultant represents that it is an equal
opportunity employer and it shall not discriminate against any subcontractor, employee
or applicant for employment because race, religious creed, color, national origin,
ancestry, physical handicap, medical condition, marital status, sex, sexual orientation,
age or any other impermissible basis under law.
28.11 No Attorneys' Fees. In the event of any dispute or legal action arising under
this Agreement, the prevailing party shall not be entitled to attorneys' fees.
28.12 Counterparts. This Agreement may be executed in two (2) or more
counterparts, each of which shall be deemed an original and all of which together shall
constitute one (1) and the same instrument.
[SIGNATURES ON NEXT PAGE]
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IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
on the dates written below.
APPROVED AS TO FORM:
CITY ATTORNEY'S OFFICE
Date:?/jas
By:
A,Aon'C. Harp djq a 3 pU
C* Attorney
ATTEST:
Date:
Leilani I. Brown
City Clerk
CITY OF NEWPORT BEACH,
a California municipal corporation
Date: CA - 17 - tom
By:
Gr e . Leung
C y anager
CONSULTANT: BFSG, LLC, a Delaware
limited liability company
Date:
By:
John Campbell
Co -President
Date:
By:
Darren Stewart
Vice President and Secretary
[END OF SIGNATURES]
Attachments: Exhibit A — Scope of Services
Exhibit B — Schedule of Billing Rates
Exhibit C — Insurance Requirements
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EXHIBIT A
SCOPE OF SERVICES
As directed by the City, the Consultant shall provide the services described herein related to
the City of Newport Beach 457 Deferred Compensation Plan ("Plan") and Retiree Health Savings
Account. The Consultant shall perform all the duties and services specifically set forth herein and
shall provide such other services as it deems necessary or advisable.
1. Investment Consulting:
In accordance with the goals of the Project and terms and conditions of the Agreement,
Consultant shall:
1.1 Draft and maintain an Investment Policy Statement ("IPS"), which incorporates a
process and methodology for reviewing and monitoring investment options for the
Plans and annual review to ensure it is meeting the needs of the City, as the
employer, and the Plan participants, who are employees of the City ("Client").
1.2 Provide comprehensive quarterly investment analysis review of all investment
options available in the Plans to ensure they are meeting the IPS parameters, as
well as provide recommendations on additional options and asset classes to
consider, and analyze the Plans' asset allocation by fund and underlying sector.
The fund lineup will also be analyzed to determine the amount of overlap that may
be occurring.
1.3 Provide a market overview addressing the major markets, indices, sectors and the
economic statistics that are affecting the investment options in the Plan.
1.4 Provide an in-depth portfolio summary, including fund and benchmark returns,
overlap, correlation, style analysis and overall portfolio returns against custom
benchmarks.
1.5 Provide a detailed quantitative and qualitative examination of each mutual fund
investment option within the Plans, including performance numbers vs. the
category and index, manager style drift, risk/return, standard deviation, Sharpe
ratio, expense ratio, upside and downside capture.
1.6 Be available no less than four times per year to meet with the Investment
Committee, or other designated fiduciaries, to present the quarterly reports and
findings, make recommendations and answer questions related to the Plans.
1.7 Consultant shall serve as a discretionary investment manager similar to an ERISA
3(38) Investment Manager. Consultant shall be responsible for the implementation
of the Investment Policy Statement through the selection, monitoring, and
deselection of investment options offered to Clients of the City of Newport Beach
457 Deferred Compensation Plan and Retiree Health Savings Plan. Consultant
shall provide City notice of investment changes prior to implementation.
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2. Compliance and Administration Consulting:
In accordance with the Project goals and the terms and conditions of the Agreement,
Consultant shall:
2.1 Provide consulting assistance on fiduciary best -practices, including the following:
2.1.1 Formalize Investment Committee (chartering)
2.1.2 Fiduciary Education
2.2 Provide assistance with legislative and industry changes.
2.3 Provide draft meeting minutes documenting committee meeting discussions for the
City's use.
2.4 Provide benchmarking of the Plans' costs as compared to industry average.
3. Vendor Benchmarking (Request for Information):
In accordance with the Project goals and the terms and conditions of the Agreement
engagement, Consultant shall:
3.1 Conduct a review of the universe of vendors in the marketplace to determine
appropriate vendors with which to benchmark current vendor costs.
3.2 Prepare a customized Request for Information ("RFI") based on specifics of the
City's Plans, such as demographics, assets, and investments.
3.3 Distribute the approved RFI to 3 - 5 providers.
3.4 Provide a detailed report outlining the current fee structure and arrangement
between the City and the retirement plan service provider. This analysis will break
out service costs and management costs to provide complete transparency in all
expenses related to the Plans.
3.5 Compare overall fees for the Plans to other similarly sized plans (customized
"industry average"), per participant cost/revenues compared to industry average,
analyze revenue distribution to provider(s) and all related parties and explain
alternate options for revenue distribution, if applicable.
4. One -Time Projects and Requests for Proposal Solicitations:
In accordance with the Project goals and the terms and conditions of the Agreement, the
City may engage Consultant on an on -call or as -needed basis to:
4.1 Conduct a review of the universe of vendors in the marketplace.
4.2 Prepare a customized Request for Proposals ("UP") based on the specifics of the
Plans, such as demographics, assets, and investments.
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4.3 Develop a detailed analysis of qualified vendors.
4.4 Develop scoring methodology for vendor selection.
4.5 Assist with final contract negotiation with a chosen vendor and assist in finalizing
and approving plan documents.
5. Participant Planning
5.1 Provide basic or comprehensive financial planning services upon request by
Clients.
5.2 Plans to be delivered by an employee of Consultant who has earned the Certified
Financial Planner designation.
5.3 Services require Clients to provide additional information.
5.4 Services shall be provided to a Client subject to the terms, conditions, and
limitations contained in the Financial Planning and Consulting Agreement, a
sample of which is set forth below, which must be executed by each Client before
financial planning is provided to that Client.
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FINANCIAL PLANNING AND CONSULTING AGREEMENT
In connection with the agreement entered into on (enter month, day, yearl,
between Benefit Financial Services Group, an SEC registered investment adviser
having a principal mailing address of 2040 Main Street, Suite 720, Irvine, California
92614 (the "PLANNER") and the City of Newport Beach, whose mailing address is
100 Civic Center Drive, Newport Beach, CA 92660 (the "EMPLOYER"), I,
<<<INSERT EMPLOYEE NAME>>> (the "CLIENT"), as a prerequisite to
receiving the services contemplated under the Agreement, acknowledge and
agree to the following:
PLANNER agrees to provide basic financial planning and consulting
services to CLIENT. Per the terms of the Agreement described above, such
services are to be provided only to the extent requested by CLIENT. CLIENT will
not incur any separate or additional fee as a result of electing to receive the
PLANNER's financial planning and consulting services.
CLIENT acknowledges that recommendations provided by PLANNER are
not endorsed or reviewed by EMPLOYER.
PLANNER's financial planning and consulting services shall conclude upon
PLANNER's communication of its recommendations to CLIENT. It is expressly
understood by CLIENT that these services do not create an ongoing relationship
between PLANNER and CLIENT.
PLANNER will remain available to review and update any recommendations
provided to CLIENT upon CLIENT's request.
PLANNER's recommendations (i.e. investments, estate planning, retirement
planning, taxes, insurance, etc.) shall be discussed by the PLANNER with CLIENT
and may be implemented, at CLIENT's sole discretion, with the corresponding
professional advisors (i.e. broker, accountant, attorney, etc.) of CLIENT's
choosing. In respect to estate planning matters, PLANNER's role shall be that of a
facilitator between CLIENT and CLIENT's corresponding professional advisors. No
portion of PLANNER's services should be interpreted as legal or accounting
advice. CLIENT should defer to CLIENT's attorney or accountant.
CLIENT agrees to provide information and/or documentation requested by
PLANNER as pertains to CLIENT's objectives, needs, and goals. PLANNER shall
not be required to verify any information obtained from the CLIENT, CLIENT's
attorney, accountant, or other professionals, and is expressly authorized to rely
thereon. CLIENT is free at all times to accept or reject any recommendation from
PLANNER, and CLIENT acknowledges that he has the sole authority with regard
to the implementation, acceptance, or rejection of any recommendation or advice
from PLANNER.
BFSG, LLC Page A-4 10-18
CLIENT is free to obtain legal, accounting, and brokerage services from any
professional source to implement the recommendations of PLANNER. CLIENT will
retain absolute discretion over all implementation decisions.
PLANNER's financial planning and consulting services do not include
investment implementation, supervisory, management, or reporting services, nor the
regular reviewing, updating, or monitoring of CLIENT'S investment portfolio or financial
plan. In the event CLIENT desires that PLANNER provide investment supervisory or
management services, CLIENT may request that PLANNER do so under the terms of
a separate Investment Advisory Agreement between PLANNER and the CLIENT, for
which services PLANNER shall be paid a separate and additional fee.
PLANNER, acting in good faith, shall not be liable for any action, omission,
investment recommendation/decision, or loss in connection with its services. The
federal and state securities laws impose liabilities under certain circumstances on
persons who act in good faith, and therefore nothing herein shall in any way constitute
a waiver or limitation of any rights which CLIENT may have under any federal or state
securities laws, ERISA, or under the rules promulgated by the Employee Benefits
Security Administration and/or the Department of Labor. In no event shall PLANNER
be responsible to CLIENT for any special, indirect, incidental, exemplary, punitive, or
consequential damages in connection with or otherwise arising out of this Agreement.
CLIENT hereby acknowledges prior receipt of a copy of the PLANNER's written
Disclosure Statement as set forth on Part 2A of Form ADV and PLANNER's Privacy
Notice.
Subject to the conditions and exceptions noted below, and to the extent not
inconsistent with applicable law, in the event of any dispute pertaining to PLANNER's
services, both PLANNER and CLIENT agree to submit the dispute to arbitration in
accordance with the auspices and rules of the American Arbitration Association
("AAA"), provided that the AAA accepts jurisdiction. PLANNER and CLIENT
understand that such arbitration shall be final and binding, and that by agreeing to
arbitration, both PLANNER and CLIENT are waiving their respective rights to seek
remedies in court, including the right to a jury trial. CLIENT acknowledges that he/she/it
has had a reasonable opportunity to review and consider this arbitration provision prior
to execution.
Agreed to and accepted by:
Signature
Date
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EXHIBIT B
SCHEDULE OF BILLING RATES
Consultant shall provide the services indicated in Exhibit A of the Agreement in accordance with
the following Schedule of Billing rates:
RECURRING CONSULTING SERVICES:
457(b) Deferred Compensation Plan
$30,000 / year
Retiree Health Savings Plan
$10,000 / year
401(a) Deferred Compensation Plan
$1,000 / year
TOTAL:
$41,000 / year
1. Recurring consulting services shall be paid by the City in arrears on a quarterly basis.
2. City shall be provided with a quarterly invoice to be paid directly to Consultant.
3. In addition to Consultant's compensation, the City may also incur, relative to all mutual
fund purchases, charges imposed at the mutual fund level (e.g. advisory fees and other
fund expenses), transaction fees, and administrative fees.
4. Performance -based fees are prohibited under this Agreement.
ONE-TIME PROJECTS (REQUESTS FOR PROPOSAL/INFORMATION):
Consulting Services (Per RFP/RFI): $5,000 per RFP (billable upon completion of
project. RFIs are included in recurring costs)
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EXHIBIT C
INSURANCE REQUIREMENTS - PROFESSIONAL SERVICES
1. Provision of Insurance. Without limiting Consultant's indemnification of City, and
prior to commencement of Work, 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. Consultant
agrees to provide insurance in accordance with requirements set forth here. If
Consultant uses existing coverage to comply and that coverage does not meet
these requirements, Consultant agrees to amend, supplement or endorse the
existing coverage.
2. Acceptable Insurers. All insurance policies shall be issued by an insurance
company currently authorized by the Insurance Commissioner to transact
business of insurance in the State of California, with an assigned policyholders'
Rating of A- (or higher) and Financial Size Category Class VII (or larger) in
accordance with the latest edition of Best's Key Rating Guide, unless otherwise
approved by the City's Risk Manager.
3. Coverage Requirements.
A. Workers' Compensation Insurance. Consultant shall maintain Workers'
Compensation Insurance, statutory limits, and Employer's Liability
Insurance with limits of at least one million dollars ($1,000,000) each
accident for bodily injury by accident and each employee for bodily injury by
disease in accordance with the laws of the State of California, Section 3700
of the Labor Code.
Consultant shall submit to City, along with the certificate of insurance, a
Waiver of Subrogation endorsement in favor of City, its City Council, boards
and commissions, officers, agents, volunteers and employees.
B. General Liability Insurance. Consultant shall maintain commercial general
liability insurance, and if necessary umbrella liability insurance, with
coverage at least as broad as provided by Insurance Services Office form
CG 00 01, in an amount not less than one million dollars ($1,000,000) per
occurrence, two million dollars ($2,000,000) general aggregate. The policy
shall cover liability arising from premises, operations, personal and
advertising injury, and liability assumed under an insured contract (including
the tort liability of another assumed in a business contract).
C. 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 Consultant
arising out of or in connection with Work to be performed under this
Agreement, including coverage for any owned, hired, non -owned or rented
vehicles, in an amount not less than one million dollars ($1,000,000)
combined single limit each accident.
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D. 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
one million dollars ($1,000,000) per claim and two million dollars
($2,000,000) 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 years after completion of the Services required by this
Agreement.
4. Other Insurance Requirements. The policies are to contain, or be endorsed to
contain, the following provisions:
A. Waiver of Subrogation. All insurance coverage maintained or procured
pursuant to this Agreement shall be endorsed to waive subrogation against
City, its City Council, boards and commissions, officers, agents, volunteers
and employees or shall specifically allow Consultant or others providing
insurance evidence in compliance with these requirements 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 from
each of its subconsultants.
B. Additional Insured Status. All liability policies including general liability,
excess liability, pollution liability, and automobile liability, if required, but not
including professional liability, shall provide or be endorsed to provide that
City, its City Council, boards and commissions, officers, agents, volunteers
and employees shall be included as insureds under such policies.
C. Primary and Non Contributory. All liability coverage shall apply on a primary
basis and shall not require contribution from any insurance or self-insurance
maintained by City.
D. Notice of Cancellation. All policies shall provide City with thirty (30)
calendar days' notice of cancellation (except for nonpayment for which ten
(10) calendar days' notice is required) or nonrenewal of coverage for each
required coverage.
5. Additional Agreements Between the Parties. The parties hereby agree to the
following:
A. Evidence 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 and other
endorsements as specified herein for each coverage. Insurance certificates
and endorsement 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. The
certificates and endorsements for each insurance policy shall be signed by
a person authorized by that insurer to bind coverage on its behalf. At least
BFSG, LLC Page C-2 10-22
fifteen (15) days prior to the expiration of any such policy, evidence of
insurance showing that such insurance coverage has been renewed or
extended shall be filed with the City. If such coverage is cancelled or
reduced, Consultant shall, within ten (10) days after receipt of written notice
of such cancellation or reduction of coverage, file with the City evidence of
insurance showing that the required insurance has been reinstated or has
been provided through another insurance company or companies. City
reserves the right to require complete, certified copies of all required
insurance policies, at any time.
B. City's Right to Revise Requirements. City reserves the right at any time
during the term of the Agreement to change the amounts and types of
insurance required by giving Consultant sixty (60) calendar days' advance
written notice of such change. If such change results in substantial
additional cost to Consultant, City and Consultant may renegotiate
Consultant's compensation.
C. Right to Review Subcontracts. Consultant agrees that upon request, all
agreements with subcontractors or others with whom Consultant enters into
contracts with on behalf of City will be submitted to City for review. Failure
of City to request copies of such agreements will not impose any liability on
City, or its employees. Consultant shall require and verify that all
subcontractors maintain insurance meeting all the requirements stated
herein, and Consultant shall ensure that City is an additional insured on
insurance required from subcontractors. For CGL coverage, subcontractors
shall provide coverage with a format at least as broad as CG 20 38 04 13.
D. Enforcement of Agreement Provisions. Consultant acknowledges and
agrees that any actual or alleged failure on the part of City to inform
Consultant of non-compliance with any requirement imposes no additional
obligations on City nor does it waive any rights hereunder.
E. 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 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.
F. 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 requirements unless
approved by City.
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G. City Remedies for Non -Compliance. If Consultant or any subconsultant fails
to provide and maintain insurance as required herein, then City shall have
the right but not the obligation, to purchase such insurance, to terminate this
Agreement, or to suspend Consultant's right to proceed until proper
evidence of insurance is provided. Any amounts paid by City shall, at City's
sole option, be deducted from amounts payable to Consultant or reimbursed
by Consultant upon demand.
H. 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. City assumes no
obligation or liability by such notice, but has the right (but not the duty) to
monitor the handling of any such claim or claims if they are likely to involve
City.
Consultant's 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.
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