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"j ~ ~' ~ ~ ' ~~ CONSULTANT AGREEMENT
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£cid ~ e Dw~u e THIS AGREEMENT, made and entered into this 28a' day of May, 2008 by and between
Benefit Funding Services Group, Inc a California Corporation (hereinafter "Contractor"), and the
City of Santa Ana, a charter city and municipal corporafion organized and existing under the
Constitution and laws of the State of Califomia (hereinafter "City").
RECITALS
A. The City desires to retain a Contractor having special skill and knowledge in the field of
employee deferred compensation plan analysis and assessment.
B. Contractor represents that Contractor is able and willing to provide such services to the
City.
C. In undertaking the performance of this Agreement, Contractor represents that it is
knowledgeable in its field and that any services performed by Contractor under this
Agreement will be performed in compliance with such standards as may reasonably be
expected from a professional fum in the field.
NOW THEREFORE, in considerafion of the mutual and respective promises, and subject to the
terms and conditions hereinafter set forth, the parties agree as follows:
1. SCOPE OF SERVICES
Contractor shall perform analysis, assessment and education services regarding the Santa
Ana Employee Deferred Compensation Program, as set forth in Exhibit A, attached hereto and
incorporated by this reference. Contractor shall also provide consulting services in relation to
the City's search for a new Plan Administrator, as set forth in Exhibit A.
2. COMPENSATION
a. City agrees to pay, and Contractor agrees to accept as total payment for its services,
the rates and charges identified in Exhibit A. The total sum to be expended under this
Agreement shall not exceed $25,000.00 during the term of this Agreement.
b. Payment by City shall be made within thirty (30) days following receipt of proper
invoice evidencing work performed, subject to City accounting procedures. Payment need not
be made for work which fails to meet the standards of performance set forth in the Recitals
which may reasonably be expected by City.
3. TERM
This Agreement shall commence on the date first written above and terminate on June 30,
2009, unless temunated earlier in accordance with Section 12, below.
4. INDEPENDENT CONTRACTOR
Contractor shall, during the entire term of this Agreement, be construed to be an
independent contractor and not an employee of the City. This Agreement is not intended nor
shall it be construed to create anemployer-employee relationship, a joint venture relationship, or
to allow the City to exercise discretion or control over the professional manner in which
Contractor performs the services which are the subject matter of this Agreement; however, the
services to be provided by Contractor shall be provided in a manner consistent with all
applicable standards and regulations governing such services. Contractor shall pay all salaries and
wages, employer's social security taxes, unemployment insurance and similar taxes relating to
employees and shall be responsible for all applicable withholding taxes.
5. INSURANCE
Prior to undertaking performance of work under this Agreement, Contractor shall
maintain and shall require its subcontractors, if any, to obtain and maintain insurance as
described below:
a. Due to the nature of services provided, Commercial General Liability insurance is not
required.
b. Worker's Compensation Insurance. In accordance with the provisions of Section
3300 of the Labor Code, Contractor, if Contractor has any employees, is required to be insured
against liability for worker's compensation or to undertake self-insurance. Prior to commencing
the performance of the work under this Agreement, Contractor agrees to obtain and maintain any
employer's liability insurance with limits not less than $1,000,000 per accident.
c. Professional liability (errors and omissions) insurance, with a combined single limit of
not less than $1,000,000 per claim.
d. The following requirements apply to the insurance to be provided by Contractor
pursuant to this section:
(i) Contractor shall maintain all insurance required above in full force and
effect for the entire period covered by this Agreement.
(ii) Certificates of insurance shall be furnished to the City upon execution of
this Agreement and shall be approved in form by the City Attorney.
(iii) Certificates and policies shall state that the policies shall not be canceled
or reduced in coverage or changed in any other material aspect without
thirty (30) days prior written notice to the City.
e. If Contractor fails or refuses to produce or maintain the insurance required by this
section or fails or refuses to furnish the City with required proof that insurance has been procured
and is in force and paid for, the City shall have the right, at the City's election, to forthwith
terminate this Agreement. Such termination shall not effect Contractor's right to be paid for its
time and materials expended prior to notification of termination. Contractor waives the right to
receive compensation and agrees to indemnify the City for any work performed prior to approval
of insurance by the City.
6. INDEMNIFICATION
Contractor agrees to and shall indemnify and hold harmless the City, its officers, agents,
employees, Contractors, special counsel, and representatives from liability: (1) for personal
injury, damages, just compensation, restitution, judicial or equitable relief arising out of claims
for personal injury, including health, and claims for property damage, which may arise from the
direct or indirect operations of the Contractor or its contractors, subcontractors, agents,
employees, or other persons acting on their behalf which relates to the services described in
section 1 of this Agreement; and (2) from any claim that personal injury, damages, just
compensation, restitution, judicial or equitable relief is due by reason of the terms of or effects
arising from this Agreement. This indemnity and hold harmless agreement applies to all claims
for damages, just compensation, restitution, judicial or equitable relief suffered, or alleged to
have been suffered, by reason of the events refereed to in this Section or by reason of the terms
of, or effects, arising from this Agreement.
7. CONFIDENTIALITY
If Contractor receives from the City information which due to the nature of such
information is reasonably understood to be confidential and/or proprietary, Contractor agrees that
it shall not use or disclose such information except in the performance of this Agreement, and
further agrees to exercise the same degree of care it uses to protect its own information of like
importance, but in no event less than reasonable care. "Confidential Information" shall include
all nonpublic information. Confidential information includes not only written information, but
also information transferred orally, visually, electronically, or by other means. Confidential
information disclosed to either party by any subsidiary and/or agent of the other party is covered
by this Agreement. The foregoing obligations of non-use and nondisclosure shall not apply to
any information that (a) has been disclosed in publicly available sources; (b) is, through no fault
of the Contractor disclosed in a publicly available source; (c) is in rightful possession of the
Contractor without an obligation of confidentiality; (d) is required to be disclosed by operation of
law; or (e) is independently developed by the Contractor without reference to information
disclosed by the City.
S. CONFLICT OF INTEREST CLAUSE
Contractor covenants that it presently has no interests and shall not have interests, direct
or indirect, which would conflict in any manner with performance of services specified under
this Agreement.
9. NOTICE
Any notice, tender, demand, delivery, or other cornmunication pursuant to this
Agreement shall be in writing and shall be deemed to be properly given if delivered in person or
mailed by fast class or certified mail, postage prepaid, or sent by telefacsimile or other
telegraphic communication in the manner provided in this Section, to the following persons:
To City: Clerk of the City Council
City of Santa Ana
20 Civic Center Plaza (M-30)
P.O. Box 1988
Santa Ana, CA 92702-1988
telefacsimile (714) 647-6956
With courtesy copies to:
Executive Director of Finance and Management Services
City of Santa Ana
20 Civic Center Plaza (M-17)
P.O. Box 1988
Santa Ana, California 92702
and
City Attorney
City of Santa Ana
20 Civic Center Plaza (M-29)
P.O. Box 1988
Santa Ana, California 92702
telefacsimile (714) 647-6515
To Contractor: Benefit Funding Services Group
2040 Main Street Suite 150
Irvine CA 92614
A party may change its address by giving notice in writing to the other party. Thereafter,
communicafion shall be addressed and transmitted to the new address. If sent by mail,
communication shall be effective or deemed to have been given three (3) days after it has been
deposited in the United States mail, duly registered or certified, with postage prepaid, and
addressed as set forth above. If sent by telefacsimile, communication shall be effective or
deemed to have been given twenty-four (24) hours after the time set forth on the transmission
report issued by the transmitting facsimile machine, addressed as set forth above. For purposes
of calculating these time frames, weekends, federal, state, County or City holidays shall be
excluded.
10. EXCLUSIVITY AND AMENDMENT
This Agreement represents the complete and exclusive statement between the City and
Contractor, and supersedes any and all other agreements, oral or written, between the parties. In
the event of a conflict between the terms of this Agreement and any attachments hereto, the
terms of this Agreement shall prevail. This Agreement may not be modified except by written
instrument signed by the City and by an authorized representative of Contractor. The parties
agree that any teens or conditions of any purchase order or other instrument that aze inconsistent
with, or in addition to, that terms and conditions hereof, shall not bind or obligate Contractor nor
the City. Each party to this Agreement acknowledges that no representations, inducements,
promises or agreements, orally or otherwise, have been made by any party, or anyone acting on
behalf of any party, which are not embodied herein.
11. ASSIGNMENT
Inasmuch as this Agreement is intended to secure the specialized services of Contractor,
Contractor may not assign, transfer, delegate, or subcontract any interest herein without the prior
written consent of the City and any such assignment, transfer, delegation or subcontract without
the City's prior written consent shall be considered null and void. Nothing in this Agreement
shall be construed to limit the City's ability to have any of the services which are the subject to
this Agreement performed by City personnel or by other Contractors retained by City.
12. TERMINATION
This Agreement may be terminated by the City upon thirty (30) days written notice of
termination. In such event, Contractor shall be entitled to receive and the City shall pay Contractor
compensation for all services performed by Contractor prior to receipt of such notice of termination,
subject to the following conditions:
a. As a condition of such payment, the Executive Director may require Contractor to deliver
to the City all work product completed as of such date, and in such case such work product shall be
the property of the City unless prohibited by law, and Contractor consents to the City's use thereof
for such purposes as the City deems appropriate.
b. Payment need not be made for work which fails to meet the standard of performance
specified in the Recitals of this Agreement.
13. DISCRIMINATION
Contractor shall not discriminate because of race, color, creed, religion, sex, marital
status, sexual orientation, age, national origin, ancestry, or disability, as defined and prohibited
by applicable law, in the recruitment, selection, training, utilization, promotion, termination or
other employment related activities. Contractor affirms that it is an equal opportunity employer
and shall comply with all applicable federal, state and local laws and regulations.
14. JURISDICTION -VENUE
This Agreement has been executed and delivered in the State of California and the
validity, interpretation, performance, and enforcement of any of the clauses of this Agreement
shall be determined and governed by the laws of the State of California. Both parties further
agree that Orange County, California, shall be the venue for any action or proceeding that may
be brought or arise out of, in connection with or by reason of this Agreement.
15. PROFESSIONAL LICENSES
Contractor shall, throughout the term of this Agreement, maintain all necessary licenses,
permits, approvals, waivers, and exemptions necessary for the provision of the services
hereunder and required by the laws and regulations of the United States, the State of California,
the City of Santa Ana and all other governmental agencies. Contractor shall notify the City
immediately and in writing of her inability to obtain or maintain such pemuts, licenses,
approvals, waivers, and exemptions. Said inability shall be cause for termination of this
Agreement.
16. MISCELLANEOUS PROVISIONS
a. Each undersigned represents and warrants that its signature hereinbelow has the power,
authority and right to bind their respective parties to each of the terms of this Agreement, and shall
indemnify City fully, including reasonable costs and attorney's fees, for any injuries or damages to
City in the event that such authority or power is not, in fact, held by the signatory or is withdrawn.
b. All Exhibits referenced herein and attached hereto shall be incorporated as if fully set
forth in the body of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement the date and year
first above written.
ATTEST:
~~
~v PA RICIA E. ~ ALY
Clerk of the Council
APPR/LOVED AS TO FORM:
~~ EPH W. ETC
City Attorney
RECOMMENDED FOR APPROVAL:
CITY OF SANTA ANA
DAVID N.
City Manager
BENEFIT FUNDING
SERVICES GROUP, INC.
C~^~`C~ ti~ 't` , ~~ .~ .~
FRANCISCO GUTIERREZ
Executive Director of the
C. CAMPBELL
Finance and Management ~ fJ- QS3 a GSA
Services Agency Tax ID# a?
EXHIBIT A
SCOPE OF SERVICES
1. Investment Consultine Fee• $15,000
• Prepare four Quarterly Investment Analysis Reviews for 457 Deferred Compensation Plan and meet
with the Plan Investment Committee up to four times . Said review shall include, but not be limited to:
Mazket overview addressing the major mazkets, indices, sectors and the economic statistics
affecting them;
In-depth portfolio summary, including fund and benchmark returns, style analysis and overall
portfolio return;
Analyze the Plan asset allocation by fund and underlying sector. T1re fund lineup will also be
analyzed to deternilne the amount of overlap that maybe occurring;
Detailed quantitative and qualitative examination of each mutual fund investment option within
the Plan, including performance numbers versus the category and index, manager style drift, risk /
return, standard deviation, Sharpe ratio, expense ratio, upside and downside capture and fund
allocation;
• Review of City's Investment Policy Statement to ensure it is meeting the needs of the Client and
the defined conhibution plan participants, and that the processes outlined within aze being
adhered to; and
Recommend possible fund alternatives when, in conjunction with the Investment Committee, it is
determined a change in fund line-up is necessary.
• Perform fund searches when necessary and make `watch list" recommendations
• Assist in fund change implementations with vendor, when applicable
• Prepaze annual cost analysis and negotiate with vendor to potentially lower overall costs and recapture any
excess revenues on behalf of the Plan, if applicable
• Draft and maintain Investment Policy Statement
• Draft Committee Charter for adoption by City Council to delegate authority to Committee
2. Request for Proposal Fee• $5.000
• Negotiate with Great-West Life to recapture revenues and establish a custom Stable Value Fund, if desired by
the City
• Work with City to develop Request for Proposal and attend any meetings to address questions or concerns about
RFP process with participants. Development of RFP shall include:
• Perform a Needs Assessment defining, with the Plan Administrator and Investment Committee,
the 457 and 3121 plan parameters and objectives
• Set forth fiduciary and administrator responsibilities, investment policy, management of
appropriate fund options and asset classes, etc.
• Disseminate RFP to selected service providers upon approval from the City
• Collect responses and prepaze an analysis incorporating the vendor's recordkeeping/administration capabilities;
investment offerings; costs; and education /communication abilities.
• Present findings to City's Plan Administrator Committee
• Coordinate in-person interviews with each of City's chosen finalists. Consultant will help prepare interview
questions, and will develop scorecazds to make the decision-making process efficient during the actual
interviews (if applicable)
• Negotiate final details on behalf of client (if applicable)
• Prepare Management Letter to quantify and s»n,n,a^ze process findings
• Document entire evaluation process for City's fiduciary file.
3. Pazhcmant Education Services Fee: $4,000
• Draft employee communications regazding educational topics, fund changes, etc.
• Conduct two (2) education meetings to discuss investment options in the Plan
• Generate web-based educational presentations to post to the City's Intranet
• Assist with developing education campaigns and any other educational needs of the Plan
$24,000
Total Contract Fee:
~~~ Benefit Funding
F Services Croup
June 3, 2008
Mr. Eddie Duque
Ciri~ of Santa Ana
20 Civic Center Plaza (M-17)
P.O. Box 1988
Santa Ana, CA 92702
Dear Eddie:
Enclosed you' 11 find three executed originals of the Consultant Agreement between the
City of Santa Ana and Benefit Funding Services Group. Inc. Please send one fully
executed original back to us for our files.
Please let me know if you have any questions or need anything.
Th you,
Mic ele Romine
Project Manager
Enclosures
2040 MniN S"rREET I Sure 150 I IRVINE, CALIFORNIA 92614 I TEL: 949.955.2552 I Fnx. 949.955.2553 I W W W.BFSG.NET