HomeMy WebLinkAboutReso 48-1986 RESOLUTION NO. 48-86
CITY COUNCIL, CITY OF SOUTH SAN FRANCISCO, STATE OF CALIFORNIA
A RESOLUTION APPROVING AND AUTHORIZING
THE. EXECUTION OF A DEFERRED COMPENSATION
SERVICE AGREEMENT
BE IT RESOLVED by the City Council of the City of South San Francisco that:
1. Approval of Agreement.
The Agreement entitled "Deferred Compensation Service Agreement" between
the City of South San Francisco and Home Savings of America is hereby approved,
and a copy of said Agreement is attached hereto as Exhibit "A."
2. Execution of Agreement.
The City Manager is hereby'authorized to execute said Agreement on behalf
of the City, and the City Clerk attest his signature thereto.
I hereby certify that the foregoing Resolution was regularly introduced and
adopted by the City Council of the City of South San Francisco at a regular
meeting held on the 26th day of F~hrlJa~y , 19 86 ' by the following
vote:
AYES:
NOES:
ABSENT:
Councilmembers Mark N. Addieqo. John "Jack Dragn, Rirhmrd A
Gus Nicolopulos and Roberta Cerri Teglia
None
None
Haffey
EXHIBIT A TO RESOLUTION NO. 48-86
DEFERRED COMPENSATION SERVICE AGREEMENT
This Deferred Compensation Service Agreement ("Agree-
ment'') is entered into this 26th day of February , 19 86
between HOME SAVINGS OF AMERICA ("Home Savings"),
Post Office Bo~ 4700, ~ Irwindale, Ca. and the city of South San
Francisco (the " City ") 4~ c.r~nH Av~ P.O. Box 711 ,
.~o,,~h .~n Fr~n~oo , California, a political subdivision
of the State of California.
WI TNE SSETH
%~IEP, EAS, the City of South.'San Francisco Deferred Comp~n.~mt4nn Plan
a Deferred Compensation Plan ('the "P1 " ' '
an ) meeting the require-
ments of Section 457 of the Internal Revenue Code and section
1..7585 of the California Revenue and Taxation Code;
WHEREAS, the City
Savings administer the Plan
desires that Home
WHEREAS, Home Savings desires to administer
the Plan subject to ~e terms and condi-
tions of this Agreement; and
WHEREAS, the City has adopted Resolution
No. , dated , '19. authorizing the
establishment of the Plan and 'the adopt'ion of this Agreement.
.NOW, THEREFORE, in consideration of the foregoing
and of the mutual covenants and promises hereinafter' set
forth, it is agreed:
DEFINITIONS.
A. 6greement - This Agreement and its exhibits,
schedules and other documents attached hereto at the time of
execution of this Agreement, as the same may be amended from
time to time.
B. Custodial Bank - A bank or other financial
institution insured in accordance with the regulations of the
FHLB authorized by Home Savings to receive, hold and distribute
deferred compensation funds.
C. Deferred Compensation Funds - ~eferred
compensation received from Plan participants and any increase
in such amounts due to investment.
City
D. Employee - Any person employed by the
, any portion of whose income is subject to
withholding of income tax and/or for whom Social Security
contributions are made by the city , as well as any
other person qualifying as a common law employee of the
City as determined by a Court of competen.t juris-
tiction.
E. Employee ParticiDation Agreement - An
agreement between an employee and the employer authorizing
the employer ko defer part of the employee's compensation
and to invest it in the investment media offered by the Plan.
F. Employer - The City , or
any other governmental entity of which the City iS
the governing .body.
G. Funding Agency - An entity that wishes
to provide, or does provide, investment media to the Plan.
H. Investment Contract - A contract between
%he Plan and funding agency setting forth the responsibili-
ties of each with respect to the operation and terms of an
investment media.
I. Investment Media - A method of investing
deferred compensation funds under the Plan.
J. Plan Participant - An Employee of the
City who has signed an employee participation agreement
and who has actually deferred compensation.
2. TERM. The term of this Agreement shall com-
mence as of the 1st day of March , 19 86 , and shall ter-
minate on the 1st day of March , 19 87 , ("Termina-
tion Date"). However, if written notice of termination is
not given ninety (90) days prior to the Termination Date,
the Agreement shall be automatically renewed for the period
of one year, such one-year renewal period to conunence as of
the Agreement's Termination Date. The term of this Agreement
shall be perpetually extended in this manner for one-year
periods until written notice of termination is properly given
by either party to this Agreement. Notwithstanding the fore-
going, Home Savings or the C~y shall have the right to
terminate this Agreement upon ninety (90) days' written notice
to Home Savings at any time following the City's
termination of the Plan.
3. P~EPARATION OF DOCUMENTS. Home Savings 'shall
assist the city in the preparation of all documents
and agreements which must be prepared in order to impl'ement
the Plan.. These documents shall include, but shall not be
limited to, participation agreements, termination agreements,
agreements with funding agencies and agreements with any
other person.or.entity providing services to the Plan.
2
~ TERMS OF INVESTMENT MEDIA.
.... 4. A. Investment Media Supplied by Home Savings.
(1) General. Home Savings shall pro-
vide to the Plan, as an investment medium, deposit instruments.
Home Savings shall, for record-keeping purposes only, separate
deferred compensation.funds invested indeposit instruments
into sub-accounts for each employee. Interest on deposit
instruments shall be credited to each employee's account in
accordance with the prevailing practice at Home Savings.
Legal and beneficial ownership of all deferred compensation
funds held by Home Savings shall at all times be vested in
the city .
(2) DepOsit Instruments. Funds invested
in deposit instruments at Home Savings shall be invested in
thirty (30) day fixed-rate, fixed-term deposit instruments.
Home Savings shall credit to each account 8.00~ interest
compounded daily (an effective annual yield of 8.45~). Home
Savings guarantees the availability of this, or a higher
interest rate, for eight (8) years from the date of this
Agreement. Home Savings shall not, however, be required
pay this or any other interest rate should such interest
rate be determined to violate any federal or state law or
regulation.
Home Savings shall at all times credit thirty (30)
day fixed-rate, fixed-term deposit instruments with the high-.
est interest rate permitted by the Federal Home Loan Bank
Board. Consequently, if in the future the Federal Home Loan
Bank Board permits Home Savings to pay an interest rate in
excess of 8.00~, it shall offer to 'pay the higher rate.
Home Savings shall not mssess withdrawal charges
or any other penalty on the withdrawal of funds from ~%irty
(30) day fixed-rate, fixed-term deposit instruments, regard-
less of the reason for the withdrawal. Notwithstanding the
foregoing, Home Savings shall be permitted to assess any
penalty required to be assessed by federal or state law or
regulation against a deposit instrument.
(3) Other Accounts. Home Savings shall
offer as investment media any other deposit instruments that
may, from time to time, provide a higher or lower yield on
deferred compensation funds than thirty (30) day fixed-rate,
fixed-term deposit instruments. For example, Home Savings
shall be required, at the request of the City , to
offer T-bill accounts or marketable certificates of deposit
if the yield to Plan participants on these instruments would
be higher than the yield on thirty (30) day fixed-rate, fixed-
term deposit instruments.
(4) Insurance. Deposits at ~ome Savings
are insured in accordance with the regulations of the Federal
Home Loan Bank Board.
5. ENROLLMENT RESPONSIBILITIES OF HOME SAVINGS.
Home Savings shall be responsible for the'enrollment of employ-
ees who wish to participate in the Plan. In conducting this
enrollment, Home Savings shall offer employees comprehensive
written materials explaining the advantages of the Plan and
the type of employees who will be most greatly benefited by
the Plan. In addition, during the initial enrollment of
employees in the Plan, Home Savings shall make group presen-
tations to employees who are interested in the Plan in order
to provide further explanation of and to answer questions
concerning the Plan. During the entire term of this Agree-
ment, Home Savings shall provide personal counseling to
employees participating in the Plan and to employees who
wish to begin participating in the Plan.
6. HOr~E SAVINGS NOT A FIDUCIARY. It is neither
the intention of Home Savings nor of the
that Home Savings act as a fiduciary under the ~s of this
Agreement or of the Plan.
7. ENROLLMENT RESPONSIBILITIES OF THE CITY
A. Facilities. The .'~ shall
provide Home Savings with facilities for the counseling and
enrollment of employees into the Plan. These facilities
shall be large enough to accommodate group meetings. The
facilities shall be in a location which is convenient and
accessible to most employees. If one location is not con-
venient and accessible to most employees, the City
shall provide facilities at several locations. The City
shall provide at'least one permanent location at which Home
Savings can distribute written information concerning the
Plan.
B. Communication. The c.~ Fy
shall permit Home Savings to communicate with employees dur-
ing the City's normal business hours.
C. Notices. The City shall permit
Home Savings to post notices on bulletin boards or in other
places used to disseminate information to employees (includ-
ing periodic publications of the ~mp]nypp npw.~]ette~ in order to
notify employees of the existence of the Plan or of the times
and places at which representatives of Home Savings will be
available for counseling or enrolling employees in the Plan.
8. COLLECTION OF DEFERRED COMPENSATION.
A. Transfer. Each time the City
deducts a deferred compensation amount from an employee's
earnings it shall, as soon as reasonably possible, transfer
such amount to Home Savings.
B. Payroll Deduction. In order to facilitate
the collection and transmission of deferred compensation
funds to Home Savings or its designate, the City .shall
utilize adequate payroll deduction procedures and adequate
payroll deduction facilities.
9. CUSTODIAL BANK. Home Savings shall be authorized
to employ the services of a FDIC insured custodial bank to receive
and hold deferred compensation funds received from the
City , Home Savings, or any other entity designated
by Home Savings. The custodial bank shall only be authorized
to disburse deferred compensation funds it receives on instruction
from the City or Home Savings. Home Savings
shall not be liable, under any circumstances, for the negligence
or the willful misconduct of the custodial bank.
10. COLLECTION AND DISBURSEMENT.
A. Custodial Bank. Home Savings shall direct
the collection and disbursement of funds by the custodial
bank to and from participants in the Plan and to and from
funding agencies. Home Savings shall direct the disburse-
ment and collection of funds in accordance with the Plan,
the employee participation agreement and the investment
contracts between'the Plan and the funding agencies.
B. Federal and State Laws. Notwithstanding
any provision of this Agreement to the contrary, Home Savings
shall not be required to disburse, transfer or withhold any
deferred compensation funds in violation of any federal or
state law or regulation. In addition, Home Savings shall
not be required to distribute deferred compensation funds to
Plan participants unless all tax laws and regulations, federal
and state, are complied with to the satisfaction of Home
Savings.
11. RECORD KEEPING AND REPORTS.
A. Funding Agencies. Home Savings shall
establish, or require to be established by the funding agen-
cies, a record of each Plan participant's deferred compensa-
tion account. This record shall include, at a minimum, the
following information: participant' s name, social Security
number, total contribution, amount of contribution invested
in each investment media and beneficiary designation. Home
savings or the funding agencies shall provide this informa-
tion to the C~ty or to Plan participants on a
( ....... '~'~A-, quarterly) basis.
B. Home Savings. All written records com-
piled by Home Savings in administering the .Plan shall be the
property of the City · However, all records in
the form of computer tapes, discs and programs shall be the
property of Home Savings.
12. AGENTS AND INDEPENDENT CONTRACTORS. Notwith-
standing any other provision of this Agreement to the con-
trary, Home Savings shall have the right to designate an
agent to perform in its plaCe any acts it is permitted or
required to perform under this Agreement. Home Savings shall,
however, be required to obtain the consent of the City
to appoint an agent unless the appointment of such agent is
expressly provided for by another provision of this Agreement.
The C~t~r shall not unreasonably withhold its consent to
the appointment of an agent or independent contractor by
Home Savings.
13. LIABILITY OF HOME SAVINGS. Home Savings shall
ngt be liable for any liens, charges, claims, demands, losses,
costs or damages of any kind arising by reason of any omis~fon
or failure on the part of the City to provide
sufficient data and/or transmit appropriate funds to Home
Savings, the custodial bank or the funding media.
14. LIABILITY FOR ACTS OF AGENTS AND INDEPENDENT
CONTRACTORS. Home Savings shall not, under any circumstances',
be liable for the negligent or willful misconduct of any
agent or independent contractor, or the employees of such
agent or independent contractor, appointed or employed by
Home Savings, whether or not appointed with ~e consent of
the City .
15. PROVISION AND TRANSMISSION OF INFORMATION TO
HOME SAVINGS. At Home Savings' request, the City
shall provide all information Home Savings requires to enroll
employees in the Plan and to service their accounts. In
addition, the City agrees to provide Home Savings
with all information concerning the Plan it receives from
Plan participants including, but not limited to information
concerning their enrollment, termination, retirement, change
in deferred compensation deduction, change in amounts desig-
nated to be invested in investment media, change in the method
or timing of distributions, requests for emergency withdrawals,
and complaints. The City shall provide Home Savings
such information as soon as reasonably possible following
its receipt of the information and shall use its best efforts
to assure the accuracy and completeness of the information.
The City shall hold harmless Home Savings from any
damages or other liability resulting from the Ci~y,~
failure to promptly and accurately provide the above-mentioned
information.
1~. COMPENSATION FOR SERVICES OF HOME SAVINGS AND
FUNDING AGENCIES. Home SaVings shall provide all services
heretofore mentioned without any charge to the city
or to employees enrolled in the Plan. Funding agencies shall
provide investment media to Plan participants free of any
charge.
17. - CONDUCT OF HOME SAVINGS. In perfo~ning the
services set forth in this. Agreement, Home Savings shall con-
duct itself with due regard to the published rules and regu-
lations' of the City . Home Savings shall not inten-
tionally commit any act that tends to degrade the City
or bring it into public contempt or ridicule, or prejudice
the maintenance of the good employer-employee relationship
existing between the c~y and its employees. Home
Savings shall not, however, be liable for the conduct of its
agents or independent contractors.
· 18. CONFIDENTIALITY. Ail information supplied to
and processed by Home Savings shall be confidential and shall
not be disclosed to anyone other than the City or
those entities which have a lawful right to such information.
19. CIRCUMSTANCES EXCUSING PERFORMANCE. The per-
formance of this agreement by the parties hereto is subject
to force majeure and is contingent upon fires, power failures,
strikes, accidents, acts of God, weather conditions, restric-'
tions imposed by any government or governmental agency, ille-
gality, delays beyond the delayed party's control, or defaults
by Plan participants or the city . Failure of
either party to perform under the terms of this Agreement
shall excuse the other party's performance.
20. ASSIGNMENT. Neither party to this Agreement
shall have the right to assign its rights or obligations
hereunder without the written.consent of the other party
hereto. Such consent shall not be unreasonably withheld.
Unless agreed to by the parties, no assignment shall relieve
any party to this Agreement of any duties or liabilities
hereunder.
21. NOTICES. Ail notices and demands given here-
under shall be addressed to Home Savings at:
4900 Rivergrade Road, Irwindale, CA 91706
and to the City at: 400 Grand Ave., P.O. Box 711
South San Francisco, CA 94083 -
Ail notices shall be in writing and shall be served by per-
sonal delivery or registered mail, charges prepaid. Such
notices shall be deemed given when personally delivered or
mailed, all charges prepaid, except that notices of change
of address, shall be effective only after the actual receipt
thereof.
22. PARTIES BOUND. This Agreement and the provi-
sions hereof shall be binding upon the respective parties
and shall inure to the benefit of the same and to their
successors and assigns. ·
23. APPLICABLE LAW. This Agreement, its validity,
construction and effect shall be governed and construed under
the laws of the State of California applicable to contracts
executed therein and wholly to be performed therein.
24. UNLAWFUL PROVISIONS. If any provision of
this Agreement shall be held void, voidable, invalid or
inoperative, no other provision of this Agreement shall be
affected as a result thereof, and, accordingly, the remain-
ing provisions of this Agreement shall remain in full force
and effect as though such void, voidable, invalid or inopera-
tive provision had not been contained herein.
25. AMENDMENTS. No provision of this Agreement
may be amended or added to except by an agreement in writing
signed by the parties hereto or their respective successors.
'or assigns.
26. BREACH. A party to this Agreement s~all not~
be deemed to be in breach of any of its obligations hereunder
unless and until the non-breaching party shall have given
specific written notice by certified or registered mail,
return receipt requested, of the nature of such breach and
the breaching party shall have failed to cure' such breach
within ninety (90) days after its receipt of such written
notice.
27. RIGHTS OF THIRD PARTIES. This Agreement shall
not be deemed to give any right or remedy to any third party
unless said right or remedy is specifically granted by both
parties to such third party in writing.
28. ATTORNEYS' FEES. In the event of any action,
suit or proceeding arising from or based upon this Agreement
brought by either party hereto against the other, the prevail-
ing party shall be entitled to recover from the other its
reasonable attorneys' fees in connection therewith in addition
to the costs of such action, suit or proceeding.
29. REMEDIES. Except as otherwiSe provided in
this Agreement, all rights and remedies herein or otherwise
shall be cumulative and none of them shall be in limitation
of any other right or remedy.
30. ~ADINGS. The headings contained in this
Agreement'are for convenience only and shall not be considered
in the construction or interpretation of any provision hereof.
31. ENTIRE UNDERSTANDING. This' Agreement sets
fOrth the entire understanding of the parties hereto relat-
ing to the subject matter hereof. No modification, amend-
ment, waiver, termination or discharge of this Agreement or
of any of the terms or provisions hereof shall be binding
upon either party unless confirmed by a written instrument
signed by both parties. No waiver by either party of any
term or provision of this Agreement or of any default here-
under shall_affect that party's right thereafter to enforce
such term or p~ovision or to exercise any-sight or remedy in
the event of any subsequent default, whether or not similar.
IN WITNESS WHEREOF', the parties have caused 'this
Deferred Compensation Service Agreement to be executed as of
the date first written above.
ATTEST:
HOME SAVINGS OF AMERICA
Title:
9