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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