HomeMy WebLinkAbout2013/11/05 Item 04 : =�r
.-- •-�= �� CITY COUNCIL
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�° --� � AGENDA STATEMENT
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___ �� CITY OF
CHULA VISfA
NOVEMBER �, 2013 Item�
ITEDZ TITLE: RESOLliTION OF THE CITY COU�TCIL OF THE CITY OF
CHULA VISTA APPROVl�'G THE FORI�7 OF AN
AGREEMENT BETWEEN THE CITY .4i\�D FIDUCIARY
EXPERTS; LLC
SUBMITTED BY: DIRECTOR OF FINAi\TCE/TREASURE�
REVIER'ED BI': CITl' MANAGER
ASSISTANT CIT NAGER��
4/STHS VOTE: YES � NO �X
SU11��ARI'
The Finance Department has conducted a Request for Proposal to engage a consultant to
review the City's defened compensation plans and current processes. The proposal by
Fiduciary Experts, LLC is recommended to be a�irarded the contract by the selection
committee based on theu experience and pricina. The contract is for a three-yeaz term
���ith t�tio one-vear options to rene�i.
E\�'IRONn'IENTAL REVIE�V
The Environmental Review Coordinator has reviewed the proposed activity for
compliance with the Califomia Environmental Quality Act (CEQA) and has determined
that enterine into an a�reement is not a "Project" as defined under Section 1�378 of the
State CEQA Guidelines because it will not result in a physical change to the
em�ironment; therefore, pursuant to Section 1�060(c)(3) of the State CEQA Guidelines
the actions proposed are not subject to CEQA.
RECOi17MENDATION
That Council approves the resolution.
BOARDS/COD'I�IISSION RECOMMENDATION
Not applicable.
DISCUSSION
During the past decade. numerous leeislative and reQUlator�� chanaes have si2nificanth�
impacted the wav public sector employers manaee their deferred compensation plans.
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I
NOV�MBER 5, 2013, Item�
Page 2 of 4
Because of t6e Small Business Job Protection Act, the Economic Growth and Tax Relief
Reconciliation Act and the Pension ProtecYion Act, employers are required to e�ercise
fiduciary `due diligence' to assure that fund options and provider services are
competitive and provide optimal investment return to participants. Therefore, it is part of
the Ciry's fiduciary responsibility to explore the most competitive options (for both funds
and services) while formaliziilg the fiduciary process.
The selection committee unanimously agreed to recommend the City select Fiduciary
Experts LLC. The Finance Department will work with Fiduciary Experts, LLC in
formalizine the investment coimnittee and reviewing information as it pertains to the
emplo}�ee defened compensation plans and providing input on the fund selections and
services rendered by the City's deferred compensation providers and negotiating lower
costs overall. The City has two defeiTed compensation providers; Nationwide Retirement
Solutions and ICMA-Retirement Corporation. The two Plans' have assets in excess of
�62.6 million and approximately 1,100 participants. Based on a comprehensive review
of fees, investment options and educational services, the consultant would be in charge of
facilitating the process to review and restructure the plans and review aud negotiate on
the City's behalf as its fiduciary. "
Through Fiduciary Experts LLC, their services would be independent of our deferred
compensation vendor relationships. Some of the duties Yo be performed by Fiduciazy
Experts, LLC are to include:
• Acting as an independent fiduciary and provide investment advice to City with
respect to decisions, and make decisions where necessary, related to the Plan's
investment of assets for the Plans
• Provide a full Fiduciary-Cost Analysis on the plans for discovery purposes and to
identify areas of need for consideration prior to any cl�anges or implementation.
• Assist the City with ensuring that the Plans are in compliance with the requirements
of section 404(c) by ensuring that the fund line up constitutes a broad range of
investment altematives, as defined in regulations section 2550.404(c)-1.
• Act as plan fiduciary and formalize process necessary to administer and manageplan
assets and distributions on behalf of plan participants.
• Act as a 3-38 Fiduciary for City to remove legal liability for the City's fiduciary
responsibilities.
• Perform due diligence and benchmarking of delegated vendors/professionals needed
to perform needed administration of plan.
• Provide a market overview addressing the major markets, indices, sectors and the
economic statistics that are affecting them.
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\OVE?v1BER �, ?013: Item�
Paee 3 of 4
• Comprehensive quarterlv in��estment analvsis revie�v of all Plans and investment
options as��ell as additional options and asset classes to consider.
• If an RFP is deemed necessan�, assist the City in managing the RFP process through
and afrer vendor implementation.
• Pro��ide an in-depth portfolio summary; including fund and benchmark retums; sn�le
analvsis and overall portfolio returns. Remove duplicit� and inefficiencies ��ithin the
Plan fund line up.
• Provide a detailed quantitative and qualitative examination of each mutual fund
in��estment option �i�ithin the Plan, including performance numbers versus the
category and index; manager style drifr; risk/retum; standard deviation, Sharpe ratio;
expense ratio, upside and do�timside capture and fund allocation:
• Annually revie�v Administrative Investment Policy Statement (IPS) to ensure it is
meeting the needs of the Cin• and the deferred compensation panicipants.
• Continuallv monitor the Plans' im�estments to ensure these are meetine the IPS
pazameters as ���ell ensurina adequate investment options for the Plan participants.
• �Vill provide a Request for Information or Request for Proposal regazding the Plans in
order to pro�ide a fair and competitive anal}�sis of what competitors «�ould be willing
to offer the Client as a tooi of neeotiation with current �endors.
• \6'ill act as co-fiducian� on all investment options by providine investment advice on
a resular basis to the Plans reeazding the plan assets in accordance �iith the provisions
ofthis aereement.
• Provide a Plan Espense Summary separating service costs and manaeement costs to
estimate sen�ice provider re�=enues �vith a detailed anal�sis of re�enue distribution to
service pro�-ider(s) and all related parties.
Usine of a fiduciar�� consultant ���ill provide a dedicated resource to improve manaeement
of both 4�7 plans more efficiently and ���ith full transparency and mitigate the legal
liabilin� of the City's fiducian� responsibilities ��hile improvine senices and lo���ering
o��erall costs to participants.
Fiduciary Esperts, LLC manaees o��er �300 million in retirement plan assets and is
dedicated 100% to retirement plan fiducian� services N�ithout selling product or having
am� affiliation to a broker-dealer. n4aribel Larios is the Principal and o��mer of Fiduciary
Esperts LLC, and also ser��es as the Client Relationship Manaoer. A4s. Larios is a
Reeistered In�estment Advisor located in Chula Vista.
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NOVED�IBER �, 2013, Item�
Page 4 of 4
DECISION AIAKER CONFLICT
Staff l�as reviewed the decision contemplated by this action and has determined that it is
not site specific and consequently, the 500-foot rule found in California Code of
Regulations section 18704.2(a)(1) is not applicable to this decision. Staff is not
independently a�vaze, nor has staff been infornied by any City Councilmember, of any
other fact that may constitute a basis for a decision maker conflict of interest in this
matter.
CURRENT YEAR FISCAL IMPACT
There is no anticipafed budgetazy impact to the General Fund for the fiduciary sen�ices
and no net cost to the participants of the deferred compensation plans. The cost of the
service will be paid from cost recovery savings (from the deferred compensation plan
providers) that will be placed in a credit account for the City. Services are cost neutral
due to such savines neeotiated on behalf of the City. - _
Fiduciary E�perls, LLC fees for the term of the agreement are:
Year One Fee expiring on 11/04/2014 $24,000
Year T«�o Fee expiring on 11/04/2015 $20,000
Year Three Fee expiring on I 1/04/2016 $20,000
Year Four Fee expirin� on 11/04/2017 $20,000 Option Year 1
Yeaz Five Fee expiring on 11/04/2018 $20,000 Option Year 2
The City has t���o deferred compensation providers with Plan assets in excess of$62.6
million and approximately 1,100 participants.
ONGOING FISCAL IMPACT
There is no ongoing fiscal impact as a resulY of approving this agreement:
ATTACHMENTS
Fiduciary Experts, LLC a�reement
Prepm�ed by.� Plaillip Dm-is, Assis�aiat DireGOr, Finaivice
4-4
COUivCII RESOLUTION N0.
RESOLUTION OF THE CITY COUI�'CIL OF THE CITI' OF
CHUL.A VIST.A APPROVIi�TG 7�HE FORi�4 OF .A\'
AGREE\4ENT BET�'��EE?�t THE CITY A\'D FIDUCIARY
EXPERTS_ LLC
�'�'HEREAS, durine the past decade. numerous leeislati��e and regulatory chanses ha�z
sienificanth� impacted the �ra�� public sector employers manase their deferred compensation
plans; and
\VHEREAS, because of the Small Business Job Protection Act. the Economic Gro��th
and Tax Relief Reconciliation Act and the Pension Protection Act, employers are required to
exercise fiduciary "due dilieence" to assure that fund options and_pro��ider senices are
competitive and pro��ide optimal investment rerum to panicipants; and
WHEREAS; therefore; it is part of the City's fiduciazy responsibility to explore the most
competitive options (for both funds and sen�ices) �vhile formalizine their fiducian� process
�'�'HEREAS. the Citv is tasked �vith formalizins the investment committee and revie���in�
information as it pertains to the employee deferred compensation plan and providing input on the
fund selections and sen�ices rendered by the Citv's deferred compensation pro��ider and
neaotiatine IoH�er costs o��erall: and
�1'HEREAS; the Ciri� has had t�vo deferred compensation providers for the past se��eral
��ears that are Nationwide Retirement Sen�ices and ICA4A-Retirement Corporation
�1'HEREAS; based on a comprehensi��e revie��� of fees; imestment options and
educational services; the co�sultant �could be in chazee of facilitating the process to restructure
plans, re�ieti� and negotiate on the Cin�'s behalf as its fiduciary
WHEREAS; the Finance Depanment conducted a Request For Proposal (RFP'� li-12/li)
for consultants [hat closed on I�'oeember 9. 2012: and
WHEREAS; the Selection Committee unanimously chose Fiduciary Experts; LLC as the
sucessful proposer; and
�VHEREAS, Consultant warrants and represenu that it is esperienced and staffed in a
manner such that it can deli��er the ser��ices required of Consultant to Citv in accordance �a�ith the
time frames and the terms and conditions of the Aereement.
J:Wnomep�FI�AL RESOS A\�D ORDI\A\CES�2013V 1 OS 13Uteso-Finance- Fiducian•Expens LLC Aereement.doc
10/2>/2013 10:>4 A�1
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Resolution No.
Pa�e 2
NOR', THEREFORE; BE IT RESOLVED by the City Council of the City of Chula
Vista, that it appro��es the Agreement between the City of Chula Vista and Fiduciary Experts,
LLC, for fiduciary ser��ices related to the City's deferred compensation plans, in the form
presented, as may have been modified by the Council prior to its approval and with such minor
modifications as may be required or approved by the City AYtorney, a copy of which shall be
kept on file in the Office of the Ciq� Clerk and authorizes and directs the Mayor to execute same.
Presented by Approved as to form by
Maria Kachadoorian ! len oo i
� �
Director of Finance/Treasurer ' At� rney
J:�Attorney\F[t�'AL RESOS AND ORDINANCES\20I3VI1 OS 13\Reso-Finance-Fiduciary Erpens LLC Aereemencdoc
10/2�12013 10:54 AM
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THE ATTACHED AGREEME?�TT HAS BEEI�T REVIE��TED
AI�TD APPROVED AS TO FORM BY THE CITY
ATTORNEY'S OFFICE AND RJILL BE
FORI��ALLY SIGl�TED UPOI�T APPROVAL BY
THE CITY COUNCIL
�� �
l
,G n R. � oo ins
� City Attorney
Dated: S
AGREEMEI�TT BETR'EEN
THE CITY OF CHLJLA VISTA A\TD
FIDUCIARY EXPERTS, LLC
FOR
FIDUCIARY SERVICES RELATED TO THE CITY'S DEFERRED
COMPENSATION PLANS
4-7
Agreement beri��een
City of Chula Vista
and
Fiduciary Experts, LLC
For Fiduciary Ser��ices Related to the City's Deferred Compensation Plans
This agreement(Agreement); effecti��e November 5, 2013, is between the City-related entiry
whose name and business form is indicated on Eachibit A, Paragraph 2, (Ciry), and the entity
whose name, business form, place of business and telephone numbers are indicated on Exhibit A,
Paragraphs 4 through 6, (Consultant); and is made with reference to the following facts:
RECITALS
WHEREAS, during tbe past decade, numerous legislative and -regulatory changes have
significantly impacted the way public sector employers manage their deferred compensation
plans; and
WHEREAS, because of the Small Business Job Profection Act, the Economic Growth
and Tax Relief Reconciliation Act and the Pension Protection Act, employers are required to
exercise fiduciary "due diligence" to assure that fund options and provider services are
competitive and provide optimal investment retuin to partieipants; and
WHEREAS, tberefore, it is part of tbe city's fiduciary responsibility to explore the most
competitive options (for both funds and services) while fonnalizing their fiduciary process
WHEREAS, the city is tasked with formalizing the inveshnent committee and revie�ving
infoauation as it pertains to the employee deferred compensation plan and providing input on the
fund selections and services rendered by the city's defe�red coinpeusation provider and
negotiaring lower costs overall; and �
WHEREAS, the city has had nvo deferred compensation providers for the past several
years that are Nationwide Retirement Services and 1CMA-Retirement Corporation
WHEREAS, based on a comprehensive review of fees, investment options and
educational services, the consultant would be i�� cl�arge of facilitatiug the process to restructure
plans, review and negotiate on the City's bel�alf as its fiduciary
WHEREAS, the Finance Department conducted a Request For Proposal (RFP# 13-12/13)
for consultants that closed on I��ovember 9, 2012; and
WHEREAS, the Selection Conunittee unanimously chose Fiduciary Experts, LLC as the
sucessful proposer;; and
Page 1
Twn Parry�Agreemen�Benveeu tlte Cip�ajClnda I isla m�d Fiducimv Esneras.LLC for Fiduciarn Service.v(ar the Citr Uefer'red Comoensa(ion
Plmis.
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R'HEREAS, Consultant warrants and represents that it is experienced and staffed in a
manner such that it can deliver the sen ices required of Consultant to City in accordance witb the
time frames and the terms and conditions of this AQreement.
[End of Recitals. A'eit Page Starts Obligator��Pro��isions.]
Paee 2
Txro Parq�.lgreemem Baw�een lhe Cin'aJChula Dism and Fiduciarv Ezoeru.LLCTor Fiducian�Services for rhe Cin�Delnred Comnensation
Plans.
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OBLIGATORT PROVISIONS PAGES
NOW, THEREFORE, for valuable co��sideration the City and Consultant do hereby mutually
aeree as follows:
All of the Recitals above are incorporated inYo Yhis Agreement by this reference.
ARTICLE I. CONSULTANT'S OBLIGATIONS
A. General
1. General Duties. Consultant sl�all perfonn all of the services described o❑ Exhibit A,
Paragraph 7 (General Duties).
2. Scope of Work and Schedule. ln perfoiming and delivering the General Duties,
Consultant shall also perfonn the services, and deliver to .City the "Deliverables"
described in Exhibit A, Paragiaph 8, entitled "Scope of Work and Schedule," according
to, and within the time frames set fortl� in E�ibit A, Paragraph 8, time being of the
essence of this agreement The General Duties and tl�e work and Deliverables required in
the Scope of Work and Schedule shall be referred to as the "Defined Services." Failure to
complete the Defined Services by the times indicated does not, except at the option of the
City, tenninate this Agreement.
a. Reducrions in Scope of Work. City may independently, or upon request from
ConsulYant, from time to time, reduce the Defined Services to be performed by the
Consultant under this Agreement. Upon doing so, City and Consultant aeree to meet
iu good faith and confer for tl�e purpose of negotiating a coiresponding reduction in
the compensation associated with tl�e reduction.
b. Additio�7al Se�vices. In addition to performing the Defined Services, City may
require Co��sultant to perfonn additiona] consulting services related to the Defined
Services (Additional Services), and upon dou�g so in writing, if they are within the
scope of services offered by Consultant, Consultant shall perform same on a time and
materials basis at the rates set forth in the "Rate Scl�edule" in E�ibit A,
Para�raph 10(C), unless a separate fixed fee is otherwise agreed upon. All
compensation for Additional Services shall be paid monthly as billed.
3. Standard of Care. The Consultant expressly warrants that the work to be perfom�ed
pursuant to this Aereement, ���hether Defi��ed Services or Additional Services, shall be
perfomied in accordance with tl�e standard of care ordinarily exercised by members of
the profession cun�eutly practicing under similar conditions a��d in similar locations.
a. No l7�aiver of Stai�dard of Care. Where approval by City is required, it is understood
to be conceptual approval only and does not relieve the Consultant of responsibility
for complying with all laws, codes, industry standards, and liability for damages
caused by negligent acts, e�TOrs, omissions, noncompliance witli industry standards,
or the willful misconduct of the Consultant or its subcontractors.
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Two ParN Ag�eemen(Benveen U+a Cip�nf Chuln Vism and Fidacimv Esoer(e'.LLC for!'idncian�Services fm-dre Cirv Deferred Cm aoensprion
Ylans.
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B. Application of La«�s. Should a federal or state la«� pre-empt a local law, or rewlation, the
Consultant must comply ���ith the federal or state law and implementina rewlarions. No
provision of this Aoreement requires the Consultant to obser��e or enforce compliance �vith
any provision; perform any other act, or do any other thing in contravention of federal, state;
temtorial, or local law, reeulation, or ordinance. If compliance with any pro��ision of this
A�reement violates or�vould require the Consultant to violate any law; the Consultant agrees
to notify Ciry immediately in writing. Should this occur, the Ciry and the Consultant a�ree
that they ���ill make appropriate arraneements to proceed with or; if necessary, amend or
terminate this Agreement; or portions of it; expeditiously.
1. Subcontracrors. Consultant aarees to take appropriate measures necessary to ensure that
all participants utilized by the Consultant to complete its oblieations under this
A�reement; such as subcontractors, comply "�ith all applicable yla�vs; regula4ons;
ordinances, and policies; ���hether federal, state, or local, affecting Project
implementation. In addition, if a subconcractor is expected to fulfill any responsibiliries of
the Consultant under this Aareement, the Consultant shall ensure that the subcontractor
cames out the Consultant's responsibilities as set forth in this Aereement.
C. Insurance
1. General. Consultant must procure and maintain, durine the period of performance of this
Aereement; and for n;�elve months afrer completion, policies of insurance from insurance
companies to protect aeainst claims for injuries to persons or damages to property that
may arise from or in connection with the performance of the work under this Agreement
and the results of that work by the Consultant, his a�ents; representatives, employees or
subcontractors; and provide documentation of same prior ro commencement of���ork.
2. Minimum Scope of Insurance. Coverage must be at least as broad as:
a. CGL. Insurance Services Office Commerciat General Liability coverage (occurrence
Form CG0001).
b.Auto. Insurance Senrices Office Form Number CA 0001 coverine Automobile
Liabiliry, Code 1 (any auto). V
a 6�'C. ��'orkers' Compensation insurance as required by tbe State of Califomia and
Employer's Liabiliry Insurance.
d.E&O. Professional Liabilitv or Errors & Omissions Liability msurance appropriate to
the Consultanrs profession. Architects` and En�ineers' covera�e is to be endorsed to
include contractual liability. �
3. D4inimum Limits of Insurance. Consultant must maintain limits no less than those
included in the table below:
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Troo ParlrA�reemenl8e++ceen 1he Ci�•ofChula �7sla and Fiduciam£zpests.LLC(or Fidutiarv Services forlhe CiNDefer(ed Comnensation
Plans.
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i. General Liability: $1,000,000 per occurrence for bodily injury, personal injury,
(Includine (including death), and property damage. lf Commercial General
operations, Liabiliry insurance with a genera] aggregate limit is used, either
products and the general aggregate limit�nust apply separately to this
completed Project/location or d�e geueral aggregate limit nmst be rivice the
operations, as required occun-ence limit.
a licable)
ii. Automobile $1;000,000 per accident for bodily injw-y, including death, and
Liability: property damage.
iii. Workers' Statuto�y
Compensation $1,000,000 each accident
Employer's $1;000,000 disease-policy limit
Liability: $1;000,000 disease-eacl� em ]oyee
iv. Professional $1,000,000 each occu�rence -
Liability or En�ors
& Omissions
Liabili :
4. Deductibles and Self-Insured Retentions. Any deductibles or self-insured retentions must
be declared to and approved by the City. At tl�e opCion of the City, either tl�e insurer will
reduce or eliminate sucl� deductibles or seif-insured retentions as they pertain to the City,
its officers, officials, employees and volunteers; or the Consultant will provide a financial
guarantee satisfactory to the City guaranteeing payment of losses and related
investigations, claim administration, and defense expenses.
5. Other lnsurance Provisions. The general liability, automobile liability, and where
appropriate, the worker's compensation policies are to contain, or be endorsed to contain,
the followin� provisions:
a. Additiona7 Iilsureds. City of Chula Vista, its officers, officials, einployees, agents,
and volunteers are to be named as additional iusureds with respect to all policies of
insurance, including those with respect to liability arising out of automobiles owned,
leased, hired or borrowed by or on behalf of the Consultant, where applicable, and,
with respect to liability arising out of work or operations perFonned by or on behalf oF
the Consultant, including providing materials, parts or equipment fumished in
connection with such work or operations. Tl�e general liabiliry additional insured
coverage must be provided in tl�e fom� of an endorsement to the ConsultanYs
insurance using ISO CG 2010 (11/85) or-its equivalent Specifically, the eodorsement
must not exclude Products/Completed Operations coverage.
b. Pri»rary bisurance. Tl�e Coi�sultant's General Liability insurance coverage must be
prin�ary insurance as it pertains to tl�e City, its officers, officials, employees, agents,
and volunteers. Any insurance or self-insurance maintained by tl�e City; its officers,
officials, employees, or volunteers is wholly separate from the insurauce of the
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Consultant and in no �vay relieves the Consultant from its responsibilin� to provide
insurance.
c. Cancellarion. The insurance policies required by this Agreement shall not be canceled
by eitber party, except afrer thirty days' prior ���ritteo norice to the Ciry by certified
mail; retum receipt requested. The �vords "will endeavor' and "but Failure to mail
such notice shall impose no obligation or liabiliry of a�y kind upon the company, its
agents; or representatives ' shall be deleted from all certificates.
d. ld�aiver ojSubrogalion. Consultant's insurer ��-ill provide a �Vaiver of Subroeation in
favor of the City for each required policy providine coverage for the term required by
this A�reement. In addition, Consultant waives any rieht it may have or may obtain
to subrogation for a claim against the Ciq�.
6. Claims Forms. If General Liability, Pollution and/or Asbestos Pollution Liabiliry and/or
Errors & Omissions coveraee are �ti�ritten on a daims-made form:
a. Reb-o Date. The "Retro Date" must be sho�vn, and must be before the date of the
Aereement or the beeinnine of the work required by the Agreement.
b. Maintenance arid Evidence. Insurance must be maintained and e��idence of insurance
must be provided for at least five years after completion of the ���ork required by the
A�reement.
c. Cmtcellarion. If covera�e is canceled or non-renewed, and not replaced with another
claims-made policy form with a "Retro Date" prior to the effective date of tbe
Ab eement; the Consultant must purchase "extended reportine' coverage for a
minimum of five years after completion of the �rork required by the Aoreement.
d. Copies. A copy of the claims reporting requirements must be submitted to the City
for review.
7. Aceeotabilitv of Insurers. Insurance is to be placed with licensed insurers admitted to
transact business in the State of California with a current A.M. Best's ratin� of no less
than A V. If insurance is placed with a surplus lines insurer, insurer must be listed on the
State of Califomia List of Eligible Surplus Liues Insurers (LESL� with a current A.D4.
Best's ratin� of no less than A X. Exception may be made for the State Compensation
Fund �ti�hen not specifically rated.
3. Verification of Coveraee. Consultant shall fumish the City �i�ith oriQinal ceRificates and
amendatory endorsements effectin� coverase required by Section I.C. of this A�reement.
The endorsements should be on insurance indushy forms, provided those endorsements
or policies conform to the requuements of this Agreement. All certificates and
endorsements are to be received and approved by the City before �vork commences. The
Ciry reserves the right ro require; at any rime, complete; certified copies of all required
Paee 6
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Plau.
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insurance policies, including endorsements evidevcing the coverage required by these
specifications.
9. Subcontractors. Consultant must include all subconsultants as insureds under its policies
or furnish separate certificates and endorsements for each subconsultant. All coverage for
subconsultants is subject to all of the requirements included in these specifications.
10. Not a Limitation of Otl�er Oblieations. Insurance provisions under this Article shall not
be construed to limit the Consultant's obligations under this Agreement, including
Indemnity.
1 I. Additional GoveraQe. To the extent that Insurance coverage exceeds the minimums
identified in section 3, recovery shall not be limited to tl�e insurance minimums, but shall
instead extend to the actual policy limits.
D. Security for Performance
1. Performance Bond. In tl�e event that Exhibit A, at Paragraph 18, indicates the need for
Consultant to provide a Performance Bond (indicated by a check mark in the
parenthetical space immediately �receding tl�e subparagraph entitled "Perfonnance
Bond"), then Consultant shall provide to the City a performance bond, in the amount
indicated at E�ibit A, Paragrapl� 18, in the fon�� prescribed by tl�e City and by such
sureties whicl� are autl�orized to transact such business in tl�e State of Cali£oinia, listed as
approved by the United States Department of Treasury Circular 570,
httu:/hv�vw.fms.treas.00v/c�70, and whose underwriting limitation is sufficient to issue
bonds in the amount required by tl�e Agreement, and which also satisfy tl�e requireinents
stated in Section 995.660 of tbe Code of Civil Procedure, except as provided oiherwise
by laws or regulations. All bonds signed by an agent must be accompanied by a certified
copy of sucl� agenYs authority to act. Surety companies must be duly licensed or
authorized in tl�e jurisdiction in which the Project is IocaCed to issue bonds for the limits
so required. Fonn must be satisfactory to the Risk Manager or City.
2. Letter of Credit. In the event that E�ibit A, at Paragraph 18, indicates the need for
Consultant to provide a Letter of Credit (indicaYed by a cl�eck mark in the parenthetical
space immediately preceding tl�e suUparagraph entitled "Letter of CrediP'), then
Consultant shall provide to the City an in�evocable letter of credit callable by tbe Ciry at
its unfettered discretion by submitting to tl�e bank a lefter, signed by the City Manager,
stating that the Consultant is in Ureacl� of the tenns of this Agreement. The letter of
credit shall be issued by a bank, and be in a fom� and amount satisfactory to the Risk
Manager or City Attomey which amount is indicated in the space adjacent to the term,
"Letter of Credit" in E��ibit A, Paragraph 18.
3. Otl�er Securitv. In the event d�at E�cl�ibit A, at Paragraph 18, indicates the need for
Consultant to provide security other than a Performance Bond or a Letter of Credit
(indicated by a check mark in the parenthetical space immediately preceding the
suUparagraph entitled "Otl�er Securiry"), then Consultant shall provide to the City such
Paee 7
Two Parp'Agreenren(Bebveen dre Cip'nf Chula Vis1a and Fiducimv Exnerts.LLC fw'l�iduciar>>Services for llre CiN De(erred Conmensarion
Plans.
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other securit�� therein listed in a form and amount satisfacrory to the Risk A4anager or
City Attornev.
E. Business License. Consultant a�rees to obtain a business license from the City and to
othenvise comply with Title � of the Chula Vista b4unicipal Code.
ARTICLE II. CITl' OBLIGATIONS
A. Consultation and Cooperation. City shall rewlarly consult the Consultant for the purpose
of reviewine the proeress of the Defined Services and Schedule; and to provide direction and
widance to achie�e the objectives oF this Agreement. The City shall allow Consultant access
to its office facilities; files and records, as deemed necessary and appropriate by the City,
throuehout the term of this Aereement. ln addition; City agrees to provide the materials
identified at Exhibit A, Paragraph 9; �vith the understanding that delay in the provision of
those materials beyond thirty days after authorization to proceed; shall constitute a basis for
the justifiable delay in the Consultant's performance.
B. Compensation.
l. Follo�ti�ine Receiot of Billine. Upon receipt of a properly prepared bill from Consultant,
submitted to the Ciry as indicated in Exhibit A, Paraaraph 17, but in no event more
frequently than monthly; on the day of the period indicated in E�chibit A, Para�raph 17;
City shall compensate Consultant for all services rendered by Consultant according to the
terms and conditions set foRh in E�chibit A; Paraeraph 10; adjacent ro the goveming
compensation relationship indicated by a "checkmark" next to the appropriate
arrangement, subject to the requirements for retention set forth in Paragraph 13 of
E�ibit A; and shall compensate Consultant for out of pocket expenses as provided in
Exhibit A; Paraeraph 1 l.
2. Supporting Information. Any billing submitted by Consultant shall contain sufficient
information as to the propriety of the billing, induding properly executed payrolls time
records, invoices, contracts, or vouchers describine in detail the nature of the charges to
the Project in order to permit the City to evaluate that the amount due and payable is
proper, and such billing shall specifically contain the City's account number indieated on
Exhibit A, Paraeraph 17(C) to be chareed upon makinQ such payment.
3. Exclusions. In determinine the amount of the compensation Ciry will exclude any cost
1) incurred prior to the effective date of this Agreement; or 2) arisine out of or related to
the errors, omissions; ne�ligence or acts of willful misconduct of the Consultant, its
agents, employees, or subcontractors.
a. Erro�s ond Omissrons. In the event that the Ciry Administrator determines that
the Consultant's neelieence, errors, or omissions in the performance of work
under this Aareement has resulted in expense to Ciry b eater than would have
resulted if there were no such neelieence. errors, omissions. Consultant shall
reimburse City for any additional expenses incurred by the City. \'othin� in this
Paee 8
Troo Pan}•Agreemersl Ben.ren the Cip�nf Chula �tsta and Fiducian�Eroertc LLC(ar Fidverarv Serviees for rFe Cin Deferred Campensation
Plau.
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paragraph is intended to limit City's rights under other provisions of this
Agreement.
4. Pavinent Not Final Approval. The Consultant understands and agrees that payment to the
Consultant for any Project cost does not constitute a City final decision about whether
that cost is allowable and eligible for payment uvder the Project and does not coi�stitute a
waiver of any violation of Consultant of die teiYns of the Agreement. The Consultant
acknowledges that City �vill not make a final determination about the eligibility of any
cost until the final payment has been made on the Project or fl�e results of an audit of the
Project requested by the City 6as been completed, whichever occurs latest. If Ciry
determines that the Consultant is vot entitled to receive any portion of the compensation
due or paid, Ciry will notify the Consultant in writing, stating its reasons. The Consultant
agrees that Project closeout will not alter the Consu]tanYs responsibility to retum any
funds due City as a result of later refunds, corrections, or other similar transactions; nor
will Project closeout alter the right of City to disallow costs and recover funds provided
for the Project on the basis of a later audit or other review.
a. Consultant's Obligation to Pay. Upon notification to the Consultaut that specific
amounts are owed to City, whether for excess payinents or disallowed costs, the
ConsultanC agrees to remit to City prom�tly the amounts owed, including applicable
interest.
ARTICLE lli. ETHICS
A. Financial Interests of Consultant
1. Consultant is Desienated as an FPPC Filer. If Consultant is designated on Exhibit A,
Paragraph 14, as an "FPPC filer," Consultant is deemed to be a "ConsultanY' for the
purposes of the Political Refom� Act conflict of interest and disclosure provisions, and
shall report economic interests to tl�e City Clerk on Che required Statement of Economic
Interests in sucli reporting categories as are specified in Paragrapl� 14 of Exhibit A, or if
none are specified, tl�en as detennined by the City Attomey.
2. No Participation in Decisiou. Regardless of wbether Consultant is designated as an FPPC
Filer, Consultant sball not make, or participate in making or in any way attempt to use
Consultant's position to influence a governmental decision in which Consultant knows or
has reason to lu�ow Consultant has a financial interest other than the compensation
promised by this Agreement.
3. Search to Determine Economic Interests. Regardless of whether Consultant is designated
as an FPPC Filer, Consultant wan�ants and represents that Consultant has dilige��tly
conducted a searcl� and inventory of Consultant's economic interests, as the term is used
in the regulations proinulgated by the Fair Political Practices Commission, and has
detennined that Consultant does not, to tl�e best of Consultaut's knowledge, have an
economic interest whicl� would conflict witl� Consultant's duties under this Agreement.
Page 9
TN�o Party Agrcewent Be�wecu the Ciry�oJClnda I'ista and Fiducimv Ex�nercc LLC fm�Pidnaimv Sernicee fm'rlre Citv Delerred Con�nm�satimi
Plans.
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4. Promise Not to Acquire Conflictine Interests. Reeardless of whether Consultant is
desi�nated as an FPPC Filer; Consultant further warrants and represents that Consultant
�vill not acquire, obtain; or assume an economic interest durins the term of this
A�reement which would constitute a conflict of interest as prohibited by the Fair Political
Practices Act.
�. Dutv to Advise of Conflictine L�terests. Reeardless of�a�hether Consultant is designated
as an FPPC Filer, Consultant further �varrants and represents that Consultant will
immediately advise the Ciry Attomey if Consulta�t leams of an economic interest of
ConsultanPs [hat may result in a conflict of interest for the purpose of the Fau Polirical
Practices Act, and rewlations promul�ated thereunder.
6. Specific �'�'arranties AQainst Economic Interests. Consultant �3�arrants; represents and
aorees that:
a. \'either Consultant, nor ConsultanPs immediate family members; nor Consultant's
employees or aeents (Consultant Associates) presently have any interest; directly or
indirectly, �vhatsoever in any property ���hich may be the subject matter of the Defined
Services; or in any property within 2 radial miles from the esterior boundaries of any
property which may be the subject matter of the Defined Sen=ices, (Prohibited
Interest), other than as listed in E�chibit A; Paragraph 14.
b. No promise of future employment, remuneration, consideration, eratuity or other
reward or eain has been made to Consultant or Consultant Associates in connection
with Consultant's performance of this Aereement. Consultant promises to advise City
of any such promise that may be made during the Term of this Aareement; or for
twelve months thereafter.
c. Consultant Associates shall not acquire any.such Prohibited Interest �i�ithin the Term
of this Aereement; or for hvelve months after the expiration of this Ageement,
except �vith the written permission of City.
d. Consultant may not conduct or solicit any business for any party to this Agreement;
or for any thud party that may be in conflict with Consultant's responsibilities under
this Agreement, except with the written permission of City.
N. LIQUIDATED DAMAGES
A. Application of Sectioa The provisions of this section apply if a Liquidated Damages Rate
is provided in E�ibit A, Para�raph 13.
1. Estimatine Damaees. It is acknowledged by both parties that time is of the essence in the
completion of this Aereement. It is difficult to estimate the amoun[ oFdamages resulting
from delay in performance. The parties have used their judgment to amve at a reasonable
amount to compensate for delay.
Paee l0
Tn�o Parq•dgreemen(Benreen the Ciry�of Chufn 1�sm and Fidvcram Ezoer(t.LLC(or Fiduciam Servicu for lhe Cirv Deferred Comneuanon
Plans.
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2. Amount of Penaltv. Failw�e to con�plete tl�e Defined Services within tl�e allotted time
period specified in this Agreement sl�all result in d�e following penalty: For each
consecutive calendar day in excess of the time specified far the completion of the
respective work assignment or Deliverable, the Consultant shall pay to the Ciry, or have
withheld from monies due, the sum of Liquidated Damages Rate provided in E�chibit A;
Paragraph 13 (Liquidated Damages Rate).
3. Request for Extension of Time. If the performance of auy act required of Consultant is
directly prevented or delayed by reason of sh�ikes, lockouts, labor disputes, unusual
govemmental delays, acts of God, fire, floods, epidemics, freight embargoes, or other
causes beyond the reasonable coi�trol of the Consult�ant, as detennined by the Ciry,
Consultant shall be excused from perfonning tl�at act for the period of time equal to the
period of time of the preve»tion or delay. In the event Consultant claims the existence of
sucli a delay, the Consultant sl�all notify the City's Coutract Admivistrator, or designee, in
writing of that fact within ten calendar days after tl�e begim�in� of any such claimed
delay. Extensions of time will not be granted for delays to minor portions of work unless
it can be shown that such delays did or will delay the progress of the work.
ARTICLE V. IND�MNIFICATION
A. Defense, Indemnity, and Hold Harmless.
I. General Requirement. To the maxin�um extent allowed by law, Coasultant shall defend,
indenmify, protect and l�old harmless tl�e City, its elected and appointed officers, agents
and employees, from and against any and all claiins, demands, causes of action, costs,
expenses, (including reasonable attomey's fees and actual costs), liability, loss, damage
or injury, in law or equity, to property or persons, including wrongful death, in any
manner arising out of or incident to any alleged acCs, omissions, negligence, or willful
misconduct of Consultant, its officials, officers, employees, agents, and contractors,
arising out of or in connection with the perfoimance of the Defined Services, tl�e results
of such performance, or tl�is Agreement. This indemnity provision does not include any
daims, damages, liability, costs and expenses arising fi-om the sole negligence or sole
willful misconduct of the Ciry, its officers, employees. Also covered is liability arising
from, coimected witl�, caused by or claimed to be caused by the active or passive
negligent acts or omissions of the City, its agents, officers, or employees which may be in
combination with tlie active or passive negligent acts or omissions of the Consultant, its
employees, agents or officers, or any tl�ird paiTy.
2. Desian Professional Services. Notwithstanding the forgoing, if the services provided
under this Agreement are design professio��al services, as defined by California Civil
Code section 2782.5, as may be amended from tiine to time, the defense and indemnity
obligation under Section 1; above, sl�all be limited to tl�e extent required by Califomia
Civil Code section 2782.8.
3. Costs of Defense and Award. Included in the obligations in Sections A.1 and A2, above,
is the Consultant's obligation to defend, at ConsultanYs own cost, expense and risk, any
Page 11
Twn PartyAgreemeni Benceen Ihe Ciq�nf Cluifo Vis/a and Fidi�cinm Ea'oerls LLC fa'Fidncia��Services'(ar 1/re CiN Defen'ed Carrpensa(on
P(arrs.
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and all suits; actions or other leeal proceedings, that may be brought or instituted aeainst
tbe City, its duectors, officials, officers, employees, a�ents and/or ��olunteers, subject to
the limitations in Sections A1. and A.2. Subject to the limitarions in Sections A1. and
A?.; Consultant shall pay and satisfy any judgment, award or decree that may be
rendered aeainst Ciry or its directors; officials, officers; employees; agents and/or
volunteers, for any and all related leeal expenses and costs incurred by each of them.
4. Insurance Proceeds. Consultant's obligation to indemnify shall not be restricfed to
insurance proceeds, if any, received by the Ciry; its directors; officials, officers,
employees; agents, and/or volunteers.
�. Declarations. Consultanrs oblieations under Artide V shall not be limited by any prior
or subsequent declaration by the Consultant.
6. Enforcement Costs. Consultant a�rees to pay any and all costs City incurs enforcing the
indemnity and defense provisions set forth in ARicle V.
7. SurvivaL Consultant's oblieations under rlrticle V shall survive the termination of this
Aereement. V
8. No Alteration of Other Oblieations. This Article V; shall in no way alter, affect or
modify any of the Consultanr s other oblieations and duties under this Agreement.
ARTICLE VI. TERMINATION OF AGREEMENT
A. Terminatioo for Cause. I£ duou�h any cause, Consultant shall fail to fulfill in a timely and
proper manner Consultant's obli�ations under this Agreement, or if Consultant shall violate
any of the covenants, a�reemenu or stipulations of this Agreement, Cin� shall have the risht
to terminate this Agreement by Qiving written notice to Consultant of such termination and
specifying the effective date thereof at least five (�) days before the effective date of such
termination. In that event, all finished or unfinished documents, data, studies; surveys,
dra���ings, maps; reports and other materials prepared by Consultant shalL at the option of the
City, become the property of the City; and Consultant shall be entitled to receive just and
equitable compensation, in an amount not to exceed that payable under this Agreement and
less any dama�es caused City by Consultant's breach, for any �vork satisfactorily completed
on such documents and other materials up to the effective date of\TOtice of Termination.
B. Termination of Agreement for Con��enience of City�. Ciry may terminate this Aereement
at any time and for any reason, by �iving specific written notice to Consultant of such
termination and specifying the effective date thereof, at least thirty (30) days before the
effective date of such termination. In that event, all finished and un£mished documents and
other materials described hereinabove shall, at the option of the City, become City's sole and
exclusive property. If the Agreeme�t is terminated by Ciry as provided in this paragraph;
Consultant shall be entitled to receive just and equitable compensation, in an amount not to
exceed that payable under this A�reement, for any satisfactory �vork completed on such
documents and other materials to the effective date of such termination. Consultant hereby
Paee 12
Tx•o Parp�Agreeme�v Benceen�he Cit}•of Chula lQsta and Fidvciarv Erneru.LLC for Fiduciarn Services for the Cim Deferred Corweualion
P(ans.
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expressly waives any and all claims for damages or compensation arising under this
Agreement except as set fortl� in this section.
ARTICLE V1I. RECORD RETENTION AND ACCESS
A. Record Retention. During the course of the Project and for tl�ree (3) years following
completion, the Consultant agrees to maintain, intact and readily accessible, all data,
documents, reports, records, contracts, and supporting materials relating to the Project as City
may require.
B. Aceess to Records of Consultant and Subcontractors. The Consultant agrees to permit,
and require its subcontractors to pennit City or its authorized representatives, upon request,
to inspect all Project work, materials, payrolls, and otller data, and to audit the books,
records, and accounts of tl�e Contractor and its subcontractors pertaining to the Project.
C. Project Closeout. Tl�e Consultant agrees Cl�at Project closeout does not alter the reporting
and record reteution requirements of this Agreement.
ARTICLE VllI. PROJECT COMPLETION, AUDIT, AND CLOSEOUT
A. Project Completion. Witl�in ninety (90) calendar days following Project completion or
termination by City, Consultant agrees to submit a final certification of Project expenses and
auditreports, as applicable.
B. Audit of Consultants. Consultant agrees to perform financial and compliance audits the
City may require. The Consultant also agrees to oUtain any other audits required by Ciry.
Consultant agrees tbat Project closeout will not alter Consultant's audit responsibilities. Audit
costs are allowable Project costs.
C. Project Closeout. Project closeout occurs when City notifies the Consuttant that City has
closed the Project, and either forwards tl�e final �ayment or aclmowledges that the Consultant
has remitted tl�e proper refund. The Consultant agrees tl�at Project doseout by City does not
invalidate any continuing requirements imposed by tUe Agreement or any unmet
requirements set forth in a written notification from City
ARTICLE IX. MISCELLANEOUS PROVISIONS
A. Assignability. The services of Consultant are personal to the City, and Consultant shall not
assign any interest in this Agreement, and shall not transfer any interest in the same (whether
by assignment or notation), without prior written consent of City.
1. Limited Consent Ci[y hereby co�sents to the assignn�ent of the portions of the DeSned
Services identified in Exhibit A, Paragrapl� 16 to the subconsultants identified as
"Pennitted Subconsultants."
Page 13
Two ParryAgreement Belroeen Nre Ci1��r�fCGu1a Vista and Fiduciarc Ezpe�9s LLC(or Fiducimv Sernices forlhe CiN Defeia'ed Conruensaiion
P[ans.
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B. O��•nership, Publication, Reproduction and Use of �'Iaterial. All reports; studies;
information, data; statistics, forms, designs, plans, procedures, systems and any ott�er
materials or properties produced under this Agreement shall be the sole and exclusive
property of Ciry. No such materials or propeRies produced in ���hole or in part under this
Agreement shall be subject to private use; copyrishts or patent rights by Consultant in the
United States or in any other country without the express �ritten consent of City. Ciry shall
have unrestricted authority to publish; disclose (e�:cept as may be limited by the provisions of
the Public Records Act), distribute, and othen;�ise use; copyright or patent, in whole or i❑
part, any such reports, studies, data; statistics; forms or other materials or properties produced
under this Aereement.
C. Independent Contractor. Ciry is interested only in the results obtained and Consultant shall
perform as an independent contractor with sole control of the manner and means of
performin� the semices required under this Aereement Ciq� maintains the ri�ht only to
reject or accept Consultant's work products. Consultant and any of the Consultant's agents;
employees or representatives are, for all purposes under this Agreement; independent
contracrors and shall not be deemed to be employees of Ciry, and none of them shall be
entitled to any bene5ts to �i�hich City employees are entitled includine but not limited to;
overtime, retirement benefits, worker's compensation benefits, injury leave or other leave
benefits. Therefore, City will not withhold state or federal income tax; social security tas or
any other payroll tax, and Consultant shall be solely responsible for the payment of same and
shall hold the City harmless with reeard ro them.
1. Actions on Behalf of Citv. Except as City may specify in �vriring, Consultant shall have
no authoriry, express or implied; to act on behalf of Ciry in any capaciry «=hatsoever, as
an agent or otherwise. Consultant shall have no authority, express or implied, to bind
City or its members, agenu, or employees; ro any obli�ation�vbatsoe�er, unless expressly
provided in ihis Agreement.
2. No ObliQations to Third Parties. In connection with the Project, Consultant aerees and
shall require that its agents, employees, subcontractors agree that Ciry sball not be
responsible for any obligations or liabilities to any third party, includine its aeents,
employees; subcontractors, or other person or entity that is �ot a party to this A�reement.
Notwithstanding that City may have concuned in or approved any solicitation;
subagreement, or third party contract at any tier, City shall have no obli�ation or liabiliry
to any person or entity not a party to this A�reement.
D. Administrari��e Claims Requirements and Procedures. No suit or arbitration shall be
brought arisin� out of this Agreement; against Ciry unless a claim has first been presented in
writine and filed with Ciry and acted upon by City in accordance �i�ith the procedures set
forth in Chapter 134 of the Chula Vista Municipal Code, as same may from time to time be
amended; the provisions of which are incorporated by this reference as if fully set forth
herein, and such policies and procedures used by City in the implementation of same. Upon
request by Ciry; Consultant shall meet and confer in good faith �i�ith Ciry for the purpose of
resolving any dispute over the terms of this Agreement.
Paee 14
Two Pa,i}•Agreement Ben.rm�he Ciry•of Chula I csfa and Fiduciorv Ezoerts.LLC for Fiduciarv Sen�icer(or!he Cirv Deferred Compensation
Plans.
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E. Administration of Contract. Each pariy designates tl�e individuals (Contract
Administrators) indicated on Exhibit A; Paragraph 12, as that party's contract administrator
who is authorized by the parry to represent it in the routine admivish-ation of this Agreement.
F. Term. This Agreement shall terminate when the parties I�ave complied with all executory
provisions hereof.
G. Statement of Costs. In tUe event that Consultant pre�ares a report or docutnent, or
participates in the preparation of a report or document in perforniing the Defined Services,
Consultant shall include, or cause the inclusion of, in the report or document, a statement of
the numbers and cost in dollar amounts of all contracts aud subcontracts relating to the
preparation of the report or document.
H. Consultant is Real Estate Broker and/or Salesman. If tl�e box on Exhibit A, Paragraph 15
is marked; the Consultant and/or its principals is/are licensed with-the State of California or
some other state as a real estate biroker or salesperson. Otl�eiwise, Consultant represents that
neither Consultant, nor its principals are licensed real estate Urokers or salespersons.
I. Notices. All notices, demands or requests provided for or permitted to be given pursuant to
this Agreement must be in writin�. All notices, demands and requests to be sent to any party
shall be deemed to have been properly given or served if personally served or deposited in
the United Sfates mail, addressed to such parry, posYage prepaid, registered or ce�tified, with
return receipt requested, at the addresses identified in this Agreement as the places of
business for each of the designated parties.
J. Integration. This Agreeme�t, together with any other written document referred to or
contemplated in it, embody the eutire Agreement and understanding between the parties
relating to tbe subject matter hereo£ Neither tl�is Agreement nor any provision of it may be
amended, inodiSed, waived or discharged except by an instrument in writing executed by the
parry against which enforcement of sucli amendinent, waiver or discharge is sought.
K. Capacity of Parties. Each signatory and party to this Agreement warrants and represents to
the other parry that it has legal authority and capaciry and direction from its principal to enter
into this Agreement, and that all necessary resolutio��s or otl�er actions have been taken so as
to enable it to enter into tl�is Agreement.
L. Governing Law/Venue. This A�reement shall be govemed by and construed in accordance
with the laws of the State of California. Any action arising under or relating to this
Agreement shall be broueht only in the federal or state courts located in San Diego Counry,
State of Califomia, and if applicable, the City of Chula Vista, or as close thereto as possible.
Venue for this Agreement, and perfonnance under it, shall be the City of Chula Vista.
(End of page. Next page is signature page.)
Pa�e 1�
Tioo PartyAgrcen�ent Banvecri Uie Cip�ofClrula Vism m�d Fidnciarn Eznc-�'1s LLC for F'iducim��Savices for�the Cirv De(erred Comaensmion
Plons.
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Signature Page
to
Agreement beri��een
City of Chula Vista and
Fiduciary Esperts, LLC
For Fiduciar�� Ser�-ices for the Cit��'s Deferred Compensation Plans
II�' 1WITI�'ESS WHEREOF, City and Consultant bave executed this Agreement;
indicatine that they have read and understood same; and indicate their full and complete consent
to its terms:
City of Chula Vista
By:
�4ayor
Attest:
Donna Noms, Ciry Clerk
Approved as to form:
Glen R. Gooeins; Ciry Attomey
Fid � Expert L
By:
aribel L �
Principal and Client Relationship M;r
E�chibit List to Aareement: Exhibit A
(LIST ADDITIO\'AL E\HIBIi'S, AS NECESSARI'�
Paee 16
Tkro Parq•Agreemenl Bm��een 1he Cip'af C6u(u 1 am and Fidutiarv Eraerts.LLC for Fiduciarv Sm�icet(or the Cirv Deterred Camoensa�ion
larzs.
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Exhibit A
to
Agreement between
City of Chula Vista
and
Fiduciary Expert, LLC
1. Effective Date: The Agreement sball take effect upon full execution of the Agreement, as of
the effective date stated on pa�e 1 of the Agreement.
2. City-Related Entity:
(X) City of Chula Vista, a municipal chartered corporation of the State of California
O The Chula Vista Public Financing Authority, a - .
O The Chula Vista Industrial Developinent Authority, a
( ) Otl�er: , a [insert business form]
(C�tY)
3. Place of Business for City:
City of Chula Vista
276 Fourth Avenue
Chula Vista, CA 91910
4. Consultant
Fiduciary Expert, LLC
5. Business Form of Consultant:
( ) Sole Proprietorship
( ) Partnership
( ) Corporation
(X) Limited Liability Company
6. Place of Business, Telephone a��d Fax Number of Consultant:
2380 Treehouse Street
Chula Vista, CA 9191�
(619) 819-8604
(888) 668-4015 FAX
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Troo Par��Aereeeienl8ehaeeri d�e Cil��of Chu(a Vis�o o��d Fidueian�Faoeras.LLC for Fideiciurv Services(or lhe Cim Defeiv'ed Com�ensa(ion
P(ans.
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7. General Duries:
Provide any and all sen�ices to the City to ensure that the Ciry is in compliance with its
responsibilities as a Fiduciary to the Ciry's deferred compensation plan participants.
8. Scope of�'l'ork and Schedule:
A. Detailed Scope of�\'ork:
Consultant shall:
1. Provide a full Fiduciary-Cost Analysis on the plans for disco��ery purposes and
identify areas of need for consideration prior to any changes or implementation.
2. Act as an independent fiduciary and provide investme�t advice to City with respect to
decisions; and make decisions where necessary, related to the Plan's iovestment of
assets for the Plans.
3. Take minutes of ineetines with Inveshnent Committee and document process for
proper follo�v up and compliance and set up corporate eovernance.
4. Compose and develop City Policy dele�ating and formalizing the duties invol��ed as a
plan fiduciary.
�. Provide a market overview addressine the major mazkets; indices, and sectors and the
economic statistics that are affectine them.
6. Conduct comprehensive quarterly investment analysis review of all Plans and
investment options as well as additional options and asset classes to consider.
7. Conduct RFP if determined necessary and assist Ciry in managin� the RFP process
through and after implementation.
8. Provide an in-depth portfolio summary, including fund and benchmark retums; style
analysis and overall portfolio returns. Remove redundant funds from the pro�ider's
fund line up.
9. Provide a detailed quantitative and qualitative examination of each mutual fund
investment option within the Plan, includine performance numbers versus the
cateeory and index, manaeer sryle drifr, risk/retum; standard deviation; Sharpe ratio,
expense ratio, upside and downside capture and fund allocation.
10. Annually revie�v Administrative Investment Policy Statement (IPS) to ensure it is
meering the needs of the Client and the deferred compensation participants.
Paee 1S
Two Parq•Agreenrenl8enrern the Cip•of Chu(a �'esm and Fiduciarv Ezoertc LLCTor Fiduciarv Services far�he Cirv Deferred Comoensation
Plans.
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11. Continually monitor the Plans' inveshnents to ensure these are meetin� the IPS
parameters as well as ensurivg adequate investment options for the Plan participants.
12. Make recommendations of possible alternatives to funds whei� in conjunction with
the Investment Committee, it is determined a change in fund line-up is necessary.
13. Be available as requested but not less than two times per year to meet with the
Invesrinent Committee or other people designated by the Client fo present tl�e
quarterly reports, and to assist committee with avy questions or issues that may arise
14. Provide a Request for Information or Request for Proposal regarding the Plans in
order to provide a fair and competitive analysis of wl�at competitors would be willing
to offer the Client as a tool of negotiation with current vendors.
15. Act as co-fiduciary on all investment options by providing investment advice on a
regular basis to the Plans regarding fhe plan assets in accordance witl� the provisions
of this agreement.
16. Assist tl�e Client with ensurin� that the Plans are in compliance with the requirements
of section 404(c) by ensuring tliat tl�e fund line u� constitutes a broad ra�ge of
investment altematives, as defined in regulations section 2550.404(c)-1.
17. Act as plan fiduciary and formalize process necessary to administer and manage plan
assets and disCributions on bel�alf of plan participants.
18. Act as a 3-38 Fiduciary for City to remove liability firom city council members and
finance department.
19. Perform due diligeace and benchmarking of delegated vendors/pirofessionals needed
to perform needed administration of pla��.
20. Prepare a Plan Expense Summary separating service costs and management costs to
estimate service provider revenues with a detailed analysis of revenue distribution to
service provider(s) and all related parties.
21. Perform recordkeeping services such as security systems, tax and accounting services
aud information provided to participants and the Ciry.
B. Date for Commencement of Consultant Services:
(X ) Same as Effective Date of Agreement
( ) Other:
C. Dates ar Time Limits for Delivery of Deliverables:
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T�vo Parq�Agreenient Belween the Cip�njChula 1�sla and Fiduciam Emerts.LLC for Fiducim��Services(or the CiNDeferred Comoensalion
Plmes.
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Deliverable No. 1:Completion of Annual Deferred Compensation Review for fiscal }ear
2014. on or before November 4. 2014.
Deliverable \'o. 2: Completion of Annual Deferred Compensation Review for fiscal year
201�; on or before November 4, 2015.
Deliverable No. 3: Completion of Annual Deferred Compensation Review for fiscal year
2016, on or before November 4, 2016.If first one-year rene�val option is exercised:
Deliverable \To. 4: Completion of Annual Deferred Compensation Review for fiscal year
2017; on or before November 4, 2017.
If second one-year renewal option is exercised: Deliverable \To. �: Completion of Annual
Deferred Compensation Review for fiscal year 2018; on or before November 4, 2018.
D. Date for completion of all Consultant sen�ices:
This agreement will be for a three-year term, witb options for n��o, one-year renewals. A
possible total of five-years for the a�reement will be in effect should the options be
exercised. The aereement term will end on \iovember 4, 2016, unless the Ciry exercises
its option to renew. The City has sole discretion to exercise the renewal options. The City
may do so by written notice to the Consultant, by the City Manager or his designee. If the
first option to re�ew is exercised, the term of the agreement will end on November 4,
2017; if both one-year renewal options are exercised, the aereement term shall end on
November 4. 2018.
9. Materials Required to be Supplied by City to Consultant:
The City agrees to make available to Consultant, without cost, sufficient copies of any applicable
reports; a�reements, contracts, resolutions and other relevant documents reearding the City's
Deferred Compensation Plans as reasonably may be required from time to time for the prompt
and efficient performance by Consultant of its obligations hereunder.
10. Compensation:
A. (X) Single Fixed Fee Arrangement.
For performance of all oFthe Defined Services by Consultant as herein required; Ciry shall
pay a single fixed fee in the amounts and at the times or milestones or for the Deliverables set
fonh belo��:
Sinele Fixed Fee Amount:
Completion of Annual Deferred Compensation Revie�v for:
Fiscal Year 2014: 520.000
Fiscal Year 201�: �20,000
Fiscal Year 2016: �20.000
IF fust option to rene�v exercised; Fiscal I'ear 2017: S20,000
Paae 20
Txro Parq�Agreement BtM'een the Cip'of Chula f4sta mrd Fiduciarv Eroerts.LLC for Fiduciarv Sen•icu for rhe Cirv Deferred Compensorion
Plau.
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If second option to renew exercised, Fiscal Year 2018: $20,000
Preparation of Request for Proposals $4,000
Milesrone or Event or Deliverable Amount or Percent of Fixed Fee
O 1. Interim Monthly Advances. The City shall make interim monthly advances
against the compensation due for each phase on a percentage of completion basis for
each given pl�ase such that, at the eud of each phase only the compensation for Chat
phase has been paid. Any payments made hereunder shall be considered as interest
free loans that must be retumed to the Ciry if the Pl�ase is not satisfactorily
completed. If the Phase is satisfactorily completed, the City shall receive credit
againsC the coinpensation due for that phase. Tl�e retention amount or percentage set
forth in Paragraph 19 is Co be applied to eacl� interim payment sucl� that, at the end of
the phase, the full retention has been held back from the coinpensation due for that
phase:Percentage of completion of a phase shall be assessed in the sole and
unfettered discretion by the ContracYs Administrator designated l�erein by the City, or
such other person as the City Manager shall designate, but only upon such proof
demanded by the City that l�as been provided, but in no event shall such interim
advance payment be made unless the Consultant shall have represented in writing that
said percentage of completion of the phase has been perfom�ed by the Consultant.
The practice of making interim monthly advauces sl�all not convert this agreement to
a time and materials basis of payment.
B. O Phased Fixed Fee An-angement.
For the performance of eacl� phase or portion of the.Defined Services by Consultant as are
separately identified below, City shall pay the fixed fee associated with eacb phase of Services,
in the amounts and at the tiines or milestones or DeliveraUles set forth. Consultant shall not
commence Services under any Phase, and shall not be entitled to the compensation for a Phase,
unless Ciry shall bave issued a notice to proceed to Consultant as to said Phase.
Phase Fee for Said Phase
1. $
2. $
3. $
O 1. Interim Monthly Advances. The City shall make interim monthly advances
against tlie compensation due for eacl� pl�ase on a percentage of completion basis for �
each given phase such that, at the end of each phase only the compensation for that
phase has been paid. Any payments made hereu��der sl�all Ue considered as interest
free loans that must be retumed to tl�e City if the Phase is not satisfacYorily
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TH�o Par(}�Agreeu�ettt Benvaen Uie Ci��of CluJo 6isra artd Fiduciarr Exoer�s.LLC(or Fidnaiwv Services for the CiN De(erred Conmensnlion
Plans.
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completed. If the Phase is satisfactorily completed, the Ciry shall receive credit
against the compensation due for that phase. The retention amount or percentage set
forth in Para�raph 18 is to be applied to each interim payment such that, at the end of
the phase; the full retention has been held back from the compensation due For that
phase. Percentage of completion of a phase shall be assessed in the sole and
unfettered discretion by the Contracts Administrator designated herein by the Ciry, or
such other person as the City ManaQer shall desienate; but only upon such proof
demanded by the Ciry that has been pro��ided; but in no event shall such interim
advance payment be made unless the Consultant shall ha��e represented in�;�riti�a that
said percenta�e of completion of the phase has been performed by the Consultant.
The practice of making interim monthly advances shall not convert this a�reement to
a time and materials basis of payment.
C. ( ) Hourly Rare .�nanaement
For performance of the Defined Services by Consultant as herein required, City shall pay
Consultant for the productive hours of time spent by Consultant in the performance of said
Semices. at the rates or amounts set forth in the Rate Schedule herein below accordine to the
followine terms and conditions: y
(1) O Not-to-Esceed Limitation on Time and\4aterials Arrangement
Nonrithsianding the expenditure by Consultant of time and materials in excess of said
Maximum Compensation amount, Consultant agrees that Consultant will perform all of
the Defined Sen�ices herein required of Consultant for S ,
includin� all Materials, and other"reimbursables" (Maximum Compensation).
(2) O Limitation without Further Authorization on Time and n4aterials f�n-an�ement
At such time as Consultant shall have incurred time and materials equal to
S (Authorization Limit), Consultant shall not be entitled to
any additional compensation without further authorization issued in �vriting and approved
by the Ciry. I�TOthing herein shall preclude Consultant from providine additional Services
at ConsultanPs own cost and expense. See E�chibit B for wage rates.
O Hourly rates may increase by 6% for services rendered after [month], 20_, if delay
in providing services is caused by City.
ll. A4aterials Reimburseinent Arranaement
For the cost of out of pocket expenses incurred by Consultant in the performance of services
herein required; Ciry shall pay Consultant at the rates or amounts set forth belo�ti�:
(X)\'one; the compensatiou includes all costs.
Paee 22
T»�o Part��.4greemenl BeM•een Ihe Cip•of Chula I tsta artd Fiduciarv Ezoeru LLC for Fiduciarv Services for 1he Cim Deferred Compensation
Plans.
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Cost or Rate
( ) Reports, not to exceed $ $
( ) Copies, not to exceed $ $
( ) Travel, not to exceed $ $
( ) Printing, not to exceed $ ' �
( ) Postage, not to exceed $ $
( ) Delivery, not to exceed $ $
( ) Outside Services: $
O Other Actual Identifiable Direct Costs: �
not to exceed $ $
, not to exceed $ $
12. Contract Administrators:
City: Phillip Davis, Assistant Director of Finance
Consultant: Maribel Larios, President and Client Services Manager
13. Liquidated Dama2es Rate:
( ) $ per day.
( ) Other:
14. Statement of Economic lnterests, Consultant Reporting Categories, per Conflict of Interest
Code (Chula Vista Municipal Code chapter 2.02):
O I�'ot Applicable. Not an FPPC Filer. �
( X ) FPPC Filer
( X) Category No. 1. Investments, sources of income and business interests.
O Category No. 2. Interests in real property.
O Category No. 3. Investments, business positions, interests in real property, and
sources of income subject to the regulatory, permit or licensine authority of the
department administering this Agreement.
O Cate�ory No. 4. lnvestments and business positions in business entities ai�d sources of
income tl�at engage in land development, constructioi� or the acquisition or sale of
real proper[y.
O Category No. 5. Investments and business positious in business entities and sources
of income that, within the past nvo years, have contracted wiell tl�e Ciry of Chula
Paee 23
Two Par��Asreemerrt Benveen Ute Ciq•nf Chuln Vis�a a��d Fiduciom Eroerts.LLC Ior Fiduciarn Semices(or tlre Cirv Deferred Compensarion
Plmir.
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Vista or the City's Rede��elopment Agency to provide sen�ices; supplies, materials;
machinery or equipment.
O Category No. 6. Investments and business positions in business entities and sources of
income that; within the past h��o years, have contracted with the department
administerin� this Aoreement to provide services; supplies, materials; machinery or
equipment.
O List Consultant Associares interests in real property ���ithin 2 radial miles of Project
Property; if any:
li. O Consultant is Real Estate Broker and/or Salesman
16. Permitted Subconsultants: None.
17. Bill Processine:
A. Consultant's Billin� to be submitted for the follo�rine period of time:
( ) Monthly
( ) QuaRerly
( X) Other: Afrer annual deferred compensation plan review
B. Day of the Period for submission of ConsultanPs Billine:
( ) Fust of the Month
( ) l�th Day of each Month
( ) End of the D4onth
O Other:Upon completion of Annual Deferred Compensation Revie�v.
C. City's Account\TUmber: To be assigned by the Finance Department
18. Securiry for Performance
( ) Performance Bond, S
( ) Letter of Credit, �
( ) Other Securiry:
Pase 24
Txro Parq•Agreemem Ba+ceen rhe Ciq�nf Chula I�sta and Fiduciarv Fsnats LLC(or Fiduciaro Servicu(or the Cirv Deferred Comnensotion
Plans.
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Re�ised 09/18/73 J1.1M
I
Type:
Amount: $
O Retention. If this space is checked, then notwitl�standing oCl�er provisions to the contrary
requiring the paymenY of compensation to the Consultant sooner, tl�e City shall be entitled
to retain, at their option, either the following "Retention Percentage" or "Retention
Amount' until the City determines that tl�e Retention Release Event, listed below, has
occurred:
( ) Retention Percentage:
( ) Retention Amount: $
Retention Release Event:
O Completion of All Consultant Services
( ) Other:
O Other: The Retention Ainount may be released on a monthly basis provided that
Consultant has perfom�ed said monthly services to the sole satisfaction of the Assistant City
Manager/Director of Development Services or l�is designee.
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Trvn pnrtpAgree�uext 8enreen tGe Ciq�oJGr�da 1'i.cln med Fiduciarn Eiperls LLC Im-Fidnc7ar��Sm��ices(or�he Cih�Deferred Conioensation
Plons.
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