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HomeMy WebLinkAboutRES NO 60-96 RESOLUTION NO. 6 0 ' 9 6 A RESOLUTION ESTABLISHING A DEFERRED COMPENSATION PLAN FOR THE CITY MANAGER WHEREAS, the City of Bakersfield (hereinafter "Employer") recognizes that the City Manager does valuable services to the City of Bakersfield; and WHEREAS, the establishment of a deferred compensation plan for such City Manager serves the interests of the Employer by enabling it to provide reasonable retirement security for this employee, by providing increased flexibility in its personnel management system, and by assisting in the retention of competent personnel; and WHEREAS, the Employer has determined that the establishment of a deferred compensation plan to be administered by the ICMA Retirement Corporation serves the above objections; and WHEREAS, the Employer desires that its deferred compensation plan be administered by the ICMA Retirement Corporation, and that the funds held under such plan be invested in the ICMA Retirement Trust, a trust established by public employers for the collective investment of funds held under their retirement and deferred compensation plans; NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF BAKERSFIELD AS FOLLOWS: That the Employer hereby adopts or has previously adopted the deferred compensation plan (the "Plan") in the form of: (Select one) OF~GINAL [] The ICMA Retirement Corporation Deferred Compensation Plan, referred to as Appendix A [] The plan provided by the Employer (executed copy attached hereto), BE IT FURTHER RESOLVED that the Employer hereby executes the Declaration of Trust of the ICMA Retirement Trust, attached hereto as Appendix B, intending this execution to be operative with respect to any retirement or deferred compensation plan subsequently established by the Employer, if the assets of the plan are to be invested in the ICMA Retirement Trust. BE IT FURTHER RESOLVED that the Finance Director shall be the coordinator for this program; shall receive necessary reports, notices, etc. from the ICMA Retirement Corporation or the ICMA Retirement Trust; shall cast, on behalf of the Employer, any required votes under the ICMA Retirement Trust; Administrative duties to carry out the plan may be assigned to the appropriate departments, and is authorized to execute all necessary agreements with ICMA Retirement Corporation incidental to the administration of the Plan. ........ o0o ........ -2- ,2)HIGINAL I HEREBY CERTIFY that the foregoing Resolution was passed and adopted by the Council of the City of Bakersfield at a regular meeting thereof held on May 22, 1996, by the following vote: ting CITY CLERK and EX OFFICg~) of the Council of the City of Bakersfield APPROVED: ~AY ~ Z 1996 BoB , ^YOR CITY OF BAKERSFIELD APPROVED AS TO FORM: OFFICE OF THE CITY ATTORNEY BY JI.~D¥ K: SK(~USEN City Attorneyj JKS\meg S:~RES\TANDY.RES--May 16, 1996 -3- ORIGINAL EXPLANATION OF RIGHTS AND DUTIES UNDER DEFERRED COMPENSATION AGREEMENT 1. If the Employee remains in the active employ of the Employer until the Service Date, the Deferred Compensation will be payable to the Employee in a single lump sum immediately thereafter. The Employee's voluntary termination of employment (or termination for cause) before the Service Date will result in forfeiture of the entire Deferred Compensation. If the Employee is involuntarily terminated (other than for cause) prior to the Service Date, the Deferred Compensation shall become vested and payable to Employee in a single lump sum immediately thereafter. The Deferred Compensation will be fully vested and immediately payable in the event of termination of employment due to death or disability. It shall be the responsibility of the Employer to determine whether and when payment is due under the Deferred Compensation Agreement. Payment will be made directly by the Employer to the Employee, and the Employer will be responsible for all income and employment tax withholding and reporting on such payment. It is understood that the Employee may be subject to tax on the amount that becomes payable on the Service Date, whether or not the Employer actually causes a payment to be made at that time. The ICIVIA Retirement Corporation shall not have the right or duty to assure timely contribution of the Deferred Compensation, to determine whether the Employee has remained employed until the Service Date, or otherwise to enforce or carry out the terms of the Deferred Compensation Agreement between the Employer and Employee. The ICMA Retirement Corporation will maintain an individual account in the name of the Employee reflecting the amount invested in the ICMA Retirement rust under the Deferred Compensation Agreement, and the ICMA Retirement Corporation will remit the Deferred Compensation (i.e., the amount invested in the ICMA Retirement Trust plus or minus earnings or losses under the selected investment option) to the Employer upon the Employer's request at any time before or after the Service Date. It is the responsibility of the Employer to determine whether the deferred compensation agreement under Section 457(f) of the Internal Revenue Code and the investment of the deferred compensation under the investments options specified above are consistent with the requirements of applicable state law. I understand that where state law, local law, or the Employer's Plan restricts the nature of the investment of these funds, it will be necessary to restrict the investment choice to those available under the law or the plan. APPENDIX A Declaration of Trust of the ICMA Retirement Trust (Appendix B) 1/95 DECLARATION OF TRUST OF ICMA RETIREMENT TRUST ARTICLE I. NAME AND DEFINITIONS Section 1.1 Name: The Name of the Trust created hereby is the ICMA Retirement Trust. Section 1.2 Definitions: Wherever they are used herein, the following terms shall have the following respective meanings: (a) By-laws. The By-laws referred to in Section 4.1 hereof, as amended from time to time. (b) Deferred Compensation Plan. A deferred compensation plan established and maintained by a Public Employer for the purpose of providing retirement income and other deferred benefits to its employees in accordance with the provision of section 457 of the Internal Revenue Code of 1986, as amended. (c) Employees. Those employees who participate in Qualified Plans. (d) Employer Trust. A trust created pursuant to an agreement between RC and a Public Employer, or an agreement between RC and a Public Employer for administrative services that is not a trust, in either case for the purpose of investing and administering the funds set aside by such Employer in connection with its Deferred Compensation a[~raements with its employees or in connection w~th its Qualified Plan. (e) Investment Contract. A non-negotiable contract entered into by the Retirement Trust with a financial institution that provides for a fixed rate of return on investment. (f) ICMA. The International City/County Management Association. (g) ICMA/RC Trustees. Those Trustees elected by the Public Employers who, in accordance with the provisions of Section 3.1(a) hereof, are also members of the Board of Directors of ICMA or RC (or in the case of RC, former members of the RC Board). (h) Investment Adviser. The Investment Adviser that enters into a contract with the Retirement Trust to p/.rovide advice with respect to investment of the rust Property. (i) Portfolios. The separate commingled accounts of investment established by the investment Adviser to the Retirement Trust, under the supervision of the Trustees, for the purpose of providing investments for the Trust Property. (j) Public Employee Trustees. Those Trustees elected by the Public Employem who, in accordance with the provision of Section 3. l(a) hereof, are full- time employees of Public Employers. (k) Public EmployerTrustees. Public Employers who serve as trustees of the Qualified Plans. (I) Public Employer. A unit of state or local government, or any agency or instrumentality thereof, that has adopted a Deferred Compensation Plan or a Qualified Plan and has executed this Declaration of Trust. (m) Qualified Plan. A plan sponsored by a Public (o) Retirement Trust. The Trust createq by this Declaration of Trust. (p) Trust Property. The amounts held in the Retirement Trust on behalf of the Public Employers in connection with Deferred Compensation Plans and on behalf of the Public Employer Trustees for the exclusive benefit of Employees pursuant to Qualified Plans. The Trust Property shall include any income resulting from the investment to the amounts so held. (q) Trustees, The Public Employee Trustees and ICMA/RC Trustees elected by the Public Employers to serve as members of the Board of Trustees of the Retirement Trust. ARTICLE II. CREATION AND PURPOSE OF THE TRUST; OWNERSHIP OF TRUST PROPERTY Section 2.1 Creation: The Retirement Trust was created by the execution of this Declaration of Trust by the initial Trustees and Public Employers and is established with respect to each participating Public Employer by adop- tion of this Declaration of Trust. Section 2.2 Purpose: The purpose of the Retirement Trust is to provide for the commingled investment of funds held by the Public Employers in connection with their Deferred Compensation and Qualified Plans. The Trust Property shall be invested in the Portfolios, in Investment Contracts, and in other investments recom- mended by the Investment Adviser under the supe~i- sion of the Board of Trustees. No part of the Trust Property will be invested in securities issued by Public Employers. Section 2.3 Ownership of Trust Pro[3erty: The Trustees shall have legal title to the Trust Property. The Public Employers shall be the beneficial owners of the portion of the Trust Property allocable to the Deferred Com- pensation Plans. The po~on of the Trust Properly allocable to the Qualified Plans shall be held for the Public Employer Trustees for the exclusive benefit of the Employees. ARTICLE III. TRUSTEES Section 3.1 Number and Qualification of Trustees: (a)The Board of Trustees shall consist of nine Trustees. Five of the Trustees shall be full-time employees of a Public Employer (the Public Employee Trustees) who are authorized by such Public Employer to serve as Trustee. The remaining four Trustees shall consist of two per- sons who, at the time of election to the Board of Trustees, are members of the Board of Directors of ICMA and two persons who, at the time of election, are members or former members of the Board of Directors of RC (the ICMA/RC Trustees). One of the Trustees who is a director of ICMA, and one of the Trustees who is a director of RC, shall, at the time of election, be full- time employees of Public Employers. (b) No person may serve as a Trustee for more than two terms in any ten-year period. Section 3.2 Election and Term: (a) Except for the Trustees appointed to fill vacancies pursuant to Section 3.5 hereof, the Trustees shall be elected by a vote of a majority of the voting Public Employers in accordance with the procedures set forth in the By-Laws. (b) At the Employer for the purpose of providing retirement income to its employees which satisfies the firstetectionofTrustees, thraeTrusteesshallbeelected qualification requirements of Section 401 of ti~e ~):":i,~ foratermofthreeyears,threeTrusteesshallbeelected Internal Revenue Code, as amended. ~ for a term of two years and three Trustees shall be ';-' elected for a term of one year. At each subsequent (n) RC.The international City Management Association ? election, three Trustees shall be elected, each to serve Retirement Corporation. ~ for a term of three years and until his or her successor . :'i, is elected and qualified. Section 3.3 Nominations: The Trustees who are full-time employees of Public Employers shall serve as the Nominating Committee for the Public Employee Trust- ees. The Nominating Committee shall choose candi- dates for Public Employee Trustee in accordance with the procedures set forth in the By-Laws. Section 3.4 Resignation and Removal: (a) Any Trustee may resign as Trustee (without need for prior or subse- quent accounting) by an instrument in writing signed by the Trustee and delivered to the other Trustees and such resignation shall be effective upon such delivery, or at a later date according to the terms of the instru- ment. Any of the Trustees may be removed for cause, by a vote of a majodty of the Public Employers. (b) Each Public Employee Trustee shall resign his or her position as Trustee within sixty days of the date on which he or she ceases to be a full-time employee of a ' Public Employer. Section 3.5 Vacancies: The term of office of a Trustee shall terminate and a vacancy shall occur in the event his or her death, resignation, removal, adjudicated incompe- tence or other incapacity to pedorm the duties of the office of a Trustee. In the case of a vacancy, the remaining Trustees shall appoint such person as they in their discretion shall see fit (subject to the limitations set forth in this Section), to serve for the unexpired portion of the term of the Trustee who has resigned or othenvise ceased to be a Trustee. The appointment shall be made by a written instrument signed by a majodty of the Trustees. The person appointed must be the same type of Trustee (i.e., Public Employee Trustee or ICMA/RC Trustee) as the person who has ceased to be a Trustee. An appointment of a Trustee may be made in anticipation of a vacancy to occur at a later date by mason of retirement or resignation, pro- vided that such appointment shall not become effective pdor to such retirement or resignation. Whenever a vacancy shall occur, until such vacancy is filled as provided in this Section 3.5, the Trustees in office, regardless of their number, shall have all the powers granted to the Trustees and shall discharge all the duties imposed upon the Trustees by this Declaration. A written instrument certifying the existence of a va- cancy signed by a majority of the Trustees shall be conclusive evidence of the existence of such vacancy. Section 3.6 Trueteee Serve In Representative Capacity: By executingthis Declaration, each Public Employer agrees that the Public Employee Trustees elected by the Public Employers are authorized to act as agents and representatives of the Public Employers collectively. ARTICLE IV. POWERS OF TRUSTEES Section 4.1 General Powers: The Trustees shall have the power to conduct the business of the Trust and to carry on its operations. Such power shall include, but shall not be limited to, the power to: (a) receive the Trust Property from the Public Employers, Public EmployerTrustees or the trustee or administrator under any Employer Trust; (b) enter into a contract with an Investment Adviser providing, among other things, for the establishment and operation of the Portfolios, selection of the Investment Contracts in which the Trust Property may be invested, selection of the other investments for the Trust Propertyand the payment of reasonable fees to the Investment Adviser and to any sub- investment adviser retained by the Investment Adviser; (c) review annually the performance of the Investment Adviser and approve annually the contract with such Investment Adviser; (d) invest and reinvest the Trust Property in the Portfolios, the Investment Contracts and in any other investment recommended by the Investment 11 Adviser, but not including securities issued by Public Employers, prowded that if a Public Employer has directed that its monies be invested in one or more specified Porlfolios or in an Investment Contract, the Trustees of the Retirement Trust shall invest such monies in accordance with such directions; (e) keep such portion of the Trust Property in cash or cash balances as the Trustees, from time to time, may deem to be in the best interest of the Retirement Trust created hereby without liability for interest thereon; (f) accept and retain for such time as they may deem advisable any securifles or other property received or acquired by them as Trustees hereunder, whether or not such securities or other property would normally be purchased as investment hereunder; (g) cause any securities or other property held as part of the Trust Property to be registered in the name of the Retirement Trust or in the name of a nominee, and to hold any investments in bearer form, but the books and records of the Trustees shall at all times show that all such investments are a part of the Trust Property; (h) make, execute, acknowledge, and deliver any and all documents of transfer and conveyance and any and all other instruments that may be necessa~ or appropriate to carry out the powers herein granted; (I) vote upon any stock, bonds, or other securities; give general or spacial proxieeor powerso~ettomey with or without power of substitution exercise any · conversion privileges, subsctil:~on rights, orother options, and make any paymeofsiocldenteithoreto; oppose, or consent to, or othenvise pa.'tic, ate in coq~rate reorganizations or to other changes affecting corporate securities and delegate disc retiona ry powers and pay any assessments or charges in connection therewith and generally exercise any of the powers of an owner with respect to stocks, bonds, securities or other property held as part of the Trust Properly; (j) enter into contracts or arrangemants for goods or services required in connection with the operation of the Retirement Trust, including, but not limited to, contracts with custodians and contra<is for the provision of administrative senecas; (k) borrow or raise money for the purposes of the Retirement Trust in such amount, and upon such terms and conditions, as the Trustees shall deem advisable, provided that the aggregate amount of such borrowings shall not exceed 30% of the value of the Trust Property. No person lending money to the Trustees shall be bound to see the application of the money lanl or to inquire into its validity, expediency or propriety or any such borrowing; (I) incur reasonable expenses as required for the operation of the Retirement Trust and deduct such expenses from of the Trust Prope~y; (m) pay expenses properly allocable to the Trust Property incurred in connection with the Deferred Compensation Plans, Qualified Plans, or the Employer Trusts and deduct such expenses from that portion of the Trust Property to which such expenses are propedy allocable; (n) pay out of the Trust Property all real and personal property taxes, income taxes and other taxes of any and all kinds which, in the opinion of the ~ ~;. Trustees, are propedy levied, or assessed under existing or future laws upon, or in respect of, the 'Trust Property and allocate any such taxes to the g~ppropriste accounts; (o) adopt, amend and repeal the By-laws, provided that such By-laws are at ail times consistent with the terms of this Declaration of Trust; (p) employ persons to make available interests in the Retirement Trust to employers eligible to maintain a Deferred Compensation Plan under Section 457 o r a Qualified Plan under Section 401 of the Internal Revenue Code, as amended; (q) issue the Annual Report of the Retirement Trust, and the disclosure documents and other literature used by the Retirement Trust; (r) in addition to conducting the investment program authorized in Section 4.1(d), make loans, including the purchase of debt obligations, providedthat all such loans shall bear interest at the current market rate; (s) contract for, and delegate any powers granted hereunder to, such officers, agents, employees, auditors and attorneys as the Trustees may select, provided that the Trustees may not delegate the powers set forth in paragraphs (b), (c) and (o) of this Section 4.1 and may not delegate any powers if such delegation would violate their fiduciary duties; (t) provide for the indemnification of the Officers and Trustees of the Retirement Trust and pumhase fiduciary insurance; (u) maintain books and records, including separate accounts for each Public Employer, Public Employer Trustee or Employer Trust and such additional separate accounts as are required under, and consistent with, the Deferred Compensation or Qualified Plan of each Public Employer; and (v) do all such acts, take all such proceedings, and exercise all such rights and privileges, although not specifically mentioned here~n, as the Trustees may deem necessary or appropriate to administer the Trust Property and to carry out the purposes of the Retirement Trust. Section 4.2 Dlatrlbutlon of Trust Property: Distributions of the Trust property shall be made to, or on behalf of, the Public Employer or Public Employer Trustee, in accor- dance with the terms of the Deferred Compensation Plans Qualified Plans or Employer Trusts. The Trust- ees of the Retirement Trust sha be fu y protected n making payments in accordance with the directions of the Public Employers, Public Employer Trustees or trustees or administrators of any Employer Trust with- out ascertaining whether such payments are in compli- ance with the provisions of the applicable Deferred Compensation or Qualified Plan or Employer Trust. Section 4.3 Execution of Instruments: The Trustees may unanimously designate any one or more of the Trust- ees to execute any instrument or document on behalf of all including but not limited to the signing or endorse- ment of any check and the signing of any applications, insurance and other contracts, and the action of such designated Trustee or Trustees shall have the same force and effect as if taken by all the Trustees. ARTICLE V. DUTY OF CARE AND LIABILITY OF TRUSTEES Section 5.1 Duty of Care: In exercising the powers hereinbefore granted to the Trustees, the Trustees shall perform all acts within their authority for the exclusive purpose of providing benefits for the Public Employers in connection with Deferred Compensation Plans and Public Employer Trustees pursuant to Quali- fied Plans, and shall perform such acts with the care, skill, prudence and diligence in the circumstances then prevailin~ that a prudent person acting in a like capacity and famihar with such matters would use in the conduct of an enterprise of a like character and with like aims. Section 5.2 Liability: The Trustees shall not be liable for any mistake of judgment or other action taken in good faith, and for any action taken or omitted in reliance in good faith upon the books of account or other records of the Retirement Trust, upon the opinion of counsel, or upon reports made to the Retirement Trust by any of its officers, employees or agents or by the Investment Adviser or any sub-investment adviser, accountant, appraiser or other expert or consultant selected with reasonable ca re by the Trustees, officers or employees of the Retirement Trust. The Trustees shall also not be liable for any loss sustained by the Trust Property by reason of any investment made in good faith and in accordance with the standard of care set forth in Section 5.1. Section 5.3 Bond: No Trustee shall be obligated to give any bond or other security for the pedormance of any of his or her duties hereunder. ARTICLE VI. ANNUAL REPORT TO SHAREHOLDERS The Trustees shall annually submit to the Public Employers and Public Employer Trustees a written report of the transac- tions of the Retirement Trust, including financial statements which shall be certified by independent public accountants chosen by the Trustees. ARTICLE VII. DURATION OR AMENDMENT OF RETIREMENT TRUST Section 7.1 Withdrawal: A Public Employer or Public Em- ~,loyer Trustee may, at any time, withdraw from this Retirement Trust by dalivenng to the Board of Trustees a written statement of withdrawal. In such statement, the Public Employer o~ Public Employer Trustee shall acknowledge that the Trust Property allocable to the Public Employer is derived from compensation de- ferred by employees of such Public Employer pursuant to its Deferred Compensation Plan or from contribu- tions to the accounts of Employees pursuant to a Qualified Plan, and shall designate the financial institu- tion to which such property shall be transferred by the Trustees of the Retirement Trust or by the trustee or administrator under an Employer Trust. Section 7.2 Duration: The Retirement Trust shall continue until terminated by the vote of a majority of the Public Employers, each casting one vote. Upon termination, all of the Trust Propen'y shall be paid out to the Public Employers, Public Employer Trustees or the trustees or administrators of the Employer Trusts, as appropriate. Section 7.3 Amendment: The Retirement Trust may be amended by the vote of a majority of the Public Employ- ers, each casting one vote. Section 7.4 Procedure: A resolution to terminate or amend the Retirement Trust or to remove a Trustee shall be submitted to a vote of the Public Employ. ers if: (i) a majority of the Trustees so direct, or;, (i~) a petition requesting a vote signed by not less that 25 percent of the Public Employers, is submitted to the Trustees. ARTICLE VIII. MISCELLANEOUS Section 8.1 Governing Law: Except as otherwise required by state or local law, this Declaration of Trust and the Retirement Trust hereby created shall be construed and regulated by the laws of the District of Columbia. Section 8.2 Counterparts: This Declaration may be ex- ecuted by the Public Employers and Trustees in two or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.