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 ........
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,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
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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.