Item 10.2.
City Council Meeting Agenda - Page 212 of 222 - Monday, February 24, 2025 shall be under no duty to question Data received from the Agency, to compute contributions made to the Plan, to determine or inquire whether contributions are adequate to meet and discharge liabilities under the Plan, or to determine or inquire whether contributions made to the Plan are in compliance with the Plan or applicable law.
In addition, PARS shall not be liable for nonperformance of Services to the extent such nonperformance is caused by or results from erroneous and/or late delivery of Data from the Agency. In the event that the Agency fails to provide Data in a complete, accurate and timely manner and pursuant to the specifications in Exhibit 1 C, PARS reserves the right, notwithstanding the further provisions of this Agreement, to terminate this Agreement upon no less than ninety (90) days written notice to the Agency.
6. Records. Throughout the duration of this Agreement, and for a period of five (5) years after termination of this Agreement, PARS shall provide duly authorized representatives of Agency access to all records and material relating to calculation of PARS' fees under this Agreement. Such access shall include the right to inspect, audit and reproduce such records and material and to verify reports furnished in compliance with the provisions of this Agreement. All information so obtained shall be accorded confidential treatment as provided under applicable law.
7. Confidentiality. Without the Agency's consent, PARS shall not disclose any information relating to the Plan except to duly authorized officials of the Agency, subject to applicable law, and to parties retained by PARS to perform specific services within this Agreement. The Agency shall not disclose any information relating to the Plan to individuals not employed by the Agency without the prior written consent of PARS, except as such disclosures may be required by applicable law.
8. Independent Contractor. PARS is and at all times hereunder shall be an independent contractor. As such, neither the Agency nor any of its officers, employees or agents shall have the power to control the conduct of PARS, its officers, employees, or agents, except as specifically set forth and provided for herein. PARS shall pay all wages, salaries, and other amounts due its employees in connection with this Agreement and shall be responsible for all reports and obligations respecting them, such as social security, income tax withholding, unemployment compensation, workers' compensation, and similar matters.
9. Indemnification. PARS and Agency hereby indemnify each other and hold the other harmless, including their respective officers, directors, and employees, from any claim, loss, demand, liability, or expense, including reasonable attorneys' fees and costs, incurred by the other as a consequence of, to the extent, PARS' or Agency's, as the case may be, negligent acts, errors or omissions with respect to the performance of their respective duties hereunder.
10. Compliance with Applicable Law. The Agency shall observe and comply with federal, state, and local laws in effect when this Agreement is executed, or which may come into effect during the term of this Agreement, regarding the administration of the Plan.
PARS shall observe and comply with federal, state, and local laws in effect when this Agreement is executed, or which may come into effect during the term of this Agreement, regarding Plan administrative services provided under this Agreement.
Item 10.2.
City Council Meeting Agenda - Page 213 of 222 - Monday, February 24, 2025
11. Applicable Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California. In the event any party institutes legal proceedings to enforce or interpret this Agreement, venue and jurisdiction shall be in the County of Contra Costa.
12. Force Majeure. When a party's nonperformance hereunder was beyond the control and not due to the fault of the party not performing, a party shall be excused from performing its obligations under this Agreement during the time and to the extent that its performance is prevented by such cause. Such cause shall include, but not be limited to:
any incidence of fire, flood, acts of God or unanticipated communicable disease, acts of terrorism or war commandeering of material, products, plants or facilities by the federal, state or local government, a material act or omission by the other party or any law, ordinance, rule, guidance or recommendation by the federal, state or local government, or any agency thereof, which becomes effective after the date of this Agreement that delays or renders impractical either party's performance under the Agreement.
13. Ownership of Reports and Documents. The originals of all letters, documents, reports, and data produced for the purposes of this Agreement shall be delivered to and become the property of the Agency. Copies may be made for PARS but shall not be furnished to others without written authorization from Agency.
14. Designees. The Plan Administrator of the Agency, or their designee, shall have the authority to act for and exercise any of the rights of the Agency as set forth in this Agreement, subsequent to and in accordance with the written authority granted by the Governing Body of the Agency, a copy of which writing shall be delivered to PARS.
Any officer of PARS, or his or her designees, shall have the authority to act for and exercise any of the rights of PARS as set forth in this Agreement.
15. Notices. All notices hereunder and communications regarding the interpretation of the terms of this Agreement, or changes thereto, shall be effected by delivery of the notices in person or by depositing the notices in the U.S. mail, registered or certified mail, return receipt requested, postage prepaid and addressed as follows:
(A) To PARS: PARS; 4350 Von Karman Avenue, Suite 100, Newport Beach, CA 92660; Attention: President
(B) To Agency: City of Pleasant Hill; 100 Gregory Lane, Pleasant Hill, CA 94523; Attention: City Manager
Notices shall be deemed given on the date received by the addressee.
16. Term of Agreement. This Agreement shall remain in effect for the period beginning May 2, 2022 and ending May 1, 2025 ("Term"). This Agreement may be terminated at any time by giving thirty (30) days written notice to the other party of the intent to terminate. Absent a thirty (30) day written notice to the other party of the intent to terminate, this Agreement will continue unchanged for successive twelve-month periods following the Term.
17. Amendment. This Agreement may not be amended orally, but only by a written instrument executed by the parties hereto.
Item 10.2.
City Council Meeting Agenda - Page 214 of 222 - Monday, February 24, 2025
18. Entire Agreement. This Agreement, including exhibits, contains the entire understanding of the parties with respect to the subject matter set forth in this Agreement.
In the event a conflict arises between the parties with respect to any term, condition or provision of this Agreement, the remaining terms, conditions, and provisions shall remain in full force and legal effect. No waiver of any term or condition of this Agreement by any party shall be construed by the other as a continuing waiver of such term or condition.
19. Attorneys Fees. In the event any action is taken by a party hereto to enforce the terms of this Agreement the prevailing party herein shall be entitled to receive its reasonable attorney's fees.
20. Counterparts. This Agreement may be executed in any number of counterparts, and in that event, each counterpart shall be deemed a complete original and be enforceable without reference to any other counterpart.
21. Headings. Headings in this Agreement are for convenience only and shall not be used to interpret or construe its provisions.
22. Effective Date. This Agreement shall be effective on the date first above written, and also shall be the date the Agreement is executed.
AGENCY:
BY:
June Catalano
TITLE: City Manager
DATE:
PARS:
BY: ~~2_
Tod Hammeras
TITLE: Chief Financial Officer
DATE: 4/14/2022
Item 10.2.
City Council Meeting Agenda - Page 215 of 222 - Monday, February 24, 2025
EXHIBIT IA
SERVICES
PARS will provide the following services for the City of Pleasant Hill Public Agencies PostEmployment Benefits Trust:
1. Plan Installation Services:
(A) Meeting with appropriate Agency personnel to discuss plan prov1s10ns, implementation timelines, actuarial valuation process, funding strategies, benefit communication strategies, data reporting, and submission requirements for contributions/reimbursements/ distributions;
(B) Providing the necessary analysis and advisory services to finalize these elements of the Plan;
(C) Providing the documentation needed to establish the Plan to be reviewed and approved by Agency legal counsel. Resulting final Plan documentation must be approved by the Agency prior to the commencement of PARS Plan Administration Services outlined in Exhibit IA, paragraph 2 below.
2. Plan Administration Services:
(A) Monitoring the receipt of Plan contributions made by the Agency to the trustee of the PARS Public Agencies Post-Employment Benefits Trust ("Trustee"), based upon information received from the Agency and the Trustee;
(B) Performing periodic accounting of Plan assets, reimbursements/distributions, and investment activity, based upon information received from the Agency and/or Trustee;
(C) Coordinating the processing of distribution payments pursuant to authorized direction by the Agency, and the provisions of the Plan, and, to the extent possible, based upon Agency-provided Data;
(D) Coordinating actions with the Trustee as directed by the Plan Administrator within the scope of this Agreement;
(E) Preparing and submitting a monthly report of Plan activity to the Agency, unless directed by the Agency otherwise;
(F) Preparing and submitting an annual report of Plan activity to the Agency; (G) Facilitating actuarial valuation updates and funding modifications for compliance with the applicable GASB pronouncements and/or statements, if prefunding OPEB obligations;
(H) Coordinating periodic audits of the Trust;
(I) Monitoring Plan and Trust compliance with federal and state laws.
3. PARS is not licensed to provide and does not offer tax, accounting, legal, investment or actuarial advice.
Item 10.2.
City Council Meeting Agenda - Page 216 of 222 - Monday, February 24, 2025 EXHIBIT 1B
FEES FOR SERVICES
PARS will be compensated for performance of Services, as described in Exhibit IA based upon the following schedule:
An annual asset fee shall be paid from Plan assets based on the following schedule:
For Plan Assets from:
$1 to
$10,000,001 to
$15,000,001 to
$50,000,001 and
$10,000,000
$15,000,000
$50,000,000
above
Annual Rate:
0.25%
0.20%
0.15%
0.10%
Annual rates are prorated and paid monthly. The annual asset fee shall be calculated by the following formula [Annual rate divided by 12 (months of the year) multiplied by the Plan asset balance at the end of the month]. Trustee and Investment Management Fees are not included.
Item 10.2.
City Council Meeting Agenda - Page 217 of 222 - Monday, February 24, 2025
EXHIBIT IC
DATA REQUIREMENTS
PARS will provide the Services under this Agreement contingent upon rece1vmg the following information. Agency is solely responsible for ensuring that all information and documentation provided to PARS is true, correct, and authorized:
1. Executed Legal Documents:
(A) Certified Resolution
(B) Adoption Agreement to the Public Agencies Post-Employment Benefits Trust (C) Trustee Investment Forms
2. Contribution - completed Contribution Transmittal Form signed by the Plan Administrator ( or authorized Designee) which contains the following information:
(A) Agency name
(B) Contribution amount
(C) Contribution date
(D) Contribution method (Check, ACH, Wire)
3. Distribution - completed Payment Reimbursement/Distribution Form signed by the Plan Administrator ( or authorized Designee) which contains the following information:
(A) Agency name
(B) Payment reimbursement/distribution amount
(C) Applicable statement date
(D) Copy of applicable premium, claim, statement, warrant, and/or administrative expense evidencing payment
(E) Signed certification of reimbursement/distribution from the Plan Administrator ( or authorized Designee)
4. Other information pertinent to the Services as reasonably requested by PARS and Actuarial Provider.
Item 10.2.
City Council Meeting Agenda - Page 218 of 222 - Monday, February 24, 2025 Exhibit 2
City of Pleasant Hill
Pension Rate Stabilization Program
(PRSP)
Funding Policy
Item 10.2.
City Council Meeting Agenda - Page 219 of 222 - Monday, February 24, 2025 Purpose and Introduction
The purpose of this Pension Rate Stabilization Program (PRSP) Funding Policy ("Policy") is to establish a methodology and a process for funding current and future costs associated with the City's contractual obligations to provide pension benefits as set forth in the City's labor agreements.
Adoption and Implementation
The City Council is responsible for adopting the Pension Rate Stabilization Program (PRSP) and for approving any significant revision. The designated Plan Administrators are responsible for developing administrative procedures, as needed, to implement the Policy. In this role, the Plan Administrators are authorized to make minor administrative changes in the Policy as long as they are intended to carry out the purpose of this Policy and will not have any significant policy impact. The City Council will review and approve this policy via resolution, as needed, to ensure it meets the current and future needs of the City.
Initial Set Up
The City shall establish an Internal Revenue Service Code Section 115 approved irrevocable trust to achieve a higher rate of return on investments than that earned in LAIF.
Once the City transfers funds into such a trust, they can only be utilized for payment of employee pension costs.
The following outlines the governance and administration of the proposed Trust:
City Council has the authority to establish the Trust and define policies for the administration of the Trust funds.
The Plan Administrator will have overall responsibility for the Trust funds and will develop and manage procedures in accordance with the City Council's adopted policies. The City Council will designate the City Treasurer and the Finance Manager as the Plan Administrators.
Trust Administrator, Public Agency Retirement Services (PARS), keeps plan documents current to ensure that they reflect the substantive plan and provides ongoing consulting, reporting and plan accounting records.
Trustee, currently US Bank, will be the plan's trustee and custodian and will safeguard the assets in the Trust, hold the investment securities for safekeeping and make disbursements on request.
1 Item 10.2.
City Council Meeting Agenda - Page 220 of 222 - Monday, February 24, 2025 Investment Manager, currently Highmark Capital Management, will recommend investment portfolio allocations based upon the Pension Trust Funds' adopted investment policies and manage those assets accordingly.
Trust Administrator
PARS has established a multiemployer irrevocable trust in compliance with the requirements of Section 115 of the Internal Revenue Code. While it is a multi-employer trust, each employer's contributions benefit only its own employees. There is no sharing of either liability or investment earnings, and separate employer accounts are maintained.
PARS serves as the administrator of the Trust.
Trustee
Any contributions made to the program are held and invested by a trustee. The trustee duties include:
1. Safeguarding assets for the benefit of retirees;
2. Providing oversight protection of the investments;
3. Custodian of the assets; and
4. Disbursing funds to pay for pension costs.
Investment Manager
Investment Manager assists the City with selecting investment strategy depending on what rate of return the City expects to earn and level of risk tolerance the City is willing to take. Investment Manager provides annual review of the investment portfolio and asset allocation as well as takes on fiduciary responsibility for the City's pension asset management.
Asset Allocation Investment Strategy
PARS provides flexibility to the City in the selection of the investment strategy for its funds in the Trust, giving the City control on target yield and level of risk on its investments. The City has the ability to select one of five Investment Options that best suits its desired or expected return on its investments in the Trust. Each Investment Option allocates the assets in varying investment combinations of equity, fixed income, and cash. With each Investment Option, as the expected rate of return increases, so does the assumed risk. 2 Item 10.2.
City Council Meeting Agenda - Page 221 of 222 - Monday, February 24, 2025 The Asset Allocation Strategies and the corresponding Investment Options currently available are:
Equity Fixed Income Cash
Conservative 5%-20% 60% - 95% 0% - 20%
Moderately Conservative 20% -40% 50% - 80% 0% - 20%
Moderate 40% - 60% 40% - 60% 0% - 20%
Balanced 50% - 70% 30% - 50% 0% - 20%
Capital Appreciation 65% - 85% 10% - 30% 0% - 20%
The City Council will select the most appropriate investment option in the Trust.
This Policy recognizes that there will be investment market place volatility and that actual economic and demographic experience will differ from assumed experience. Accordingly, this Policy is intended to provide flexibility to smooth such volatility and experience in a reasonable, systematic and financially sound manner.
Contributions
To begin the funding of the Trust, the City will make a one-time contribution of $1.0 million to the Trust utilizing General Fund resources.
The City will consider making additional contributions to the Trust based on the net position of the General Fund recommended by the City Manager and Finance Manager. The amount will be based on unassigned General Fund Balance when revenues exceed costs (not including Measure K funds) in the audited financial statements. The contribution amount will be based on the annual excess audited unassigned General Fund Balance (not including Measure K). The recommended contribution amount will be based on the higher of 10% or $50,000 of the excess unassigned General Fund Balance.
Withdrawals
In order to establish a procedure for withdrawals of the funds:
a. City Manager will make recommendations to City Council during the budget process.
b. If needed immediately, City Manager will bring City Council Agenda Item for approval.
3 Item 10.2.
City Council Meeting Agenda - Page 222 of 222 - Monday, February 24, 2025