City Council Memorandum
TO: HONORABLE MAYOR AND CITY COUNCIL DATE: DECEMBER 12, 2023 FROM: HUMAN RESOURCES DEPARTMENT WARDS: ALL
SUBJECT: APPROVE THE AMENDMENT TO THE PROFESSIONAL SERVICES AGREEMENT WITH SHUSTER ADVISORY GROUP, LLC AS THE CITY’S DEFINED CONTRIBUTION PLAN CONSULTANT AND INVESTMENT ADVISOR FOR THE PLAN IN ACCORDANCE WITH PURCHASING RESOLUTION NO. 23914, SECTION 702 (H).
ISSUE:
Approve the Amendment to the Professional Services Agreement with Shuster Advisory Group, LLC as the City’s Defined Contribution Plan Consultant and Investment Advisor for the Plan in Accordance with Purchasing Resolution No. 23914, Section 702 (h).
RECOMMENDATIONS:
That the City Council:
Approve the Amendment to the Professional Services Agreement with Shuster Advisory Group, LLC. to extend the agreement by two (2) years, in accordance with Purchasing Resolution 23914, Section 702 (h); and, Authorize the City Manager, or designee, to execute the Amendment to the Professional Services Agreement with Shuster Advisory Group, LLC., and all related documents, including additional extensions to the agreement or making any minor non-substantive changes as necessary to effectuate the Agreement.
BACKGROUND:
The City of Riverside currently offers 457b and 401a deferred compensation plans to all eligible benefited City employees. All costs of the plan are borne by the plan participants.
Under Section 457(b) of the Internal Revenue Code, government entities may sponsor a deferred compensation plan, while meeting fiduciary responsibilities under California law, to allow employees to defer income tax on retirement savings into future years. As a fiduciary, the City has a responsibility to control the investment choices made available in the 457(b) and 401(a) plans.
The City of San Bernardino performed an RFP for the award of a Defined Contribution Plan financial advisor which included a proposal from Shuster Advisory Group LLC, which was deemed by the City of San Bernardino to be the most qualified financial advisor. The firm offered the same or better price to the City of Riverside based off the City of San Bernardino award.
On January 5, 2020, City Council approved the Professional Services Agreement with Shuster Advisory Group, LLC., Inc. effective December 15, 2020, through December 14, 2023, with an option to extend the Agreement for one additional two-year term thereafter upon mutual agreement of both parties for a total contract term of five years.
DISCUSSION:
Over the past three years, Shuster Advisory Group, LLC., has successfully proven to deliver the wide range of fiduciary services needed by the City, such as the reduction of administrative plan fees, development of an Investment Policy Statement (IPS), selecting initial investment options, periodically reviewing investments for additions and deletions, providing periodic investment advisory reports, the selection of default investments for participants who fail to make investment elections, and coordinating Deferred Compensation Committee meetings, recording meetings and providing minutes. Additionally, Shuster Advisory Group, LLC. has provided consulting assistance on fiduciary best practices and education, aided with mandatory and optional legislative change, provided compliance updates and best practices, and assists the City with communications to other plan providers.
The current Agreement with Shuster Advisory Group, LLC. expires December 14, 2023. The Human Resources Department requests to extend the current Professional Consultant Services Agreement with Shuster Advisory Group, LLC. to December 14, 2025.
Shuster Advisory Group, LLC. continues to offer the same or better price to the City of Riverside, which is in compliance with Purchasing Resolution No. 23914, Section 702 (h) which states, “When Services, except for Professional Services, can be Procured from a Contractor who offers the same or better price, terms and conditions as the Contractor previously offered as the Lowest Responsive Bidder under Competitive Procurement or negotiations conducted by the City or another public agency, provided that, in the opinion of the Manager, it is in the best interests of the City to do so.” The Purchasing Manager concurs that this recommendation is in compliance with Purchasing Resolution No. 23914, Section 702 (h).
STRATEGIC PLAN ALIGNMENT:
Identify which Strategic Priority and Goal from the Envision Riverside 2025 Strategic Plan the item contributes to.
Briefly discuss how the item aligns with EACH of the five Cross-Cutting Threads based on the definitions in the Envision Riverside 2025 Strategic Plan. Examples of various ways a project could align with each thread include, but are not limited to, the following:
Community Trust – The Amendment aligns City and financial oversight to continue to provide fiscally responsible deferred compensation services to employees.
Equity – All required steps were taken to ensure a fair and equitable process was in place for the selection of Shuster Advisory Group, LLC. The award was granted based on cost, qualifications, experience, and plan offerings.
Fiscal Responsibility – This Amendment to the Agreement with Shuster Advisory Group, LLC. ensures the City is meeting its fiduciary responsibilities for a 457b and 401a deferred compensation plans for employees.
Innovation – Offering a Deferred Compensation Plan to employees is an affordable way to enhance the City’s benefit offerings to attract and retain talent. This benefit allows employees to defer income tax on retirement savings into future years.
Sustainability & Resiliency – Riverside is committed to meeting the needs of the present without compromising the needs of the future and ensuring the City’s capacity to provide fiduciary services to the City.
FISCAL IMPACT:
The proposed action has no fiscal impact to the City. The 457(b) plans earnings belong to the plan’s participants and all costs incurred are paid for from the plan resources. This Amendment extends the Agreement for two years. Shuster Advisory Group, LLC will be paid $48,000 annually from plan resources.
Prepared by: Rene Goldman, Human Resources Director
Certified as to
availability of funds: Kristie Thomas, Finance Director/Assistant Chief Financial Officer Approved by: Edward Enriquez, Assistant City Manager/Chief Financial Officer/Treasurer Approved as to form: Phaedra A. Norton, City Attorney
Attachment: Amendment to the Professional Services Agreement with Shuster Advisory Group, LLC Shuster Advisory Group ● Page 2