_______________________
SECTION 4. The City Council hereby authorizes the transfer of assets from the City of Vernon California Employers’ Retiree Benefit Trust (CERBT) Program to the Trust.
SECTION 5. The City Council hereby authorizes the appointment of Alta Trust Company as Trustee and Charles Schwab Trust Bank as custodian of the Trust and deposited assets. The transfer of assets is contingent upon the acceptance of Alta Trust Company as Trustee and Charles Schwab Trust Bank as custodian.
SECTION 6. Based upon representations made by Shuster Advisory Group, LLC and Alta Trust Company, and the review and recommendation of City staff, the City Council certifies that the Trust satisfies the requirements of Section 115 of the IRC and that all assets held by that trust shall qualify as “plan assets” that are irrevocably dedicated to the prefunding of OPEB obligations.
SECTION 7. The City Council hereby appoints the City Administrator, or the City Administrator’s designee, as the City’s Administrator for the Trust.
SECTION 8. The City’s Administrator is hereby authorized to execute the legal and administrative documents on behalf of the City and to take whatever additional actions are necessary to maintain the City’s participation in the Trust and to maintain compliance with any relevant regulation issued or as may be issued; therefore, authorizing him/her to take whatever additional actions are required to administer the City’s Trust.
SECTION 9. The City’s Administrator is hereby authorized to transfer assets from the City of Vernon CERBT Program to the Trust.
SECTION 10: That this Resolution shall be effective August 4, 2026.
SECTION 11. Severability. If any provision of this Resolution or the application thereof to any person or circumstance is held invalid, such invalidity shall not affect other provisions or applications, and to this end, the provisions of this Resolution are declared to be severable.
/ / /
/ / /
/ / /
/ / /
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Item 16 Page 6 of 35
Resolution No. 2026-037
_______________________
SECTION 12. The City Clerk, or Deputy City Clerk, shall certify the passage and adoption of this resolution and enter it into the book of original resolutions.
APPROVED AND ADOPTED August 4, 2026.
MELISSA YBARRA, Mayor
ATTEST:
GENOVEVA ROCHA, City Clerk
APPROVED AS TO FORM:
ZAYNAH MOUSSA-MILWARD,
City Attorney
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Item 16 Page 7 of 35
Resolution No. 2026-037
_______________________
CERTIFICATION
STATE OF CALIFORNIA )
COUNTY OF LOS ANGELES ) ss.
CITY OF VERNON )
I do hereby certify that the attached is a true copy of Resolution No. 2026-037 that was passed and adopted at the Regular Meeting held on August 4, 2026, by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
__________________________
GENOVEVA ROCHA, City Clerk
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4828-2402-5842.v3
ADOPTION AGREEMENT
FOR THE
MULTIPLE EMPLOYER OPEB/PENSION 115 TRUST
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TABLE OF CONTENTS
Page
4828-2402-5842.v3
INTRODUCTION ........................................................................................................................1 ARTICLE 1 EMPLOYER INFORMATION ...................................................................................1 ARTICLE 2 PLAN INFORMATION..............................................................................................1 ARTICLE 3 TRUST ADMINISTRATIVE SERVICES....................................................................2 ARTICLE 4 INVESTMENTS........................................................................................................2 ARTICLE 5 TRUST FEES AND EXPENSES ..............................................................................2 ARTICLE 6 REPRESENTATIONS AND WARRANTIES.............................................................3 ARTICLE 7 STANDARD OF CARE AND INDEMNIFICATION....................................................4 ARTICLE 8 AMENDMENT..........................................................................................................4 ARTICLE 9 NO GUARANTEE OF INVESTMENT RESULTS......................................................4 ARTICLE 10 ADOPTION OF TRUST..........................................................................................5 EXHIBIT A ..............................................................................................................................A-6 EXHIBIT B ..............................................................................................................................B-1 EXHIBIT C C-1
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INTRODUCTION
By executing this Adoption Agreement, the Employer named in Article 1 of this Adoption Agreement hereby adopts and agrees to be bound by the terms of the Multiple Employer OPEB/Pension 115 Trust (the “Trust”), a copy of which is attached as Exhibit A. To the extent there is a conflict between this Adoption Agreement and the Trust, the Trust will control. Unless otherwise specified below, initially capitalized terms used in this Adoption Agreement are defined in the Trust.
ARTICLE 1
EMPLOYER INFORMATION
1.1 Employer’s Name, Address, and Telephone Number
(a) Name: City of Vernon
(b) Address: 4305 S. Santa Fe Avenue, Vernon, CA 90058
(c) Telephone: 323-583-8811
1.2 Employer’s Taxpayer Identification Number: 95-6000808 ARTICLE 2
PLAN INFORMATION
2.1 Plan Names:
OPEB Plan(s): City of Vernon OPEB Trust Account
Pension Plan(s): N/A
(Each a “Plan” and collectively, the “Plans”)
2.2 Employer-designated: Plan Administrator’s Name, Title, Address, and Telephone Number:
(a) Title: City Administrator
(b) Address: 4305 S. Santa Fe Avenue, Vernon, CA 90058
(c) Telephone: 323-583-8811 x228
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ARTICLE 3
TRUST ADMINISTRATIVE SERVICES
As a condition of the Employer’s participation in the Trust, the Employer and the Trust Administrator have executed the Trust Administrative Services Agreement attached as Exhibit B.
ARTICLE 4
INVESTMENTS
The Employer hereby directs the Trust Administrator to direct the Trustee to invest the assets in the Employer’s Account in accordance with the investment strategy and any investment policy mutually agreed to by the Employer and the Trust Administrator.
ARTICLE 5
DISTRIBUTION LIMITATIONS
5.1 Unless the Employer otherwise elects below, there shall be no dollar or time-period limitation on Distributions (as defined by Section 3.03 of the Trust) from the Trust. The Employer elects to impose a distribution limitation for OPEB expenditures as follows:
Maximum Distribution Amount (per fiscal year):
Applicable Period for Distribution: Distributions permitted only for qualified OPEB expenditures incurred during
The Employer elects to impose a distribution limitation for Pension expenditures as follows:
Maximum Distribution Amount (per fiscal year):
Applicable Period for Distribution: Distributions permitted only for qualified Pension expenditures incurred during
5.2 The Employer may modify the elections set forth in this Article by submitting a revised Adoption Agreement or written amendment, subject to Trustee acceptance.
ARTICLE 6
TRUST FEES AND EXPENSES
6.1 Trustees Fee will be equal to 0.02% (annual maximum fee per plan is $5,000). Other fees, including Trust Administration Fees are specified in Section 2.1 of the Trust Administrative Services Agreement. Please refer to Section 2.1 of the Trust .
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4828-2402-5842.v3
Administrative Services Agreement for further information about payment of fees and expenses.
6.2 Method of Payment. Unless the Employer otherwise elects below, the Trust Administration Fees (as defined in Section 10.01(b) of the Trust), Trustee Fees (as defined in Section 10.01(c) of the Trust), and any other reasonable fees and expenses of administering the Employer’s Account will be paid from the Employer’s Account. In lieu of payments from its Account, the Employer hereby elects to pay the following amounts:
Trust Administration Fees
Trustee Fees
All expenses of the Employer’s Account other than fees Other (please insert description):
____________________________________
____________________________________
____________________________________
ARTICLE 7
REPRESENTATIONS AND WARRANTIES
7.1 The Employer hereby represents and warrants that each of the following statements is true and correct to the best of its knowledge:
(a) The Employer is a state, a political subdivision of a state or another public agency whose income is excludable from gross income under section 115 of the Code that is established and maintained under the laws of the [State/Commonwealth] of ___California______.
(b) The Employer has established and maintains one or more Plans the exclusive purpose of each is to provide OPEB and/or retirement benefits to its former employees.
(c) The exclusive purpose of the Employer’s participation in the Trust is to fund the Pension Obligation or OPEB Obligation, or both, under the Employer’s Plans. (d) The Employer’s participation in the Trust for the purpose of funding, as applicable, the Pension Obligation or OPEB Obligation, or both, under the Employer’s Plans is authorized under the laws of the [State/Commonwealth] of ____California_______.
(e) The Employer’s Plans do not permit participants to direct or otherwise exercise in any manner, whether direct or indirect, control over the investment of their accounts or benefits accrued under the Plans.
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(f) The Employer has received copies, and has read and understands the terms, of the Trust.
ARTICLE 8
STANDARD OF CARE AND INDEMNIFICATION
8.1 Standard of Care. The Trustee and the Trust Administrator must discharge their duties in accordance with the standard of care set forth in Section 6.01 of the Trust.
8.2 Employer Indemnification of Trustee. The Employer, from its own funds and not from any assets of the Trust, agrees to indemnify the Trustee and each of its affiliates against, and will hold them harmless from, any and all loss, claims, liability, and expense, including cost of defense and reasonable attorneys’ fees, imposed upon or incurred at any time by any of them by reason of or in connection with the performance of the Trustee’s services under this Agreement, except to the extent such damages resulted from the Trustee’s or affiliate’s performance (or non-performance) of its duties under the Trust in a manner that constitutes gross negligence, material breach of contract, willful misconduct, or willful breach of the standard of care articulated in Section 6.01 of the Trust.
8.3 Employer Indemnification of Trust Administrator. Employer, from its own funds and not from any assets of the Trust, agrees to indemnify the Trust Administrator and each of its affiliates against, and will hold them harmless from, any and all damages imposed upon or incurred by any of them by reason of, or in connection with its services under the Trust or the Trust Administrative Services Agreement, except to the extent that such damages resulted from the Trust Administrator’s or affiliate’s performance (or nonperformance) of its duties under the Trust or the Trust Administrative Services Agreement in a manner that constitutes gross negligence, material breach of contract, willful misconduct or willful breach of the standard of care articulated in Section 6.01 of the Trust.
ARTICLE 9
AMENDMENT
The Employer understands and agrees that the Trust may be amended from time to time by the Trust Administrator with the approval of two-thirds of the Employers then participating in the Trust. Amendments that materially increase City costs or liability require City consent or trigger an opt-out termination right without penalty.
ARTICLE 10
NO GUARANTEE OF INVESTMENT RESULTS
The Employer understands and acknowledges that investments in the Trust involve risk and that there is no guarantee of investment performance or other performance of the Trust, including but not limited to, custodians, depositories, or counterparties to investment strategies of the Trust.
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ARTICLE 11
ADOPTION OF TRUST
By executing this Adoption Agreement, the Employer hereby adopts and agrees to be bound by the terms of the Trust and hereby approves, ratifies and confirms the appointment of Alta Trust Company as the Trustee and Shuster Advisory Group, LLC as the Trust Administrator as of the effective date of this Adoption Agreement. This Adoption Agreement and the Trust Agreement are effective on the ___ day of ____________________, 20__.
EMPLOYER ACCEPTED:
CITY OF VERNON TRUST ADMINISTRATOR
Agency Name SHUSTER ADVISORY GROUP, LLC
By: By:
Brian Saeki
Its: City Administrator Its:
Date: Date:
ACCEPTED:
ATTEST:
______________________________ TRUSTEE
Genoveva Rocha, City Clerk
By:
Its:
Date:
APPROVED AS TO FORM:
_______________________________
Zaynah Moussa-Milward,
City Attorney
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EXHIBIT A
TRUST
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INVESTMENT ADVISOR AGREEMENT
MULTIPLE EMPLOYER OPEB/PENSION 115 TRUST
This agreement (“Agreement”) is entered into between Global Retirement Partners, LLC, a Limited Liability Company, d/b/a Shuster Advisory Group, a HUB International Company (“SHUSTER”), , and City of Vernon (“EMPLOYER”), a California charter City and California municipal corporation as further identified on Appendix A., as the responsible plan fiduciary for the Plan(s) as further identified in Appendix A, desires to engage SHUSTER to provide the services described in this Agreement according to the terms of this Agreement.
1. Fiduciary Authority. The account for which SHUSTER is providing investment advisory service is part of a multiple employer trust intended to qualify as a tax-exempt trust of a state or political subdivision thereof for an essential governmental function within the meaning of Section 115 of the Code and any regulations issued thereunder and the EMPLOYER has fiduciary authority with respect to the account for the employer.
2. Term. The term of this Agreement will commence __________, 2026.
3. Services. SHUSTER agrees to perform the Fiduciary Services described in Appendix B.
4. Fees.
(A) The compensation, direct and indirect, of SHUSTER for the performance of the Services is described in Appendix C.
5. Fiduciary Status: Limitations on Functions. EMPLOYER acknowledges that:
(A) In performing the Fiduciary Services, SHUSTER is acting as an investment fiduciary of the Plan and as a registered investment advisor under the Investment Advisers Act of 1940. (B) In performing Fiduciary Services, SHUSTER does not act as, nor has SHUSTER agreed to assume the duties of, a trustee or the Plan Administrator, and SHUSTER has no discretion or responsibility to interpret the Plan documents, to determine eligibility or participation under the Plan, or to take any other action with respect to the management, administration or any other aspect of the Plan. (C) SHUSTER does not provide legal or tax advice.
(D) Investments are subject to various market, political, currency, economic, and business risks, and may not always be profitable. As a result, SHUSTER does not and cannot guarantee financial results. (E) SHUSTER may, by reason of performing services for other employers, from time to time acquire confidential information. EMPLOYER acknowledges and agrees that SHUSTER is unable to divulge to the EMPLOYER or any other party, or to act upon, any such confidential information with respect to its performance of this Agreement.
(F) SHUSTER is entitled to rely upon all information provided to SHUSTER (whether financial or otherwise) from reputable third parties or by EMPLOYER, EMPLOYER’s representatives or third-party service providers to EMPLOYER, the Plan or SHUSTER, without independent verification. EMPLOYER agrees to promptly notify SHUSTER in writing of any material change in the financial and other information provided to SHUSTER and to promptly provide any such additional information as may be reasonably requested by SHUSTER.
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(G) EMPLOYER understands that SHUSTER: (i) may perform other services for other clients, (ii) may charge a different fee for other clients, and (iii) may give advice and take action that is different for each client even when retirement plans are similar.
(H) SHUSTER has no responsibility to provide any services related to assets not included in the SHUSTER investment portfolio or purchased directly by EMPLOYER. Such assets shall be referred to collectively as “Excluded Assets.” The Excluded Assets shall be disregarded in determining the Fees payable to SHUSTER pursuant to this Agreement, and the Fees shall be calculated only on the remaining assets (the “Included Assets”).
6. Representations of EMPLOYER. EMPLOYER represents and warrants as follows:
(A) It is the responsible plan fiduciary for the control and/or management of the assets of the Plan, and for the selection and monitoring of service providers for the Plan. SHUSTER is entitled to rely upon this statement until notified in writing to the contrary.
(B) The person signing the Agreement on behalf of EMPLOYER has all necessary authority to do so. (C) The execution of this Agreement and the performance thereof is within the scope of the investment authority authorized by the governing instrument and/or applicable laws. The signatory on behalf of EMPLOYER represents that the execution of the Agreement has been duly authorized by appropriate action and agrees to provide such supporting documentation as may be reasonably required by SHUSTER. (D) The Plan and related Trust permit payment of fees out of Plan assets. EMPLOYER has determined that the fees charged by SHUSTER are reasonable and are the obligation of the Plan; however, if EMPLOYER desires, it may pay the fees directly, rather than with Plan assets.
7. Representations of SHUSTER. SHUSTER represents and warrants as follows:
(A) SHUSTER is registered as an investment adviser (“RIA”) under the Investment Advisers Act of 1940. (B) The person signing this agreement on behalf SHUSTER has the power and authority to enter into and perform this Agreement.
(C) SHUSTER agrees to take reasonable steps to protect Private Participant Information and Plan Investment Data in its possession;
SHUSTER is not responsible for the assessment of systems and procedures of third parties for the protection of plan and participant data;
SHUSTER is not responsible for the actions by, or the failure to act by EMPLOYER, by other service providers, or by Plan participants to protect Data; SHUSTER shall have no liability in the event of a Data breach or a violation of participant privacy rights (under the California Consumer Privacy Act or otherwise) unless said breach is the direct result of negligence, recklessness, or willful misconduct of an employee, agent, or representative of SHUSTER.
8. Standard of Care. SHUSTER will perform the Fiduciary Services described in Appendix B to the Plan in accordance with the standard of care of the prudent man rule set forth in ERISA Section 404(a)(1)(B).
9. Termination. Either party may terminate this Agreement upon 30 days prior written notice to the other party.
Such termination will not, however, affect the liabilities or obligations of the parties arising from transactions initiated prior to such termination, and such liabilities and obligations (together with the provisions of section 8, 17, and 18 .) shall survive any expiration or termination of this Agreement. Upon termination, SHUSTER will .
Item 16 Page 18 of 35
have no further obligation under this Agreement to act or advise EMPLOYER with respect to services under this Agreement.
10. Receipt of Disclosure and Consent to Electronic Delivery. EMPLOYER acknowledges receipt and undertakes to review and consider the disclosures made by SHUSTER (including in this Agreement, the Form ADV Part 2 and SHUSTER Privacy Policy), in particular the portions related to services, compensation, and potential conflicts of interest, as well as the remainder of the disclosures concerning, among other matters, background information such as educational and business history, business practices such as the types of advisory services provided, the methods of securities analysis used, and the like.
Further, EMPLOYER consents to electronic delivery (via email or other generally accepted method) of current and future distributions of SHUSTER’s Form ADV Part 2 and Privacy Policy. Consent to electronic delivery may be canceled at any time by sending a written request to SHUSTER.
11. Notices. Any and all notices required or permitted under this Agreement shall be in writing and shall be sufficient in all respects if (i) delivered personally, (ii) mailed by registered or certified mail, return receipt requested and postage prepaid, or (iii) sent via a nationally recognized overnight courier service to the EMPLOYER’s address listed on Appendix A and SHUSTER’s address, 155 N. Lake Ave, Ste. 950, Pasadena, CA 91101, or such other address as any party shall have designed by notice in writing to the other party.
12. Assignability. This Agreement is not assignable by either Party hereto without the prior written consent of the other Party.
13. Effect. This Agreement shall be binding upon and shall inure to the benefit of the Parties and their respective heirs, successors, survivors, administrators and assigns.
14. Entire Understanding and Modification. This Agreement constitutes and contains the entire understanding between the parties and supersedes all prior oral or written statements dealing with the subject matter herein. This Agreement can be amended or modified by the written consent of the Parties.
15. Severability. If any one or more of the provisions of this Agreement shall, for any reason, be illegal or invalid, such illegality or invalidity shall not affect any other provision of this Agreement and this Agreement shall be enforced as if such illegal or invalid provision had not been contained herein.
16. Headings. All headings used herein are for ease of reference only and in no way shall be construed as interpreting, decreasing or enlarging the provisions of this Agreement.
17. Applicable Law; Forum. The laws of the State of California shall govern this Agreement in all respects, including but not limited to the construction and enforcement thereof, unless otherwise preempted or superseded by federal law.
18. Arbitration Agreement. To the extent permitted by law, all controversies between EMPLOYER and SHUSTER, which may arise out of or relate to any of the services provided by SHUSTER under this Agreement, or the construction, performance or breach of this or any other Agreement between SHUSTER and EMPLOYER, whether entered into prior to, on or subsequent to the date hereof, shall be settled by binding arbitration in Pasadena, Los Angeles County, California, under the Commercial Arbitration Rules of the American Arbitration Association. Judgment upon any award rendered by the arbitrator(s) shall be final, and may be entered into any court having jurisdiction.
19. Amendment Process. The Agreement may be modified, by written agreement of both EMPLOYER and SHUSTER.
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20. Waiver of Limitation. Nothing in this Agreement shall in any way constitute a waiver or limitation of any rights which EMPLOYER or Plan or any other party may have under federal or state securities laws.
This Agreement constitutes both an agreement between the parties and a disclosure statement. The Parties have caused this Agreement to be executed by their duly authorized officers as of the date set forth above. This Agreement shall not be binding on SHUSTER or the EMPLOYER until each has accepted it, in writing, as indicated by their signatures below.
EMPLOYER: Global Retirement Partners, LLC d/b/a Shuster Advisory Group, a HUB International Company
Signature: ____________________________ Signature: ____________________________ Name: Brian Saeki Name: Scott Hauptmann
Title: City Administrator Title: President
Date: Date:_______________________________
*The EMPLOYER is signing this Agreement both as the employer that sponsors the Plan and as the fiduciary responsible for selecting the Plan’s investments and engaging its service providers.
ATTEST: ACKNOWLEDGED:
Genoveva Rocha, City Clerk Mark Shuster, Investment Advisor Representative APPROVED AS TO FORM:
Zaynah Moussa-Milward,
City Attorney
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APPENDIX A – EMPLOYER/PLAN SPONSOR - PLAN INFORMATION
EMPLOYER/Plan Sponsor
City of Vernon
Tax ID#
95-6000808
Plan Name 1
City of Vernon OPEB Trust Account
Type of Plan
☒OPEB Plan ☐Pension Plan
☐Other:
Plan Name 2 Type of Plan
☐OPEB Plan ☐Pension Plan
☐Other:
Plan Name 3 Type of Plan
☐OPEB Plan ☐Pension Plan
☐Other:
Plan Name 4 Type of Plan
☐OPEB Plan ☐Pension Plan
☐Other:
Plan Name 5 Type of Plan
☐OPEB Plan ☐Pension Plan
☐Other:
Mailing Address
4305 S. Santa Fe Avenue
City
Vernon
State
CA
Zip Code
90058
Phone
323-583-8811
Email (for purposes of notice/electronic delivery)
[email protected]
Legal Address (☒Same as Mailing Address) City State Zip Code .
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APPENDIX B – FIDUCIARY SERVICES
SHUSTER will perform the following fiduciary services:
1. Development of an Investment Policy Statement (IPS). The IPS establishes the investment policies and objectives for the Plan(s) as well as the criteria and standards for selecting and monitoring the investments.
The EMPLOYER shall have the ultimate responsibility and authority to establish such policies and objectives and to adopt the investment policy statement.
2. Consistent with the Investment Policy Statement, SHUSTER will select the initial investment options within the Plan(s).
3. SHUSTER will periodically review the investments within the Plan(s) and shall be responsible for making additions/deletions thereto.
4. SHUSTER will provide periodic investment advisory reports that document consistency of fund management and performance to the guidelines set forth in the IPS, and to make recommendations to maintain, or remove and replace investment options. Reports to include: Market Overview, In-Depth Portfolio Summary, Plan Asset Allocation Analysis and Fund Performance Comparison to the Index.
5. Meet with EMPLOYER on a periodic basis to discuss reports and recommendations.
6. Annually review the IPS with the EMPLOYER to ensure it continues to meet the EMPLOYER’s needs.
LIMITATIONS ON FIDUCIARY SERVICES
SHUSTER shall not be responsible or liable for the recommendations of, or services rendered by, anyone other than SHUSTER, its employees, agents or representatives. The ability to perform the above services is contingent upon the rules, policies, processes, and responsiveness to our requests for information of EMPLOYER, Plan Sponsor, Custodian, and Trustee.
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APPENDIX C - FEE SCHEDULE
1. SHUSTER will not receive any other compensation, direct or indirect, for its services under this agreement. If SHUSTER receives any other compensation for Services, SHUSTER will disclose the amount of such compensation, the services provided for such compensation, the payer of such compensation, and a description of SHUSTER’s arrangement with the payer to the EMPLOYER and will offset that compensation against its stated fees.
2. All fees are billed in arrears.
3. The initial fee will be the amount, prorated for the number of days included in the initial billing period from the effective payment start date.
4. If this Agreement is terminated prior to the end of a billing period, SHUSTER shall be entitled to a fee, prorated for the number of days in the billing period prior to the effective date of termination.
5. All fees will be due and payable within 30 days and are payable to “Shuster Advisory Group, LLC”
6. The annual fee for services shall be as follows:
Beginning with the effective date of this Agreement, the annual fee for service shall be 0.08% (8 basis points) per annum, charged as 0.0067% monthly to all included assets in each Plan as of the date of the calculation.
Fees will be deducted from Plan assets and will be paid to SHUSTER by the Trust/Custodian for the Plan(s).
At SHUSTER’s discretion the billing period described above may be adjusted to quarterly. .
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EXHIBIT B
TRUST ADMINISTRATIVE SERVICES AGREEMENT
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TRUST ADMINISTRATIVE SERVICES AGREEMENT
This agreement (“Agreement”) is made this day of , 20 , by and between CITY OF VERNON (the “Employer”), a California charter City and California municipal corporation and SHUSTER ADVISORY GROUP, LLC (the “Trust Administrator”), a California limited liability company.
WHEREAS, the Employer has adopted one or more plans, policies, or collective bargaining agreements (“Plans”) in order to provide other post-employment health and welfare benefits (other than pensions) (“OPEB”) and/or retirement benefits; and WHEREAS, the Trust Administrator and Alta Trust Company (the “Trustee”) have entered into an agreement (the “Trust Agreement”) establishing the Multiple Employer OPEB/Pension 115 Trust (the “Trust”); and
WHEREAS, the Employer has adopted the Trust by executing the adoption agreement to which this Agreement is attached (the “Adoption Agreement”“) in order to fund the OPEB and retirement benefits payable under the Plans; and
WHEREAS, the Employer wishes to retain the services of the Trust Administrator to administer the Employer’s account under the Trust (“Account”).
NOW THEREFORE, the Employer and the Trust Administrator hereby agree as follows:
Capitalized words not defined in this document are defined in the Trust Agreement.
1. Trust Administrator Services
The Trust Administrator will provide the following services for the Employer’s Account:
1.1 Administrative Services
A. Instruct the custodian of the Account to make disbursements from the Employer’s Account at the direction of the Employer for the payment of OPEB or retirement benefits under the Employer’s Plans funded by the Account;
B. Verify custodian’s receipt of contributions made to the Account as informed by the Employer;
C. Provide the Employer after the end of each calendar quarter with an analysis of the performance of the investments of the Account and a statement of the changes in the investments made during such calendar quarter;
D. Provide annual statements of Trust accounts;
E. Instruct the custodian to disburse funds from the Account for the payment of the fees and expenses described in Sections 2.1 and 3.2; and .
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F. Coordinate such other actions with the Trustee and custodian of the Account as directed by the Plan Administrator that are within the scope of the Trust Administrator’s duties under the Trust Agreement.
1.2 Investment Management Services
A. Determine the asset allocation of investments in the Employer’s Account (“Investment Strategy”) based on information provided by the Employer or the Plan Administrator, including the anticipated amounts of cash required by the Plans for distributions and other expenses, and the appropriate risk tolerance for the Plans based on the Plans’ asset-liability characteristics and the Employer’s resources;
B. Prepare a recommended policy statement of the Account’s Investment Strategy acceptable to the Employer to the extent necessary to accomplish the Account’s Investment Strategy (“Investment Policy Statement”);
C. Execute the Account’s Investment Strategy by instructing the Trustee to buy and sell shares of investments permitted under the Trust in accordance with the Investment Policy Statement;
D. In consultation with the Employer, reassess and alter the Investment Strategy and Investment Policy Statement at least annually to the extent necessary to “rebalance” the Account investments; and
E. Perform reviews at least annually of the performance of the investments held in the Account, add or reduce allocations to each investment or add or delete investments in its judgment (to the extent permitted under the Investment Policy Statement and the Trust), and promptly advise the Employer of any additions or deletions of Account investments.
2. Compensation
2.1 Fees. For all services provided by the Trust Administrator under this Agreement and the Trustee under the Trust Agreement, the following fees will apply:
Trust Administration Fees (This Agreement)1: 0.01%
Trustee Fees (Trust Adoption Agreement)2: 0.02%
Custodial Asset Based Fee (Custodial Agreement)3: 0.01% Investment Advisory Fees (Investment Advisory Agmt.): 0.08% Fees will be collected quarterly other than the Investment Advisory Fee which will be collected monthly.
1 - Will convert to a flat dollar fee after the end of contract year-3 based on the highest year-end balance of the first 3 contract years.
2 - Annual maximum fee per plan of $5,000.
3 - Annual minimum fee per plan of $400. Custodian may also charge fees related to non- standard assets, checks and wire fees outlined in the Custodial Agreement for the Plan. .
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The Trust Administrator will notify the Employer in writing of any change in the above fee amounts at least 60 days before the effective date of the change.
2.2 Fees for Additional Services. If and to the extent that the Employer requests the Trust Administrator to render services other than those described under this Agreement, such additional services will be compensated separately on terms to be agreed upon between the Trust Administrator and the Employer.
2.3 Pooled Investments. Assets invested by the Trust Administrator under the terms of this Agreement may from time to time be invested in individual securities, or in a proprietary money market mutual fund or local government investment pool (either, a “Pool”). Each Pool is a commingled fund managed by the Trust Administrator. Average daily net assets subject to the fees described in this section shall not take into account any funds invested in the Pool. Expenses of the Pool, including compensation for the Trust Administrator and the Pool custodian, are described in the relevant prospectus or information statement and are paid from the Pool.
3. Expenses
3.1 Furnishing of Administrative Services, Office Space, Equipment and Personnel. The Trust Administrator will furnish at its own expense all necessary administrative services, office space, equipment, clerical personnel, telephone and other communication facilities, investment advisory facilities, and executive and supervisory personnel required to perform the services under this Agreement, inclusive of reasonable costs required to attend meetings with the Employer.
3.2 Expenses of Employer’s Account. Except as otherwise provided in this Agreement, Employer agrees to pay all expenses under the Trust incurred by (or allocable to) the Employer’s Account including, without limitation, taxes, expenses (including front- or back-end charges) of an investment fund, fees and expenses of the Account’s independent auditors and legal counsel, insurance premiums, expenses of the Trustee, the keeping of books and accounts, and the allocable costs of the annual Trust accounting described in Section 9.02 of the Trust Agreement. The Trust Administrator will calculate expenses allocable to the Account on a pro-rata basis, or in any other reasonable and equitable manner determined by the Trust Administrator.
4. Payment Terms. At the end of each calendar month, the Trust Administrator will prepare and submit fees and expenses under this Agreement as described in Sections
2.1 and 3.2. Except to the extent that the Employer has elected in the Adoption Agreement to pay such fees and expenses, the Employer authorizes the Trust Administrator to charge such fees and expenses to the Employer’s Account and authorizes and instructs the custodian to disburse funds from the Account for the payment of the fees and expenses. If the Employer has elected in the Adoption Agreement to pay such fees and expenses the Trust Administrator will prepare and submit monthly invoices to the Employer. If the Employer does not fully pay any invoice within 30 calendar days after the invoice’s postmark, then the Employer hereby authorizes the Trust Administrator to charge the unpaid amount to the Account and instructs the custodian to disburse such amount from the Account for the payment of the fees and expenses. If sufficient funds are not available or cannot for any reason . .
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otherwise be disbursed from the Account, the Trust Administrator will notify the Employer, and the Employer will pay the unpaid amount to the Trust Administrator from other sources within 10 calendar days after receiving the notice.
5. Registered Advisor; Duty of Care. The Trust Administrator hereby represents it is a registered investment advisor under the Investment Advisers Act of 1940. The Trust Administrator will immediately notify the Employer if at any time during the term of this Agreement it is not so registered or if its registration is suspended. The Trust Administrator agrees to perform its duties and responsibilities under this Agreement with reasonable care. The federal securities laws impose liabilities under certain circumstances on persons who are required to act in good faith. Nothing herein in any way constitutes a waiver or limitation of any rights which the Employer, the Trust, or the Trust Administrator may have under any federal securities laws. The Employer hereby authorizes the Trust Administrator to sign an Internal Revenue Service Form W-9 on behalf of the Employer and to deliver such form to broker-dealers or others from time to time as required in connection with securities transactions pursuant to this Agreement.
6. Trust Administrator’s Other Clients. The Employer understands that the Trust Administrator performs investment advisory services for various other clients which may include investment companies, commingled trust funds and/or individual portfolios. The Employer agrees that the Trust Administrator, in the exercise of its professional judgment, may give advice or take action with respect to any of its other clients which may differ from advice given or the timing or nature of action taken with respect to the Account. The Trust Administrator has no obligation to purchase, sell or exchange any security for the Employer solely by reason of the fact that the Trust Administrator, its principals, affiliates, or employees may purchase, sell or exchange such security for the account of any other client or for itself or its own accounts.
7. Risk Acknowledgment. The Trust Administrator does not guarantee the future performance of the Account or any specific level of performance, the success of any investment decision or strategy that the Trust Administrator may use, or the success of the Trust Administrator’s overall management of the Account. The Employer understands that investment decisions made for the Employer’s Account by the Trust Administrator are subject to various markets, currencies, economic, political and business risks, and that those investment decisions will not always be profitable. The Employer understands that past performance does not necessarily predict future performance for the Account. The Trust Administrator will manage only the securities, cash and other investments held in Employer’s Account and in making investment decisions for the Account, the Trust Administrator will not consider any other securities, cash or other investments owned by the Employer or any of the Plans. Neither the Trust Administrator nor its officers, directors, agents, employees, nor affiliates shall be liable for any losses in the Account, or any loss, cost, indebtedness, or liabilities arising from the Trust Administrator’s management of the investments in the Account (together, “Losses”) except for any Losses that result from an act or omission of the Trust Administrator constituting a violation of law or an act or omission of the Trust Administrator constituting gross negligence, active negligence in performing administrative duties such as instruction errors or reporting failures, willful misfeasance, bad faith or reckless disregard of its obligations under this Agreement or as otherwise may be provided by law. The Trust Administrator is not responsible for any loss incurred by reason of any act or omission of the Employer, the custodian of the Account, a third party manager, any broker-dealer, or any other third party. .
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8. Term of Agreement. This Agreement will remain in effect until terminated by either party at any time by giving 60 days’ written notice to the other party of its intent to terminate.
9. Force Majeure. The Trust Administrator has no liability for any losses arising out of the delays in performing or inability to perform the services which it renders under this Agreement which result from events beyond its control, including interruption of the business activities of the Trust Administrator or other financial institutions due to acts of God, acts of governmental authority, acts of war, terrorism, civil insurrection, riots, labor difficulties, or any action or inaction of any carrier or utility, or mechanical or other malfunction.
10. Disciplinary Actions. The Trust Administrator will promptly notify the Employer if the Trust Administrator is found to have violated any state or federal securities law or regulation in any criminal action or civil suit in any state or federal court or in any disciplinary proceeding before the Securities and Exchange Commission or any other regulatory agency or department of the United States, any registered securities exchange, the Financial Industry Regulatory Authority, or any regulatory authority of any State based upon the performance of services as an investment advisor.
11. Confidentiality. The Trust Administrator will not disclose any information relating to the Plans or the Account except to authorized officers of the Employer, the Plan Administrator the Trustee and third parties retained by the Trust Administrator to perform specific services within this Agreement without the Employer’s consent. The Employer will not disclose any information relating to the Trust to individuals other than authorized officers of the Employer and the Plan Administrator, or their respective designees, without the Trust Administrator’s consent.
12. Independent Contractor. The Trust Administrator, its employees, officers and representatives, will not be deemed to be employees, agents (except as to the purchase or sale of securities described in Section 1), partners, servants, and/or joint ventures of the Employer or the Account by virtue of this Agreement or any actions or services rendered under this Agreement.
13. Records. The Trust Administrator will maintain appropriate records of all its activities hereunder. The Trust Administrator will use its best efforts to provide the Employer with a statement within 60 days following the end of each calendar quarter showing deposits, withdrawals, purchases and sales (or maturities) of investments, earnings received during the quarter, and the value of assets held on the last business day of the calendar quarter, all as provided for in the Trust Agreement, based on the information requested from and furnished to it by the Trustee.
14. Ownership of Reports and Documents. The Trust Administrator acknowledges that the originals of all correspondence, documents, reports and records produced in the course of providing the services pursuant to this Agreement are the property of the Employer. In the event this Agreement is terminated, the Trust Administrator agrees to provide such originals to the Employer. The Trust Administrator will not furnish copies of any such correspondence, documents reports and records to any party other than the Employer or the Plan Administrator, or their respective designees, or third parties retained by the Trust Administrator to perform services under this Agreement without the Employer’s consent. Notwithstanding the preceding provisions of this paragraph, the Trust Administrator is authorized to retain copies of any correspondence, documents, . .
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reports, and records to the extent needed to comply with applicable law, including, but not limited to, federal securities laws.
15. Trust Administrator’s Disclosure Statement. The Trust Administrator warrants that it has delivered to the Employer, at least 48 hours prior to the execution of this Agreement, the Trust Administrator’s current Securities and Exchange Commission Form ADV, Part II. The Employer acknowledges receipt of such disclosure statement at least 48 hours prior to the execution of this Agreement.
16. Amendment. This Agreement shall not be changed, modified, terminated or discharged in whole or in part, except by an instrument in writing signed by both parties hereto, or their respective successors or assigns.
17. Successors and Assigns. The provisions of this Agreement are binding on the Trust Administrator and its respective successors and assigns, provided, however, that the rights and obligations of the Trust Administrator may not be assigned without the Employer’s consent.
18. Designees. In accordance with Section 1.18 of the Trust Agreement, the Employer will certify to the Trust Administrator in writing the persons or entity with the plenary authority pursuant to applicable state law over the investment and management of the Employer’s Plans or its designee (“Plan Administrator”). The Plan Administrator has the authority to act on behalf of, and to exercise any of the rights of, the Employer under this Agreement.
In accordance with Section 6.1(l) of the Trust Agreement, the Trust Administrator may designate and engage the services of such agents, representatives, advisors, counsel, accountants and other third parties, including affiliates of the Trust Administrator, and delegate its authority to perform specified services under this Agreement to such third parties. Any such designee shall have the authority to perform the services delegated to it by the Trust Administrator. Any officer of the Trust Administrator has the authority to exercise any of the rights of the Trust Administrator under this Agreement.
19. Notice. Written notices required under this Agreement will be sent by regular mail, certified mail, overnight delivery or courier, and will be deemed given when received at the parties’ respective addresses shown below. Either party must notify the other party in writing of a change in address.
Employer’s Address:
City of Vernon
4305 S. Santa Fe Avenue
Vernon, CA 90058
Attn: City Administrator
Trust Administrator’s Address:
Shuster Advisory Group, LLC
155 N. Lake Ave, #950
Pasadena, CA 91101
Attn: Mark Shuster, Managing Member
20. Arbitration. The Employer understands and agrees that, to the extent permitted by law, all claims and disputes arising out of transactions or activities in connection with the . .
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Account, or construction, performance, or breach of this Agreement, will be determined by arbitrators sitting in Los Angeles, California, in accordance with the current rules then in effect of the American Arbitration Association. The arbitrators may allocate attorneys’ fees and arbitration costs between parties. In this regard, the Employer understands that: (1) Arbitration is final and binding on the parties; (2) the parties are waiving their right to seek a judicial determination in court, including the right to jury trial; (3) prearbitration discovery is generally more limited than and different from court proceedings; (4) the panel of arbitrators will typically include a minority of arbitrators who are in the securities industry; and (5) arbitration will be conducted according to the securities arbitration rules then in effect of the American Arbitration Association.
21. Applicable Law. This Agreement will be construed, enforced and administered according to the laws of the state of California, without regard to its conflicts of law principles. In the event that either party institutes legal proceedings against the other, the venue will lie in any court of competent jurisdiction in the state of California.
22. Entire Agreement. This Agreement, including exhibits and any other documents referenced herein, constitutes the entire agreement of the parties with respect to the subject matter of this Agreement, and supersedes all prior negotiations, agreements, and understandings, whether written or oral, with respect thereto.
23. Severability. If any provision of this Agreement is held by any court of competent jurisdiction to be invalid or unenforceable, the remaining provisions of the Agreement will continue in full force and effect.
24. Counterparts. This Agreement may be executed in any number of counterparts and by different parties in separate counterparts, each of which when so executed will be deemed to be a complete original and all of which together will constitute one and the same Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their authorized officers on the date set forth in the first paragraph of this Agreement.
TRUST ADMINISTRATOR EMPLOYER
Shuster Advisory Group, LLC City of Vernon
By: By:
Brian Saeki
Its: Its: City Administrator
ATTEST:
________________________________
Genoveva Rocha, City Clerk
APPROVED AS TO FORM:
________________________________
Zaynah Moussa-Milward, City Attorney
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C-1
4828-2402-5842.v3
EXHIBIT C
PLAN ADMINISTRATOR: SPECIMEN SIGNATURE
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Exhibit C - Plan Administrator Specimen Signatures
CITY OF VERNON
The persons identified below are authorized to provide written or electronic (including through any digital portal or platform and through electronic mail) instructions to Shuster Advisory Group, LLC as Trust Administrator and Investment Advisor, Charles Schwab Trust Bank as Custodian, and Alta Trust Company as Trustee, on behalf of the City. These firms may rely on the instructions received from any one of these authorized persons unless notified in writing to the contrary.
Signature:
Full Legal Name: Brian Saeki Title: City Administrator
Address: 4305 Santa Fe Avenue
City: Vernon State: CA Zip Code: 90058
E-mail address: [email protected]
Signature:
Full Legal Name: Alice Hui Title: Finance Director
Address: 4305 Santa Fe Avenue
City: Vernon State: CA Zip Code: 90058
E-mail address: [email protected]
Signature:
Full Legal Name: Maria-Luisa Olea Title: Assistant Finance Director Address: 4305 Santa Fe Avenue
City: Vernon State: CA Zip Code: 90058
E-mail address: [email protected]
Signature:
Full Legal Name: Title:
Address:
City: State: Zip Code:
E-mail address:
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Proposal for Adoption of the Section 115 Trust Administered by Shuster Advisory Group Project Title: Adoption of the Multiple Employer OPEB/Pension 115 Trust Administered by Shuster Advisory Group
Prepared for: City of Vernon (“City”)
Prepared by: Shuster Advisory Group (“Shuster”)
Date: 04/24/2026
1. Firm Overview
Shuster Advisory Group is an independent, SEC-registered investment advisory firm specializing in Section 115 Trust administration and investment management for California public agencies. We serve as a full fiduciary to trust assets — acting solely in the best interest of each agency — providing discretionary investment management, trust administration, and ongoing compliance oversight for Other Post-Employment Benefits (“OPEB”) and pension prefunding programs. Our program offers individual (non-pooled) accounts, fully customizable investment portfolios, complete fee transparency, and dedicated local service, supported by Charles Schwab Trust Bank as Custodian and Alta Trust as Directed Trustee.
2. Scope of Work
Trust Administration and Investment Advisory Services
A. Shuster will serve as Trust Administrator and discretionary Investment Advisor and Fiduciary for the City’s Section 115 Trust. Shuster will perform the following services:
1. Coordinate all aspects of Trust establishment.
2. Develop and maintain a customized Investment Policy Statement tailored to the City’s OPEB funding objectives, risk tolerance, and liquidity needs.
3. Provide discretionary investment management of trust assets in accordance with the approved Investment Policy Statement, including portfolio construction, ongoing monitoring, and quarterly rebalancing.
4. Coordinate contributions to and qualified distributions from the Trust, including processing of all required documentation and coordination with the custodian, Charles Schwab Trust Bank.
5. Provide quarterly investment performance reports and account statements, including GASB 75- compliant reporting to support the City’s annual financial reporting obligations.
6. Monitor federal and state regulatory compliance requirements applicable to the Trust on an ongoing basis and keep the City informed of relevant changes.
7. Provide general fiduciary consulting, including analysis of funding strategies, asset allocation recommendations, and availability for staff and City Council presentations as needed.
3. Cost Proposal
The fees for all services provided by Shuster as Trust Administrator and Investment Advisor, Charles Schwab Trust Bank as Custodian, and Alta Trust Company as Trustee are detailed below. Fees are to be invoiced directly to the Trust assets unless otherwise directed by the City.
Trust Administration Fees (This Agreement)1
: 0.01%
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Trustee Fees (Trust Adoption Agreement)2: 0.02%
Custodial Asset Based Fee (Custodial Agreement)3
: 0.01%
Investment Advisory Fees (Investment Advisory Agmt.): 0.08% Fees will be collected quarterly other than the Investment Advisory Fee which will be collected monthly.
1 - Will convert to a flat dollar fee after the end of contract year-3 based on the highest year-end balance of the first 3 contract years.
2 - Annual maximum fee per plan of $5,000.
3 - Annual minimum fee per plan of $400. Custodian may also charge fees related to non- standard assets, checks and wire fees outlined in the Custodial Agreement for the Plan.
4. Agreement
Upon the City’s acceptance of this proposal, the parties will execute a Trust Adoption Agreement, Trust Administrative Services Agreement, and Investment Advisor Agreement agreed upon by the City and Shuster.
Shuster Advisory Group looks forward to the opportunity to serve the City of Vernon. .
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