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HomeMy WebLinkAboutItem 08 - Agreement with Benefit Financial Services Group for Administrative, Investment, and Communication ServicesFinance and Management Services www.santa-ana.org/finance Item # 8 City of Santa Ana 20 Civic Center Plaza, Santa Ana, CA 92701 Staff Report December 3, 2024 TOPIC: Administrative, Investment, and Communication Advisory Services AGENDA TITLE Agreement with Benefit Financial Services Group for Administrative, Investment, and Communication Advisory Services RECOMMENDED ACTION Authorize the City Manager to execute an agreement with Benefit Financial Services Group ("BFSG") for administrative, investment, and communication advisory services for a total aggregate amount not -to -exceed $175,000 for a three-year term beginning January 1, 2025, and expiring December 31, 2027, with a provision for a two-year extension (Agreement No. A-2024-XXX). GOVERNMENT CODE §84308 APPLIES: Yes DISCUSSION The City of Santa Ana's full-time employee 457 Deferred Compensation Plan ("Plan") was established in 1973, with the adoption of City Resolution 7-21. The 457 Deferred Compensation Plan is a voluntary supplemental retirement savings program that allows employees to make contributions to the Plan up to an amount established by the Internal Revenue Service. Other than the amounts pursuant to City Council -appointee contracts, the City does not contribute any funds to the plan. As of June 30, 2024, the City's 457 Deferred Compensation Plan holds $152 million in plan assets for 1,349 participants. The Retiree Health Savings plan holds $17 million in plan assets. The 457 Deferred Compensation Plan is administered through the Finance and Management Services Agency, with advisory contributions from Human Resources. Management of the plan includes quarterly performance review of investments, analyzing the Plan's fund options, maintaining and revising the Plan's investment policy Statements as necessary, and ensuring the Plan's cost-effectiveness. In addition, the Retiree Health Savings (RHS) plan was included as part of the Request for Proposals (more information is in the paragraph below), so the selected firm will provide services similar to those provided to the 457 plan. Currently, the City utilizes an independent fiduciary firm, Benefits Financial Services Group (BFSG), to assist in reviewing investments, compliance, and fund selection. Administrative, Investment, and Communication Advisory Services December 3, 2024 Page 2 On September 19, 2024, the Finance and Management Services Agency released Request for Proposals (RFP) No. 24-109 for plan and investment advisory services for the 457 and RHS Plan. Four firms submitted proposals in response to the RFP: BFSG. LLC, Fiduciary Experts LLC, SageView Advisory Group, and Shuster Advisory Group, LLC. The selection committee with experience in the related services evaluated proposals. Staff recommends awarding an agreement to the highest -ranked vendor, BFSG, LLC. Following a comprehensive evaluation of the four bids received, which assessed both cost and professional expertise, BFSG, LLC was determined to offer the best overall value. Their proposal demonstrated the firm has the necessary resources and expertise to complete the required services as specified in the RFP. Their fee was competitive and aligned with the other bids received. ENVIRONMENTAL IMPACT There is no environmental impact associated with this action. FISCAL IMPACT There is no fiscal impact associated with this action. All administrative fees pertaining to the services will be borne by the plan participants. Internal Revenue Code permits administrative reimbursement from plan assets. EXHIBIT(S) 1. Agreement Submitted By: Kathryn Downs, Executive Director of Finance and Management Services Approved By: Alvaro Nunez, City Manager EXHIBIT 1 AGREEMENT FOR ADMINISTRATIVE, INVESTMENT AND COMMUNICATION ADVISORY SERVICES BETWEEN BFSG, LLC AND CITY OF SANTA ANA THIS AGREEMENT is made and entered into on this 1 st day of Janua , 2025 by and between BFSG, LLC, ("Contractor"), and the City of Santa Ana, a charter city and municipal corporation organized and existing under the Constitution and laws of the State of California ("City"). RECITALS A. On September 19, 2024, the City issued a Request for Proposal No. 24-109 ("RFP"), by which it sought a contractor to provide Plan Administrative, Investment and Communication Advisory Services related to the 457 (b) Deferred Compensation Plan and Retirement Health Savings ("RHS") Plan. B. Contractor submitted a responsive proposal ("Proposal") that was selected by the City, and such Proposal is referenced herein as if set out in full. Contractor represents that it is able and willing to provide services described in the scope of work that was included in the RFP. C. In undertaking the performance of this Agreement, Contractor represents that it is knowledgeable in its field and that any services performed by Contractor under this Agreement will be performed in compliance with such standards as may reasonably be expected from a professional consulting firm in the field. NOW THEREFORE, in consideration of the mutual and respective promises, and subject to the terms and conditions hereinafter set forth, the parties agree as follows: 1. SCOPE OF SERVICES Contractor shall perform during the term of this Agreement, the tasks and obligations including all labor, materials, tools, equipment, and incidental customary work required to fully and adequately complete the services described and set forth in Scope of Services - Exhibit A, attached hereto and incorporated by reference. 2. COMPENSATION a. City agrees to pay, and Contractor agrees to accept as total payment for its services for City, the rates and charges identified in Compensation - Exhibit B. The total amount to be expended during the term of this Agreement shall not exceed $175,000. b. Payment by City shall be made within forty-five (45) days following receipt of proper invoice evidencing work performed, subject to City accounting procedures. City and Contractor agree that all payments due and owing under this Agreement shall be made through Automated Clearing House (ACH) transfers. Contractor agrees to execute the City's standard ACH Vendor Payment Authorization and provide required Page 1 of 9 #449976v2 documentation. Upon verification of the data provided, the City will be authorized to deposit payments directly into Contractor's account(s) with financial institutions. Payment need not be made for work which fails to meet the standards of performance set forth in the Recitals which may reasonably be expected by City. 3. TERM This Agreement shall commence on the date first written above for a three (3) year term with the option for the City to grant up to one 2-.year renewal, exercisable by a writing by the City Manager and the City Attorney, unless terminated earlier in accordance with Section 15, below. 4. INDEPENDENT CONTRACTOR Contractor shall, during the entire term of this Agreement, be construed to be an independent Contractor and not an employee of the City. This Agreement is not intended nor shall it be construed to create an employer -employee relationship, a joint venture relationship, or to allow the City to exercise discretion or control over the professional manner in which Contractor performs the services which are the subject matter of this Agreement; however, the services to be provided by Contractor shall be provided in a manner consistent with all applicable standards and regulations governing such services. Contractor shall pay all salaries and wages, employer's social security taxes, unemployment insurance and similar taxes relating to employees and shall be responsible for all applicable withholding taxes. 5. OWNERSHIP OF MATERIALS This Agreement creates a non-exclusive and perpetual license for City to copy, use, modify, reuse, or sublicense any and all copyrights, designs, and other intellectual property embodied in plans, specifications, studies, drawings, estimates, and other documents or works of authorship fixed in any tangible medium of expression, including but not limited to, physical drawings or data magnetically or otherwise recorded on computer diskettes, which are prepared or caused to be prepared by Contractor under this Agreement ("Documents & Data"). Contractor shall require all subcontractors to agree in writing that City is granted a non-exclusive and perpetual license for any Documents & Data the subcontractor prepares under this Agreement. Contractor represents and warrants that Contractor has the legal right to license any and all Documents & Data. Contractor makes no such representation and warranty in regard to Documents & Data which were provided to Contractor by the City. City shall not be limited in any way in its use of the Documents and Data at any time, provided that any such use not within the purposes intended by this Agreement shall be at City's sole risk. 6. INSURANCE Prior to undertaking performance of work under this Agreement, Contractor shall maintain and shall require any subcontractors to obtain and maintain insurance as described below for the entire Term of this Agreement against claims for injuries to persons or damage to property which Page 2 of 9 #451059vl may arise from or in connection with services, produces and materials supplied to City. Total cost of such insurance shall be borne by Contractor. MINIMUM SCOPE OF INSURANCE Coverage shall be at least as broad as: 1. Commercial General Liability (CGL): Insurance Services Office Form CG 00 01 covering CGL on an "occurrence" basis, including products and completed operations, property damage, bodily injury and personal & advertising injury with limits no less than $1,000,000 per occurrence and $2,000,000 aggregate. Required policy limits can be met with primary and umbrella/excess insurance policies. 2. Automobile Liability: Insurance Services Office Form Number CA 00 01 covering any auto (Code 1), with limits no less than $1,000,000 combined single limits. In the event Contractor does not maintain commercial automobile liability insurance, City will accept evidence of personal automobile insurance. 3. Workers' Compensation: as required by the State of California, with Statutory Limits, and Employer's Liability Insurance with limit of no less than $1,000,000 per accident for bodily injury or disease. Coverage is not required if Contractor has no employees and signs request to waive such insurance. 4. Professional Liability (Errors and Omissions): Insurance appropriate to the Contractor's profession, with limit no less than $1,000,000 per occurrence or claim, $2,000,000 aggregate. If the Contractor maintains broader coverage and/or higher limits than the minimum requirements for each line of coverage shown above, the City requires and shall be entitled to the broader coverage and/or higher limits maintained by the Contractor. Any available insurance proceeds in excess of the specified minimum limits of insurance and coverage shall be available to the City. Other Insurance Provisions The above required insurance policies are to contain, or be endorsed to contain, the following provisions: 1. City, its City Council, its officers, officials, employees, agents, and volunteers are to be covered as additional insureds, under Contractor's CGL, Professional Liability, and Automobile Liability policies, with respect to any liability arising out of work or operations performed by or on behalf of the Contractor including materials, parts, equipment, and personnel furnished in connection with such work or operations. 2. Contractor's Insurance company(ies) agrees to waive all rights of subrogation against City, its City Council, its officers, officials, employees, agents, and volunteers for losses paid under the terms of any policy which arise from work performed by Contractor under this Agreement. 3. For any claims related to this contract, Contractor's insurance coverage shall be primary and any insurance maintained by City, its City Council, its officers, officials, employees, agents, or volunteers shall not contribute with it. Page 3 of 9 #451059vl 4. A severability of interest provision must apply for all the additional insureds, ensuring that Contractor's insurance shall apply separately to each insured against whom a claim is made or suit is brought, except with respect to the insurer's limits of liability. 5. Insurance policies required herein shall provide that coverage shall not be canceled, suspended, voided, reduced in coverage or in limits, non -renewed by the carrier, or materially changed except after thirty (30) days prior written notice has been given to City. Ten (10) days prior written notice shall be provided to City for policy cancellation or non - renewal due to non-payment of premium. 6. Certificate Holder on each Evidence of Insurance certificate shall be: City of Santa Ana, Attention: Executive Director, Finance and Management Services Agency, 20 Civic Center Plaza M-17, Santa Ana, CA 92701. The name and location of project must be included in the Description of Operations section of each certificate. Self -Insured Retentions Self -insured retentions must be declared to and approved by the City. The City may require the Contractor to purchase coverage with a lower retention or provide proof of ability to pay losses and related investigations, claim administration, and defense expenses within the retention. Acceptability of Insurers Insurance is to be placed with insurers authorized to conduct business in the state with a current A.M. Best's rating of no less than A:VII, unless otherwise acceptable to the City. Verification of Coverage Contractor shall furnish the City with original certificates of insurance including all required amendatory endorsements (or copies of the applicable policy language effecting coverage required by this clause) and a copy of the Declarations and Endorsement Page of the CGL policy listing all policy endorsements before work begins. However, failure to obtain the required documents prior to the work beginning shall not waive the Contractor's obligation to provide them. Special Risks or Circumstances City reserves the right to modify these requirements, including limits, based on the nature of the risk, prior experience, insurer, coverage, or other special circumstances. 7. INDEMNIFICATION Contractor agrees to defend, and shall indemnify and hold harmless the City, its officers, agents, employees, contractors, special counsel, and representatives from liability: (1) for personal injury, damages, just compensation, restitution, judicial or equitable relief arising out of claims for personal injury, including death, and claims for property damage, which may arise from the negligent operations of the Contractor, its subcontractors, agents, employees, or other persons acting on its behalf which relates to the services described in section 1 of this Agreement; and (2) from any claim that personal injury, damages, just compensation, restitution, judicial or equitable relief is due by reason of the terms of or effects arising from this Agreement. This indemnity and hold harmless agreement applies to all claims for damages, just compensation, restitution, judicial or equitable relief suffered, or alleged to have been suffered, by reason of the events referred to in this Section or by reason of the terms of, or effects, arising from this Agreement. The Contractor Page 4 of 9 #451059vl further agrees to indemnify, hold harmless, and pay all costs for the defense of the City, including fees and costs for special counsel to be selected by the City, regarding any action by a third party challenging the validity of this Agreement, or asserting that personal injury, damages, just compensation, restitution, judicial or equitable relief due to personal or property rights arises by reason of the terms of, or effects arising from this Agreement. City may make all reasonable decisions with respect to its representation in any legal proceeding. Notwithstanding the foregoing, to the extent Contractor's services are subject to Civil Code Section 2782.8, the above indemnity shall be limited, to the extent required by Civil Code Section 2782.8, to claims that arise out of, pertain to, or relate to the negligence, recklessness, or willful misconduct of the Contractor. 8. INTELLECTUAL PROPERTY INDEMNIFICATION Contractor shall defend and indemnify the City, its officers, agents, representatives, and employees against any and all liability, including costs, for infringement of any United States' letters patent, trademark, or copyright infringement, including costs, contained in the work product or documents provided by Contractor to the City pursuant to this Agreement. 9. RECORDS Contractor shall keep records and invoices in connection with the work to be performed under this Agreement. Contractor shall maintain complete and accurate records with respect to the costs incurred under this Agreement and any services, expenditures, and disbursements charged to the City for a minimum period of three (3) years, or for any longer period required by law, from the date of final payment to Contractor under this Agreement. All such records and invoices shall be clearly identifiable. Contractor shall allow a representative of the City to examine, audit, and make transcripts or copies of such records and any other documents created pursuant to this Agreement during regular business hours. Contractor shall allow inspection of all work, data, documents, proceedings, and activities related to this Agreement for a period of three (3) years from the date of final payment to Contractor under this Agreement. 10. CONFIDENTIALITY If Contractor receives from the City information which due to the nature of such information is reasonably understood to be confidential and/or proprietary, Contractor agrees that it shall not use or disclose such information except in the performance of this Agreement, and further agrees to exercise the same degree of care it uses to protect its own information of like importance, but in no event less than reasonable care. "Confidential Information" shall include all nonpublic information. Confidential information includes not only written information, but also information transferred orally, visually, electronically, or by other means. Confidential information disclosed to either party by any subsidiary and/or agent of the other party is covered by this Agreement. The foregoing obligations of non-use and nondisclosure shall not apply to any information that (a) has been disclosed in publicly available sources; (b) is, through no fault of the Contractor disclosed in a publicly available source; (c) is in rightful possession of the Contractor without an obligation of confidentiality; (d) is required to be disclosed by operation of law; or (e) is independently developed by the Contractor without reference to information disclosed by the City. Page 5 of 9 #451059vl 11. CONFLICT OF INTEREST CLAUSE Contractor covenants that it presently has no interests and shall not have interests, direct or indirect, which would conflict in any manner with performance of services specified under this Agreement. 12. NON-DISCRIMINATION Contractor shall not discriminate because of race, color, creed, religion, sex, marital status, sexual orientation, gender identity, gender expression, gender, medical conditions, genetic information, or military and veteran status, age, national origin, ancestry, or disability, as defined and prohibited by applicable law, in the recruitment, selection, teaching, training, utilization, promotion, termination or other employment related activities or any services provided under this Agreement. Contractor affirms that it is an equal opportunity employer and shall comply with all applicable federal, state and local laws and regulations. 13. EXCLUSIVITY AND AMENDMENT This Agreement represents the complete and exclusive statement between the City and Contractor, and supersedes any and all other agreements, oral or written, between the parties. In the event of a conflict between the terms of this Agreement and any attachments hereto, the terms of this Agreement shall prevail. This Agreement may not be modified except by written instrument signed by the City and by an authorized representative of Contractor. The parties agree that any terms or conditions of any purchase order or other instrument that are inconsistent with, or in addition to, the terms and conditions hereof, shall not bind or obligate Contractor or the City. Each party to this Agreement acknowledges that no representations, inducements, promises or agreements, orally or otherwise, have been made by any party, or anyone acting on behalf of any party, which is not embodied herein. 14. ASSIGNMENT Inasmuch as this Agreement is intended to secure the specialized services of Contractor, Contractor may not assign, transfer, delegate, or subcontract any interest herein without the prior written consent of the City and any such assignment, transfer, delegation or subcontract without the City's prior written consent shall be considered null and void. Nothing in this Agreement shall be construed to limit the City's ability to have any of the services which are the subject to this Agreement performed by City personnel or by other Contractors retained by City. 15. TERMINATION This Agreement may be terminated by the City upon thirty (30) days written notice of termination. In such event, Contractor shall be entitled to receive and the City shall pay Contractor compensation for all services performed by Contractor prior to receipt of such notice of termination, subject to the following conditions: a. As a condition of such payment, the Executive Director may require Contractor to Page 6 of 9 #451059vl deliver to the City all work product(s) completed as of such date, and in such case such work product shall be the property of the City unless prohibited by law, and Contractor consents to the City's use thereof for such purposes as the City deems appropriate. b. Payment need not be made for work which fails to meet the standard of performance specified in the Recitals of this Agreement. 16. WAIVER No waiver of breach, failure of any condition, or any right or remedy contained in or granted by the provisions of this Agreement shall be effective unless it is in writing and signed by the party waiving the breach, failure, right or remedy. No waiver of any breach, failure or right, or remedy shall be deemed a waiver of any other breach, failure, right or remedy, whether or not similar, nor shall any waiver constitute a continuing waiver unless the writing so specifies. 17. JURISDICTION - VENUE This Agreement has been executed and delivered in the State of California and the validity, interpretation, performance, and enforcement of any of the clauses of this Agreement shall be determined and governed by the laws of the State of California. Both parties further agree that Orange County, California, shall be the venue for any action or proceeding that may be brought or arise out of, in connection with or by reason of this Agreement. 18. PROFESSIONAL LICENSES Contractor shall, throughout the term of this Agreement, maintain all necessary licenses, permits, approvals, waivers, and exemptions necessary for the provision of the services hereunder and required by the laws and regulations of the United States, the State of California, the City of Santa Ana and all other governmental agencies. Contractor shall notify the City immediately and in writing of its inability to obtain or maintain such permits, licenses, approvals, waivers, and exemptions. Said inability shall be cause for termination of this Agreement. 19. NOTICE Any notice, tender, demand, delivery, or other communication pursuant to this Agreement shall be in writing and shall be deemed to be properly given if delivered in person or mailed by first class or certified mail, postage prepaid, or sent by fax or other telegraphic communication in the manner provided in this Section, to the following persons: To City: City Clerk City of Santa Ana 20 Civic Center Plaza (M-30) P.O. Box 1988 Santa Ana, CA 92702-1988 Page 7 of 9 #451059vl Fax: 714- 647-6956 With courtesy copies to: Executive Director, Finance and Management Services Agency City of Santa Ana 20 Civic Center Plaza (M-17) P.O. Box 1988 Santa Ana, California 92702 Fax: 714-647-6956 To Contractor: Darren Stewart Principal, Sr. Retirement Plan Consultant 2040 Main Street, Suite 720 Irvine, CA 92614 Email: dstewartAbf§R.com A party may change its address by giving notice in writing to the other party. Thereafter, any communication shall be addressed and transmitted to the new address. If sent by mail, communication shall be effective or deemed to have been given three (3) days after it has been deposited in the United States mail, duly registered or certified, with postage prepaid, and addressed as set forth above. If sent by fax, communication shall be effective or deemed to have been given twenty-four (24) hours after the time set forth on the transmission report issued by the transmitting facsimile machine, addressed as set forth above. For purposes of calculating these time frames, weekends, federal, state, County or City holidays shall be excluded. 20. MISCELLANEOUS PROVISIONS a. Each undersigned represents and warrants that its signature herein below has the power, authority and right to bind their respective parties to each of the terms of this Agreement, and shall indemnify City fully, including reasonable costs and attorney's fees, for any injuries or damages to City in the event that such authority or power is not, in fact, held by the signatory or is withdrawn. b. All Exhibits referenced herein and attached hereto shall be incorporated as if fully set forth in the body of this Agreement. [signatures on following page] Page 8 of 9 #451059vl IN WITNESS WHEREOF, the parties hereto have executed this Agreement the date and year first above written. ATTEST: Jennifer L. Hall City Clerk APPROVED AS TO FORM: SONIA R. CARVALHO City Attorney l d,,jL Andrea Garcia -Miller Assistant City Attorney RECOMMENDED FOR APPROVAL: Ka—fMrT Downs (Nov 18, 202417:43 PST) Kathryn Downs Executive Director Finance and Management Services Agency CITY OF SANTA ANA Alvaro Nunez City Manager BFSG, LLC i---- - Name: -%a- 140 Title: `I T i 5 9C Pagc 9 of 9 #449976vI EXHIBIT A SCOPE OF SERVICES (Z) CITY OF SANTA ANA EXHIBIT I SCOPE OF SERVICES The consultant shall perform services as set forth below: A. Administrative Responsibilities 1. Ensure plan design compliance. 2. Prepare an onboard ing/implementation plan before commencing the service. 3. Provide regulatory/technical guidance. 4. Prepare an annual plan provider cost analysis. 5. Assist in development of Request for Proposals for Plan Provider, if needed. 6. Ensure best practices are met in the interest of the participants. B. Investment Responsibilities 1. Conduct up to four quarterly reviews of investment options. 2. Conduct due diligence on current investment options and make recommendations on alternative options. 3. Assist in implementing fund changes and transitions. 4. Maintain and revise the Investment Policy Statement for the Plan. 5. Attend on -site meetings and provided recorded minutes for each meeting/conference call. 6. Ensure best practices are met in the review & evaluation of investment options. C. Communication Responsibilities 1. Assist the Committee with developing marketing and education strategies for participants. 2. Assist the Committee with developing marketing & education materials. 3. Provide educational seminars that will supplement the seminars conducted by the Plan Provider. D. Fee and Cost Analysis 1. Periodically evaluate and benchmark all fees and costs associated with the plans, including fee structure. City of Santa Ana RFP No. 24-109 EXHIBIT B COMPENSATION Fee Proposal including hourly rates if applicable BFSG, LLC proposes to perform the services detailed throughout this RFP response for an annual fee of $35,000. Additionally, BFSG will likely match any lower priced proposal from a Registered Investment Advisory Firm with similar experience and qualifications. Participant Education and Financial Planning • Offer financial planning services to participants of the Plan conducted by a Certified Financial PlannerT11 professional (CFP(R)) with the ability to schedule appointments online • Provide one-on-one consultations including fiduciary -based point -in -time asset allocation advice to Plan participants • Provide participants access to BFSG's seasonal webinar series covering a variety of topics and including guest appearance from industry experts • Provide up to two (2) employer -specific seminars or webinars per year with topics fully customizable to Client needs • Access to BFSG's National Webinar Series containing educational content for plan sponsors and participants Agreement with BFSG LLC for Administrative Investment and Communication Advisory Services - 2024 - BFSG Signed Final Audit Report 2024-11-19 Created: 2024-11-18 By: Kristin Andrade (kandrade@santa-ana.org) Status: Signed Transaction ID: CBJCHBCAABAAoaJMRYC-91TxBON LxF67 AaM8W8unbY "Agreement with BFSG LLC for Administrative Investment and C ommunication Advisory Services - 2024 - BFSG Signed" History Document created by Kristin Andrade (kandrade@santa-ana.org) 2024-11-18 - 11:59:19 PM GMT Document emailed to Kathryn Downs (kdowns@santa-ana.org) for signature 2024-11-18 - 11:59:36 PM GMT is Email viewed by Kathryn Downs (kdowns@santa-ana.org) 2024-11-19 - 1:42:42 AM GMT 5 Document e-signed by Kathryn Downs (kdowns@santa-ana.org) Signature Date: 2024-11-19 - 1:43:00 AM GMT - Time Source: server Agreement completed. 2024-11-19 - 1:43:00 AM GMT a Adobe Acrobat Sign