Item 6AAGENDA ITEM # 6A
CITY OF ATLANTIC BEACH MAY 27' Zoos
CITY COMMISSION MEETING
STAFF REPORT
AGENDA ITEM: RESOLUTION 08-07 OF THE CITY OF ATLANTIC
BEACH, FLORIDA ESTABLISHING A SECOND
DEFERRED RETIREMENT OPTION PROGRAM (DROP)
PLAN TO SEPARATELY ACCOUNT FOR POLICE
OFFICER AND GENERAL EMPLOYEE BENEFITS;
CHANGE THE PLAN NAME OF THE EXISTING DROP
PLAN; AND, CHANGE THE DESIGNATED PLAN
COORDINATOR OF THE EXISTING DROP PLAN
SUBMITTED BY: Nelson Van Liere, Finance Director
DATE: May 12, 2008
BACKGROUND: The City established one Deferred Retirement Option Program
(DROP) in 2004 for both the General Employee Retirement
System and Police Officers' Retirement System. The State of
Florida has advised the City that they need to have a separate
DROP account for each of the two City retirement plans.
The attached Resolution and Administrative Services Agreement
(Declaration of Trust) will enable the ICMA to establish a new
DROP account for the General Employee DROP participant
investments; reallocate assets for the General Employees who are
currently participating in the DROP to the new DROP account;
rename the existing DROP account to reflect activity of the Police
DROP participants only; and, assign the Finance Director as the
Plan Coordinator of both DROP plans.
BUDGET: Administrative expenses will be paid by the DROP participants.
RECOMMENDATIONS: 1. Approve the Resolution selecting the ICMA Retirement
Corporation (RC) as the investment administrator for the City's
new DROP account and naming the Finance Director as the
Plan Coordinator for both the existing and new DROPS; and,
2. Authorize the City Manager to sign the Administrative Services
Agreement and other related documents.
ATTACHMENT: 1. Resolution
2. Administrative Services Agreement
CITY MANAGER:
AGENDA ITEM # 6A
MAY 27, 2008
RESOLUTION NO: 08-07
A RESOLUTION OF THE CITY OF ATLANTIC BEACH, FLORIDA
ESTABLISHING A SECOND DEFERRED RETIREMENT OPTION PROGRAM
(DROP) PLAN TO SEPARATELY ACCOUNT FOR POLICE OFFICER AND
GENERAL EMPLOYEE BENEFITS; CHANGE THE PLAN NAME OF THE
EXISTING DROP PLAN; AND, CHANGE THE DESIGNATED PLAN
COORDINATOR OF THE EXISTING DROP PLAN
WHEREAS, the City of Atlantic Beach has employees rendering valuable
services; and
WHEREAS, the City established an ICMA-RC DROP plan through Resolution
No. 04-04 to benefit employees by providing funds for retirement and funds for their
beneficiaries in the event of death; and
WHEREAS, the State of Florida has advised the City to have separate DROP
plans for each of the two City retirement plans, Police Officer and General Employee,
and
WHEREAS, the City of Atlantic Beach desires that the new DROP plan also be
administered by the ICMA-RC and that the funds held by such a plan be invested in the
VantageTrust Company, a trust established by public employers for the collective
investment of funds held under their retirement and deferred compensation plans, and
WHEREAS, the City would like to designate the Finance Director to be the plan
coordinator for both the existing DROP administered by the ICMA-RC, plan # 108619,
and the new DROP plan:
NOW, THEREFORE, BE TT RESOLVED BY THE MAYOR AND
COMMISSION OF THE CITY OF ATLANTIC BEACH THAT;
1. The City of Atlantic Beach hereby establishes a new DROP plan for the
benefit of general employees to be titled (401) City of Atlantic Bch (DROP) General (the
"General Employee Plan") in the form of the Plan and Trust provided by the City of
Atlantic Beach (executed copy attached hereto), and
2. The General Employee Plan shall be maintained for the exclusive benefit
of eligible general employees and their beneficiaries; and
3. The existing DROP plan, Plan # 108619 (401) City of Atlantic Beach
(DROP) Police, to be used exclusively for the benefit of eligible police officers (the
"Police Officer Plan"); and
AGENDA ITEM # 6A
MAY 27, 2008
4. The City of Atlantic Beach hereby executes the Declaration of Trust of the
VantageTrust Company, and attached hereto, intending this execution to be operative
with respect to any retirement or deferred compensation plan subsequently established by
the City of Atlantic Beach, if the assets of the plan are to be invested in the VantageTrust
Company.
5. The City of Atlantic Beach hereby agrees to serve as trustee under the
General Employee Plan and to invest funds held under the General Employee Plan in the
VantageTrust Company; and
6. The Finance Director shall be designated the plan coordinator for the
General Employee Plan and the Police Officer Plan; shall receive reports, notices, etc.,
from the ICMA-RC or the VantageTrust Company; shall cast, on behalf of the City of
Atlantic Beach, any required votes under the VantageTrust Company; may delegate any
administrative duties relating to the General Employee Plan and/or Police Officer Plan to
appropriate departments; and
7. The Finance Director will coordinate with ICMA-RC to transfer the
existing general employee assets in Plan # 108619 into the General Employee Plan in a
timely manner; and
8. The City of Atlantic Beach hereby authorizes the City Manager to execute
all necessary agreements with the ICMA-RC incidental to the administration of the
General Employee Plan and Police Officer Plan.
PASSED AND ADOPTED by the City Commission of Atlantic Beach this
_ day of , 2008.
JOHN S. MESERVE
Mayor
APPROVED AS TO FORM AND CORRECTNESS:
ALAN G JENSEN, ESQUIRE
City Attorney
ATTEST:
DONNA L. BUSSEY, CMC
City Clerk
AGENDA ITEM # 6A
MAY 27, 2008
ADMINISTRATIVE SERVICES AGREEMENT
Type: 401 /DROP
Account Number: 106477
AGENDA ITEM # 6A
Plan # 106477 MAY 27' 2ooa
ADMINISTRATIVE SERVICES AGREEMENT
This Agreement, made as of the day of , 2007 (herein referred to as the
"Inception Date"), between The International City Management Association Retirement Corporation
("ICMA-RC"), a nonprofit corporation organized and existing under the laws of the State of
Delaware; and City of Atlantic Beach ("Employer") a City organized and existing under the laws of
the State of Florida with an office at 800 Seminole Road, Atlantic Beach, Florida 32233.
RECITALS
Employer acts as a public plan sponsor for a defined benefit retirement plan which contains a
distribution option called a deferred retirement option plan ("DROP") with responsibility to obtain
investment alternatives and services for employees participating in the DROP;
VantageTrust (the "Trust") is a common law trust governed by an elected Board of Trustees for the
commingled investment of retirement funds held by state and local governmental units for their
employees;
ICMA-RC acts as investment adviser to the Trust; ICMA-RC has designed, and the Trust offers, a
series of separate funds (the "Funds") for the investment of plan assets as referenced in the Trust's
principal disclosure document, "Making Sound Investment Decisions: A Retirement Investment
Guide." The Funds are available only to public employers and only through the Trust and ICMA-
RC.
In addition to serving as investment adviser to the Trust, ICMA-RC provides a complete offering of
services to public employers for the operation of employee retirement plans including, but not
limited to, communications concerning investment alternatives, account maintenance, account
record-keeping, investment and tax reporting, form processing, benefit disbursement and asset
management.
AGREEMENTS
Appointment of ICMA-RC
Employer hereby designates ICMA-RC as Administrator of the DROP to perform all non-
discretionary functions necessary for the administration of the DROP with respect to assets in the
DROP deposited with the Trust. The functions to be performed by ICMA-RC include:
(a) allocation in accordance with participant direction of individual accounts to
investment Funds offered by the Trust;
(b) maintenance of individual accounts for participants reflecting amounts deferred,
income, gain, or loss credited, and amounts disbursed as benefits;
(c) provision of periodic reports to the Employer and participants of the status of DROP
investments and individual accounts;
-2-
AGENDA ITEM # 6A
MAY 27, 2008
Plan # 106477
(d) communication to participants of information regarding their rights and elections under the
DROP; and
(e) disbursement of benefits as agent for the Employer in accordance with terms of the DROP.
2. Adoption of Trust
Employer has adopted the Declaration of Trust of the VantageTrust and agrees to the commingled
investment of assets of the DROP within the Trust. Employer agrees that operation of the DROP
and investment, management and disbursement of amounts deposited in the Trust shall be subject to
the Declaration of Trust, as it may be amended from time to time and shall also be subject to terms
and conditions set forth in disclosure documents (such as the Retirement Investment Guide or
Employer Bulletins) as those terms and conditions may be adjusted from time to time. It is
understood that the term "Employer Trust" as it is used in the Declaration of Trust shall mean this
Administrative Services Agreement.
3. Employer Duty to Furnish Information
Employer agrees to furnish to ICMA-RC on a timely basis such information as is necessary for
ICMA-RC to carry out its responsibilities as Administrator of the DROP, including information
needed to allocate individual participant accounts to Funds in the Trust, and information as to the
employment status of participants, and participant ages, addresses and other identifying information
(including tax identification numbers). ICMA-RC shall be entitled to rely upon the accuracy of any
information that is furnished to it by a responsible official of the Employer or any information
relating to an individual participant or beneficiary that is furnished by such participant or
beneficiary, and ICMA-RC shall not be responsible for any error arising from its reliance on such
information. ICMA-RC will provide account information in reports, statements or accountings.
4. Certain Representations. Warranties, and Covenants
ICMA-RC represents and warrants to Employer that:
(a) ICMA-RC is anon-profit corporation with full power and authority to enter into this
Agreement and to perform its obligations under this Agreement. The ability of ICMA-RC to
serve as investment adviser to the Trust is dependent upon the continued willingness of the
Trust for ICMA-RC to serve in that capacity.
(b) ICMA-RC is an investment adviser registered as such with the Securities and Exchange
Commission under the Investment Advisers Act of 1940, as amended. ICMA-RC Services,
Inc. (a wholly owned subsidiary of ICMA-RC) is registered as abroker-dealer with the
Securities and Exchange Commission (SEC) and is a member in good standing of the
National Association of Securities Dealers, Inc.
-3-
AGENDA ITEM # 6A
MAY 27, 2008
Plan # 106477
ICMA-RC covenants with employer that:
(c) ICMA-RC shall maintain and administer the DROP incompliance with the requirements for
plans which satisfy the qualification requirements of Section 401 of the Internal Revenue
Code; provided, however, ICMA-RC shall not be responsible for the qualified status of the
DROP in the event that the Employer directs ICMA-RC to administer the DROP or disburse
assets in a manner inconsistent with the requirements of Section 401 or otherwise causes the
DROP not to be carried out in accordance with its terms; provided, further, that if the DROP
document used by the Employer contains terms that differ from the terms of ICMA-RC's
standardized plan document, ICMA-RC shall not be responsible for the qualified status of
the DROP to the extent affected by the differing terms in the Employer's plan document.
Employer represents and warrants to ICMA-RC that:
(d) Employer is organized in the form and manner recited in the opening paragraph of this
Agreement with full power and authority to enter into and perform its obligations under this
Agreement and to act for the DROP and participants in the manner contemplated in this
Agreement. Execution, delivery, and performance of this Agreement will not conflict with
any law, rule, regulation or contract by which the Employer is bound or to which it is a party.
Participation in Certain Proceedings
The Employer hereby authorizes ICMA-RC to act as agent, to appear on its behalf, and to join the
Employer as a necessary party in all legal proceedings involving the garnishment of benefits or the
transfer of benefits pursuant to the divorce or separation of participants in the Employer plan.
Unless Employer notifies ICMA-RC otherwise, Employer consents to the disbursement by ICMA-
RC of benefits that have been garnished or transferred to a former spouse, spouse or child pursuant
to a domestic relations order.
6. Compensation and Pa ment
(a) DROP Administration Fee. The amount to be paid for plan administration services under
this Agreement shall be 0.55% per annum of the amount of DROP assets invested in the
Trust. Such fee shall be computed based on average daily net DROP assets in the Trust.
(b) Account Maintenance Fee. The annual Account Maintenance Fee for Plan participants will
be waived for Employers who use EZLink for contribution processing and submit deposits
by wire transfer or ACH. In the event that Employer does not use EZLink for contribution
processing and ACH/wire transfer, the annual Account Maintenance Fee shall be $36.00 per
Plan participant. If applicable, this fee is payable on the first day of the calendar quarter
following establishment and is prorated by reference to the number of calendar quarters
remaining on the day of payment. The Account Maintenance fee is debited from each Plan
participant's account .
-4-
AGENDA ITEM # 6A
MAY 27, 2008
Plan # 106477
(c) Compensation for Management Services to the Trust; Compensation for Advisory and
other Services to The Vantagepoint Funds and Payments from Third-Party Mutual Funds.
Employer acknowledges that in addition to amounts payable under this Agreement,
ICMA-RC receives fees from the Trust for investment management services furnished to
the Trust. Employer further acknowledges that certain wholly owned subsidiaries of
ICMA-RC receive compensation for advisory and other services furnished to The
Vantagepoint Funds, which serve as the underlying portfolios of a number of Funds
offered through the Trust. The fees referred to in this subsection are disclosed in the
Retirement Investment Guide. These fees are not assessed against assets invested in the
Trust's Mutual Fund Series. In addition, to the extent that third party mutual funds are
included in the investment line-up for the Plans, ICMA-RC may receive payments from
such third party mutual funds or their service providers, which may be in the form of
12b-1 fees, service fees, or compensation for sub-accounting or other services provided
by ICMA-RC on behalf of the funds.
(d) Mutual Fund Services Fee. There is an annual charge of 0.15% assessed against average
daily net DROP assets invested in the Trust's non-proprietary funds of VantageTrust.
(e) Payment Procedures. All payments to ICMA-RC pursuant to this Section 6 shall be paid out
of the DROP assets held by the Trust and shall be paid by the Trust. The amount of DROP
assets held in the Trust shall be adjusted by the Trust as required to reflect such payments.
The compensation and payment set forth in this section 6 is contingent upon the Employer's
use of ICMA-RC's EZLink system for contribution processing and submitting contribution
funds by ACH or wire transfer on a consistent basis over the term of this Agreement.
7. Custody
Employer understands that amounts invested in the Trust are to be remitted directly to the Trust in
accordance with instructions provided to Employer by ICMA-RC and are not to be remitted to
ICMA-RC. In the event that any check or wire transfer is incorrectly labeled or transferred to
ICMA-RC, ICMA-RC will return it to Employer with proper instructions.
Responsibility
ICMA-RC shall not be responsible for any acts or omissions of any person other than ICMA-RC in
connection with the administration or operation of the DROP.
9. Term
This Agreement may be terminated without penalty by either party on sixty days advance notice in
writing to the other.
10. Amendments and Adiustments
-5-
AGENDA ITEM # 6A
MAY 27, 2008
Plan # 106477
(a) This Agreement may not be amended except by written instrument signed by the parties.
(b) The parties agree that an adjustment to administrative and operational services or any
reduction in fees under this Agreement may be implemented by ICMA-RC through a
proposal to the Employer via correspondence or the Employer Bulletin.
(c) No failure to exercise and no delay in exercising any right, remedy, power or privilege
hereunder shall operate as a waiver of such right, remedy, power or privilege.
11. Notices
All notices required to be delivered under Section 10 of this Agreement shall be delivered personally
or by registered or certified mail, postage prepaid, return receipt requested, to (i) Legal Department,
ICMA Retirement Corporation, 777 North Capitol Street, N.E., Suite 600, Washington, D.C, 20002-
4240; (ii) Employer at the office set forth in the first paragraph hereof, or to any other address
designated by the party to receive the same by written notice similarly given.
12. Com fete Agreement
This Agreement shall constitute the sole agreement between ICMA-RC and Employer relating to the
object of this Agreement and correctly sets forth the complete rights, duties and obligations of each
party to the other as of its date. Any prior agreements, promises, negotiations or representations,
verbal or otherwise, not expressly set forth in this Agreement are of no force and effect.
13. Governing Law
This agreement shall be governed by and construed in accordance with the laws of the State of
Florida, applicable to contracts made in that jurisdiction without reference to its conflicts of laws
provisions.
-6-
AGENDA ITEM # 6A
MAY 27, 2008
Plan # 106477
In Witness Whereof, the parties hereto have executed this Agreement as of the Inception Date first
above written.
CITY OF ATLANTIC BEACH
by:
Signature/Date
Name and Title (Please Print)
INTERNATIONAL CITY/COUNTY
MANAGEMENT ASSOCIATION
RETIREMENT CORPORATION
~,
~~ ~~
r'
By
Angela C. Montez
Assistant Corporate Secretary
-7-