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HomeMy WebLinkAbout1993-01-26 - AGENDA REPORTS - 1992 93 BUDGET (2)NEW BUSINESS DATE: SUBJECT: DEPARTMENT: Background January 26, 1993 1992-93 Budget Analysis City Manager Item to be presented by: Geor a Caravalho Adjustment Each year at this time, the City of Santa Clarita takes the opportunity to assess its budgetary condition. Given the continued recession, it is critical to continually monitor our budgetary and financial position to ensure that any deviations from initial budget projections are addressed in a timely fashion. The current recession has lingered for longer than the economists projections. It is now thought that the recovery,- specifically for California, will lag into Spring of 1994. Due to the interrelationship of the national, state, regional, and local economies, Santa Clarita is exhibiting slippage in key revenue areas within the General Fund. These include Subdivision Maps and Improvements, Building and Safety Permits, as well as various development related revenues. Given six months of actual data, it is projected that General Fund Revenues will be a million down from the original General Fund budget estimate of $30,637,300. Also, in addition, $500,000 is attributed to potential additional revenue reductions anticipated by the State for California for Local Governments. It is proposed that this potential reduction be addressed at this time, given that all are uncertain when the actual reduction may occur. A breakdown and analysis of this projected shortfall by category of revenue is presented in Attachment B. In order to address this projected net revenue shortfall and continue to maintain a balanced budget, it is recommended that the City Council make a corresponding adjustments and appropriations for the remaining months of this fiscal year. Proposed changes are reflected by division within Attachment C. It should be noted that many of the savings are derived from postponement of various expenditures such as positions, equipment, etc. Adapted:i4 — 9-3 "y a a Item:._._... In addition to addressing the projected revenue shortfall corresponding appropriations, staff is also recommending Council authorization to continue funds from the prior fiscal year. Continuing appropriations represent funds authorized for appropriations in the 1991-92 fiscal year which were not expended, but are still required to complete projects authorized by the City Council. This includes funds for operational or Capital projects not completed. Attachment D specifically breaks down the continuing appropriations among the various funds. Also, attached is resolution 93-10, Attachment E, which makes two changes to the salary resolution: 1. Creation of the position of City Planner at grade 61. 2. Change of title of Economic Development.. Coordinator to Marketing and Economic Development Manager. No Change in Salary. These changes are presented to accurately reflect the responsibilities of the stated positions and needs of the organization. Finally, presented for the City Council's consideration is Resolution 93-6, addressing the City's temporary/part-time, seasonal deferred compensation plan. Adopting this resolution will allow the City to offer a deferred compensation program to temporary employees as a replacement for Social Security contributions now matched by the City. The action will result in a net annual savings of $66,000 to the General Fund. Recommendation That the City Council adjust revenues and appropriations for various funds in the amounts specified within Attachments B, C, D, E and F. Attachments A - Overview of General Fund Budgetary Position. B- Analysis of year end Revenue 1992-93 Fiscal Year. C- Analysis of year end Expenditure 1992-93 Fiscal Year. D,- Resolution 93-12. Authorizing Appropriations Continued From Prior Fiscal Year. E- Resolution 93-10. Amending Resolution 92-222 providing compensation for employees. F- Resolution 93-6. Deferred Compensation. BEGINNING BALANCE REVENUES TRANSFERSIN CONTINUING APPROPRIATIONS Operations APPROPRIATIONS OTHER USES ENDING BALANCE CITY OF SANTA CLARITA 1992 - 93 BUDGET SUMMARY COMPARISON GENERALFUND 1992-93 ADOPOTED BUDGET JULY 1, 1992 30,637,300 533,000 67 31,668,600 308,700 1992.93 BUDGET REVISION JANUARY 26,1993 8,024,100 28,671,900 533,000 4,612,100 1281960 30,964,990 1,196,200 455,710 m DESCRIPTION PROPERTY TAKES OTHER TAXES LICENSES AND PERMITS FINES, FORFEITURES & PENALTIES USE OF MONEY AND PROPERTY REVENUE FROM OTHER AGENCIES CHARGES FOR CURRENT SERVICES OTHER REVENUES General Fund Sub -Total Potential State Revenue Loss Potential General Fund Sub -Total FISCAL YEAR 1992-1993 GENERAL FUND REVENUE PROJECTION FY 92-93 at 11/30/92 370,245 4,920,978 528,336 456 403,771 2,107,280 152,227 9,048 8,492,341 8,492,341 Projected 92-93 -------------- 4,163,435 15,546,027 1,268,006 1,094 1,577,800 5,491,962 1,112,119 11,505 -------------- 29,171,948 -------------- (500,000) ---28,671,948 Budget 92-93 -------------- 4,351,000 15,152,900 1,930,700 500 2,145,800 5,202,700 1,848,500 5,200 -------------- 30,637,300 -____-----__0_ -------------- 30,637,300 Projected Variance to Budget -------------- (187,565) 393,127 (662,694) 594 (568,000) 289,262 (736,381) 6,305 -------------- (1,465,352) _______ (500,000) -------------- (1,965,352) 1992-93 Adopted Budget ADMINISTRATIVE SERVICES City Council City Manager Unallocated Reserve Debt Services City Ahomey City Clerk Personnel Finance Adminlstratlon Computer Services TOTAL ADMINISTRATIVE SERVICES COMMUNITY DEVELOPMENT Community Development Administration Economic Development Development Services/ Code Enforcement Advance Planning/Speclal Studies Engineering Code Enforcement Building and Safety TOTAL COMMUNITY DEVELOPMENT PUBLIC WORKS Public Works Administration Solid Waste Management General Services Vehicles Property Management TOTAL PUBLIC WORKS PUBLIC SAFETY Police Services Rre Protection Miscellaneous Public Safety TOTAL PUBLIC SAFETY PARKS ANDRECREATION Panes and Recreation Administration Recreation Parks Maintenance Aquatics Emergency Preparedness TOTAL PARKS AND RECREATION TOTAL OPERATING APPROPRIATIONS FOR GENERAL FUND SUMMARY OF GENERAL FUND REVENUES BY MAJOR SOURCE 1992-93 Projected Year End Expenditures 4,373,200 TOTAL PUBLIC WORKS 4,323,300 -1.15% PUBLIC SAFETY 8,524,700 ADMINISTRATIVE SERVICES 8.524,700 %+or - 185,500 City Council 185,500 0.00% 735,900 City Manager 733,200 -0.37% 2,063,800 Unallocated Reserve 1,963,800 -5.09% 1,941,700 Debt Services 1,829,700 -6.12% 345,100 City Attorney 445,000 2245% 329,300 City Clark 330,900 0.48% 344,800 Personnel 344,800 0.00% 915,400 Finance Administration 879,500 -4.08% 906,600 Computer Services 906,600 0.00%. 7,768,100 TOTAL ADMINISTRATIVE SERVICES 7,619,000 -1.96% 33,049,600 COMMUNITY DEVELOPMENT 32,401,750 -2.00% 272,200 Community Development Administration 232,570 -17.04% 522,600 Economic Development 517,600 -0.97% 674,000 Development Services 649,600 -3.76% 986,700 Advance Planning/ Special Studies 696,700 -41.62% - 2,283,700 Engineering 2,242,700 -1.83% 222,200 Code Enforcement 222,200 0.00% 966,500 Building and Safety 956,980 -0.99% 5,927,900 TOTAL COMMUNITY DEVELOPMENT 5,518,350 -7.42% PUBLIC WORKS 354,200 Public Works Administration 350,200 -1.14% 659,900 Solid Waste Management 659,900 0.00% 1,978,100 General Services 2,031,800 2.64% 199,600 Vehicles 100,000 -99.60% 1,181,400 Properly Management 1,181,400 0.00% 4,373,200 TOTAL PUBLIC WORKS 4,323,300 -1.15% PUBLIC SAFETY 8,524,700 Police Services 8.524,700 0.00% 35,000 Fire Protection 35,000 0.00% 3,500 Miscellaneous Public Safety 3,500 0.00% 8,563,200 TOTAL PUBLIC SAFETY 8,563,200 0.00% PARKS AND RECREATION 486,300 Parks and Recreation Administration 471,400 3.16% 2,294,400 Recreation 2,294,500 0.00%. 2,857,300 Parks Maintenance 2,832,800 -0.86% 519,600 Aquatics 519,600 0.00%,. 259,600 Emergency Preparedness 259,600 0.00% 6,417,200 TOTAL PARKS AND RECREATION 6,377,900 -0.62% 33,049,600 TOTAL OPERATING APPROPRIATIONS FOR GENERAL FUND 32,401,750 -2.00% Additional Potential City Wide Savings 154,800 Less Continuing Appropriations 1,281,960 TOTAL 30,964,990 RESOLUTION NO. 93-12 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA CLARITA CONTINUING APPROPRIATED FUNDS FROM FISCAL YEAR 1991-92 TO FISCAL YEAR 1992-93 AND MAKING APPROPRIATIONS FOR THE AMOUNT BUDGETED WHEREAS, a proposed annual budget for the City of Santa Clarita for the fiscal year commencing July 1, 1991, and ending June 30, 1992, was submitted to the City Council and is on file in the City Clerk's Office, and WHEREAS, proceedings for adoption of said budget were duly taken, and WHEREAS, the City Council has made certain revisions, corrections, and modifications to said proposed budget; and WHEREAS, the City Manager caused the proposed budget document to be corrected to reflect the changes ordered by the City Council, and WHEREAS, funds were appropriated yet unexpended on various operational and capital projects for the 1991-92 Fiscal Year, and WHEREAS, these funds must be continued into the subsequent fiscal year to complete appropriations previously authorized, NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SANTA CLARITA DOES RESOLVE AS FOLLOWS: Section 1. The attachments hereto and included herein by Resolution are adopted as the Continuing Appropriations of the City of Santa Clarita for Fiscal Year commencing July 1, 1991, and ending June 30, 1992, and will thus become part of. the 1992-93 adopted budget for Fiscal Year commencing July 1, 1992, and ending June 30, 1993. Section 2. There is hereby appropriated to each account set forth in said budget, attached hereto and made a part hereof, the sum shown for each fund in the 1992-1993 budget, and the City Manager is authorized and empowered to expend such sum.for the purpose of such account but no expenditure by any office or department will exceed the amount budgeted therefore without prior approval of the City Manager. APPROVED AND ADOPTED this 26 day of January, 1993. Mayor ATTEST: City Clerk STATE OF CALIFORNIA ) COUNTY OF LOS ANGELES ) ss CITY OF.SANTA CLARITA ) I, Donna M. Grindey, hereby certify that. the foregoing Resolution was duly adopted by the City Council of the City of Santa Clarita at a regular meeting thereof, held on the day of , 1993 by the fallowing vote of the Council: AYES: COUNCILMEMBERS: NOES: ABSENT: 14*004433114 CITY OF SANTA CLARITA Continuing Appropriations by Fund Fiscal Year 1992-1993 General Fund 1,281,960 CDBG 295,735 Capital Projects General Fund 3,581,903 P.F.A. Bond Proceeds 4,812,550 Gas Tax 49,288 County Aid 318,000 Federal Aid 4,092,900 Bikeway Funds 137,400 T.D.A. Streets & Roads 8,205,809 Proposition C 457,200 Proposition A 346,980 State Park Grants 134,000 Developer Fees 99,150 — 22,235,180 22,235,180 Total Continuing Appropriations 23,812,875 =AMVENT E RESOLUTION NO. 93-10 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA CLARITA AMENDING RESOLUTION NO. 92-222 PROVIDING FOR THE COMPENSATION.OF THE EMPLOYEES OF THE CITY WHEREAS, Section 37206 of the Government Code requires the City Council to prescribe the time and method of paying salaries, wages and benefits -of employees of the -City; and WHEREAS, the City Council hasauthorized and directed, under the provisions. of the Municipal Code of the City of Santa Clarita, Section 2.080.060 (7), the City Manager to prepare a proposed salary plan for all City employees; and . WHEREAS, Resolution No. 92-222 was adopted an November 10, 1992; and WHEREAS; The City Council has allocated funds in the 92/93 budget for the position that is the subject of this resolution. NOW, THEREFORE, BE IT RESOLVED, by the City Council of the City of Santa Clarita as follows: SECTION 1: Exhibit 1 is hereby amended to add and change the following positions: Title Grade City Planner 61 Marketing and Economic Development Manager 55 SECTION 2: That the City Clerk shall certify the adoption of this resolution PASSED, APPROVED, AND ADOPTED by the City Council of the City .of Santa Clarita at a regular City Council meeting on the day of 1993. MAYOR ATTEST: CITY CLERK STATE OF CALIFORNIA y COUNTY OF LOS ANGELES ) CITY OF. SANTA CLARITA ) ss I, Donna M. Grindey, hereby duly adopted by the City Council meeting thereof, held on the vote of the Council: AYES: COUNCILMEMBERS: NOES: COUNCILMEMBERS: ABSENT: COUNCILMEMBERS: certify that the foregoing Resolution was of the City of Santa Clarita at a regular day of 1993 by the following CITY CLERK CITY OF SANTA CLARITA Exh16141 Maximum Monthly Management Community Public Parks, Recreation& Grade Salary Services Finance Development Works Community Services 80 $10,037 City Manager City Plainer* 60 55 55,456 Personnel Manager* Accounting Manager* Principle Planner* Transp. Manager* Park/Rec. Supdt* Mkmg & Econ. Dev. Mgr' Field Mains. Supervisor* Gen. Srvcs. Manger* 50 $4,828 City Clerk* Assoc. Engineer* Assoc. Traffic Eng.* 49 $4,713 48 $4,598 47 $4,487 Supv. Build. Imp.* Assoc. Planner* 45 $4,274 Pub. Info. Off.* Admin. Asst.* Asst Engineer Rec. Supervisor* Admin. Asst! Admin. Asst/ Park Supervisor/Arborist* Asst. Traffic Engineer Park Supervisor* . Park Planning Supervisor* Admin. AssL* 44 $4,171 Sr. Code Enf. Officer 43 $4,071 Info. Analyst Personnel Analyst 42 $3,972 Asst. Planner B Park Dev. Coord. Sr. Build. Imp. r. P.W. Inspect( 39 $3,692 Accountant Purchasing Agent Emerg. Prep. Coord. Solid Waste Analyst Admin. Analyst Q.ASSIMXLS (over) t,14i93 CITY OF SANTA CLARITA Exhibit I Transit Analyst 38 $3,602 Info. Specialist Rw, Inspector Code Enforc. O@'. Building Inspect. 37 $3.516 Vehicle Maint. Mechanic Trails Coord. 36 $3,430 Admin. Aide Asst. Planner Graphic Artist Engineer. Tech. Assistant Revenue Collector Rea .33 $3,189 Crew Leader Crew Leader BMW IB 32 $3,113 Personnel Tech. Engineer. Aid Exec. Secretary Exec, Secretary Exec. Secretary Exec. Secretary Buyer BMW B Materials Clerk 23 $2,499 Accnt. Clerk Cashier aASSR nS (over) 1/14/93 RESOLUTION NO. 93-6 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA CLARITA, CALIFORNIA RELATING TO THE TEMPORARY, PART TIME, SEASONAL (T.P.S.) DEFERRED COMPENSATION PLAN FOR THE CITY OF SANTA CLARITA WHEREAS; the Employer has employees rendering valuable services; and WHEREAS, the establishment of adeferred compensation plan for such employees serves the interests of the Employer by enabling it to provide reasonable retirement security for its employees, by providing increased flexibility in its personnel management system, and by.assisting in the attraction and retention of competent personnel; and WHEREAS, the Employer has determined that the establishment of a deferred compensation plan to be administered by the ICMA Retirement Corporation serves the above objectives; and WHEREAS, the Employer 'desires that its deferred compensation plan be administered by the ICMA Retirement Corporation, and that the funds held under such plan be invested in the ICMA Retirement Trust, a trust established by public employers for the collective investment of funds held under their retirement and deferred compensation plans; NOV, THEREFORE BE IT RESOLVED that the Employer hereby adopts or has previously adopted the deferred compensation plan (the 'Plan') in the form of: the ICMA Retirement Corporation Deferred Compensation Plan, -referred to as Appendix A. BE IT FURTHER RESOLVED, that the Employer hereby executes the Declaration of Trust of the ICMA.Retirement Trust, attached hereto -as Appendix B, intending this execution to.be operative with respect to any retirement or deferred compensation plan subsequently established by the Employer, if the assets of the plan are to be invested in the ICMA Retirement Trust. BE IT. FURTHER RESOLVED, the Personnel Officer shall be the coordinator for this program; shall receive necessary reports, notices, etc. from the ICMA Retirement Corporation or the ICMA Retirement Trust; shall cast, on behalf of the Employer, any required votes under the ICMA Retirement Trust; Administrative duties to carry out the plan may be -assigned to the appropriate departments, and is authorized to execute all necessary agreements with ICMA Retirement Corporation incidental to the administration of the Plan. PASSED, APPROVED AND ADOPTED -this day of , 1993. MAYOR ATTEST: CITY CLERK t STATE•OF CALIFORNIA ) COUNTY OF LOS ANGELES ) ss CITY OF SANTA CLARITA ) I,'Donna M. Grindey, DO HEREBY CERTIFY that the above and foregoing Resolution was duly adopted by the City Council of the City of Santa Clarita at a regular meeting thereof, held on the day of 1993, by the following vote of Council: AYES: COUNCILMEMBERS: NOES: COUNCILMEMBERS: ABSENT: COUNCILMEMBERS: CITY CLERK Deferred Compensation Plan Document (Appendix A) DEFERRED COMPENSATION PLAN DOCUMENT ARTICLE I. INTRODUCTION The Employer hereby establishes the Employer's Deferred Compensation Plan, hereinafter referred to as the 'Plan.- The Plan"The Plan consists of the provisions set forth in this document. The primary purpose of this Plan is to provide retirement income and other deferred benefits to the Employees of the Employer in accordance with the provisions of Section 457 of the Internal Revenue Code of 1986, as amended (the "Code"). This Plan shall be an agreement solely between the Employer and participating Employees. ARTICLE II. DEFINITIONS Section 2.01 Account: The bookkeeping account maintained for each Participant reflecting the cu- mulative amount of the Participant's Deferred Com- pensation, including any income, gains, losses, or increases or decreases in market value attributable to the Employer's investment of the Participant's Deferred Compensation, and further reflecting any distributions to the Participant or the Participant's Beneficiary and any fees or expenses charged against such Participant's Deferred Compensation. Section 2.02 Administrator: The person or persons named to carry out certain nondiscretionary ad- ministrative functions under the Plan, as hereinafter described. The Employer may remove any person as Administrator upon 60 days' advance notice in writing to such person, in which case the Employer shall name another person or persons to act as Administrator. The Administrator may resign upon 60 days' advance notice in writing to the Employer, in which case the Employer shall name another person or persons to act as Administrator. Section 2.03 Beneficiary: The person or persons desig- nated by the Participant in his Joinder Agreement who shall receive any benefits payable hereunder in the event of the Participant's death. In the event that the Participant names two or more Beneficiaries, each Beneficiary shall be entitled to equal shares of the benefits payable at the Participant's death, un- less otherwise provided in the Participant's Joinder Agreement. If no beneficiary is designated in the Joinder Agreement, if the Designated Beneficiary predeceases the Participant, or if the designated Beneficiary -does not survive the Participant for a period of fifteen (15) days, then the estate of the Participant shall be the Beneficiary. Section 2.04 Deferred Compensation: The amount of Normal Compensation otherwise payable to the Participant which the Participant and the Employer mutually agree to defer hereunder, any amount credited to a Participant's Account by reason of a transfer under section 6.03, or any other amount which the Employeragrees to creditto a Participant's Account. Section 2.05 Employee: Any individual who provides services for the Employer, whether as an employee of the Employer or as an independent contractor, 0s/s9 and who has been designated by the Employer as eligible to participate in the Plan. Section 2.06 Includible Compensation: The amount of an Employee's compensation from the Employer for a taxable year that is attributable to services per- formed for the Employer and that is includible in the Employee's gross income for the taxable year for federal income tax purposes; such term does not include any amount excludable from gross income under this Plan or any other plan described in Section 457(b) of the Code or any other amount excludable from gross income for federal income tax purposes. Includible Compensation shall be deter- mined without regard to any community property laws. Section 2.07 Joinder Agreement: An agreement en- tered into between an Employee and the Employer, including any amendments or modifications thereof. Such agreement shall fix the amount of Deferred Compensation, specify a preference among the investmentaltematives designated bythe Employer, designate the Employee's Beneficiary or Beneficia- ries, and incorporate the terms, conditions, and provisions of the Plan by reference. Section 2.08 Normal Compensation: The amount of compensation which would be payable to a Partici- pant by the Employer for a taxable year if no Joinder Agreement were in effect to defer compensation under this Plan. Section 2.09 Normal Retirement Age: Age 70-1/2, un- less the Participant has elected an alternate Normal Retirement Age by written instrument delivered to. the Administrator prior to Separation from Service. A Participant's Normal Retirement Age determines the period during which a Participant may utilize the catch-up limitation of Section 5.02 hereunder. Once a Participant has to any extent utilized the catch-up limitation of Section 5.02, his/her Normal Retire- ment age may not be changed. A Participant's alternate Normal Retirement Age may not be eadier than the earliest date that the Participant will become eligible to retire and receive unreduced retirement benefits underthe Employer's basic retirement plan covering the Participant and may not be later than the date the Participant will attain age 70-1/2. If a Participant continues employ- ment after attaining age 70-1/2, not having previ- ously elected an alternate Normal Retirement Age, the Participant's alternate Normal Retirement Age shall not be later than the mandatory retirement age, if any, established by, the Employer, or the age at which the Participant actually separates from ser- vice if the Employer has no mandatory retirement age. If the Participant will not become eligible to receive benefits under a basic retirement plan maintained by the Employer, the Participant's alter- nate Normal Retirement Age may not be earlier than age 55 and may not be later than age 70-1/2. Section 2.10 Participant: Any Employee who has joined the Plan pursuant to the requirements of Article IV. Section 2.11 Plan Year: The calendar year. Section 2.12 Retirement: The first date upon which both of the following shall have occurred with respect to a participant: Separation from Service and attain- ment of age 65: Section 2.13 Separation from Service: Severance of the Participant's employment with the Employer which constitutes a "separation from service" within the meaning of Section 402(e)(4)(A)(iii) of the Code. In general, a Participant shall be deemed to have severed his employment with the Employer for pur- poses of this Plan when, in accordance with the established practices of the Employer, the employ- ment relationship is considered to have actually terminated. In the case of a Participant who is an independent contractor of the Employer, Separation from Service shall. be deemed to have occurred when the Participant's contract under which ser- vices are performed has completely expired and terminated, there is no foreseeable possibility that the Employer will renew the contract or enter into a new contract for the Participant's services, and it is not anticipated that the Participant will become an Employee of the Employer. ARTICLE III. ADMINISTRATION Section 3.01 Duties of Employer: The Employer shall have the authority to make all discretionary decisions affecting the rights or benefits of Participants which may be required in the administration of this Plan. Section 3.02 Duties of Administrator: The Adminis- trator, as agent for the Employer, .shall perform nondiscretionary administrative functions in con- nection with the Plan, including the maintenance of Participants' Accounts, the provision of periodic reports of the status of each Account, and the disbursement of benefits on behalf of the Employer in accordance with the provisions of this Plan. ARTICLE IV. PARTICIPATION IN THE PLAN Section 4.01 Initial Participation: An Employee may become a Participant by entering into a Joinder Agreement prior to the beginning of the calendar month in which the Joinder Agreement is to become effective to defer compensation not yet earned. Section 4.02 Amendment of Joinder Agreement: A Participant may amend an executed Joinder Agreement to change the amount of compensation not yet earned which is to be deferred (including the reduction of such future deferrals to zero) or to change his investment preference (subject to such restrictions as may result from the nature or terms of any investment made by the Employer). Such amendment shall become effective as of the begin- ning of the calendar month commencing after the date the amendment is executed. A Participant may at any time amend his Joinder Agreement to change the designated Beneficiary, and such amendment shall become effective immediately. ARTICLE V. LIMITATIONS ON DEFERRALS Section 5.01 Normal Limitation: Except as provided in section 5.02, the maximum amount of Deferred Compensation for any Participant for any taxable year shall not exceed the lesser of $7,500.00 or 33- 1/3 percent of the Participant's Includible Compen- sation for the taxable year. This limitation will ordi- narily be equivalent to the lesser of $7,500.00 or 25 percent of the Participant's Normal Compensation. Section 5.02 Catch -Up Limitation: For each of the last three (3) taxable years of a Participant ending be- fore his attainment of Normal Retirement Age, the maximum amount of Deferred Compensation shall be the lesser of: (1) $15,000 or (2) the sum of (i) the Normal Limitation for the taxable year, and (ii) the Normal Limitation for each prior taxable year of the Participant commencing after 1978 less the amount of the Participant's Deferred Compensation for such prior taxable years. A prior taxable year shall be taken into account under the preceding sentence only if (i) the Participant was eligible to participate in the Plan for such year (or in any other eligible deferred compensation plan established under Section 457 of the Code which is properly taken into account pursuant to regulations under section 457), and (ii) compensation (if any) deferred under the Plan (or such other plan) was subject to the deferral limitations set forth in Section 5.01. Section 5.03 Other Plans: The amount excludable from a Participant's gross income under this Plan or any other eligible deferred compensation plan under section 457 of the Code shall not exceed $7,500.00 (or such greater amount allowed under Section 5.02 of the Plan), less any amount excluded from gross income under section 403(b), 402(a)(8), or 402 (h)(1)(B) of the Code, or any amount with respect to which a deduction is allowable by reason of a contribution to an organization described in section 501(c)(18) of the Code. ARTICLE VI. INVESTMENTS AND ACCOUNT VALUES Section 6.01 Investment of Deferred Compensation: All investments of Participant's Deferred Compen- sation made by the Employer, including all property and rights purchased with such amounts and all income attributable thereto, shall be the sole prop- erty of the Employer and shall not be held in trust for Participants oras collateral security for the fulfillment of the Employer's obligations under the Plan. Such property shall be subject to the claims of general creditors of the Employer, and no Participant or Beneficiary shall have anyvested interest orsecured or preferred position with respect to such property or have any claim against the Employer except as a general creditor. Section 6.02 Crediting of Accounts: The Participant's Account shall reflect the amount and value of the investments or other property obtained by the Em- ployer through the investment of the Participant's Deferred Compensation. It is anticipated that the Employer's investments with respect to a Partici- pant will conform to the investment preference specified in the Participant's Joinder Agreement, but nothing herein shall be construed to require the Employer to make any particular investment of a Participant's Deferred Compensation. Each Partici- pantshall receive periodic reports, not lessfrequentty than annually, showing the then -current value of his Account. Section 6.03 Transfers: (a) Incoming Transfers: A transfer may be accepted from an eligible deferred compensation plan maintained by another employer and credited to a Participant's Account under the Plan if (i) the Participant has separated from service with that employer and become an Employee of the Employer, and (ii) the other employer's plan pro- vides that such transfer will be made. The Employer may require such documentation from the prede- cessor plan as it deems necessary to effectuate the transfer, to confirm that such plan is an eligible deferred compensation plan within the meaning of Section 457 of the Code, and to assure thattransfers are provided for under such plan. The Employer may refuse to accept a transfer in the form of assets other than cash, unless the Employer and the Administrator agree to hold such other assets under the Plan. Any such transferred amount shall not be treated as a deferral subject to the limitations of Article V, except that, for purposes of applying the limitations of Sections 5.01 and 5.02, an amount deferred during any taxable year under the plan from which the transfer is accepted shall be treated as if it has been deferred under this Plan during such taxable yearand compensation paid bythe transferor employershall be treated as if it had been paid by the Employer, (b) Outgoing Transfers: An amount may be trans- ferred to an eligible deferred compensation plan maintained by another employer, and charged to a Participant's Account under this Plan, if (i) the Par- ticipant has separated from service with the Em- ployer and become an employee of the other em- ployer, (ii) the other employer's plan provides that such transfer will be accepted, and (iii) the Partici- pant and the employers have signed such agree- ments as are necessaryto assure that the Employer's liability to pay benefits to the Participant has been discharged and assumed by the other employer. The Employer may require such documentation from the other plan as it deems necessary to effec- tuate the transfer, to confirm that such plan is an eligible deferred compensation plan within the meaning of section 457 of the Code, and to assure that transfers are provided for under such plan. Such transfers shall be made only under such circumstances as are permitted under section 457 of the Code and the regulations thereunder. Section 6.04 Employer Liability: In no event shall the Employers liability to pay benefits to a Participant under Article VI exceed the value of the amounts credited to the Participant's Account; the Employer shall not be liable for losses arising from deprecia- tion or shrinkage in the value of any investments acquired under this Plan. ARTICLE VII. BENEFITS Section 7.01 Retirement Benefits and Election on Separation from Service: Except as otherwise provided in this Article VII, the distribution of a Participant's Account shall commence as of April 1 of the calendar year after the Plan Year of the Participant's Retirement, and the distribution of such Retirement benefits shall be made in accordance with one of the payment options described in Sec- tion 7.02. Notwithstanding the foregoing, the Partici- pant may irrevocably elect within 60 days following Separation from Service to have the distribution of benefits commence on a fixed or determinable date otherthan that described in the preceding sentence which is at least 60 days afterthe date such election is delivered in writing to the Employer and forwarded to the Administrator, but not later than April 1 of the year following the year of the Participant's Retire- ment or attainment of age 70-1/2, whichever is later. Section 7.02 Payment Options: As provided in Sections 7.01, 7.04, and 7.05, a Participant or Beneficiary may elect to have the value of the Participant's Account distributed in accordance with one of the following payment options, provided that such op- tion is consistent with the limitations set forth in Section 7.03: (a) Equal monthly, quarterly, semi-annual orannual payments in an amountchosen bythe Participant, continuing until his Account is exhausted; (b) One lump -sum payment; (c) Approximately equal monthly, quarterly, semi- annual or annual payments, calculated to continue for a period certain chosen by the Participant. (d) Annual Payments equal to the minimum distributions required underSection401(a)(9) of the Code over the life expectancy of the Participant or over the life expectancies of the Participant and his/her Beneficiary. (e) Paymentsequalto payments made bythe issuer of a retirement annuity policy acquired by the Employer. r (f) Any other.payment option elected by the Participant and agreed to by the Employer and Administrator, provided that such option must provide forsubstantially nonincreasing payments for any. period after the latest benefit commencement date under Section 7.01. A Participant's or Beneficiary's election of a payment option must be made at least 30 days before the payment of benefits is to commence. If a Participant or Beneficiary fails to make a timely election of a payment option, benefits shall be paid monthly under option (c) above for a period of five years. Section 7.03 Limitation on Options: No payment option may be selected by a Participant or Beneficiary under Sections 7.02, 7.04, or 7.05 unless it satisfies the requirements of Sections401(a)(9) and 457(d)(2) of the Code, including that payments commencing before the death of the Participant shall satisfy the incidental death benefits requirement under Section 457(d)(2)(B)(i)(1). Unless otherwise elected by the Participant, all determinations under Section 401(a)(9) shall be made without recalculation of life expectancies. Section 7.04 Post-retirement Death Benefits: (a) Should the Participant die after he/she has begun to receive benefits under a payment option, the remaining payments, if any, underthe payment option shall be payable to the Participant's Beneficiary commenc- ing within the 30 -day period commencing with the 61st day after the Participant's death, unless the Beneficiary elects payment under a different pay- ment option that is available under Section 7.02 within 60 days of the Participant's death. Any different payment option elected by a Beneficiary under this section must provide for payments at a rate that is at least as rapid as under the payment option that was applicable to the Participant. In no event shall the EmployerorAdministratorbe liable to the Beneficiary for the amount of any payment made in the name of the Participant before the Administrator receives proof of death of the Participant. (b) If the designated Beneficiary does not continue to live for the remaining period of payments under the payment option, then the commuted value of any remaining payments under the payment option shall be paid in a lump sum to the estate of the Benefi- ciary. In the event that the Participant's estate is the Beneficiary, the commuted value of any remaining payments underthe payment option shall be paid to the estate in a lump sum. Section 7.05 Pre -retirement Death Benefits: (a) Should the Participant die before he/she has begun to receive the benefits provided by Section 7.01, the value of the Participant's Account shall be payable to the Beneficiary commencing within the 30 -day period commencing on the 91st day after the Participant's death, unless the Beneficiary irrevocably elects a different fixed or determinable benefit com- mencement date within 90 days of the Participant's death. Such benefit commencement date shall be not later than the later of (i) December 31 of the year following the year of the Participant's death, or (it) if the Beneficiary is the Participant's spouse, December 31 of the year in which the Participant would have attained age 70-1/2. (b) Unless a Beneficiary elects a different payment option prior to the benefit commencement date, death benefits under this Section shall be paid in approximately equal annual installments over five years, or over such shorter period as may be neces- sary to assure that the amount of any annual install- ment is not less than $3,500. A Beneficiary shall be treated as if he/she were a Participant for purposes of determining the payment options available under Section 7.02, provided, however, that the payment option chosen by the Beneficiary must provide for payments to the Beneficiary over a period no longer than the life expectancy of the Beneficiary, and provided that such period may not exceed fifteen (15) years if the Beneficiary is not the Participant's spouse. (c) In the event that the Beneficiary dies before the payment of death benefits has commenced or been completed, the remaining value of the Participant's Account shall be paid to the estate of the Beneficiary in a lump sum. In the event that the Participant's estate is the Beneficiary, payment shall be made to the estate in a lump sum. Section 7.06 Unforeseeable Emergencies: (a) In the event an unforeseeable emergency occurs, a Par- ticipant may apply to the Employer to receive that part of the value of his Account that is reasonably needed to satisfy the emergency need. If such an application is approved bythe Employer, the Partici- pant shat l be paid only such amount as the Employer deems necessary to meet the emergency need, but payment shall not be made to the extent that the financial hardship may be relieved through cessa- tion of deferral under the Plan, insurance or other reimbursement, or liquidation of other assets to the extent such liquidation would not itself cause severe financial hardship. (b) An unforeseeable emergency shall be deemed to involve only circumstances of severe financial hardship to the Participant resulting from a sudden unexpected illness, accident, or disability of the Participant or of a dependent (as defined in Section 152(a) of the Code) of the Participant, loss of the Participant's property due to casualty, or other simi- lar and extraordinary unforeseeable circumstances arising as a result of events beyond the control of the Participant; The need to send a Participant's child to college or to purchase a new home shall not be considered unforeseeable emergencies. The deter- mination as to whether such an unforeseeable emergency exists shall be based on the merits of each individual case. Section 7.07 Transitional Rule for Pre -1989 Benefit Elections: In the event that, priorto January 1 1989, a Participant or Beneficiary has commenced re- ceiving benefits under a payment option or has irrevocably elected a payment option or benefit commencement date, then that payment option or election shall remain in effect notwithstanding any other provision of this Plan. ARTICLE VIII. NOWASSIGNABILITY Section 8.01 In General: Except as provided in Section 8.02, no Participant or Beneficiary shall have any right to commute, sell, assign, pledge, transfer or otherwise convey or encumber the right to receive any payments hereunder, which payments and rights are expressly declared to be non -assignable and non -transferable. Section 8.02 Domestic Relations Orders: (a) Allow- ance of Transfers: To the extent required under a final judgment, decree, or order (including approval of a property settlement agreement) made pursuant - to a state domestic relations.law, any portion of a Participant's Account may be paid or set aside for payment to a spouse, former spouse, or child of the Participant. Where necessary to carry out the terms of such an order, a separate Account shall be established with respect to the spouse, former spouse, or child who shall be entitled to make investment selections with respect thereto in the same manner as the Participant; any amount so set aside for a spouse, former spouse, or child shall be paid out in a lump sum at the earliest date that benefits may be paid to the Participant, unless the order directs a different time or form of payment. Nothing in this Section shall be construed to autho- rize any amount to be distributed under the Plan at a time or in a form that is not permitted under Section 457 of the Code. Any payment made to a person other than the Participant pursuant to this Section shall be reduced by required Income tax withhold- ing; the fact that payment is made to a person other than the Participant may not prevent such payment from being includible in the gross income of the Participant for withholding and income tax reporting purposes. (b) Release from Liability to Participant: The Employer's liability to pay benefits to a Participant shall be reduced to the extent that amounts have been paid or set aside for payment to a spouse, former spouse, or child pursuant to paragraph (a) of this Section. No such transfer shall be effectuated unless the Employer or Administrator has been provided with satisfactory evidence that the Em- ployer and the Administrator are released from any further claim by the Participant with respect to such amounts. The Participant shall be deemed to have released the Employer and the Administrator from any claim with respect to such amounts, in any case in which (i) the Employer or Administrator has been served with legal process or otherwise joined in a proceeding relating to such transfer, (ii) the Partici- pant has been notified of the pendency of such proceeding in the manner prescribed by the law of the jurisdiction in which the proceeding is pending for service of process in such action or by mail from the Employer or Administrator to the Participant's last known mailing address, and (iii) the Partici- pant fails to obtain an order of the court in the proceeding relieving the Employer or Administra- tor from the obligation to comply with the judg- ment, decree, or order. (c) Participation in Legal Proceedings: The Em- ployer and Administrator shall not be obligated to defend against or set aside any judgment, decree, or order described in paragraph (a) or any legal order relating to the garnishment of a Participant's benefits, unless the full expense of such legal action is borne by the Participant. In the event that the Participant's action (or inaction) nonetheless causes the EmployerorAdministratorto incursuch expense, the amount of the expense may be charged against the Participant's Account and thereby reduce the Employer's obligation to pay benefits to the Partici- pant. In the course of any proceeding relating to divorce, separation, or child support, the Employer and Administrator shall be authorized to disclose information relating to the Participant's Account to the Participant's spouse, former spouse, or child (including the legal representatives of the spouse, former spouse, or child), or to a court. ARTICLE IX. RELATIONSHIP TO OTHER PLANS AND EMPLOYMENT AGREEMENTS This plan serves in addition to any other retirement, pension, or benefit plan or system presently in existence or hereinafter established for the benefit of the Employer's employees, and participation hereunder shall not affect benefits receivable under any such plan or system. Nothing contained in this Plan shall be deemed to constitute an employment contract or agreement between any Partici- pant and the Employer or to give any Participant the right to be retained in the employ of the Employer. Nor shall anything herein be construed to modify the terms of any employment contract or agreement between a Participant and the Employer. ARTICLE X. AMENDMENT OR TERMINATION OF PLAN The Employer may at any time amend this Plan provided that it transmits such amendment in writing to the Administra- tor at least 30 days prior to the effective date of the amend- ment. The consent of the Administrator shall not be required in order for such amendment to become effective, but the Administrator shall be under no obligation to continue acting as Administrator hereunder if it disapproves of such amend- ment. The Employer may at any time terminate this Plan. The Administrator may at any time propose an amend. ment to the Plan by an instrument in writing transmitted to the Employer at least 30 days before the effective date of the amendment. Such amendment shall become effective un- less, within such 30 -day period, the Employer notifies the Administrator in writing that it disapproves such amendment, in which case such amendment shall not become effective. In the event of such disapproval, the Administrator shall be under no obligation to continue acting as Administrator hereunder. If this Plan document constitutes an amendment and restatement of the Plan as previously adopted by the Employer, the amendments contained herein shall become effective on January 1, 1989, and the terms of the preceding Plan document shall remain in effect through December 31, 1988. Except as may be required to maintain the status of the Plan as an eligible deferred compensation plan under Section 457 of the Code or to comply with other applicable laws, no amendment or termination of the Plan shall divest any Participant of any rights with respect to compensation de- ferred before the date of the amendment or termination. ARTICLE XI. APPLICABLE LAW This Plan shall be construed under the laws of the state where the Employer is located and is established with the intent that it meet the requirements of an "eligible deferred compensation plan" under Section 457 of the Code, as amended. The provisions of this Plan shall be interpreted wherever possible in conformitywith the requirements of that section. ARTICLE XII. Any notice to a party of this plan document shall be given at the last address provided in writing from one party to another party. Any notice such mailed shall be determined to have been received by such party. IH4bY4;�4.i�i►@i:l PROPERTY TARES OTHER TARES LICENSES AND PERMITS FINES, FORFEITURES & PENALTIES USE OF MONEY AND PROPERTY REVENUE FROM OTHER AGENCIES CHARGES FOR CURRENT SERVICES OTHER REVENUES General Fund Sub -Total Potential State Revenue Loss Potential General Fund Sub -Total FISCAL YEAR 1992-1993 GENERAL FUND REVENUE PROJECTION FY 92-93 at 11/30/92 370,245 4,920,978 528,336 456 403,771 2,107,280 152,227 9,048 8,492,341 8,492,341 Projected 92-93 -------------- 4,163,435 15,546,027 1,268,006 1,094 1,577,600 5,491,962 1,112,119 11,505 29,171,948 -------------- (500,000) -------------- 28,671,948 .............. Projected Budget Variance 92-93 to Budget 4,351,000 15,152,900 1,930,700 500 2,145,800 5,202,700 1,848,500 5,200 30,637,300 -'-------e 30,637,300 (187,565) 393,127 (662,694) 594 (568;000) 289,262 (736,381)" 6,305 REGclvL�- r:: a,,: A PART OF THE RECORD AT MEENVG Mlmd=Year 1992-93 Budget Review and Adjustment Comparison of Revenues Properly Taxes Other Taxes Licenses and Permits Fines, Foreitures & Penalties Use of Money and Property Revenue from Other Agencies Charges for Current Services Other Revenues 0 2 4 6 81012141618 Millions Comparison of General Fund Expenditures Administrative Services Community Development Public Works Public Safety Parks & Recreation by Department 0 2 4 6 8 10 Millions ®92/93 Adopted Budget ®92-93 Projected Year. End Deferred Compensation Plan Document (Appendix A) ICMA RETIREMENT CORPORATION Section 2.11 Plan Year: The calendar year. Section 2.12 Retirement: The first date upon which both of the following shall have occurred with respect to a participant: Separation from Service and attain- ment of age 65. Section 2.13 Separation from Service: Severance of the Participant's employment with the Employer which constitutes a "separation from service" within the meaning of Section 402(e)(4)(A)(iii) of the Code. In general, a Participant shall be deemed to have severed his employment with the Employerfor pur- poses of this Plan when, in accordance with the established practices of the Employer, the employ- ment relationship is considered to have actually terminated. In the case of a Participant who is an independent contractor of the Employer, Separation from Service shall be deemed to have occurred when the Participant's contract under which ser- vices are performed has completely expired and terminated, there is no foreseeable possibility that the Employer will renew the contract or enter into a new contract for the Participant's services, and it is not anticipated that the Participant will become an Employee of the Employer. ARTICLE 111. ADMINISTRATION Section 3.01 Duties of Employer: The Employer shall havetheauthorityto make all discretionary decisions affecting the rights or benefits of Participants which may be required in the administration of this Plan. Section 3.02 Duties of Administrator: The Adminis- trator, as agent for the Employer, shall perform nondiscretionary administrative functions in con- nection with the Plan, including the maintenance of Participants' Accounts, the provision of periodic reports of the status of each Account, and the disbursement of benefits on behalf of the Employer in accordance with the provisions of this Plan. ARTICLE IV. PARTICIPATION IN THE PLAN Section 4.01 Initial Participation: An Employee may become a Participant by entering into a Joinder Agreement prior to the beginning of the calendar month in which the Joinder Agreement is to become effective to defer compensation not yet earned. Section 4.02 Amendment of Joinder Agreement: A Participant may amend an executed Joinder Agreement to change the amount of compensation not yet earned which is to be deferred (including the reduction of such future deferrals to zero) or to change his investment preference (subject to such restrictions as may result from the nature or terms of any investment made by the Employer). Such amendment shall become effective as of the begin- ning of the calendar month commencing after the date the amendment is executed. A Participant may at anytime amend his Joinder Agreement to change the designated Beneficiary, and such amendment shall become effective immediately. ARTICLE V. LIMITATIONS ON DEFERRALS Section 5.01 Normal Limitation: Except as provided in section 5.02, the maximum amount of Deferred Compensation for any Participant for any taxable year shall not exceed the lesser of $7,500.00 or 33- 1/3 percent of the Participant's Includible Compen- sation for the taxable year. This limitation will ordi- narily be equivalent to the lesser of $7,500.00 or 25 percent of the Participant's Normal Compensation. Section 5.02 Catch -Up Limitation: For each of the last three (3) taxable years of a Participant ending be- fore his attainment of Normal Retirement Age, the maximum amount of Deferred Compensation shall be the lesser of: (1) $15,000 or (2) the sum of (i) the Normal Limitation for the taxable year, and (ii) the Normal Limitation for each prior taxable year of the Participant commencing after 1978 less the amount of the Participant's Deferred Compensation for such prior taxable years. A prior taxable year shall be taken into account under the preceding sentence only if (i) the Participant was eligible to participate in the Plan for such year (or in any other eligible deferred compensation plan established under Section 457 of the Code which is properly taken into account pursuant to regulations under section 457), and (ii) compensation (if any) deferred under the Plan (or such other plan) was subject to the deferral limitations set forth in Section 5.01. Section 5.03 Other Plans: The amount excludable from a Participant's gross income under this Plan or any other eligible deferred compensation plan under section 457 of the Code shall not exceed $7,500.00 (or such greater amount allowed under Section 5.02 of the Plan), less any amount excluded from gross income under section 403(b), 402(a)(8), or 402 (h) (1)(B) of the Code, or any amount with respect to which a deduction is allowable by reason of a contribution to an organization described in section 501(c)(18) of the Code. ARTICLE VI. INVESTMENTS AND ACCOUNT VALUES Section 6.01 Investment of Deferred Compensation: All investments of Participant's Deferred Compen- sation made bythe Employer, including all property and rights purchased with such amounts and all income attributable thereto, shall be the sole prop- erty of the Employer and shall not be held in trustfor Participants oras collateral securityforthe fulfillment of the Employer's obligations under the Plan. Such property shall be subject to the claims of general creditors of the Employer, and no Participant or Beneficiary shall have anyvested interest or secured or preferred position with respect to such property cr have any claim against the Employer except as a general creditor. Section 6.02 Crediting of Accounts: The Participant's Account shall reflect the amount and value of the investments or other property obtained by the Em- ployer through the investment of the Participant's Deferred Compensation. It is anticipated that the Employer's investments with respect to a Partici- pant will conform to the investment preference specified in the Participant's Joinder Agreement, but nothing herein shall be construed to require the Employer to make any particular investment of a Participant's Deferred Compensation. Each Partici- pant shall receive periodic reports, not less frequently than annually, showing the then -current value of his Account. Section 6.03 Transfers: (a) Incoming Transfers: A transfer may be accepted from an eligible deferred compensation plan maintained by another employer and credited to a Participant's Account under the Plan if (i) the Participant has separated from service with that employer and become an Employee of the Employer, and (ii) the other employer's plan pro- vides that such transfer will be made. The Employer may require such documentation from the prede- cessor plan as it deems necessary to effectuate the DEFERRED COMPENSATION PLAN DOCUMENT ARTICLE I. INTRODUCTION The Employer hereby establishes the Employer's Deferred Compensation Plan, hereinafter referred to as the "Plan" The Plan consists of the provisions set forth in this document. The primary purpose of this Plan is to provide retirement income and other deferred benefits to the Employees of the Employer in accordance with the provisions of Section 457 of the Internal Revenue Code of 1986, as amended (the "Code"). This Plan shall be an agreement solely between the Employer and participating Employees. ARTICLE 11. DEFINITIONS Section 2.01 Account: The bookkeeping account maintained for each Participant reflecting the cu- mulative amount of the Participant's Deferred Com- pensation, including any income, gains, losses, or increases or decreases in market value attributable to the Employer's investment of the Participant's Deferred Compensation, and further reflecting any distributions to the Participant or the Participant's Beneficiary and any fees or expenses charged against such Participant's Deferred Compensation. Section 2.02 Administrator: The person or persons named to carry out certain nondiscretionary ad- ministrative functions under the Plan, as hereinafter described. The Employer may remove any person as Administrator upon 60 days' advance notice in writing to such person, in which case the Employer shall name another person or persons to act as Administrator. The Administrator may resign upon 60 days' advance notice in writing to the Employer, in which case the Employer shall name another person or persons to act as Administrator. Section 2.03 Beneficiary: The person or persons desig- nated by the Participant in his Joinder Agreement who shall receive any benefits payable hereunder in the event of the Participant's death. In the event that the Participant names two or more Beneficiaries, each Beneficiary shall be entitled to equal shares of the benefits payable at the Participant's death, un- less otherwise provided in the Participant's Joinder Agreement. If no beneficiary is designated in the Joinder Agreement, if the Designated Beneficiary predeceases the Participant, or if the designated Beneficiary -does not survive the Participant for a period of fifteen (15) days, then the estate of the Participant shall be the Beneficiary. Section 2.04 Deferred Compensation: The amount of Normal Compensation otherwise payable to the Participant which the Participant and the Employer mutually agree to defer hereunder, any amount credited to a Participant's Account by reason of a transfer under section 6.03, or any other amount which the Employer ag rees to credit to a Participant's Account. Section 2.05 Employee: Any individual who provides services for the Employer, whether as an employee of the Employer or as an independent contractor, 08/89 and who has been designated by the Employer as eligible to participate in the Plan. Section 2.06 Includible Compensation: The amount of an Employee's compensation from the Employer for a taxable year that is attributable to services per- formed for the Employer and that is includible in the Employee's gross income for the taxable year for federal income tax purposes; such term does not include any amount excludable from gross income under this Plan or any other plan described in Section 457(b) of the Code or any other amount excludablefrom gross income forfederal income tax purposes. Includible Compensation shall be deter- mined without regard to any community property laws. Section 2.07 Joinder Agreement: An agreement en- tered into between an Employee and the Employer, including any amendments or modifications thereof. Such agreement shall fix the amount of Deferred Compensation, specify a preference among the investment alternatives designated bythe Employer, designate the Employee's Beneficiary or Beneficia- ries, and incorporate the terms, conditions, and provisions of the Plan by reference. Section 2.08 Normal Compensation: The amount of compensation which would be payable to a Partici- pant by the Employer fora taxable year if no Joinder Agreement were in effect to defer compensation under this Plan. Section 2.09 Normal Retirement Age: Age 70-1/2, un- less the Participant has elected an alternate Normal Retirement Age by written instrument delivered to the Administrator prior to Separation from Service. A Participant's Normal Retirement Age determines the period during which a Participant may utilize the catch-up limitation of Section 5.02 hereunder. Once a Participant has to any extent utilized the catch-up limitation of Section 5.02, his/her Normal Retire- ment age may not be changed. A Participant's alternate Normal Retirement Age may not be earlier than the earliest date that the Participant will become eligible to retire and receive unreduced retirement benefits underthe Employer's basic retirement plan covering the Participant and may not be later than the date the Participant will attain age 70-1/2. If a Participant continues employ- ment after attaining age 70-1/2, not having previ- ously elected an alternate Normal Retirement Age, the Participant's alternate Normal Retirement Age shall not be later than the mandatory retirement age, if any, established by the Employer, or the age at which the Participant actually separates from ser- vice if the Employer has no mandatory retirement age. If the Participant will not become eligible to receive benefits under a basic retirement plan maintained by the Employer, the Participant's alter- nate Normal Retirement Age may not be earlierthan age 55 and may not be later than age 70-1/2. Section 2.10 Participant: Any Employee who hasjoined the Plan pursuant to the requirements of Article IV. be paid in a lump sum to the estate of the Benefi- ciary. In the event that the Participant's estate is the Beneficiary, the commuted value of any remaining payments under the payment option shall be paid to the estate in a lump sum. Section 7.05 Pre -retirement Death Benefits: (a) Should the Participant die before he/she has begun to receive the benefits provided by Section 7.01, the value of the Participant's Account shall be payable to the Beneficiary commencing within the 30 -day period commencing on the 91st day after the Participant's death, unlessthe Beneficiary irrevocably elects a different fixed ordeterminable benefit com- mencement date within 90 days of the Participant's death. Such benefit commencement date shall be not later than the later of (i) December 31 of the year following the year of the Participant's death, or (ii) if the Beneficiary isthe Participant's spouse, December 31 of the year in which the Participant would have attained age 70-1/2. (b) Unless a Beneficiary elects a different payment option prior to the benefit commencement date, death benefits under this Section shall be paid in approximately equal annual installments over five years, or oversuch shorter period as may be neces- sary to assure that the amount of any annual install- ment is not less than $3,500. A Beneficiary shall be treated as if he/she were a Participant for purposes of determining the payment options available under Section 7.02, provided, however, that the payment option chosen by the Beneficiary must provide for payments to the Beneficiary over a period no longer than the life expectancy of the Beneficiary, and provided that such period may not exceed fifteen (15) years if the Beneficiary is not the Participant's spouse. (c) In the event that the Beneficiary dies before the payment of death benefits has commenced or been completed, the remaining value of the Participant's Account shall be paid to the estate of the Beneficiary in a lump sum. In the event that the Participant's estate is the Beneficiary, payment shall be made to the estate in a lump sum. Section 7.06 Unforeseeable Emergencies: (a) In the event an unforeseeable emergency occurs, a Par- ticipant may apply to the Employer to receive that part of the value of his Account that is reasonably needed to satisfy the emergency need. If such an application is approved by the Employer, the Partici- pant shall be paid only such amount asthe Employer deems necessary to meet the emergency need, but payment shall not be made to the extent that the financial hardship may be relieved through cessa- tion of deferral under the Plan, insurance or other reimbursement, or liquidation of other assets to the extent such liquidation would not itself cause severe financial hardship. (b) An unforeseeable emergency shall be deemed to involve only circumstances of severe financial hardship to the Participant resulting from a sudden unexpected illness, accident, or disability of the Participant or of a dependent (as defined in Section 152(a) of the Code) of the Participant, loss of the Participant's property due to casualty, or other simi- lar and extraordinary unforeseeable circumstances arising as a result of events beyond the control of the Participant. The need to send a Participant's child to college or to purchase a new home shall not be considered unforeseeable emergencies. The deter- mination as to whether such an unforeseeable emergency exists shall be based on the merits of each individual case. Section 7.07 Transitional Rule for Pre -1989 Benefit Elections: In the event that, prior to January 11989, a Participant or Beneficiary has commenced re- ceiving benefits under a payment option or has irrevocably elected a payment option or benefit commencement date, then that payment option or election shall remain in effect notwithstanding any other provision of this Plan. ARTICLE VIII. NON -ASSIGNABILITY Section 8.01 In General: Except as provided in Section 8.02, no Participant or Beneficiary shall have any right to commute, sell, assign, pledge, transfer or otherwise convey or encumber the right to receive any payments hereunder, which payments and rights are expressly declared to be non -assignable and non -transferable. Section 8.02 Domestic Relations Orders: (a) Allow- ance of Transfers: To the extent required under a final judgment, decree, or order (including approval of a property settlement agreement) made pursuant to a state domestic relations law, any portion of a Participant's Account may be paid or set aside for payment to a spouse, former spouse, or child of the Participant. Where necessary to carry out the terms of such an order, a separate Account shall be established with respect to the spouse, former spouse, or child who shall be entitled to make investment selections with respect thereto in the same manner as the Participant; any amount so set aside for a spouse, former spouse, or child shall be paid out in a lump sum at the earliest date that benefits may be paid to the Participant, unless the order directs a different time or form of payment. Nothing in this Section shall be construed to autho- rize any amount to be distributed under the Plan at a time or in a form that is not permitted under Section 457 of the Code. Any payment made to a person other than the Participant pursuant to this Section shall be reduced by required income tax withhold- ing; the fact that payment is made to a person other than the Participant may not prevent such payment from being includible in the gross income of the Participant for withholding and income tax reporting purposes. (b) Release from Liability to Participant: The Employer's liability to pay benefits to a Participant shall be reduced to the extent that amounts have been paid or set aside for payment to a spouse, former spouse, or child pursuant to paragraph (a) of this Section. No such transfer shall be effectuated unless the Employer or Administrator has been provided with satisfactory evidence that the Em- ployer and the Administrator are released from any further claim by the Participant with respect to such amounts. The Participant shall be deemed to have released the Employer and the Administrator from anyclaim with respectto such amounts, in any case in which (i) the Employer or Administrator has been served with legal process or otherwise joined in a proceeding relating to such transfer, (ii) the Partici- pant has been notified of the pendency of such proceeding in the manner prescribed by the law of the jurisdiction in which the proceeding is pending for service of process in such action or by mail from the Employer or Administrator to the Participant's transfer, to confirm that such plan is an eligible deferred compensation plan within the meaning of Section 457 of the Code, and to assure that transfers are provided for under such plan. The Employer may refuse to accept a transfer in the form of assets other than cash, unless the Employer and the Administrator agree to hold such otherassets under the Plan. Any such transferred amount shall not be treated as a deferral subject to the limitations of Article V, except that, for purposes of applying the limitations of Sections 5.01 and 5.02, an amount deferred during any taxable year under the plan from which the transfer is accepted shall be treated as if it has been deferred under this Plan during such taxable yearand compensation paid by the transferor employer shall be treated as if it had been paid by the Employer. (b) Outgoing Transfers: An amount may be trans- ferred to an eligible deferred compensation plan maintained by another employer, and charged to a Participant's Account under this Plan, if (i) the Par- ticipant has separated from service with the Em- ployer and become an employee of the other em- ployer, (ii) the other employers plan provides that such transfer will be accepted, and (iii) the Partici- pant and the employers have signed such agree- ments as are necessaryto assure that the Employer's liability to pay benefits to the Participant has been discharged and assumed by the other employer. The Employer may require such documentation from the other plan as it deems necessary to effec- tuate the transfer, to confirm that such plan is an eligible deferred compensation plan within the meaning of section 457 of the Code, and to assure that transfers are provided for under such plan. Such transfers shall be made only under such circumstances as are permitted under section 457 of the Code and the regulations thereunder. Section 6.04 Employer Liability: In no event shall the Employers liability to pay benefits to a Participant under Article VI exceed the value of the amounts credited to the Participant's Account; the Employer shall not be liable for losses arising from deprecia- tion or shrinkage in the value of any investments acquired under this Plan. ARTICLE VII. BENEFITS Section 7.01 Retirement Benefits and Election on Separation from Service: Except as otherwise provided in this Article VII, the distribution of a Participant's Account shall commence as of April 1 of the calendar year after the Plan Year of the Participant's Retirement, and the distribution of such Retirement benefits shall be made in accordance with one of the payment options described in Sec- tion 7.02. Notwithstanding the foregoing, the Partici- pant may irrevocably elect within 60 days following Separation from Service to have the distribution of benefits commence on a fixed or determinable date otherthan that described in the preceding sentence which is at least 60 days afterthe date such election is delivered in writing to the Employer and forwarded to the Administrator, but not later than April 1 of the year following the year of the Participant's Retire- ment or attainment of age 70-1/2, whichever is later. Section 7.02 Payment Options: As provided in Sections 7.01, 7.04, and 7.05, a Participant or Beneficiary may elect to have the value of the Participant's Account distributed in accordance with one of the following payment options, provided that such op- tion is consistent with the limitations set forth in Section 7.03: (a) Equal monthly, quarterly, semi-annual or annual payments in an amountchosen bythe Participant, continuing until his Account is exhausted; (b) One lump -sum payment; (c) Approximately equal monthly, quarterly, semi- annual or annual payments, calculated to continue for a period certain chosen by the Participant. (d) Annual Payments equal to the minimum distributions required under Section 401(a)(9) of the Code over the life expectancy of the Participant or over the life expectancies of the Participant and his/her Beneficiary. (e) Payments equal to payments made bythe issuer of a retirement annuity policy acquired by the Employer. (f) Any other payment option elected by the Participant and agreed to by the Employer and Administrator, provided that such option must provide forsubstantiallynonincreasing payments for any period after the latest benefit commencement date under Section 7.01. A Participant's or Beneficiary's election of a payment option must be made at least 30 days before the payment of benefits is to commence. If a Participant or Beneficiary fails to make a timely election of a payment option, benefits shall be paid monthly underoption (c) above for a period of five years. Section 7.03 Limitation on Options: No payment option may be selected by a Participant or Beneficiary under Sections 7.02, 7.04, or 7.05 unless it satisfies the requirements of Sections 401(a)(9) and 457(d)(2) of the Code, including that payments commencing before the death of the Participant shall satisfy the incidental death benefits requirement under Section 457(d)(2)(B)(i)(1). Unless otherwise elected by the Participant, all determinations under Section 401(a)(9) shall be made without recalculation of life expectancies. Section 7.04 Post-retirement Death Benefits: (a) Should the Participant die after he/she has begun to receive benefits under a payment option, the remaining payments, if any, underthe payment option shall be payable to the Participant's Beneficiary commenc- ing within the 30 -day period commencing with the 61st day after the Participant's death, unless the Beneficiary elects payment under a different pay- ment option that is available under Section 7.02 within 60 days of the Participant's death. Any different payment option elected by a Beneficiary under this section must provide for payments at a rate that is at least as rapid as under the payment option that was applicable to the Participant. In no event shall the EmployerorAdministrator be liable to the Beneficiary for the amount of any payment made in the name of the Participant before the Administrator receives proof of death of the Participant. (b) If the designated Beneficiary does not continue to live for the remaining period of payments under the payment option, then the commuted value of any remaining payments under the payment option shall last known mailing address, and (iii) the Partici- pant fails to obtain an order of the court in the proceeding relieving the Employer or Administra- tor from the obligation to comply with the judg- ment, decree, or order. (c) Participation in Legal Proceedings: The Em- ployer and Administrator shall not be obligated to defend against or set aside any judgment, decree, or order described in paragraph (a) or any legal order relating to the garnishment of a Participant's benefits, unless the full expense of such legal action is borne by the Participant. In the event that the Participant's action (or inaction) nonetheless causes the Employer orAdministratorto incursuch expense, the amount of the expense may be charged against the Participant's Account and thereby reduce the Employer's obligation to pay benefits to the Partici- pant. In the course of any proceeding relating to divorce, separation, or child support, the Employer and Administrator shall be authorized to disclose information relating to the Participant's Account to the Participant's spouse, former spouse, or child (including the legal representatives of the spouse, former spouse, or child), or to a court. ARTICLE IX: RELATIONSHIP TO OTHER PLANS AND EMPLOYMENT AGREEMENTS This plan serves in addition to any other retirement, pension, or benefit plan or system presently in existence or hereinafter established for.the benefit of the Employer's employees, and participation hereunder shall not affect benefits receivable under any such plan or system. Nothing contained in this Plan shall be deemed to constitute an employment contract or agreement between any Partici- pant and the Employer or to give any Participant the right to be retained in the employ of the Employer. Nor shall anything herein be construed to modify the terms of any employment contract or agreement between a Participant and the Employer. ARTICLE X. AMENDMENT OR TERMINATION OF PLAN The Employer may at anytime amend this Plan provided that it transmits such amendment in writing to the Administra- tor at least 30 days prior to the effective date of the amend- ment. The consent of the Administrator shall not be required in order for such amendment to become effective, but the Administrator shall be under no obligation to continue acting as Administrator hereunder if it disapproves of such amend- ment. The Employer may at any time terminate this Plan. The Administrator may at any time propose an amend- ment to the Plan by an instrument in writing transmitted to the Employer at least 30 days before the effective date of the amendment. Such amendment shall become effective un- less, within such 30 -day period, the Employer notifies the Administrator in writing that it disapproves such amendment, in which case such amendment shall not become effective. In the event of such disapproval, the Administrator shall be under no obligation to continue acting as Administrator hereunder. If this Plan document constitutes an amendment and restatement of the Plan as previously adopted by the Employer, the amendments contained herein shall become effective on January 1, 1989, and the terms of the preceding Plan document shall remain in effect through December 31, 1988. Except as may be required to maintain the status of the Plan as an eligible deferred compensation plan under Section 457 of the Code or to comply with other applicable laws, no amendment or termination of the Plan shall divest any Participant of any rights with respect to compensation de- ferred before the date of the amendment or termination. ARTICLE XI. APPLICABLE LAW This Plan shall be construed under the laws of the state where the Employer is located and is established with the intent that it meet the requirements of an "eligible deferred compensation plan" under Section 457 of the Code, as amended. The provisions of this Plan shall be interpreted wherever possible in conformity with the requirements of that section. ARTICLE XII. Any notice to a party of this plan document shall be given at the last address provided in writing from one party to another party. Any notice such mailed shall be determined to have been received by such party. - ------ 7-7 Declaration of Trustof- the ICMA Retirem'- ent7rust (Appendix, B) t DECLARATION OF TRUST OF ICMA RETIREMENT TRUST ARTICLE I. NAME DEFINITIONS Section 1.1 Name: The Name of the Trust, as amended and restated hereby, is the ICMA Retirement Trust. Section 1.2 Definitions: Wherever they are used herein, the following terms shall have the following respective meanings: (a) Bylaws. The bylaws referred to in Section 4.1 hereof, as amended from time to time. (b) Deferred Compensation Plan. A deferred compensation plan established and maintained by a Public Employer for the purpose of providing retirement income and other deferred benefits to its employees in accordance with the provision of section 457 of the Internal Revenue Code of 1954, as amended. (c) Employees. Those employees who participate in Qualified Plans. (d) Employer Trust. A trust created pursuant to an agreement between RC and a Public Employer for the purpose of investing and administering the funds set aside by such Employer in connection with its Deferred Compensation agreements with its employees or in connection with its Qualified Plan. (e) Guaranteed Investment Contract. A contract entered into bythe RetirementTrust with insurance companies that provides for a guaranteed rate of return on investments made pursuant to such contract. (f) ICMA. The International City Management Association. (g) ICMA/RC Trustees. Those Trustees elected by the Public Employers who, in accordance with the provisions of Section 3.1(a) hereof, are also members, or former members, of the Board of Directors of ICMA or RC. (h) Investment Adviser. The Investment Adviser that enters into a contract with the Retirement Trust to provide advice with respect to investment of the Trust Property. (1) Portfolios.ThePortfoliosofinvestment established by the Investment Adviser to the Retirement Trust, under the supervision of the Trustees, for the purpose of providing investments for the Trust Property. Q) Public Employee Trustees. Those Trustees elected bythe Public Employerswho, in accordance withthe provision of Section 3.1(a) hereof, are full- time employees of Public Employers. (k) Public Employer Trustees. Public Employerswho serve as trustees of the Qualified Plans. (1) Public Employer. A unit of •state or local government, or any agency or instrumentality thereof, that has adopted a Deferred Compensation Plan or a Qualified. Plan and has executed this Declaration of Trust. (m) Qualified Plan. A plan sponsored by a Public Employer for the purpose of providing retirement income to its employees which satisfies the qualification requirements of Section 401 of the Internal Revenue Code, as amended. (n) RC.The International City ManagementAssociation Retirement Corporation. (o) Retirement Trust. The Trust created by the Declaration of Trust. (p) Trust Property. The amounts held in the Retirement Trust on behalf of the Public Employers in connection with Deferred Compensation Plans and on behalf of the Public Employer Trustees for the exclusive benefit of Employees pursuant to Qualified Plans. The Trust Property shall include any income resulting from the investment to the amounts so held. (q) Trustees. The Public Employee Trustees and ICMA/RC Trustees elected bythe Public Employers to serve as members of the Board of Trustees of the Retirement Trust. ARTICLE II. CREATION AND PURPOSE OF THE TRUST; OWNERSHIP OF TRUST PROPERTY Section 2.1 Creation: The Retirement Trust is created and established by the execution of this Declaration of Trust by the Trustees and the Public Employers. Section 2.2 Purpose: The purpose of the Retirement Trust is to provide for the commingled investment of funds held by the Public Employers in connection with their Deferred Compensation and Qualified Plans. The Trust Property shall be invested in the Portfolios, in Guaranteed Investment Contracts, and in other invest- ments recommended by the Investment Adviser under the supervision of the Board of Trustees. Nopartofthe Trust Property will be invested in securities issued by Public Employers. Section 2.3 Ownership of Trust Property: The Trustees shall have legal title to the Trust Property. The Public Employers shall be the beneficial owners of the portion of the Trust Property allocable to the Deferred Com- pensation Plans. The portion of the Trust Property allocable to the Qualified Plans shall be held for the Public Employer Trustees for the exclusive benefit of the Employees. ARTICLE 111. TRUSTEES Section3.1 Number and Qualification ofTrustees:(a)The Board of Trustees shall consist of nine Trustees. Five of the Trustees shall be full-time employees of a Public Employer (the Public Employee Trustees) who are authorized by such Public Employer to serve as Trustee. The remaining four Trustees shall consist of two per- sons who, at the time of election to the Board of Trustees, are members of the Board of Directors of ICMA and two persons who, at the time of election, are members of the Board of Directors of RC (the ICMA/RC Trustees. One of the Trustees who is a director of ICMA, and one of the Trustees who is a director of RC, shall, at the time of election, be full-time employees of a Public Employer. (b) No person may serve as a Trustee for more than one term in any ten-year period. Section3.2Election and Term: (a) Except for the Trustees appointed to fill vacancies pursuant to Section 3.5 hereof, the Trustees shall be elected by a vote of a majorityof the Public Employers in accordance with the procedures set forth in the By -Laws. (b) At the first election of Trustees, three Trustees shall be elected for a term of three years, three Trustees shall be elected for a term of two years and three Trustees shall be elected for a term of one year. At each subsequent election, three Trustees shall be elected fora term of three years and until his or her successor is elected and qualified. Section 3.3 Nominations: The Trustees who are full-time employees of Public Employers shall serve as the Nominating Committee for the Public Employee Trust- ees. The Nominating Committee shall choose candi- dates for Public Employee Trustees in accordance with the procedures set forth in the By -Laws. Section 3.4 Resignation and Removal: (a) Any Trustee may resign as Trustee (without need for prior or subse- quent accounting) by an instrument in writing signed by the Trustee and delivered to the other Trustees and such resignation shall be effective upon such delivery, or at a later date according to the terms of the instru- ment. Any of the Trustees may be removed for cause, by a vote of a majority of the Public Employers. (b) Each Public Employee Trustee shall resign his or her position as Trustee within sixty days of the date on which he or she ceases to be a full-time employee of a Public Employer. Section 3.5 Vacancies: The term of office of a Trustee shall terminate and a vacancy shall occur in the event of the death, resignation, removal, adjudicated incompetence or other incapacity to perform the duties of the office of a Trustee. In the case of a vacancy, the remaining Trustees shall appoint such person as they in their discretion shall see fit (subjectto the limitations set forth in this Section), to serve for the unexpired portion of the term of the Trustee who has resigned or otherwise ceased to be a Trustee. The appointment shall be made by a written instrument signed by a majority of the Trustees. The person appointed must be the same type of Trustee (Le., Public Employee Trustee or ICMA/ RC Trustee) as the person who has ceased to be a Trustee. An appointment of a Trustee may be made in anticipation of a vacancy to occur at a later date by reason of retirement or resignation, provided that such appointment shall not become effective prior to such retirement or resignation. Whenever vacancy in the number of Trustees shall occur, until such vacancy is filled as provided in this Section 3.5, the Trustees in office, regardless of their number, shall have all the powers granted to the Trustees and shall discharge all the duties imposed upon the Trustees by this Declara- tion. A written instrument certifying the existence of such vacancy signed by a majority of the Trustees shall be conclusive evidence of the existence of such va- cancy. Section 3.6 Trustees Serve in Representative Capacity: By executing this Declaration, each Public Employer agrees that the Public Employee Trustees elected by the Public Employers are authorized to act as agents and representatives of the Public Employers collec- tively. ARTICLE IV. POWERS OF TRUSTEES Section 4.1 General Powers: The Trustees shall have the power to conduct the business of the Trust and to carry on its operations. Such power shall include, but shall not be limited to, the power to: (a) receive the Trust Property from the Public Employers, Public Employer Trustees or other Trustee of any Employer Trust; (b) enter into a contract with an Investment Adviser providing, among otherthings, forthe establishment and operation of the Portfolios, selection of the Guaranteed Investment Contracts in which the Trust Property may be invested, selection of the other investments for the Trust Property and the payment of reasonable fees to the Investment Adviser and to any sub -investment adviser retained by the Investment Adviser; (c) review annually the performance of the Investment Adviser and approve annually the contract with such Investment Adviser; (d) invest and reinvest the Trust Property in the Portfolios, the Guaranteed Interest Contracts and in any other investment recommended by the Investment Adviser, but not including securities issued by Public Employers, provided that if a Public Employer has directed that its monies be invested in specified Portfolios or in a Guaranteed Investment Contract, the Trustees of the Retirement Trust shall invest such monies in accordance with such directions; (e) keep such portion of the Trust Property in cash or cash balances as the Trustees, from time to time, may deem to be in the best interest of the Retirement Trust created hereby without liability for interest thereon; (f) accept and retain for such time as they may deem advisable any securities orotherproperly received or acquired by them as Trustees hereunder, whether or not such securities or other property would normally be purchased as investment hereunder; (g) cause any securities or other property held as part of the Trust Property to be registered in the name of the Retirement Trust or in the name of a nominee, and to hold any investments in bearerfrom, but the books and records of the Trustees shall at all times show that all such investments are a part of the Trust Property; (h) make,execute, acknowledge, and deliver any and all documents of transferand conveyance and any and all other instruments that maybe necessary or appropriate to carry out the powers herein granted; (1) 'vote upon any stock, bonds, or other securities; give general orspecial proxies or powers of attorney with or without power of substitution;exercise any conversion orivileees. subscription rights, orother oppose, or consentto, oiotherwise participate in, corporate reorganizations or to other changes affecting corporate securities, and delegate discretionary powers and pay any assessments or charges in connection therewith; and generally exercise any of the powers of an owner with respect to stocks, bonds, securities or other property held as part of the Trust Property; Q) enter into contracts or arrangements for goods or services required in connection with the operation of the Retirement Trust, including, but not limited to, contracts with custodians and contracts for the provision of administrative services; (k) borrow or raise money for the purposes of the Retirement Trust in such amount, and upon such terms and conditions, as the Trustees shall deem advisable, provided that the aggregate amount of such borrowings shall not exceed 30% of the value of the Trust Property. No person lending money to the Trustees shall be bound to see the application of the money lent or to inquire into its validity, expediency or propriety or any such borrowing; (1) incur reasonable expenses as required for the operation of the RetirementTrust and deduct such expenses from of the Trust Property; (m) pay expenses properly allocable to the Trust Property incurred in connection with the Deferred Compensation Plans, Qualified Plans, or the Employer Trusts and deduct such expenses from the portion of the Trust Property to whom such expenses are properly allocable; (n) pay out of the Trust Property all real and personal property taxes, income taxes and other taxes of any and all kinds which, in the opinion of the Trustees, are properly levied, or assessed under existing or future laws upon, or in respect of, the Trust Property and allocate any such taxes to the appropriate accounts; (o) adopt, amend and repeal the bylaws, provided that such bylaws are at all times consistent with the terms of this Declaration of Trust; (p) employ persons to make available interests in the Retirement Trust to employers eligible to maintain a Deferred Compensation Plan under Section 457 ora Qualified Plan underSection 401 of the Internal Revenue Code, as amended; (q) issue the Annual Report of the Retirement Trust, and the disclosure documents and other literature used by the Retirement Trust; (r) make loans, including the purchase of debt obligations, provided that all such loans shall bear interest at the current market rate; (s) contract for, and delegate any powers granted hereunder to, such officers, agents, employees, auditors and attorneys as the Trustees may select, provided that the Trustees may not delegate the powers set forth in paragraphs (b), (c) and (o) of this Section 4.1 and may not delegate any powers if such delegation would violate their fiduciary duties; (t) provide for the indemnification of the Officers and Trustees of the Retirement Trust and purchase fiduciary insurance; (u) maintain books and records, including separate accounts f oreach Public Employer, Public Employer Trustee or Employer Trust and such additional separate accounts as are required under, and consistent with, the Deferred Compensation or Qualified plan of each Public Employer; and (v) do all such acts, take all such proceedings, and exercise all such rights and privileges, although not specifically mention herein, as the Trustees may deem necessary or appropriate to administer the Trust Property and to carry out the purposes of the Retirement Trust. Section 4.2 Distribution of Trust Property: Distributions of the Trust property shall be made to, or on behalf of, the Public Employer or Public Employer Trustee, in accor- dance with the terms of the Deferred Compensation Plans, Qualified Plans or Employer Trusts. The Trust- ees of the Retirement Trust shall be fully protected in making payments in accordance with the directions of the Public Employers, Public Employer Trustees or otherTrusteeofthe EmployerTrusts without ascertain- ing whether such payments are in compliance with the provision of the Deferred Compensation or Qualified Plans, or the agreements creating the EmployerTrusts. Section 4.3 Execution of Instruments: The Trustees may unanimously designate any one or more of the Trust- ees to execute any instrument or document on behalf of all, including but not limited to the signing orendorse- ment of any check and the signing of any applications, insurance and other contracts, and the action of such designated Trustee or Trustees shall have the same force and effect as if taken by all the Trustees. ARTICLE V. DUTY OF CARE AND LIABILITY OF TRUSTEES Section 5.1 Duty of Care: In exercising the powers hereinbefore granted to the Trustees, the Trustees shall perform all acts within their authority for the exclusive purpose of providing benefits for the Public Employers in connection with Deferred Compensation Plans and Public EmployerTrustees pursuant to Quali- fied Plans, and shall perform such acts with the care, skill, prudence and diligence in the circumstances then prevailing that a prudent person acting in a like capacity and familiar with such matters would usein the conduct of an enterprise of a like chara^,ter and with like aims. Section 5.2 Liability: The Trustees shall not be liable forany mistake of judgment or other action taken in good faith, and for any action taken or omitted in reliance in good faith upon the books of account or other records of the Retirement Trust, upon the opinion of counsel, or upon reports made to the Retirement Trust by any of its officers, employees or agents or by the Investment Adviser or any sub -investment adviser, accountants, appraisers or other experts or consultant selected with reasonable care by the Trustees, officers or employees of the Retirement Trust. The Trustees shall also not be liable for any loss sustained by the Trust Property by reason of any investment made in good faith and in accordance with the standard of care set forth in Section 5.1. Section 5.3 Bond: No Trustee shall be obligated to give any bond or other security for the performance of any of his or her duties hereunder. ARTICLE VI. ANNUAL REPORT TO SHAREHOLDERS The Trustees shall annually submit to the Public Employers and Public Employer Trustees a written report of the transac- tions of the Retirement Trust, including financial statements which shall be certified by independent public accountants chosen by the Trustees. ARTICLE VII. DURATION OR AMENDMENT OF RETIREMENT TRUST Section 7.1 Withdrawal: A Public Employer or Public Em- ployer Trustee may, at any time, withdraw from this RetirementTrust by delivering to the Board of Trustees a written statement of withdrawal. In such statement, the Public Employer or Public Employer Trustee shall acknowledge that the Trust Property allocable to the Public Employer is derived from compensation de- ferred by employees of such Public Employer pursuant to its Deferred Compensation Plan or from contribu- tions to the accounts of Employees pursuant to a Qualified Plan, and shall designate the financial institu- tion to which such property shall be transferred by the Trustees of the Retirement Trust or by the Trustee of the Employer Trust. Section 7.2 Duration: The Retirement Trust shall continue until terminated by the vote of a majority of the Public Employers, each casting one vote. Upon termination, all of the Trust Property shall be paid out to the Public Employers, Public Employer Trustees or the Trustees of the Employer Trusts, as appropriate. Section 7.3 Amendment: The Retirement Trust may be amended by the vote of a majority of the public Employ- ers, each casting one vote. Section 7.4 Procedure: A resolution to terminate or amend the Retirement Trust or to remove a Trustee shall be submitted to a vote of the Public Employers if: (i) a majority of the Trustees so direct, or; (u) a petition requesting a vote signed by not less that 25 percent of the Public Employers, is submitted to the Trustees. ARTICLE VIII. MISCELLANEOUS Section 8.1 Governing Law: Except as otherwise required by state or local law, this Declaration of Trust and the Retirement Trust hereby created shall be construed and regulated by the laws of the District of Columbia. Section 8.2 Counterparts: This Declaration may be ex- ecuted by the Public Employers and Trustees in two or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.