OPERATIONAL AND ADMINISTRATIVE SERVICES AGREEMENT
DENVER PUBLIC SCHOOLS PROCOMP TRUST
AND
DENVER PUBLIC SCHOOLS
This Operational and Administrative Services Agreement (the "Agreement") is made between the Board of Trustees of the Denver Public Schools ProComp Trust (hereinafter referred to as the "Trustees"), acting on behalf of the Denver Public Schools ProComp Trust (the "Trust"), and the Board of Education of Denver Public Schools (hereinafter referred to as the "Board"),acting on behalf of Denver Public Schools (hereinafter referred to as "DPS"), which will provide operational and administrative services for the Trust.
1.Purpose of Contract.
1.1The Trustees agree to employ DPS to provideservices for the operation and administration of the Trust. The Trustees agree to reimburseDPS, in accordance with the terms of this Agreement, for the performance of such services.
1.2DPS agrees to perform the services in accordance with the provisions of this Agreement.
1.3This Agreement is not intended, deemed or construed to create any additional relationship between the Trust and DPS other than the relationships that may exist prior to the existence of this Agreement. The Trust and DPS for the purposes of this Agreement shall act as independent entities contracting with each other solely for the purposes of effecting the provisions of this Agreement.
1.4This Agreement does not change the powers of the Board, the Trustees, DPS or the Trust as provided in the Trust Agreement for Denver Public Schools Professional Compensation for Teachers or in the ProComp Agreement between DPS and Denver Classroom Teachers Association.
1AKey Employees for the Trust
1A.1Key Employees. DPS The District shall not change the Kkey Eemployees identified on Schedule 1 to this Agreement without the written consent of the Board of Trustees, which consent shall not be unreasonably denied consistent with the fiduciary obligations of the Trustees. Neither shall DPS the District make any material reduction in pay or benefits of Key Employees. This restriction does not prevent reductions in pay and benefits consistent with reductions for other employees of DPS the District. DPS The District shall maintain on its employed staff a sufficient number of employees trained in performing the Basic Services (and such aAdditional Sservices as DPS the District and the Trustees agree are appropriate or necessary is obligated to provide) to perform suchthe Operational and Administrative services reasonably promptly and accurately.
1A.2It is anticipated that Key Employees will also perform functions for DPS the District from time to time. In recognition of this fact, the Parties agree that functions for the Trust take priority except in the case of emergencies of DPSthe District.
1A.3When it becomes necessary for DPS the District to hire a Key Employee, after initial screening by DPSthe District, representative(s) of the Trust shall be allowed to participate in the interview process and express their views about the merits of each candidate interviewed. The final decision about hiring shall be made by DPSthe District.
1A.4If DPSthe District does any evaluation of the performance of a person providing services to the Trust, as part of that evaluation DPSthe District will seek the input of the Trustees concerning how the person has performed functions related to the Trust.
1A.5While the Key Employees are employees of DPSthe District, the Parties recognize the unique function of the Trust and how that function requires Key Employees such persons to act as fiduciaries and solely in the interest of the Trust, and to report information to the Trustees about possible actions of any person that could be contrary to the interests jeopardize the functions of the Trust. For that reason, Key Employees are free to make good faith reports to the Trust or any Trustee concerning any information or actions of any person that the Key Employee feels, in good faith, may be contrary to the interests of the Trust. No Key Employee shall be retaliated against in any manner by DPSthe District for making such a good faith report.
2.Term. This Agreement shall be effective February 2, 2006 and shall remain in effect until terminated in accordance with section3 of this Agreement.
3.Termination. This Agreement may be terminated by either party by giving at least ninety (90) days' written notice to the other party.
4.Staffing. DPS shall provide the following staffing services to the Trust:
4.1If so directed by the Trustees, designate a Trust Manager from the staff of DPS. This person will be an individual who will be directly involved in day to day operations of the Trust with high-level responsibility for the performance of services; will sign, if so authorized by the Trustees, or direct signature of checks; be the liaison to the Trustees and their advisors; attend meetings; and, make reports to the Trustees at the Board of Trustee Meetings. If so designated, this person will be a Key Employee.
4.2Provide necessary and qualified staffing forthe operational and administrative services under this Agreement.
4.3Develop and maintain a fiscal model for staff and consulting time for Trust services under the Agreement.
5.Operational Services. DPSshall provide the following operational services for the Trust:
5.1Develop and draft budgets for Trust operation.
5.2Track Trust investments and prepare quarterly performance reports for Trustees.
5.3 Coordinate Trust investments by forecasting monthly cash flows, and facilitating buying and selling of the Trust investment portfolio as instructed by the Trust Asset Allocation and the Trust Investment Advisor.
5.43 Prepare all required Trust filings, including tax filings, under state, federal and other applicable law.
5.54Provide accounting services for Trust including, but not limited to, preparing and distributing detailed monthly and year-to-date financial statements that detail the income and expenses of the Trust. Monthly financial statements shall be completed no later than 45 days after the end of each month.
5.6 Provide accounting services for the Trust year end, including, but not limited to, facilitating the annual audit with DPS and the external auditors, preparing and distributing the annual financial statements that detail the income and expenses of the Trust for the fiscal year. The audited annual financial statements shall be completed and presented to the Trust Board for their acknowledgement by October following the fiscal year end.
5.75 Receive and reconcile monthly bank statement on Trust assets.
5.8 Obtain and audit for accuracy the monthly ProComp invoice including auditing and calculating the traditional salaries, benefit rate and bonus payouts.
5.96 Subject to Trustee approval, place coverage for fiduciary insurance and errors and omission insurance for Trustee and Trust's fiduciaries, employees and agents.
5.107Conduct Trust business with various vendors such as banks, investment managers and other organizations that assist the Trust with business operations.
5.118Subject to Trustee approval, provide limited functional and time access to the ProComp fiscal model to the DPS and DCTA bargaining teams.
5.129Cause timely payments from the Trust as authorized by the Trustees.
6.Administrative Services. DPS shall provide the following administrative services for the Trust:
6.1Prepare and send notice of all regular or special Trustee meetings or meetings of Trustee committees. Establish a meeting location approved by the Trustees for all meetings. Prepare and distribute the meeting agenda and materials in advance of all meetings. Prepare and distribute minutes from Trustee meetings.
6.2Maintain Trust's web site.
6.3Maintain all files and official documents relating to the Trust, including but not limited to, Trust agreement, contracts, correspondence, Internal Revenue Service filings and other governmental filings.
6.4Make available all information and data necessary for the Trust's independent auditor and co-consultants to complete the annual audit and actuarial valuations, if required.
6.5Make available all information and data necessary for the Internal Revenue Service other governmental agency with oversight authority.
6.6Accept responsibility for performance of all administrative functions in accordance with written Trust provisions, applicable government regulations and written Trustee policies.
6.7Maintain internal control procedures to prevent benefit payment errors from Trust, fraud, embezzlement, and disclosure of personal information or other fiduciary breaches. Document and report all breaches and internal errorsto the Trustees and the Trust's attorney.
6.8Timely submit invoices to the Trust for reimbursement of Trust expenses paid by DPS.
7.Performance Standards.
7.1DPS acknowledges and agrees that to the extent it is a fiduciary with regard to the services it provides to the Trust and will comply with applicable fiduciary standards.
7.2DPS will maintain internal standards to perform services in a manner consistent with federal, state and other applicable laws. All breaches of these laws will be immediately disclosed to the Trustees and to the Trust'sattorney.
7.3DPS shall assemble and maintain a Trust Crisis Recovery Plan ("TCRP") that will assure the Trustees the administration of the Trust will suffer only a minimal disruption in the event of fire, natural or other disaster. The TCRP must specify how data and records are securely stored and recovered to continue business operations in the event of a disaster and specify how data integrity and confidentiality will be ensured.
7.4DPS shall comply with all applicable laws governing its services under this Agreement, including appropriate licensing, if required. DPS shall furnish evidence of appropriate licensing to Trust at the Trustees' request.
8.Authority of DPS. DPS acknowledges and agrees that it shall perform services in accordance with this Agreement and the direction of the Trustees.
9.Bond and Insurance.
9.1DPS shall obtain and maintain a fidelity bond with regard to services to the Trust under this Agreement. DPS shall provide the Trustees with satisfactory evidence of the fidelity bond.
9.2DPS shall obtain and maintain liability insurance and professional errors and omissions insurance of at least $2million, or at some other minimum level specified by the Trustees. DPS shall provide the Trustees with satisfactory evidence of coverage.
10.Records and Documents.
10.1All information, records and all other data which may be received by the Trust are to be considered confidential records of the Trust and no information from records shall be divulged by DPS or its employees unless required for services under this Agreement, required by law or authorized by the Trustees in advance of such disclosure.
10.2All files, worksheets, books, claims, documentation, forms, lists or names, investment reports, journals, ledgers, correspondence, material and all other recorded information and documents, including magnetic and electronic records, pertaining to the Trust or used for the administration of the Trust by DPS, its agents or employees are the property of the Trust. This does not include computer hardware and software unless it is purchased by the Trust. Upon request, the Trustees are entitled to receive all and any original records or, at the Trustees’ discretion, a copy of Trust records. DPS shall be afforded reasonable time to gather and furnish requested records.
10.3DPS shall furnish and otherwise make available any records for the Trust's independent auditor, governmental agency or Trustee representative at any time specified by the Trustees.
10.4DPS shall take reasonable and prudent steps to ensure the confidentiality of Trust information, including but not limited to restricting access to data to those staff members who need access in the performance of their duties and protection against unauthorized access to computer systems.
10.5DPS shall maintain internal standards to perform services in a manner consistent with federal, state and other applicable laws. All breaches of these laws will be immediately disclosed to the Trustees and Trust's counsel.
10.6The Trust owns all records, whether paper, electronic, magnetic or any other form. If the Trust'sadministrative relationship with the DPS terminates, DPS will supply the Trust with all records within a reasonable period of time and in a format acceptable to the Trustees.
11.Audits. The Trust (or its designated employees, agents or representatives) shall have the right to audit the books and records of DPS that pertain to the services provided to the Trust and paid by DPS for the Trust under this Agreement for the purpose of monitoring compliance with this Agreement. The Trust also may conduct such an audit subsequent to the termination or expiration of this Agreement.
12.Compliance with Applicable Laws. DPS represents and warrants that it will operate its business and perform its obligations relating to this Agreement in compliance with all applicable federal, stateand other laws, rules, regulations and governmental orders, and is currently in compliance therewith, including, but not all applicable federal and state labor and employment laws, rules, regulations and government orders.
13.Fees.
13.1The Trustees will cause the Trust to reimburse DPS for its services under this Agreement upon receipt of a monthly statement of costs (with itemized invoices for actual costs incurred for services covered in this Agreement) provided to the Trustees. Reimbursements shall be made to DPS no later than 45days after the end of each month for which a statement is provided.
13.2DPS agrees that the only compensation received by or on behalf of DPS for the administration of the Trust is the reimbursementpaid by the Trust. DPS will not accept any fees, commissions or other forms of compensation from any party related to the Trust for any work or business related to the Trust.
14.Notices. Any notice or other communication required or desired to be given to any party under this Agreement shall be in writing and shall be deemed given to such party when delivered personally or when deposited in the United States mails (first class, postage prepaid, and addressed to that party's address specified below). The address of either party hereto may be changed by similar written notice.
Address for notices:
If to DPS:
Superintendent, Denver Public Schools
900 Grant Street
Denver, CO 80203
If to Trust:
Chair, Board of Trustees of the Denver Public Schools ProComp Trust
900 Grant Street
Denver, CO 80203
and
Mary A. Brauer Esq.
Counsel to Denver Public Schools ProComp Trust
Reinhart Boerner Van Deuren P.C.
8400 E. Prentice Avenue, Penthouse
Greenwood Village, CO 80111
15.Miscellaneous.
15.1Entire Agreement. This Agreement, including any attachments or exhibits hereto, contains the entire agreement between DPS and the Trust with respect to the specific subject matter hereof. Any prior agreements, promises, negotiations or representations, either verbal or written, relating to the subject matter of this Agreement and not expressly set forth in this Agreement are of no force or effect. This Agreement may only be modified by a writing executed by authorized representatives of both DPS and Trust. A facsimile or other reproductive type copy of this Agreement, so long as signed by both parties, will be considered an original and will be fully enforceable against both parties.
15.2No Third-Party Beneficiaries. This Agreement is entered into by and between the parties hereto solely for their benefit. Nothing in this Agreement, express or implied, is intended to confer upon any other entity or person (including, without limitation, any person receiving or eligible to receive Trust benefits) any rights or remedies under or by reason of this Agreement.
15.3Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original and such counterparts shall constitute one and the same instrument.
15.4Governing Law. This Agreement is subject to and shall be governed by the laws of the United States and the State of Colorado, without regard to principles of conflict or choice of law, to the extent not preempted by federal law.
15.5Severability. If any provision of this Agreement is declared illegal, void or unenforceable, the remaining provisions shall remain in force and effect, unless the severance of that provision substantially deprives a party of the benefit of its bargain or increases the cost of performing its duties pursuant to this Agreement.
15.6Survival. The rights and obligations of the parties as set forth herein shall survive the termination of this Agreement to the extent necessary to effectuate the intent of the parties as expressed herein.
15.7Force Majeure. The obligations of either DPS or Trust under this Agreement will be suspended during the continuance of any force majeure applicable to that party. The term “force majeure” will mean any cause not reasonably within the control of the party claiming suspension, such as acts of God or public enemy, fires, flood, storms, earthquakes, riots, strikes, boycotts, lockouts, wars and war operations, restraints of government, powers or communication line failure. The party claiming suspension under this Section 16.7 will take reasonable steps to resume performance as soon as possible without incurring unreasonably excessive costs.