03-11-2019CITY OF EDGEWATER
POLICE OFFICERS' PENSION BOARD
QUARTERLY MEETING MINUTES
City Hall Council Chambers
Monday, March 11, 2019 at 1:30pm
TRUSTEES PRESENT: Lawrence Leaf
Alexander Penalta
Joe Mahoney
TRUSTEES ABSENT: Aaron Soltz
OTHERS PRESENT: Ken Harrison, Sugarman & Susskind
Michelle Rodriguez, Foster & Foster
Siera Feketa, Foster & Foster
Doug Lozen, Foster & Foster
John Thinnes, AndCo Consulting
Julie Christine, City of Edgewater
1. Call to Order -- Alexander Penalta called the meeting to order at 1:41 pm.
2. Roll Call — As reflected above.
3. Public Comment — Alexander Penalta thanked Joe Mahoney and the Edgewater
Police Department for saving a car crash victim from a burning car.
4. Approval of Minutes
The minutes from the December 11 2018quarterly meeting were approved, upon motion
by Lawrence Leaf and second bV Joe Mahone • motion carried 3-0.
5. New Business — None.
Old Business
a. Update on vacant council appointed trustee seat
i. Michelle Rodriguez asked the plan attorney if a council appointed trustee
could be a member of the plan. Ken Harrison commented that as long as
they were a resident of the City, they could serve as a trustee. Michelle
reviewed the process to apply for a board position and encouraged the
board to recommend anyone they thought might be interested.
7. Reports
a. AndCo Consulting, John Thinnes, Investment Consultant
i. Quarterly report as of December 31, 2018
1. John Thinnes commented the board would be sent a survey for
them to complete. AndCo would use the information to identify
areas of improvement.
2. John Thinnes commented that the fourth quarter was bad for
everybody, but the stock market was already experiencing a
recovery.
3. The market value of assets as of December 31, 2018, was
$9,468,171.
4. The quarter -to -date total fund gross performance was -7.94%,
slightly underperforming the policy benchmark of -7.49%. The 1,
3, and 5 -year trailing returns were -3.87%, 5.47%, and 4.82%
respectively. Since inception (1011100) the return was 4.69%,
slightly underperforming the benchmark of 4.80%.
John Thinnes commented that when accounting for cash flow,
the plan had almost reversed its losses.
John Thinnes gave a brief overview on how the trailing returns
would be impacted by the fourth quarter of 2018.
The board voted to accept the AndCo report as presented, upon motion by Lawrence Leaf
and second by Joe Mahoney; motion carried 3-0.
Foster & Foster, Doug Lozen, Plan Actuary
i. Actuarial Valuation
1. Doug Lozen reviewed the required City contributions and
explained the four-year smoothing methodology.
2. Doug Lozen commented there was a net loss, causing the City's
contributions to increase from 51.70% to 54.10% for fiscal year
ending September 30, 2020.
3. Doug advised the board the increases were in part due to more
retirements than expected and an investment return of 6.68%
which fell below the 7.50% assumed rate of return.
4. Doug Lozen commented 100% of State monies went to the
share plan and the State contribution was currently $0.00. Doug
commented the plan's funded status increased from 66.80% to
68.90%.
5. Doug Lozen advised the board an experience study should be
done in 2020.
The board approved the October 1 2018, Actuarial Valuation Report as
resented upon motion by Joe Mahoney and second bV Lawrence Leaf;
motion carried 3-0.
The board voted the declaration of returns for the plan shall be 7.50% for the
next Vear, the next several years, and the long-term thereafter, net of
investment related expenses, upon motion by Joe Mahoney and second b
Lawrence Leaf; motion carried 3-0.
185 Share Plan discussion
I. Joe Mahoney discussed some of the concerns members had
with the current language of how and when the monies were
allocated from the share plan.
2. Doug Lozen explained the language of the Ordinance and how
the share plan funds were currently being calculated.
3. Ken Harrison reviewed the State requirement to have the defined
benefit contribution plan and the discussions that occurred
during the establishment of the share plan.
4. Ken Harrison gave a brief overview of the distribution rules for
the 185 Share Plan.
5. Doug Lozen reviewed the definition of an eligible police officer
under the 185 Share Plan Policy.
6. Ken Harrison advised the board the Ordinance stated a member
was not eligible until their fifth year. Doug Lozen commented that
beginning eligibility on year five was better for accounting
purposes because it did not involve forfeitures if a member
terminated employment before they had five years of service.
7. The board discussed how their share plan was currently being
allocated and compared other plan's methodology for allocating
share plan monies.
8. Ken Harrison advised the board he would modify the
supplemental share plan administrative policy to reflect
allocations beginning on year five and being based on years of
2
service. Ken commented he would present the updated policy at
the next meeting.
9. Doug Lozen commented there would be no changes for fiscal
year 2017, however fiscal year 2018 would be calculated based
on seniority and would begin in the fiscal year in which the
member attains five years of service. Doug explained there
would be forfeitures for those members who have had funds
allocated to them prior to their eligibility date of five years.
c. Sugarman & Susskind, Ken Harrison, Plan Attorney
i. Share Plan distribution clarification
1. Ken Harrison advised the board that currently the Ordinance only
allows for distributions to be done via rollover and he has added
language that includes the option of direct payment of share plan
funds to the member.
The board approved the proposed Ordinance amendment as presented, upon motion by
Joe Mahoney and second by Lawrence Leaf; motion carried 3-0
ii. Legislative update
1. Ken Harrison gave a brief overview of the public records bill and
commented most of the changes would impact the Florida
Retirement System (FRS).
2. Ken Harrison commented that FRS was considering closing
down it's Defined Benefit plan and only offer members a Defined
Contribution plan.
3. Ken Harrison advised the board the special tax notice was going
to be updated and he would send it to the administrator.
iii. Disability Recertifications
1. Michelle Rodriguez reviewed the current disability recertification
language in the Ordinance and the list of affected disability
retirees.
2. Michelle Rodriguez requested direction from the board as to how
they would like Foster & Foster to administer disability
recertifications. The board discussed the definition and types of
disabilities.
3. The board agreed by consensus that the Administrator should
only recertify disability retirees as requested by the board.
8. Consent Agenda
a. Payment Ratification
i. Warrant #58, #57 and #58
b. Fund activity report for December 5, 2018 through March 04, 2019.
The board voted to approve the consent agenda as presented, upon motion by Joe
MahoneV and second by Lawrence Leaf• motion carried 3-0.
9. Staff Reports, Discussion, and Action
a. Foster & Foster, Michelle Rodriguez, Plan Administrator
i. FPPTA guest registration policy
1. Michelle Rodriguez reviewed the revised guest fee policy and
Ken Harrison advised the board that the plan could not pay any
guest fees.
ii. Update on State Annual Report
1. Michelle Rodriguez updated the board on the progress of the
State Annual Report.
iii. Upcoming educational opportunities
1. Michelle Rodriguez reviewed upcoming educational opportunities
for the board.
10. Trustee Reports, Discussion and Action — None.
3
11. Adiournment — The meeting adjourned at 3:20pm.
12. Next Meeting — Monday, June 10, 2019, at 1:30pm.
Respectfully submitted by: Approved by.-
Michelle
y:Michelle Rodriguez, Plan Admini rato Alexander Penal , hairman
Date Approved by the Pension Board: _ 6 //'1� Xf