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07-08-2010 - Joint Special General Employees' and Police Pension Boards of Trustees Minutes - Joint Special Meeting July 8, 2010 Page 1 of3 CITY OF EDGEW A TER GENERAL EMPLOYEES' & POLICE OFFICERS' PENSION BOARDS OF TRUSTEES SPECIAL MEETING MINUTES Thursday, July 8, 2010 CALL TO ORDER! ROLL CALL/DETERMINA TION OF A QUORUM The Edgewater General Employees' and Police Officers' Pension Boards held a special meeting on Thursday, July 8, 2010 in the City Hall Council Chamber at the City of Edgewater, Florida. Members Present (General): Bobby Laramore Tyna Hilton Brenda Dewees John Brackin Gigi Bennington Tim Sopko John McKinney Dan Blazi Gary Conroy Lawrence Leaf Ferd Heeb Kevin Seymour H. Lee Dehner Andrei Rado Roland Riggs Anita Kartalopoulos Ariana Tadler Aaron Wolfe Jack Evatt, The Bogdahn Group Sheila Hutcheson Julie Christine, Personnel Department Donna Looney, Personnel Director Tracey Barlow, City Manager Members Absent (General): Members Present (police): Members Absent (police): Plan Attorney: Milberg Attorneys (via telephone): City Attorney: Performance Consultant: Plan Administrator: City Staff: The special meeting of the General Employees' and Police Officers' Boards of Trustees was called to order at 10:02 a.m. by Chairman Bennington and Chairman Blazi. Both Boards had a quorum. Discussion: Consideration of action with respect to the Principal contracts (based on outcome of Attorneys' teleconference on June 22, 2010) Attorney Lee Dehner and Administrator Sheila Hutcheson opened the meeting with a summary of the recent teleconference with Principal's attorneys that resulted in Principal stating that they would not agree to the Boards' position/requests. Mr. Dehner then recounted his (and Milberg's) various conversations with Principal's in-house attorneys and their litigation attorneys. Principal's position is that any termination would have to be pursuant to the contracts and that a lawsuit by the Boards would be the resolution if the Boards disagree with Principal's position. Chairman Blazi asked about the dollar amounts of the benefit index retirees in Haines City and Auburndale, plans which Principal had agreed to terminate in the manner proposed by Attorney Dehner; the amounts were about the same as General Employees' and Police Pension Boards of Trustees Minutes - Joint Special Meeting July 8, 2010 Page 2 of3 in the Edgewater plans. Chairman Blazi also asked when the Boards could meet in executive session regarding litigation and was told this could occur only after litigation has been filed. The Administrator stated the criteria for executive session meetings, which include the requirement for a court reporter for the record of the meeting, the cost of transcription, and that the transcript must be made public once the litigation is concluded. Ms. Hutcheson also discussed the impact of litigation on the City staff and noted that two firms had declined to take the case on a contingency basis due to the anticipated time frame, fees, and costs that would be incurred in relation to the possible recovery (costlbenefit analysis). Attorney Dehner said that the two firms had also concluded that it would not be cost effective for the Board to proceed on a basis of payment of incurred costs/fees. Discussion continued with Chairman Blazi reporting his conversations with Milberg at the recent FPPT A Conference during which the Milberg attorneys said they would conduct a review of the pension plans' records to ascertain the feasibility of litigation. This review would be at no cost, and would be followed by the presentation of a report to the Boards regarding the findings. Then the Boards would decide whether or not to proceed (assuming litigation was recommended). Member Conroy asked if the Boards should file complaints with the Florida and Iowa insurance commissioners and retain the public relations firm that he had presented information about at the June 7, 20 I 0 special meeting. Attorney Dehner said that these actions should not be taken until the report from Milberg was completed. If Milberg determines that litigation is not cost effective to file a lawsuit, then the Boards would proceed to terminate the contracts, with Principal retaining the benefit index monies. The Administrator said that the City would have to make all the records available for Milberg's review, and also expressed concern as to the continued underperformance by Principal throughout the period of litigation, if the contracts were continued during this process. Member Heeb asked if the contracts could be terminated prior to litigation in order to avoid the ongoing losses and Attorney Dehner said that the Boards could certainly terminate the contracts and still have a cause of action, but that Milberg would have to evaluate this approach. City Manager Barlow asked if there was any merit to having Attorney Dehner approach Principal one more time after Milberg's review is completed. Chairman Blazi said this had been discussed (while at the conference) and Milberg said that it would be appropriate once the review was concluded to present the findings to Principal to provide one last opportunity for settlement in lieu of litigation. Mr. Barlow said the City would be able to work with Milberg in the late September/early October time frame for the review of the records, due to staff limitations during the budget cycle. The Boards then placed the call to Milberg. Milberg Attorney Anita Kartalopoulos opened the discussion by saying the firm would send Attorney Roland Riggs for the on-site records review in order for the attorneys to make a determination of the feasibility of litigation and also to see if arbitration is required. Milberg would also meet with Foster and Foster to review the investments that may be in violation of Florida statutes and any other statutory issues that may exist. Attorney Kartalopoulos would also confer further with Attorney Dehner regarding his discussions with Principal. She continued by stating that compliance with Florida's records retention laws would have to be maintained. Attorney Riggs would also bring have an IT firm with him to review the records. Attorney Ariana Tadler discussed this aspect of the review. After the conclusion of the review (if litigation is recommended by Milberg and approved by the Boards), a retention agreement would be submitted for consideration. The City Manager advised that the staff would be available for the review in late September/early October, but Ms. Kartalopoulos said the review should be conducted sooner if possible. The City Manager advised that certain records are on-site and some are archived off-site in Orlando, Florida. Milberg said the firm could send one representative to work with the City Clerk's office to begin to review the records; the Administrator will coordinate a schedule between Milberg and City Clerk's office. Milberg suggested that it might expedite the process if they could accompany staff to the off-site storage; the City Manger said he would see if this could be accommodated. Attorney Kartalopoulos said she would advise the Administrator of some dates that General Employees' and Police Pension Boards of Trustees Minutes - Joint Special Meeting July 8, 2010 Page 3 of3 Milberg's team could conduct the review and Ms. Hutcheson said she would coordinate this with the City Manager to set up the schedule with the City Clerk's office. Attorney Andrei Rado asked about the benefit index option and how it was selected; i.e., whether it was by the Boards or by the individual plan members and was advised that the Boards made the decision. Chairman Blazi stated, however, that he thought there was a form that had several options for signature/choice by the employee upon separation as a retiree, including the benefit index. There was some discussion in this regard as to whether the options on the form related to the benefit index or to the retirement option selected (such as retiree's lifetime, survivor options, etc.). Mr. Blazi suggested checking former employees' retirement forms to see what was included. Personnel Director Donna Looney said she would check the files of the six benefit index Police retirees to see what forms they completed. Milberg then asked the number of benefit index retirees in the General Plan and Ms. Hutcheson said she would email this information. They also asked when the direct funding change occurred for both Plans and this would also be provided. At this point, the call with Milberg ended and Board discussion continued. Member Laramore said that he has some pension records; the City Manager and Attorney Dehner said that any records in the custody of trustees should be provided to the City Clerk. STAFF REPORTS, DISCUSSION, AND ACTIONITRUSTEES' REPORTS, DISCUSSION, AND ACTION/REQUESTS FROM THE PUBLICIEMPLOYEES PRESENT - None. ADJOURNMENT Police Member Conroy made a motion for adjournment, which was seconded by Member Leaf; the motion passed unanimously. The Police meeting adjourned at 11 :07 a.m. Chairman Bennington adjourned the General Employees' Board meeting at II :08 a.m. Respectfully Submitted: Approved: ~~ Sheila Hutcheson Plan Administrator Approved: