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09-19-2011 Police Pension Board of Trustees Minutes - Quarterly Meeting September 19, 2011 Page 1 of 4 CITY OF EDGEWATER POLICE OFFICERS' PENSION BOARD OF TRUSTEES QUARTERLY MEETING MINUTES Monday, September 19, 2011 CALL TO ORDER/ ROLL CALL/DETERMINATION OF A QUORUM The Edgewater Police Officers' Pension Board held its quarterly meeting on Monday, September 19, 2011 in the City Hall Conference Room at the City of Edgewater, Florida. Members Present: Ferd Heeb Gary Conroy Vincent McCauley Members Absent: Chad Anderson Lawrence Leaf Plan Attorney: H. Lee Dehner Plan Administrator: Sheila Hutcheson Consultant: Jack Evatt, The Bogdahn Group City Staff: Julie Christine, Personnel Department Tracey Barlow, City Manager Secretary Conroy called the meeting to order at 1:30 p.m. There was a quorum with three members present. The Board welcomed new Trustee Chad Anderson. Election of Officers Member Heeb nominated Gary Conroy for Chairman and Chad Anderson for Secretary; Member McCauley seconded the motion, which passed unanimously on a roll call vote. APPROVAL OF MINUTES - Quarterly Meeting - June 13, 2011; Special Meeting - June 13, 2011; Special Meeting - August 1, 2011 Member Heeb made a motion to approve the minutes of the June 13, 2011 quarterly and joint special meetings and the August 1, 2011 joint special meeting; Member McCauley seconded the motion, which passed unanimously on a roll call vote.. NEW BUSINESS Foster & Foster - consideration of fee increase The Administrator reviewed the letter from Foster & Foster, which outlined certain fee increases that would affect the Plan, including the requirement for an additional calculation for the assumed return at the FRS rate of 7.75 %. Member Heeb made a motion to approve the Foster & Foster fee increase and to authorize the Attorney to prepare an addendum to the contract for execution by the Chairman /Secretary; Member McCauley seconded the motion, which passed unanimously. Police Pension Board of Trustees Minutes - Quarterly Meeting September 19, 2011 Page 2 of 4 Request for valuation and funding information from Foster & Foster to Finance Director and Personnel Director The Administrator had provided an email regarding the City's request that the Actuary be authorized to provide the Finance Director and Personnel Director information on the valuation and funding requirements when needed. It was the Board's consensus to approve the request. OLD BUSINESS Discussion /Action: Draft Amendments to the Education section of the Personnel Policy; presentation of proposed policy (Member Conroy) Member Heeb asked Attorney Dehner what the training requirement is; the Attorney stated that it is that each trustee must attend training at lease one time during each term. He asked Member Conroy why his proposed policy indicates training one time per year instead of one time each term; Member Conroy said that he has learned a great deal at the various schools /conferences he has attended and that has resulted in the hire of various consultants that have greatly helped the Board /Plan. He further pointed out that he and former Trustee Blazi had met the Milberg Firm at an FPPTA event and their services, at no cost, have provided a great deal of assistance to the Board/Plan. Member Heeb said he thinks the Board should follow the City's policy. It was the Board's consensus to defer this item to the December 12, 2011 quarterly meeting when more Trustees are present. The Administrator asked the Trustees to keep their copies of the policies so that they would not have to be copied again. Consideration of budget for administrative expenses for FY11 /12 Member Heeb had prepared a budget guideline for consideration by the Board, which he reviewed. He stated that the education/training cost is the issue to discuss. The two new Trustees need to attend some training. Christiansen & Dehner and The Bogdahn Group will try to coordinate another training session that would not incur much cost (the cost for this session has generally been about $200 /attendee)/ Member Heeb made a motion to adopt the proposed budget; Member McCauley seconded the motion. Under discussion, Chairman Conroy said he would prefer to defer this item to the next meeting to further discuss. Members McCauley and Heeb voted in favor; Chairman Conroy voted against the motion. The motion did not pass as there were not three affirmative votes. The Chairman said this will be discussed at the next meeting. REPORTS (ATTORNEY /CONSULTANTS) The Bogdahn Group, Performance Consultant - Quarterly report - June 30, 2011 Jack Evatt opened by discussing the market environment for the second quarter, as outlined in the report he distributed to the Board. He then discussed the performance for the quarter: 1.29 %, and 9.88% for the fiscal year -to -date, which outperformed the index. The longer -term returns have not performed as well compared to the indices. The mid -cap segment has been very strong. The fund's assets were $7,908,559 as of June 30, 2011, compared to $7,809,766 as of March 31, 2011. Mr. Evatt discussed the various investment options in the plan and noted that Principal's performance has improved. Member Heeb said he does want The Bogdahn Group to monitor the investment managers that Principal has on their watch/probation list, and, depending upon the time frame for the separation from Principal, the Board may need to consider manager changes within the Principal group. Member Police Pension Board of Trustees Minutes - Quarterly Meeting September 19, 2011 Page 3 of 4 Heeb said he also wants a review of the performance of the managers that the Board retained in 2009 before the Plan funds the investments after the Principal contact is ended. It was also noted that the Attorney will have to prepare new ordinance once the Plan is separated from Principal, which will affect the proposed budget for the Board's administrative costs /budget. Review of 2009 IPS Mr. Evatt suggested the review of the IPS be deferred until closer to the time of the actual separation from Principal. The Board concurred. H. Lee Dehner, Plan Attorney Legislative update Attorney Dehner opened his report by noting that the recent statutory changes will affect the Plan upon the execution of the next labor contract after the current contract expires (on September 30, 2012). He discussed the 300 hour /year overtime limitation as to the definition of the twelve -month period to be used. The Administrator had recommended that the fiscal year be the basis, as this is the basis for budgeting wages and how the Actuary values the Plan. Mr. Dehner also reviewed the logistics of the payment of the leave balances that will be pensionable, some of which is still under discussion by the State and the Attorneys. Member contributions can be increased without an accompanying increase in benefits. There is also a requirement that the Actuary has to include a report in the next valuation as to the cost of each Plan if the assumed return was 7.75 %. There will be a committee appointed to study the financial status of plans and a commission to study in line of duty disability provisions. There will be more proposals filed in the next legislative session. The federal HELP's legislation will not be considered in the next session; this would have removed the direct transfer of funds provision. The Chairman asked about disability retirees becoming normal retirements upon reaching their normal retirement date. The Administrator said it was her recollection that this was addressed in the 2008 plan restatement to specify that the disability retirement did not end upon attaining normal retirement age. The Attorney will check on this. Sheila Hutcheson, Plan Administrator Ms. Hutcheson advised that the City Finance Director is in the process of the pension fiduciary insurance renewal for October 1, 2011, and the premium payment will be reported at the next quarterly meeting. PROCESSED DISBURSEMENTS/RETURN OF CONTRIBUTIONS and DEPOSITS • DISBURSEMENTS 1. Christiansen & Dehner, professional legal fees - $292.50, $1,495.86 2. Sheila Hutcheson, plan administration fees, $3,300.00; special meeting fee (Board's share, 6/13/11) - $200.00; mileage expense - $10.50 3. The Bogdahn Group, performance consultant fees, 2 quarter, 2011 - $3,625.00 4. Foster & Foster, actuarial services - $415.00 5. Dan Blazi, commencement of retirement as of August 1, 2011 (joint and 100% survivor option) and distribution of DROP account • DEPOSITS 2010 Premium Tax Distribution - $125,638.65 (2009 amount - $125,155.52) Member Heeb made a motion to approve the processed disbursements /return of contributions and deposits; Member McCauley seconded the motion, which passed unanimously, upon a roll call vote. Police Pension Board of Trustees Minutes - Quarterly Meeting September 19, 2011 Page 4 of 4 STAFF REPORTS, DISCUSSION, and ACTION/TRUSTEES' REPORTS, DISCUSSION and ACTION; REQUESTS FROM THE PUBLIC/EMPLOYEES PRESENT Member Conroy asked for a recap of the joint meeting held earlier in the day, which the Attorney provided. Mr. Evatt asked if the Board would prefer to receive their quarterly reports electronically; the Board wants to continue to receive paper copies of the reports. ADJOURNMENT The Chairman adjourned the meeting at 3:05 p.m. Respectfully Submitted: Approved: A A P L- ' 2 a Sheila Hutcheson C irm. n Plan Administrator