01-07-2013 - Special Joint with General & Police Pension Boards JO/
CITY COUNCIL OF EDGEWATER
SPECIAL MEETING
JANUARY 7, 2013
6:00 P.M.
COUNCIL CHAMBERS
MINUTES
Special Meeting between the City Council, General Employee Pension
Board and Police Pension Board
1. CALL TO ORDER, ROLL CALL, PLEDGE OF ALLEGIANCE, INVOCATION
Mayor Thomas called the Special Meeting to order at 1 : 01 p.m. in the
Council Chambers .
There was a silent invocation and pledge of allegiance to the Flag.
Present Mayor Michael Thomas
Councilwoman Christine Power
Councilwoman Gigi Bennington
Councilman Michael Ignasiak
Councilman Gene Emter
City Manager Tracey Barlow
City Attorney Aaron Wolfe
City Clerk Bonnie Wenzel
General Employees Pension Board
Tyna Hilton
John McKinney
Tim Sopko
John Brackin
Brenda Dewees
Bobby Laramore
Police Pension Board
Ferd Heeb
Lawrence Leaf
James Morey
John Tarr
Absent Dave Arcieri
Also present were Donna Looney; Julie Christine; H. Lee Dehner,
Christiansen & Dehner, P.A. , Plan Attorney; Brad Heinrichs, Foster &
Foster; Roland Riggs, Milberg Weiss law firm (via phone) , Jack
Ascherl, Principal (via phone) .
2. Consideration of settlement agreements and termination of
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Council Special Meeting
January 7, 2013
contracts with Principal regarding the General Employees ' and
Police Officers ' Pension Plans.
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Police
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General
City Manager Barlow made a staff presentation. At the conclusion of
this he was looking for direction or a decision made by the trustees
of the General Employee Pension as well as the Police Pension to
consider a vote to go to the next step to get those estimates on the
actuarial .
Lee Dehner, Christiansen & Dehner, P.A. , Plan Attorney, spoke of
working diligently to try and extricate themselves from a Principal
contract that was entered into years ago. They have negotiated an
agreement in conjunction with the Milberg Weiss law firm whereby they
would purchase annuities for the existing current retirees and the
remaining assets would be transferred to the Police Pension Fund and
General Employee Pension Fund for administration by the pension
boards . He then described the provisions of the settlement agreement,
the procedure and the purpose of the meeting.
Roland Riggs, Milberg Weiss law firm, described the process they went
through as it related to the negotiations with Principal .
Mr. Dehner further described this would enable them to contract with
third parties directly for the services that have been provided by
Principal under the service agreement the City has had for many years
which included investment consulting, money management, custody and a
more hands on and direct relationship.
Mr. Dehner answered questions presented by Councilwoman Bennington.
Brad Heinrichs, Foster & Foster, described what happened with
Principal and the arrangement the City entered into with them as it
related to the benefit index and the annuity contract. He also
commented on the tentative agreement they have come to.
Mr. Heinrichs further described the process at this point. Council
and each board would vote to terminate Principal . Within three days
Principal would give them the market values of the annuities for
handling all of the retirees . They have three days to accept or
reject. He further commented on what he believed fair market value
was.
Mr. Heinrichs answered questions presented by Councilwoman Power.
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Council Special Meeting
January 7, 2013
Mr. Dehner identified they did try to negotiate termination whereby
Principal would transfer to the City all of their assets and the City
would assume all of the liabilities associated with current retirees .
They went to the next best option which was purchasing annuities
rather than having to pay from the benefit index.
Mr. Heinrichs answered questions presented by Councilman Ignasiak.
City Manager Barlow further identified there were 16 benefit index
employees left in the General Fund, 6 left in the Police Department
and the remainder of those that are not part of the benefit index
product, those assets would go to a new custodian which would manage
their benefits .
City Manager Barlow then questioned an employee and beneficiary that
they have purchased an annuity for passing on and where the remainders
of those assets for that one particular annuity go. Mr. Heinrichs
informed him into the pockets of the Principal Group.
City Manager Barlow and Mr. Heinrichs then answered questions
presented by Mayor Thomas .
Mr. Heinrichs and Mr. Dehner then answered questions presented by
Councilwoman Bennington and Ferd Heeb, Police Pension Board member.
City Clerk Wenzel asked that whoever makes the motion that they speak
into the microphone so they have it clearly for the record.
Councilwoman Gigi Bennington moved to approve accepting the agreement
from Principal for the General Pension Board and Police Pension Board,
second by Councilman Gene Emter.
The MOTION CARRIED 5-0-0.
Yes Mayor Michael Thomas, Councilwoman Christine Power,
Councilwoman Gigi Bennington, Councilman Michael Ignasiak,
Councilman Gene Emter
No None
Abstain None
Brenda Dewees moved to approve accepting the settlement agreement as
outlined for the General Employees Pension Board terminating
Principal, second by John Brackin.
The MOTION CARRIED 7-0-0.
Yes Councilwoman Gigi Bennington, Brenda Dewees, Tim Sopko, John
Brackin, John McKinney, Tyna Hilton, Bobby Laramore
No None
Abstain None
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Council Special Meeting
January 7, 2013
Ferd Heeb moved to approve the Police Pension Board accepting the
settlement agreement and termination contract with Principal, second
by Lawrence Leaf.
The MOTION CARRIED 4-0-0.
Yes Ferd Heeb, Lawrence Leaf, James Morey, John Tarr
No None
Abstain None
City Manager Barlow informed everyone the next meeting was scheduled
for next Tuesday, January 15th at 1 : 00 p.m. in the Council Chambers .
He requested Mr. Heinrichs get with Personnel Director Donna Looney
who would be receiving the information as stand in Board Coordinator
so they could expedite that for him to start his evaluation. He
expected to have the estimate for the annuities and Mr. Heinrich' s
evaluation report of those costs for the meeting on January 15th. The
purpose of the January 15th meeting was for motions to be made and
votes cast whether to go forward with the termination.
Councilman Emter asked if the meeting could be moved to earlier in the
day as he had to leave town on Wednesday. City Manager Barlow
identified they could not in the Council Chambers due to already
having a class scheduled until noon.
Mr. Dehner further described the process if this is approved at the
next meeting. City Manager Barlow identified they have already worked
with getting the appropriate documentation to Salem Trust to be able
to assume those and be able to distribute in February the first
monthly checks .
3. ADJOURNMENT
There being no further business to discuss, Mayor Thomas adjourned at
1: 46 p.m.
Minutes submitted by:
Lisa Bloomer, CMC
Attest: APPROVED:
City of Edg- .ater, F1► ' da
111
itS
Bonnie Wenzel, City Clerk M chael L. Thomas, Mayor
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Council Special Meeting
January 7, 2013