08-13-1991
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CITY OF EDGEWATER
POLICE PENSION BOARD MEETING
Tuesday, August 13, 1991
7:00 P.M.
SQUAD ROOM, POLICE DEPARTMENT
A meeting of the Board of Trustees of the City of Edgewater
Police Retirement Board was called to order by Chairperson
Ruth Garvey at 7:00 P.M., in the Squad Room of the Edgewater
Police Department.
ROLL CALL:
Members present were Larry Westfall, Ruth O'Rourke and Ruth
Garvey. Member Kenneth Smith was excused and Member William
Bennett was not present. Also present was Christi Watkins,
Secretary, and Jack Ascherl, Agent of Record for the City of
Edgewater.
APPROVAL OF MINUTES:
Ruth Garvey asked that the Minutes of the June 18, 1991,
reflecting NEW BUSINESS be corrected. The Minutes read,
"She suggested 2 - 3% a year," regarding C.O.L.A. 's. Ms.
Garvey stated that she did not speak that figure. She asked
that the Minutes be amended to reflect such. A motion, to
amend the Minutes to correct her statement, was made by
Larry Westfall and seconded by Ruth O'Rourke. Motion
carried 3-0. A motion was then made by Larry Westfall to
approve the amended Minutes and was seconded by Ruth
O'Rourke. Motion carried 3-0.
A motion was then made by Larry Westfall, seconded by Ruth
O'Rourke to not accept the Minutes of March 19, 1991.
Motion carried 3-0.
OLD BUSINESS:
Jack Ascherl led the Board in a discussion of differences in
the Police Pension and General Employees Pensions. Ascherl
told the Pension Board Members that, when the pensions were
first established, retirement for police officers was five
year earlier than General Employees and that, for all
intents and purposes, that was the only difference in the
two Plans. The vesting was later changed from 10 years to
five years in both Plans. He continued that about a year-
and-a-half or two years ago, the General Employees went to
a 30 year and out Plan. He said the police could have made
the same change at that time but chose to postpone it for
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further discussion. Mr. Ascherl stated that the change has
since been made. He stated both Plans changed compensation
to be all of a participating Member's income. The only
thing he could remember being different at this time is that
the General Employees asked what it would cost to provide a
cost of living Plan. He said that he now had those figures
but the General Employees have not had a meeting to discuss
the cost. He stated that the funding of the Plans was
different, in that, the General Employees do not have any
way to get state help in the funding of their Plan; the city
must fund all of their Plan. Ascherl stated that the cost
of funding the General Employees Plan this current year was
$203,000.00. The police Plan is funded through money
collected from insurance policies, and that money comes back
to the city, and member contribution of 1% by state mandate.
The city is then responsible to make up the difference in
the cost of the Plan. He told the Board Members that under
state law they are responsible for investments and deciding
who is able to collect benefits. Ascherl said the city has
chosen to appoint a Board to review the Plan and that both
Boards make recommendations to the city on what changes
should be made to the Plan(s).
Mr. Ascherl said that the police Board has taken a "quality,
blue chip kind of approach" in investing the pension money.
He said the Board has chosen, so far, to take the General
Investment Account, which is a good, conservative thing that
grows every year and doesn't go down with the market.
Ascherl said the General Investment Fund is all bonds and
mortgages. He said the Board does have the availability of
investing in Principal Mutual's stock account, real estate
account, etc. Mr. Ascherl did say that for the "long haul"
stocks out perform most any other investment. He said the
problem was that they go up and down in the mean time and
there will be years when there is a loss of money. He said
that if the value goes down, somebody would have to come up
with the money to fill the hole. He said that the city
could come in with the funding at that time. Mr. Ascherl
said that Principal Mutual, a few years ago, gave a "whole
pie" overview of diversification for the police pension Plan
with recommendations for a long-term philosophy of the Plan.
Ascherl said at that time the committee chose to stay with
the more conservative route. He said that the last time
Principal Mutual provided that service it was at no cost,
but he now thought they were charging a small fee. Mr.
Ascherl said that the fee would come out of the pension fund
as would the cost of an independent audit of the fund and
any fees for Members to attend seminars pertaining to the
pension and the governing thereof.
Mr. Ascherl said that the General Employees changed their
investment strategy by going 50% into the U.S. Stock Account
and 50% into the Index Stock Account. He said he was not
aware that the city was about to put in $203,000.00 into the
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Plan; the annual contribution. He said, "Barn. They just
dumped it in there. And, uh, so that money went into the
stock market." Ascherl said that they now have about 20% of
their money in the stock market now, which is about
$250,000.00.
Larry Westfall discussed some proposed changes to the Plan
that Jack Ascherl will forward to Principal Mutual.
Larry Westfall told the Members about the conference he
attended in St. Petersburg. He said he taped every speaker
and the tapes were available to those Members interested in
listening to them. Westfall said the conference was
informative and urged all Board Members to consider
attending future conferences.
Pending
In the matter of W-2 wages, Larry Westfall asked that a
determination be made of ,,,hat exactly is "total pay".
NEW BUSINESS:
Larry Westfall asked that the correspondence from Theresa
Littlefield be sent to Sondra pengov, so that she may
correct the Minutes of March 19, 1991, and re-submit the
Minutes for the Board's approval.
Westfall said Ms. Littlefield requested that the Board send
Principal Mutual a release giving Portfolio Management
information that she, through the Florida Municipal Index,
could use to see how this pension ranks. This is for the
purpose of determining how our funds and the operation of
our funds compare to those statewide.
Mr. Ascherl asked Westfall what information he was trying to
obtain. Westfall replied that they were trying to determine
how these funds, and the operation of, compare to that of
others statewide. Mr. Ascherl asked how Westfall came into
contact with Portfolio Management. Westfall told Ascherl
that Mr. Borzner, of the previous Board, had given the
information to Westfall. Westfall also stated that Borzner,
by motion, had requested information be gotten from
Portfolio Management. Mr. Ascherl said he was unfamiliar
with this organization but he would "inquire as to them"
himself. Mr. Ascherl stated that the League of Cities may
have a general feeling as to how other Plans are structured,
but they probably would not be able to supply any
statistical data. Westfall said he was aware that the
League of Cities had their own lobbying group. He said if
there were benefits in place in this Plan, and if the city
was putting money in to fund additional benefits, this
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meeting would have been over a long time ago. Mr. Ascherl
said that Plans always want more benefits and all Plans will
always continue growing.
Mr. Ascherl said he thought the Board had some good ideas on
some changes in the Plan and he was anxious to get a cost
estimate on what they would be. He also explained that his
role was not to sell the Board anything; it is to help the
Board with the Plan by giving them ideas on where to invest
and to work with them to make good decisions on what the
Board does and to work with the city on the recommended
changes. He said he shouldn't be here if he is here to sell
the Board things.
Mr. Ascherl then discussed the quarterly actuarial report
with the Members. Mr. Ascherl said he thought that by state
law, 30% of the money in the Plan could be put in the
market. He said that Principal Mutual does not charge the
Plan to move money within the different accounts. He
told the Board that he thought it would be a good idea to
put money into the stock market account; to see how they
feel about it. Mr. Ascherl explained "market value" and
"book value" to the Board. Larry Westfall thanked Mr.
Ascherl for attending the meeting. Westfall then asked Mr.
Ascherl when they could discuss diversifying into the stock
market. Ascherl said the Plan had about $10,000.00 in roll
over money that could be put in stocks at this time, if that
is what the Board chose to do. Westfall asked if there
would be any discussion on turning the $10,000.00 rollover
money into the stock market account. The Members decided to
wait until there was a full Board to make a money management
decision.
ADJOURNMENT:
Motion made by Larry Westfall to adjourn the meeting and it
was seconded by Ruth O'Rourke. Meeting adjourned at 9:40
P.M.
Minutes respectfully submitted by,
Christi R. Watkins