12-15-2014 CITY OF EDGEWATER GENERAL EMPLOYEES' PENSION
BOARD QUARTERLY MEETING MINUTES
City Hall Council Chambers
Monday, December 15, 2014 at 11:00AM
TRUSTEES PRESENT: Brenda Dewees
John Brackin
John McKinney
Tyna Hilton
Bobby Laramore
Tim Sopko
TRUSTEES ABSENT: Gigi Bennington
OTHERS PRESENT: H. Lee Dehner, Board Attorney
Ferrell Jenne, Plan Administrator
Jack Evatt, Investment Consultant
Mark Rhein, Salem Trust Company
Brian Bizzell, Salem Trust Company
Donna Looney, Personnel Director
1. Call to Order Brenda Dewees called the meeting to order at 11:08 AM.
2. Roll Call -As reflected above.
3. Public Comments— None.
4. Approval of Minutes
The minutes from the September 15, 2014 quarterly meeting were approved upon motion
by Bobby Laramore and seconded by Tyna Hilton, motion carried 6-0.
5. New Business
a. Certification of member election.
The Board certified the results of the member election upon motion by John McKinney and
second by Tim Sopko, motion carried 6-0.
b. Discussion of two Council appointed Trustees.
i. City clerk added the general employees' pension board to the new
applications. The current version did not have a place for someone to
apply for this Board.
ii. Board decided to table a recommendation to Council until the next Board
meeting.
iii. John Brackin stated that he does not want to serve another term.
iv. John McKinney recommended calling a special meeting to discuss and
review the applications.
c. Discussion of early implementation of GASB 68.
i. John McKinney stated that GASB 68 replaced GASB 27. Mr. McKinney
then recommended early implementation of GASB 68.
ii. Tyna Hilton asked what the costs are for early implementation. John
McKinney stated that all costs are reimbursed by the City dollar for dollar
by City contributions.
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The Board approved early implementation of GASB 68 upon motion by Tyna Hilton and
second by John Brackin, motion carried 6-0.
6. Old Business- None.
7. Reports
a. Salem Trust, Brian Bizzell and Mark Rhein
i. Brian Bizzell briefly reviewed the company structure and their fiduciary
and custodial accomplishments.
ii. Mr. Bizzell described the services they provide to the Board and the
proposed fee schedule.
1. John McKinney requested that the fee guarantee will be effective
for 3 years instead of the 2 years stated on the fee proposal.
Mark Rhein commented that this is acceptable.
2. John McKinney stated that he would like a consolidated annual
statement for all three pension plans.
3. Jack Evatt asked about the disclaimer on the bottom of the
document stating that fees would be reevaluated in 2017. Lee
Dehner stated he would address this in the contract addendum.
4. Mark Rhein commented that if there is a material change in the
Plan, the contract will need to be revisited. Mr. Rhein stated that
a floor and ceiling can be established so the contract will not be
renegotiated every six months to a year.
5. Jack Evatt recommended as an alternative to the ceiling/floor
contract, to request Salem Trust to also show an all inclusive fee
as an alternative to the proposed fee schedule.
6. Mark Rhein stated that on smaller plans with not much activity,
they have proposed an all inclusive fee.
7. Brenda Dewees asked what stipulates a "substantial change in
the Plan" as stated in the fee proposal.
a. Mark Rhein stated that this would be addressed in the
new schedule which would include a ceiling/floor.
8. Lee Dehner recommended Jack Evatt to do an analysis and
come back with recommendations.
a. John McKinney asked what the cost will be for Jack to
run the analysis. Mr. Evatt stated that there would be no
cost to perform the analysis.
9. Brenda Dewees commented that she would like to see an all
inclusive fee as well as an ala carte fee schedule.
10. Jack Evatt commented that he would like to see a fee schedule
based on basis points.
11. Board decided that they would like an analysis done by Jack
Evatt and a revised fee schedule to show a ceiling/floor.
b. The Bogdahn Group, Jack Evatt
i. Quarterly update as of September 30, 2014.
1. The quarter started at approximately 12.91VI and ended at
approximately 12.5M. Mr. Evatt stated that it was a tough quarter
for active managers.
2. Net earnings for the quarter were -1.33%, underperforming the
policy benchmark of-0.70% by 0.63% points.
3. Since inception, the fund is at 4.67%, underperforming the policy
benchmark of 5.57% by 0.90% points.
4. The Plan's total fund gross performance of -1.29% for the
quarter ranked in the 63rd percentile of the public fund sample.
5. Fiscal year to date the Fund is at 9.13% (net) beating the
assumed rate of return.
6. Jack Evatt stated that they are watching Wells Fargo and they
are not happy with the negative impact it had on the Fund from a
fiscal year to date period. Mr. Evatt commented that it is not
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uncommon for them to have good and bad periods and still has
confidence in them.
7. Jack Evatt has no recommendations at this time.
c. Christiansen & Dehner, H. Lee Dehner
i. Legislative update
1. Lee Dehner discussed SB 534 with the Board.
a. Keith Brinkman stated that the State is only going to post
information that is required by the Statue. However, Mr.
Dehner reminded the Board that additional information
can be posted on the City's website.
2. Lee Dehner discussed SB 1128 with the Board.
a. Puts a 300 hour cap on overtime. The effective date is
either July 1, 2011 or when the last CBA was done. As
of the effective date, max is what each member has
accumulated. The member is able to restore hours if
used, but can't exceed the max.
b. Mr. Dehner stated that the time period can be fiscal or
calendar year.
c. Donna Looney stated that based on the City's attorney's
direction, pay and lump sum cash-ins are reported
separately.
d. Donna Looney and John McKinney to make a
recommendation to the Board after reviewing documents
from Sheila and City attorney.
e. Lee Dehner commented to use the historical process
until a new recommendation is made.
8. Disbursements
Disbursements were approved as stated on the agenda upon motion made by Tim Sopko
and second by John McKinney, motion carried 6-0.
9. Staff Reports, Discussion, and Action
a. Ordinance 2014-0-21.
a. Ferrell Jenne informed the Board that the Ordinance was adopted at the
November 10, 2014 Council meeting and it has been filed with the State.
b. Salem Trust benefit payment.
a. Benefit payment being made via ACH, but correspondence mail has
been returned to Salem Trust for the last two months.
b. John McKinney requested that a letter be sent out via certified mail
asking for an updated address. If letter is returned, contact Salem Trust
to stop benefit payment until a valid address is provided.
c. Deceased member was overpaid by a month.
a. Board directed Ferrell Jenne to send a certified letter to the member's
spouse explaining the situation and to seek repayment.
d. Salem Trust ACH authorization form.
a. Ferrell Jenne explained that Salem is not asking the Board to change the
way they approve payments, but to allow Salem to pay vendors via ACH
instead of a check.
Board approved executing the ACH authorization form upon motion made by Tyna Hilton
and second by Bobby Laramore, motion carried 6-0.
e. 2015 FPPTA membership fees.
a. Board decided to table this until the new Board of Trustees is
established.
f. Lee Dehner requested an update from Salem Trust regarding Pennant
Management.
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a. Mark Rhein commented that the fraud was 180M and the transaction
was based on paperwork approved by an authorized agent. Most of the
assets are hard assets and they are pursuing him criminally. Mr. Rhein
stated that no Salem Trust or Pennant Management employee was
involved in this.
10. Adjournment The meeting adjourned at 12:55PM.
11. Next Meeting March 16, 2015 at 11:OOAM.
Respectfully u'bmitted by: Approved by:
m Fe cell Jenne Name: rLA1 �
Title: Plan Administrator Title: -JT �-
Date Approved By the Pension Board: �,��
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