07-29-2015 CITY OF EDGEWATER POLICE OFFICERS' PENSION BOARD
QUARTERLY MEETING MINUTES
City Hall Council Chambers
Wednesday July 29, 2015 at 1:30PM
TRUSTEES PRESENT: David Arcieri
Lawrence Leaf
Larry Brinson
TRUSTEES ABSENT: James Morey
John Tarr
OTHERS PRESENT: H. Lee Dehner, Board Attorney
Ferrell Jenne, Plan Administrator
John Thinnes, Investment Consultant
Doug Lozen, Board Actuary
Michael Ciocchetti, Assistant City Attorney
Donna Looney, Personnel Director
John McKinney, City Finance Director
Martha Miles, Police Officer
A motion was made for David Arcieri to chair the meeting in John Tarr's absence.
1. Call to Order David Arcieri called the meeting to order at 1:40PM.
2. Roll Call -As reflected above.
3. Public Comment- None.
4. Approval of Minutes
The minutes from the March 16 2015 quarterly meeting were approved upon motion by
Larry Brinson and second by Lawrence Leaf, motion carried 3-0.
5. New Business
a. Martha Miles discussion.
i. Lee Dehner stated that Martha Miles had obtained an attorney. The
attorney would like to review all paperwork. Lee Dehner advised the
board to direct Ferrell Jenne to provide all paperwork to Martha Miles'
attorney.
ii. David Arcieri reviewed plan document provisions which state there must
be a continuous accrual of service as a law enforcement officer. Martha
Miles left the police department and took a refund of her contributions
after a vested period of time and went to work for animal control. Ms.
Miles returned to the police department as a law enforcement officer and
is asking to have her prior years credited. David Arcieri stated that
according to the plan document, this is not allowed, so how can the
board act in any other manner than what is in the plan document
regarding continuous service. Lee Dehner commented the board cannot
do anything contrary to the plan document.
iii. Lee Dehner stated that Ms. Miles' attorney has a right to review all
relevant documents and request a hearing before the board according to
the claims procedure.
iv. David Arcieri commented he does not think the board should have to
incur legal fees for this issue unless a hearing is requested. The Board
agreed by consensus that no legal fees should be incurred until a
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hearing and that Ferrell Jenne has authorization to provide Ms. Miles'
attorney, Paul Kelly, with all relevant documentation.
b. Presentation of Supplemental Benefit Cost Study.
i. Doug Lozen reviewed the parameters of the study. For 2% of payroll,
future normal early retirees could get a $425 supplemental benefit each
month until age 65.
ii. David Arcieri commented the City may decide not to pay the additional
2% for a supplemental benefit and asked what the cost would be if the
members paid for it. Doug Lozen stated the cost would be a little over
2%.
iii. David Arcieri asked Doug Lozen what it would take to complete a study
determining the actual cost to the members. Doug Lozen stated the
study would take about an hour of time to calculate.
iv. The board decided to table further discussion until John Tarr is present.
c. Draft Plan Document discussion.
i. Lee Dehner gave a review of the draft plan restatement.
ii. David Arcieri commented that he was unhappy with the draft plan
document and recommended the board begin looking for new legal
counsel. Lee Dehner stated there has never been a procedure that he
had not followed and was not aware of the issues that David Arcieri was
referring to. David Arcieri commented that the restatement of the plan
document should be the same document but include all updated IRS and
procedural changes. David Arcieri stated that he believed there were
amendments the board signed that never went before City council to be
implemented into the plan. Lee Dehner stated that Principal was the plan
administrator and should have filed the amendments. David Arcieri
asked Lee if he as the legal counsel had no responsibility to make sure
those items were filed. David stated he had also sent numerous revisions
to the draft plan document, and the same items continue to be incorrect.
Lee Dehner commented that the document was for discussion purposes
and the current information was so the board was aware of the chapter
minimums required of 185 plans by the IRS. David Arcieri asked for a
motion to retain other legal counsel.
iii. Lee Dehner commented he was there to serve the board but there was
obviously a communication problem. Lee offered his resignation.
The board voted to accept Lee Dehner's resignation as the board's legal counsel, upon
motion by Larry Brinson and second by Lawrence Leaf, motion carried 3-0.
iv. The board asked Ferrell Jenne to work with the City's finance
department to send out a request for proposal for legal services.
6. Old Business
a. None.
7. Reports
a. The Bogdahn Group, Investment Consultant, John Thinnes.
i. Quarterly report as of March 31, 2015.
1. Fiscal-year-to-date market value of the fund is approximately
$8.5M.
2. Net earnings for the quarter were 2.90%, outperforming the
policy benchmark of 2.07% by 0.83% points.
3. Fiscal-year-to-date net earnings were 6.26%, outperforming the
policy benchmark of 4.60% by 1.66%.
4. Since inception the fund is at 4.96%, underperforming the policy
benchmark of 4.99% by-0.03%.
5. John Thinnes briefly reviewed each manager and their
performance.
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6. David Arcieri asked what the plan can do to get the returns the
fire plan has experienced. John Thinnes stated the fire plan's
funds are allocated differently. They have one manager (Bowen
& Hanes) with the majority of the portfolio in domestic equity
which has performed well the past five years. John Thinnes
commented that when the international market begins to
outperform domestic equities, the fire plan will see a lag whereas
the police plan returns will strengthen. John Thinnes
recommended keeping the portfolio at four managers. The plan
has experienced strong returns for the past three years and
finished in the top percentile.
7. No additional questions from the board.
b. Christiansen & Dehner, Board Attorney, Lee Dehner.
i. Legislative Update.
1. Senate Bill 534 requires additional calculations and reports from
the actuary which must be filed with the state and posted on the
City's website.
2. Senate Bill 172 has passed and deals with the allocation of
excess state monies. Per statutory provision an attempt should
be made to reach an agreement of allocations between the
sponsor and plan. If there is no agreement, 50% will go to the
City and 50% to the pension fund, which is required to go into a
share account for each member. The share plan needs to be
amended into the ordinance by October 1, 2015 or the expiration
of the current CBA agreement. A budget must also be in place.
3. House Bill 1309 formerly known as SB242, mandates all local
law plans must utilize the FRS mortality tables. In most cases,
this will cause additional funding requirements since the FRS
tables are more conservative. Implementation date will need to
be discussed with the actuary but must be in place in conjunction
with the 2016 valuation report.
4. Lee Dehner asked the board if all trustees had filed Form 1,
Financial Disclosure which was due July 1 st to avoid fines.
5. John McKinney asked Lee if the board will have to submit the
new budget to City Council for adoption and incorporation into
the City's budget. Lee stated they do not.
8. Disbursements
a. David Arcieri requested that invoice charges be itemized in more detail. Instead
of "Travel Expenses," a breakdown should be given for mileage, hotel, food,
etc.
Disbursements were approved as stated on the agenda upon motion made by Lawrence
Leaf and second by Larry Brinson motion carried 3-0.
9. Staff Reports Discussion, and Action
a. Annual Report.
i. Ferrell Jenne informed the board the annual report had been received
and approved by the State.
b. Fiduciary Liability Insurance.
i. Ferrell Jenne informed the board the current fiduciary liability policy will
expire on October 1, 2015 and needs to be renewed.
ii. John McKinney asked the board to make a motion allowing the plan
administrator to renew the liability policy each year without prior
approval.
The board voted to allow Ferrell Jenne to bind a new fiduciary liability policy each year
upon motion by Larry Brinson and second by Lawrence Leaf, motion carried 3-0.
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10. Trustees' Reports, Discussion, and Action
a. John McKinney asked the board how to proceed with receiving proposals for
legal services.
b. Mike Ciocchetti discussed sealed and unsealed options. If the board elects the
sealed option, a request for qualifications will be sent out and the details of the
respondents won't be made known until a special meeting is scheduled and
firms are chosen to make presentations. Using the unsealed method, request
for proposals are sent out and the details of the respondents, such as fee
structure and firm information, are gathered ahead of time for the board's
consideration at a special meeting.
c. The board chose to utilize the unsealed request for proposal option.
d. John McKinney stated that the process would take 30-45 days.
e. Lee Dehner asked the board what date they would like his resignation to be
effective. The board decided Lee Dehner should continue services until the
special meeting is held and a new attorney is hired.
11. Adiournment The meeting adjourned at 2:30PM.
12. Next Meeting September 14, 2015 at 1:30PM.
spectfully submitted by: Approved
erre l Jenne,�11Administrator Joh - arr, Chairman
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Date Approved By the Pension Board: 1j@ l `� 1 t `
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