12-14-2015 CITY OF EDGEWATER
GENERAL EMPLOYEES' PENSION BOARD
QUARTERLY MEETING MINUTES
City Hall Council Chambers
Monday, December 14, 2015 at 11:OOAM
TRUSTEES PRESENT: Tyna Hilton
Brenda Dewees
John McKinney
Tim Sopko
TRUSTEES ABSENT: Chris Mathewson
OTHERS PRESENT: H. Lee Dehner, Christiansen & Dehner
Ferrell Jenne, Foster &Foster
Jack Evatt, The Bogdahn Group
Brian Bizzell, Salem Trust
Mindy Johnson, Salem Trust
Mark Rhein, Salem Trust
Doug Lozen, Foster &Foster (via conference call)
Donna Looney, HR Director
Tracey Barlow, City Manager
Julie Christine, City of Edgewater
Donna Nichols, City of Edgewater
1. Call to Order Brenda Dewees called the meeting to order at 11:00AM.
2. Roll Call -As reflected above.
3. Public Comments— None.
4. Approval of Minutes
The minutes from the September 14, 2015 quarterly meeting were approved upon motion
by John McKinney and second by Tim Sopko, motion carried 4-0.
5. New Business
a. Proposed Ordinance regarding Senate Bill 1128.
i. Lee Dehner read and reviewed the proposed Ordinance stating it
amends the definition of"compensation" in conjunction with Senate Bill
1128. For service earned on or after July 1, 2011, Salary shall not
include more than 300 hours of overtime per calendar year. Provided,
however, payments for overtime in excess of 300 hours per year accrued
as of October 1, 2013 and attributable to service earned prior to October
1, 2013, may still be included in Salary for pension purposes even if the
payment is not actually made until on or after October 1, 2013. Unused
sick leave and annual leave accrued prior to October 1, 2013, Salary will
include the lesser of the amount of sick or annual leave time accrued on
October 1, 2013 or the actual amount of sick or annual leave time for
which the retiree receives payment at the time of retirement regardless of
whether the amount of sick or annual leave was, at some time prior to
retirement, reduced below the amount on October 1, 2013.
ii. Brenda DeWees commented that there was a new Mayor and City Clerk.
Lee Dehner asked Ferrell Jenne to send him the names of the new
Mayor and Interim City Clerk so he could change the information on the
proposed Ordinance.
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The board voted to approve the proposed Ordinance in conjunction with Senate Bill 1128
with name changes for Mayor and City Clerk upon motion by Tyna Hilton and second by
Tim Sopko motion carried 3-1, John McKinney opposed.
b. Special actuarial analysis for Donna Nichols and Julie Christine regarding
participation in the Defined Benefit Pension Plan.
i. Ferrell Jenne stated she had spoken to Doug Lozen, the actuary who
prepared the analysis. Since the board gave the direction to perform the
study, he was presenting it back to the board for their review and
discussion. No motion needed to be made regarding the analysis.
ii. John McKinney requested that Doug Lozen be contacted so he could
explain the analysis to the board. The board called Doug Lozen.
Note: Donna Looney arrived at 11:15am
iii. Doug Lozen reviewed scenario (A)with the board which provides Julie
Christine and Donna Nichols with a Plan Entry Date back to their original
date of employment with the City. The City would be responsible for
funding the portion of the future benefits not covered by the members'
rollovers.
1. Tim Sopko asked what the percentage cost would be for the City
if the members were allowed to enter the DB Plan. Doug Lozen
stated those figures could be found in the summary paragraphs
after each scenario— 16.3% of pay for Donna Nichols and 19.4%
of pay for Julie Christine.
iv. Doug Lozen reviewed scenario (B)with the board which determined the
Plan Entry Date such that the rollover contributions covered almost the
entirety of the increase in the Plan's UAAL. The City would be
responsible for funding the portion of the future benefits not covered by
the members' rollovers.
v. John McKinney stated he thought there was supposed to be a scenario
which showed a date of entry that would cover the liability so the UAAL
would not increase. Doug Lozen stated he could provide that calculation
within a week.
vi. John McKinney requested a special meeting be set to discuss the
revised analysis.
vii. Julie Christine commented that she had worked for the City for many
years and was misled by the previous finance director. Julie stated she
felt that she should be allowed to be reinstatement into the DB Plan.
viii. Donna Nichols asked if the new scenario would outline costs, if any, she
would have to pay for entry into the DB Plan. Donna then asked that the
discussion be tabled until she has time to review the analysis with her
financial planner.
ix. Doug Lozen confirmed there would be no additional cost for scenario (C)
to be calculated.
x. The board directed Doug Lozen to re-calculate scenarios (A) and (B)
using what the 2.5% member contributions would be and also include
this in scenario (C). Tracey Barlow asked that a fourth bullet be added to
scenario (A) and (B)showing the 2.5% member contribution amounts
that would be needed to re-enter the plan.
xi. Doug Lozen summarized the new analysis which was to include the
additional member contributions Ms. Nichols and Ms. Christine would
have made had they been in the plan from the beginning, and to
determine a date of plan entry so there was little to no change to the
UAAL.
xii. The board discussed possible dates to hold the special meeting and
decided on January 25, 2016, at 11:00am. Doug Lozen will attend via
conference call. Lee Dehner and Ferrell Jenne confirmed they were both
available to attend.
Note: Julie Christine and Donna Nichols left the meeting at 11:55am
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c. Discussion of renewing FPPTA membership for 2016.
i. Ferrell Jenne discussed the associated fees.
1. Annual board membership is$600.
2. Trustee attendance at a school/conference is$450 per trustee.
The board voted to approve the renewal of 2016 FPPTA membership upon motion by Tvna
Hilton and second by Tim Sopko, motion carried 4-0.
d. Retiree activity report for September 15, 2015— December 7, 2015.
The board voted to approve the retiree activity sheet as presented upon motion by Tvna
Hilton and second by Tim Sopko, motion carried 4-0.
6. Reports
a. Salem Trust, Mark Rhein, Custodian.
i. Mark Rhein briefly reviewed the conversion process their firm went
through and stated they had received a clean 2015 SSAE16 Report with
an unaudited opinion.
ii. Mark Rhein introduced Mindy Johnson as the new client relationship
manager and gave a brief review of her work history. Mark asked the
board's permission to change the relationship manager from Brian
Bizzell to Mindy Johnson. The board welcomed Mindy as the new
relationship manager.
b. The Bogdahn Group, Jack Evatt, Investment Consultant.
i. Quarterly report as of September 30, 2015.
1. Jack Evatt reviewed the market environment stating it was a
volatile quarter.
2. Jack reviewed the major factors that effected the equity and fixed
income portfolios for the quarter.
3. Total fund market value was at$12,542,060 as of October 1,
2014, and was$11,789,274 as of September 30, 2015.
4. Net earnings for the quarter were-5.50%, underperforming the
policy benchmark of-4.64% by-0.86%.
5. Fiscal year-to-date net earnings were -0.75%, slightly
underperforming the benchmark of-0.74%.
6. Since inception (1/1/2000) net earnings were 4.30%,
underperforming the policy benchmark of 5.13% by-0.83%.
7. Jack Evatt discussed the four year smoothing technique being
used and stated the fiscal year 2010-2011 returns of-0.40%
would be dropping off.
8. The board had no questions.
c. Christiansen & Dehner, Lee Dehner, Attorney.
i. Legislative update.
1. Lee Dehner stated the agenda for the next legislative session in
January 2016 currently had no Local Law Bills listed for
discussion.
2. Senate Bill 534, Lee asked if all calculations had been posted on
the City's website. John McKinney stated all documents had
been posted including the 60T Report.
3. House Bill 1309, requires all Local Law plans utilize the FRS
mortality table. This table is a more conservative table and will
most likely require additional funding. The effective date is
January 1, 2016.
ii. Tracey Barlow asked if the IRC language would be included in the
Senate Bill 1128 proposed Ordinance. Lee Dehner stated he would like
to keep these separate.
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7. Consent Agenda
The consent agenda was approved as presented upon motion by Tom Sopko and second
by Tyna Hilton, motion carried 4-0.
8. Staff Reports, Discussion, and Action
a. New dedicated TPA line.
i. Ferrell Jenne informed the board that a new plan administration phone
line had been created.
b. Discussion of paying invoices in between meetings.
i. Ferrell Jenne explained the necessity of paying invoices in a timely
manner and requested the board's permission to pay contractual bills in
between meetings. The board agreed.
c. Salem Trust authorized signature card.
i. Ferrell Jenne informed the board that the Salem Trust authorized
signature card needed to be updated.
9. Trustee Reports, Discussion, and Action
a. None.
10. Adjournment The meeting adjourned at 12:32pm.
11. Next Meeting January 25, 2016, at 11:00am.
Respectfully submitted by: Approved by:
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„Name: `Ferrell Jenne Name:
Title: Plan Administrator Title:
Date Approved By the Pension Board: }
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