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06-13-2016CITY OF EDGEWATER POLICE OFFICERS' PENSION BOARD QUATERLY MEETING MINUTES City Hall Council Chambers Monday, June 13, 2016 at 2:OOPM TRUSTEES PRESENT: David Arcieri Lawrence Leaf Timothy Webb Alexander Penalta TRUSTEES ABSENT: Larry Brinson OTHERS PRESENT: Ken Harrison, Sugarman Susskind Ferrell Jenne, Foster & Foster Jack Evatt, The Bogdahn Group Julie Christine, City of Edgewater, HR Department Doug Lozen, Foster & Foster 1. Call to Order Ferrell Jenne called the meeting to order at 2:04PM. 2. Roll Call - As reflected above. 3. Public Comment - None. 4. New Business a. Change in agenda, appointment of board Chairman. The board voted Alexander Penalta as Chairman upon motion by David Arcieri and second by Timothy Webb, motion carried 4-0. 5. Approval of Minutes. The minutes from the March 14, 2016 quarterly meeting were approved as presented upon motion by David Arcieri and second by Lawrence Leaf, motion carried 4-0. New Business (continued) a. Certification of member elections. i. Ferrell Jenne explained that the notice of election went out to the membership regarding the vacant position formally held by John Tarr and the term expiration of David Arcieri. David Arcieri ran unopposed and only one active member, Timothy Webb, expressed interest in serving on the board. The board certified the election results upon motion by Timothy Webb and second by Alex Penalta, motion carried 4-0. b. Discussion and review of revised Plan Restatement. i. Ken Harrison advised the board that all future changes should come through the board and not sent by individual trustees. David Arcieri commented that all changes he sent to Ken were passed along from the City Manager in an effort to get the Ordinance adopted by Council. ii. Ken Harrison reviewed the changes to the definition of compensation, the board agreed by consensus. iii. Ken Harrison commented that the revised Plan Restatement allows for buyback financing and the max installment period is not to exceed the amount of time being purchased. Ken reminded the board that the time is not credited until the full cost has been paid. Ken advised that the fire plan allows the members to finance the buyback cost up until they retire. Doug Lozen advised that if the plan allows the financing to be stretched out until retirement, the cost is neutral to the plan. The board voted the buyback financing option to mirror the language found in the City of Edgewater Firefighters' Pension Plan upon motion by David Arcieri and second by Lawrence Leaf, motion carried 4-0. iv. Ken Harrison reviewed the Chief opt out provision. Doug Lozen commented that the Chief is eligible for normal retirement so a liability was already being held. This provision had no actuarial impact on the plan. Ken Harrison commented that the Chief should speak with a financial advisor if he decides to opt out of the plan and draw a benefit. The board voted to strike language from page 13, last paragraph, "in the event of such election" and thereafter upon motion made by David Arcieri and second by Timothy Webb, motion carried 4-0. v. David Arcieri commented that he would like to set-up a share plan per the City Manager. All future Excess State Monies will go to the plan and will not be used by the City to satisfy funding requirements. Ken Harrison explained setting up a funded share plan versus a 131h check. Ken Harrison commented that he would like a copy of the CBA and advised that the bargaining units should be a part of the share plan set-up. Ken commented that a side letter should be drafted so there is an understanding of how the State Monies should be used. The board voted to include a share plan in the Plan Restatement that mirrors the City of Edgewater Firefighters' Pension Plan upon motion made by Timothy Webb and second by Lawrence Leaf, motion carried 4-0. vi. Ken Harrison commented that he would like to bring the Plan Restatement before the board at the September quarterly meeting for final review. The board agreed by consensus. c. Discussion of DROP procedures, application, and forms. i. Ken Harrison explained these are board procedures and do not need to be approved by the City. Ken briefly reviewed the forms and commented that the references to firefighters needs to be removed. ii. By consensus the board agreed to allow for partial rollover/direct disbursement. The board approved the DROP procedures, application, and forms with the discussed revisions upon motion made by David Arcieri and second by Timothy Webb, motion carried 4-0. 7. Old Business —None. 8. Reports. The Bogdahn Group, Jack Evatt, Investment Consultant i. Quarterly report as of March 31, 2016. 1. Jack Evatt gave a brief overview of the market environment during the quarter. 2. Market value of the fund at the beginning of the quarter was $8,311,663 and by the end of the quarter was $8,323,277. 3. Gross earnings for the quarter were 0.58%, underperforming the policy benchmark of 1.72% by-1.14%. The 1, 3, and 5 year trailing returns were;-2.91%, 6.23%, and 6.94%. Since inception (10/1/2000) earnings were 4.51%. 2 4. Jack Evatt reviewed the financial reconciliation quarter to date and the asset allocation. 5. David Arcieri commented that he felt like the fund can't break the 8M portfolio value. Jack Evatt advised that the fund lost a substantial amount of money when they left The Principal Group. 6. Jack Evatt reviewed the compliance checklist. 7. Alex Penalta asked if terrorist attacks impact the volatility in investments. Jack Evatt commented that there's a short term impact, but since 9/11 they are expected. 8. Jack Evatt commented that no rebalancing is needed at this time. 9. Jack Evatt informed the board that if Dana Investments doesn't start having stronger returns, taking money from them and adding additional managers in the same space would be a good idea. 10. Jack Evatt reviewed the R&D rebalancing letter, stating the letter is an update to the one currently in place. The board approved the letter of direction as presented upon motion made by David Arcieri and second by Alex Penalta, motion carried 4-0. ii. Fee memo dated June 13, 2016. 1. Jack Evatt advised the board that they have been on the same fee schedule for the last 6+ years. Jack asked the board to consider an annual all-inclusive retainer fee of $16,500 which is a $2,000 increase. Jack commented that the fee is guaranteed for three years. The board approved Ken Harrison to draft a new agreement for The Bogdahn Group that reflects the annual all-inclusive retainer of $16,500 and will be guaranteed for three years upon motion made by David Arcieri and second by Timothy Webb, motion carried 4-0. 2. Jack Evatt advised that a new investment policy statement (IPS) will need to be drafted once the Plan Restatement is adopted. Sugarman & Susskind, Ken Harrison, Board Attorney. i. Ken Harrison reviewed the IRS memo regarding normal retirement age and in-service distributions. David Arcieri commented that the City's position is that a retired police officer cannot come back and be hired as a sworn officer, but can work in a non -sworn position. Julie Christine confirmed this is correct. ii. Ken Harrison reminded the board to file their Financial Disclosure forms no later than July 1 st to avoid fines. 9. Consent Agenda The board approved the consent agenda as presented upon motion made by David Arcieri and second by Alex Penalta, motion carried 4-0. 10. Staff Reports, Discussion, and Action a. Ferrell Jenne explained that the Salem Trust authorized signature sheet needed to be updated to reflect the new board composition. b. Ken Harrison reminded the board about the upcoming FPPTA conference and that elections will be held at FPPTA. Ken Harrison briefly reviewed each nominee. The board authorized Alex Penalta to cast the FPPTA ballot as he sees fit upon motion made by Timothv Webb and second by David Arcieri motion carried 4-0 11. Trustee Reports, Discussion, and Action a. David Arcieri commented that he thought a member requested a disability application. Ferrell Jenne confirmed that she has not received a completed application to date. Ken Harrison reminded the board that an IME will need to 3 be done once the application has been submitted. A special meeting can be held is all documents are collected well in advance of the next quarterly meeting. 12. Adjournment The meeting adjourned at 3:42PM. 13. Next Meeting Monday, September 19, 2016, 1:30PM. r 7 speJcu l s mitted by: Approved by: errell Jen , Pla Administrator Alexander Penalta, Chairman Date Approved By the Pension Board:. 4