09-16-2019CITY OF EDGEWATER
GENERAL EMPLOYEES' PENSION BOARD
QUARTERLY MEETING MINUTES
City Hall Council Chambers
Monday, September 16, 2019, at 10:30AM
TRUSTEES PRESENT: Bridgette King
Tiana DeWees
Tyna Hilton
Tim Sopko
Brenda DeWees
TRUSTEES ABSENT: None
OTHERS PRESENT: Bonni Jensen, Klausner, Kaufman, Jensen & Levinson
Frank Wan, Burgess, Chambers & Associates
Michelle Rodriguez, Foster & Foster
1. Call to Order — Brenda DeWees called the meeting to order at 10:37am.
2. Roll Call — As reflected above.
3. Public Comments -- None.
4. Approval of Minutes
a. Brenda DeWees asked that the minutes be corrected to reflect Bridgette King
called the June 17, 2019, meeting to order as she was not present.
The minutes from the June 17 2019, quarterly meeting were approved with the requested
changes, on motionbV Tiana DeWees and second by Tim So ko• motion carried 5-0.
5. New Business
a. Linda Moore monthly benefit
i. Michelle Rodriguez advised the board Salem Trust had notified her on May
24, 2019. retiree Linda Moore was on their monthly death audit report and
her date of death was listed as April S. 2019. Michelle commented she
tried to contact family members but was not successful in verifying her
death. Michelle advised the board she stopped the monthly pension
payment of $430.66 as of July 01, 2019. The board directed the
administrator to search county records for a death certificate and have the
custodian contact Ms. Moore's bank to confirm the account was closed and
see if they could find out who received her May and June payments.
Old Business — None.
Reports
a. Burgess, Chambers & Associates, Frank Wan, Investment Consultant
i. Quarterly Report as of June 30, 2019
1. Frark Wan reviewed the current market environment over the last
quarter and commented their Integrity investment earned 7.6%
over the last nine months.
2. The market value of the plan as of June 30, 2019, was
$12,429,800.
3. The total funds gross returns for the quarter were 3.7%, slightly
outperforming the benchmark of 3.6%, Trailing total fund gross
returns for the 1, 3, and 5 -year periods were 7.4%, 8.4% and 5.5%
respectively.
4. Brenda DeWees asked if the American Realty Advisors (ARA)
investment could regain the money it was taking from their bond
funds. Frank Wan commented the real estate investment should
outperform their bond holdings, which were currently 40% of their
portfolio.
Klausner, Kaufman, Jensen and Levinson, Bonni Jensen, Plan Attorney
i. American Realty Advisors Documents
1. Bonni Jensen reviewed the ARA explanation memo highlighting
the investment objectives, the risk factors and trustees voting
rights. Bonni commented every property in the portfolio was
appraised annually. Bonni advised the board the investment
earnings may be considered taxable income. Tiana DeWees
asked what criteria the IRS used to determine what was taxable
income. Bonni stated historically public entities had been exempt
from paying taxes, however many years ago a public university
entered the market in direct competition to a private company.
They were sued on the basis of unfair competition and the court
determined that public entities doing business must pay taxes on
income earned. Recent tax reform measures had addressed this
issue although the provision had not been removed from the tax
code. Bonni advised the board in her 30 -years' experience, she
had never had a public entity client subject to pay taxes on
investment earnings.
2. Tim Sopko asked what their initial investment was and Fran Wan
said it was $1 million. Bonni commented they had a limited
indemnification clause and did not have any liability beyond their
initial $1 million investment.
3. Bridgette King asked if there were any distribution restrictions and
Frank Wan reviewed all the distribution options available. Frank
commented there could be a 30 to 45 day wait for significant
amounts.
4. Bonni Jensen reviewed ARA's fiduciary responsibilities listed in
their side letter. Bridgette King asked about ARA's fiduciary
liability policy and Bonni commented they would use this policy first
to file any claims.
The board approved the execution of all the American Realty Advisor documents upon
motion by Bridgette King and second by Tim So ko; motion passed 5-0.
Cyber Liability Coverage
1. Bonni Jensen reviewed some of the recent cyber -attacks on public
agencies and commented some of them still had not fully
recovered all of their data. Bonni advised the board her firm was
recommending all pension boards obtain a separate cyber liability
policy and the amount of the policy would depend on the level of
data held by the board. Bridgette King commented the City of
Edgewater carried its own cyber liability coverage. Bonni asked
the administrator to put this item on the agenda for the next
meeting for discussion.
Consent Agenda
a. Ratification of Warrants
i. Warrant#50, #51, #52 and #53
b. New invoices for payment approval
i. None
c. Fund Activity Report for June 11, 2019 through September 09, 2019
The board voted to approve the consent agenda as presented, upon motion by Bridgette
King and second by T na Hilton; motion carried 5-0.
Staff Reports, Discussion, and Action
a. Foster & Foster, Michelle Rodriguez, Plan Administrator
i. Fiduciary Liability Policy
1. This item was discussed earlier in the meeting.
J. Upcoming educational opportunities
1. Michelle Rodriguez reviewed upcoming educational opportunities
for the board.
2. Michelle Rodriguez updated the board on the progress of
contacting terminated employees who were owed a refund of their
pension contributions.
10. Trustee Reports, Discussion, and Action - None.
Adjournment —The meeting adjourned at 11:37pm.
10. Next Meeting — December 09, 2019, at 10.30am.
Respectfully submitted by: Approved by:
NI
Michelle Rodriguez, Plan AAstrator Try e'
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Date Approved by the Pension Board: ��