HomeMy WebLinkAbout06-08-2005 Special Session Minutes Minutes of the Special Session of the
CITY OF OCOEE GENERAL EMPLOYEES PENSION BOARD
Held on June 8, 2005
At 150 N. Lakeshore Drive
Ocoee, FL 34761
AGENDA ITEM 1 - CALL TO ORDER
A. Vice Chairperson Mary Anne Swickerath called the meeting to order at 9:14 a.m. in the
Commission Chambers in City Hall. She called on Secretary Jean Grafton to call the roll.
Present were Vice Chairperson Swickerath, Trustees Tom Hendrix, Russ Wagner, and Jean
Grafton. These Trustees being all of the existing members, it was declared that a quorum was
present.
Also present were Attorney H. Lee Dehner,Recording Secretary of the Meeting Jo Ann Lacey,
City Manager Robert D. Frank, City Clerk Beth Eikenberry, and three General Employee Plan
Members.
B. Approval of Minutes from Quarterly Meeting of May 11,2005.
Vice Chairperson Swickerath called for review of the Minutes of the Quarterly Meeting of
May 11,2005. Copies of the Minutes had been previously circulated to the Trustees. It was, on
motion made by Trustee Grafton,seconded by Trustee Hendrix,
Cor RESOLVED that the Minutes of the Quarterly Meeting of the Board of
Trustees of the General Employees Pension Board of May 11,2005,be and
they are hereby approved as presented.
AGENDA ITEM 11. —BUSINESS
A. Count ballots for Employee Trustee Election to complete Trustee Bishop's Term
ending September 30,2006.
The ballots from the election were delivered to the Board from the Clerk's Office, still in the
ballot receptacle which had been unopened. Vice Chairperson Swickerath asked Secretary
Grafton to open the receptacle and begin the count. It was decided that Vice Chairperson
Swickerath would call out the votes and they would be tallied by Secretary Grafton. There
were two candidates for the election: Terry Reed and Terry James. The ballots and initialed
names on the list corresponded to the amount of votes cast. The total ballots cast was 65, Terry
Reed received 45 of those votes and Terry James received 20.
B. Certify Election and Welcome New Trustee
Following a count of the ballots and a verification by all Trustees that the number of initialed
names on the list corresponded to the amount of votes cast, it was on motion made by Vice
Chairperson Swickerath,seconded by Trustee Hendrix, unanimously
tiow RESOLVED that the election of Terry Reed as General Employees Pension
Board Member be and is hereby certified by the Board following verified
election results of 45 votes for Terry Reed and 20 votes for Terry James.
General Employees Pension Board
Special Session,June 8,2005
Page 2 of 9
Vice Chairperson Swickerath then asked Mr. Reed,who was in the audience,to come forward
to join the Board. Trustee Reed was welcomed by the other Board Members and was asked to
tell something about himself. He stated that he is Facility Supervisor for the City, working
through Public Works, in charge of most of the buildings in the City. He said that his interest in
joining this Board is to see how the Pension Fund is run and hopes that he will be able to
contribute to that.
Trustee Grafton offered the thanks of the entire Board to the City Clerk's office for the way
they had handled the election.
C. Elect Chairperson and Vice Chairperson
Vice Chairperson Swickerath opened the floor for nominations for Chairperson.
It was, on motion made by Trustee Grafton, seconded by Trustee Hendrix,unanimously
RESOLVED,that Trustee Mary Anne Swickerath is hereby elected to
serve as Chairperson of the City of Ocoee General Employee Pension Board,
effective immediately.
Chairperson Swickerath opened the floor for nominations for Vice Chairperson.
It was, on motion made by Trustee Hendrix,seconded by Trustee Grafton, unanimously
RESOLVED,that Trustee Russ Wagner is hereby elected to serve as Vice
Chairperson of the City of Ocoee General Employee Pension Board,effective
immediately.
D. Resolution Adopting Signatures for Custodian
Due to having a new member elected to the Board, it is necessary to have a new custodial
directive completed for SunTrust/TRUSCO. Secretary Grafton had prepared a resolution to be
completed [one for either Terry Reed or Terry James, whichever would be certified] and it was,
on motion made by Trustee Grafton, seconded by Trustee Hendrix, unanimously
RESOLVED,that the resolution presented with new Trustee Terry Reed's name be
and is hereby approved for signature and shall be forward to TRUSCO when
executed by all Trustees.
E. Discussion with City Manager Frank re Plan Administrator
Explaining that the Plan Administrator used to be the HR Director but she is no longer with the
City and a new HR Director has not been appointed, the Pension Fund does not currently have a
Plan Administrator, Chairperson Swickerath called upon City Manager Frank for direction and
discussion. City Manager Frank greeted the Board and informed them that the hiring of a new
HR Director was not imminent but would perhaps be within the next month and that hopefully
that person would have experience dealing with an outside plan administrator or acting as plan
administrator. He asked Attorney Dehner for an explanation of who is responsible for the
administration.
General Employees Pension Board
Special Session,June 8,2005
Page 3 of 9
Attorney Dehner explained that the ultimate responsibility for plan administration lies with the
Board and the Board makes the decision as to how they want to handle it. He said that it could
be handled in one of three ways: having a City employee handle the services, similar to what has
been done here previously with this plan; contract a third party administration firm to do the full
plan administration through preparing Agendas,taking minutes, and benefit calculations; or,
some cities employed an individual and provided all of the City's benefits to that employee to
provide the pension services. He added that there was the possibility of a fourth arrangement
where if there is a City employee who provides administrative services,the Board could actually
contract with that individual with the consent of the City and pay for some of the contract for the
pension services that are rendered.
City Manager Frank said that he had understood when the former HR Director was in place,
there was a type of hybrid system in which the Director did certain things and that other items
such as the actuarial requests were contracted to others. He asked if someone could explain that
to him in full. Trustee Grafton advised that the Director had counseled with the employees,not
to advise them but to give them information for the way the plan was put together and when they
were leaving the City she got the amount of their contributions from the Finance Department if
they were not vested and, if they were, she walked them through filling out the forms for how
they wanted their retirement administered and sent those on to the actuary for the actuary to send
the figures back so the member could make his/her decision.
There was further discussion regarding these duties and it was determined that it would not be
difficult for a new Director, even if they were not familiar with plan administration,because the
rules are straightforward and it would just be a matter of gaining familiarity with the forms used.
The main point of interest to the Board was that someone would be available on site.
City Clerk Beth Eikenberry was asked for her input and she advised that in the last City she had
worked they had gone from having an in-house plan administrator to hiring an outside firm and
they ended up feeling that it was an excellent decision because of their extensive knowledge. The
firm they had used was Pension Resource Centers and the cost had been$750 a month.
Chairperson Swickerath asked City Manager Frank if he could give any indication of how the
number of employees would be increasing in the next five years, if it would be significant. City
Manager Frank said they are probably looking at 5%growth per year in employees and that in
the next year they were targeting 15-16 new positions,the bulk of which would be police
officers. He then stated that, for the number of people that are already working in HR,he did not
think the tasks associated with the plan administrator would be burdensome or overbearing,
however,the new Director would have several tasks to do for him within the first six months to a
year and whether he or she would have the time to devote that the pension plan administration
would require could be an issue. Trustee Grafton asked if there was any chance that it might be
possible for there to be another set of hands hired for that office. City Manager Frank said he did
not think he would be able to justify adding a position. Trustee Grafton then asked if that
would be the case even if their duties were split and that the Pension Board could possibly pay a
(0, part of their salary. City Manager Frank responded that he did not know and reminded that the
City Commission would have the final say in any new positions.
General Employees Pension Board
Special Session,June 8,2005
Page 4 of 9
Following a lengthy discussion about all of the possibilities for plan administration, Trustee
Wagner suggested that it would be in the best interest of the Board to defer any decision until
the next meeting when the new HR Director might be available to see what his/her capabilities
might be. City Manager Frank cautioned that, even though there may be someone on board by
the next meeting,they might not have a good idea of the department,the requirements and
priorities, and that it might be a couple of months before such a discussion could prove effective.
On motion made by Trustee Grafton,seconded by Trustee Hendrix, it was unanimously
RESOLVED to defer decision on this item and hereby directed the Secretary
to put this similar discussion on the Agenda for the August 10,2005 meeting
with the new Human Resources Director.
F. Review/Update Operating Rules and Procedures and Summary Plan
Description.
Chairperson Swickerath called the Board's attention to their copies of the Operating Rules and
Procedures and Summary Plan Descriptions for review. Attorney Denner advised that he would
make note of all items under discussion and would put any proposed changes in hard copy and
do a draft of that to be reviewed by the Board at the next meeting of the following quarter.
Chairperson Swickerath asked if the Trustees had any suggestions for changes. The following
items were then discussed.
Rules and Procedures—1.4 (page 2):
This section states"The Board of Trustees shall elect a Chairman, Vice-Chairman and a
Secretary every two years." Trustee Grafton asked for clarification of when the two years was
to begin. Attorney Dehner advised that the two years would be from the date elected. Trustee
Grafton stated that, with that being the case, she would need to start a chart to record when
people were elected or perhaps the rule could be changed to allow for election of all offices at a
particular time of year. Attorney Dehner reminded the Board that these rules are prepared,
adopted and amended for their use and that, if a rule needs to be conformed to a procedure the
Board wants to follow and carry out as its responsibility, it could be done.
After a discussion among the Board Members, with comments from Attorney Denner, it was
decided that the Board would like to change this rule and Attorney Dehner was directed to
amend it to provide that an election of officers shall be held every two years in November and, if
an office is vacated mid-term,an appointment would be made by vote of the Board for the
remainder of the term.
Rules and Procedures— 1.7(uage 4):
Trustee Grafton suggested that the entire election procedure needed to be revamped. She
indicated that there were a lot of problems with the designated procedures and asked Attorney
Denner if he had language from another plan that they could review. Attorney Dehner stated
that this particular rule is unique to this pension fund and could easily be amended. There was
an extended discussion of whether it would be better for the ballots to be taken to Human
Resources or the Clerk's office and whether or not they should be submitted in sealed envelopes.
Trustee Grafton reported that the City Clerk has traditionally handled the elections for all of the
General Employees Pension Board
Special Session,June 8,2005
Page 5 of 9
Boards and it would be appropriate as they know how to do elections. All of the Trustees were
in agreement with the City Clerk handling the elections.
There was then discussion about whether the ballots should be deposited into a ballot box that
had been sealed and had a lock which could be opened by the Board of Trustees following the
elections. There were comments that if a locked box were used, sealed envelopes for the ballots
would not be necessary. Discussion followed about whether there should be only one box or
whether boxes could be sent out in the field for those who may have difficulty getting into City
Hall to vote. It was decided that only one box would be needed as it would not be difficult for
any employee to get into City Hall to cast their vote. Attorney Denner said he would bring back
a draft incorporating all that he had heard which would include the provision that the City Clerk
should conduct the elections for this Board the same way she conducts the other elections that
she does for the City and that the Board will certify the ballots and that there would be one ballot
box at the Clerk's office as opposed to boxes out in the field. He said he would also leave the
dates which were specified in the current 1.7 because that was done so that all terms would end
on September 30 in alternating years.
Rules and Procedures—1.8 (page 6):
Trustee Grafton stated that she had a question about whether this rule would be able to remain
same as it stated that vacancies on the Board"shall be filled by special election to be conducted
in the same manner as any other election",however, if 1.7 was to be changed as discussed and
recorded above,there would be no need to make a change to this rule.
Chairperson Swickerath asked Attorney Dehner if there could be a change to the third sentence
of that rule which states, "The person selected to fill a vacancy shall fulfill only the remaining
term of the vacant office." Attorney Denner advised that there are two year designated terms in
the current Ordinance and that to make a change it would require a rule change and an Ordinance
change.
Trustee Wagner asked who the fifth Trustee was. Chairperson Swickerath answered that she
is the fifth Trustee, elected by the Board and confirmed by the City Commission. Trustee
Grafton stated that she and Trustee Hendrix were appointed by the City Commission and that
Trustee Wagner and Trustee Reed were elected by the employees. She explained that before
Chairperson Swickerath's term was to expire,the other four Trustees, at the meeting before her
term is up,will decide whether they want her to continue to be the fifth Trustee and, according to
the rules, when that is decided, it is sent to the Commission for ratification.
Rules and Regulations—5.2 C.:
Trustee Grafton commented that this particular item which required"Authorization for
payments from the Fund shall be in writing and signed by at least two trustees of the Board,"had
been changed,by motion,to require only one signature. She then stated that she would like to
have this rule continue to call for two trustees to sign; however, if the change to only one
signature was to remain, it would be necessary to change this rule. The other Trustees indicated
their agreement that they would like to have two signatures for payment as is indicated in the
Rule they were reviewing. Attorney Denner advised that would have to be done by motion.
General Employees Pension Board
Special Session,June 8,2005
Page 6 of 9
(kw Following a brief discussion, it was on motion made by Trustee Grafton, seconded by
Trustee Hendrix,unanimously
RESOLVED,that, effective June 8,2005,the procedure shall be changed to
reflect a return to the Rule as stated in Section 5.2.C,which reads
"Authorization for payments from the Fund shall be in writing and signed by
at least two trustees of the Board."
There was a discussion following this motion regarding which expenses would be covered for
the Trustees and led to a review of the following rule:
Rules and Procedures—1.6 (page 4)
Trustee Wagner asked about Trustee expenses for travel, conferences and other educational
venues. Trustee Grafton advised that all expenses are covered, including lodging and food.
She said that the travel policies established by the City are followed. Attorney Dehner advised
that per diem and reimbursement is covered in this Rule. Trustee Wagner stated that he would
like to have it specifically indicated that there is also a provision for the expenses of education.
Attorney Denner said he would change the wording to read, "All Trustees shall be entitled to
receive a per diem allowance or reimbursement for reasonable expenses incurred in conducting
the business of the Fund, including Trustee education and conferences."
Trustee Grafton advised the new Trustees that sometime last year the Board had authorized any
member to go to any educational conference or seminar without coming to the Board first to get
permission because the Board only meets four times a year. She stated that the next FPPTA
Conference would be June 26-29 and she would get information to any one of the Trustees who
would be interested. Trustee Wagner asked if he and Trustee Reed would be required to take
vacation time to attend any meetings. Trustee Grafton answered that with former City Manager
Gleason,he felt it was important and was done on City time. She said that it would need to be
clarified with the new City Manager but she was of the impression that it would be leave with
pay.
Attorney Dehner advised that there is a statutory requirement that all Trustees receive education
at least once a term and tutoring in investment related and Trustee responsibility. He added that
there are five opportunities a year with three conferences or schools sponsored by FPPTA and
two sponsored by the Division of Retirement. He said he does encourage attendance because of
the opportunity to talk with other Trustees but that in-house training can be done for those who
cannot make it for some reason in order to satisfy the statutory requirements.
Rules and Procedures—5.3 A.(5) (Daze 16):
Trustee Grafton called attention to this section which states"Copies of the Retiree's election
form and the actuary's calculations shall be provided to the Board of Trustees prior to the
commencement of payments or at the next meeting immediately following the commencement of
payments, and the Board shall review and approve the retirement benefits." She indicated that
she is not aware of this having been done in quite some time. Her question was if this is
something that should be done or if this section should be taken out of the Rules and Procedures.
Attorney Dehner advised that the information should be received in advance and approved by the
General Employees Pension Board
Special Session,June 8,2005
Page 7 of 9
Board, or as provided in this Rule, after payments commence, at the immediately following
meeting so it can be ratified and determined to be accurate.
Trustee Grafton indicated that there was what she felt to be a valid concern about the fact that
when something comes before the Board it becomes public record, including Social Security
numbers and the amount of money retirees would be receiving, and that most people do not want
this information to be a matter of public record. Attorney Denner advised that the amount is
public record but the social security number could be blacked out. Trustee Grafton said she
would go back through the files in the HR Director's office and put together a list which would
include any information which had not previously been brought before the Board.
Rules and Regulations—5.3 B.(6) (page 17)
Trustee Grafton suggested that the wording of this section which states"provide copies of all
documents to the Board of Trustees prior to payment or at the next meeting immediately
following the payment, for the Board to approve the payment,"be changed to read"pertinent
information should be included in a report to the Board of Trustees prior to payment or at the
next meeting following the payment for the Board to approve the payment." Attorney Denner
noted the change.
Rules and Regulations—6.1 (page 19)
Chairperson Swickerath asked if she had understood there was some question earlier about
Fiduciary Insurance and whether the Board had this insurance. Secretary Grafton reported that
the Board does have it but it is in default. She said she has not been able to find a renewal and
will be working in the next week to get it renewed. She then asked Attorney Denner if it would
be possible to cover the HR Director with this policy. Attorney Dehner advised that he was not
aware of any Board that covered anyone other than the Trustees. He said that would probably be
another policy and is actually referred to as a waiver of recourse at the end of Rule 6.1. He
reported that the waiver of recourse is an endorsement of the policy with a premium,typically, of
$125 to $150 which would need to be paid either by the City or the individual Trustee and that,
in every case he is aware of,the City pays that premium by separate check. He then instructed
Secretary Grafton that the way to handle this would be for the Fund to pay for the premium of
the fiduciary policy and then obtain the waiver of recourse and ask the City to provide a City
check to pay that premium.
Rules and Regulations—10.3 (Page 25)
Secretary Grafton called attention to the bottom lines of the section which say, "All Investment
Policy Statement and amendments thereto shall immediately be provided to the City,the
Department of Management Services and to the Board's actuary." She asked who the
Department of Management Services is and asked if that is Slavin's office. Attorney Dehner
advised that the Division of Retirement is within the Department of Management Services and
employs Slavin,the State Actuary.
Summary Plan Description—2 (Page 1)
Trustee Grafton stated that the new City Manager had indicated that he would be interested in
being a part of the Pension Plan but he is specifically excluded by the rules. She asked if there is
a statute that provides that the City Manager be excluded or is that something that can be
General Employees Pension Board
Special Session,June 8,2005
Page 8 of 9
changed. Attorney Denner advised that there is no statutory requirement. He said that our
Ordinance excludes those listed officials and that was because that was the way it was wanted by
the former City Manager and others. He stated that it would take an Ordinance amendment but
that could be done to permit participation by all City employees including the City Manager in
the Plan or actually require it as a condition of employment as it is for everyone else. He said
this would be a proposal for change and the Commission could then adopt it.
Trustee Grafton reminded that there are several changes to the Ordinance that is going to be
brought up at the next meeting and wondered if this could be considered then. Attorney Dehner
advised that there are some items which would not be done at the next meeting but probably in
November because of some federal compliance issues, although there were some that could not
wait until November, regarding the amendments to the investment section,that those are in the
works now. Trustee Hendrix asked if this issue could be put on the Agenda for the next
meeting. Trustee Wagner indicated that this entire section would need to be revised because the
titles of some of the Directors had changed.
Attorney Dehner recommended to Secretary Grafton to put as an Agenda item for the next
meeting for consideration of amending the Ordinance to allow participation by the City Manager
and he could have the opportunity to be present to address the issue to the Board and then the
Board could take action. He added that action should not be taken on this issue at this meeting
because it wasn't noticed for discussion.
AGENDA ITEM III. ATTORNEY COMMENTS—H. Lee Dehner,Esq.
Attorney Dehner informed the Board that the requirement in regard to the Summary Plan
Description is that it be done every other year and that is why this review is being done, and once
completed,the updated document will be ready for distribution to the members and new hires.
He advised that IRS has issued guidance on what needed to be done for the very specific
situation in the case of making a mandatory plan distribution of a lump sum between$1,000 and
$5,000. He stated that if no direction is received from the member as to what they want to do,
the IRS has issued guidance that an IRP [Individual Retirement Program)must be opened and
we must do a rollover. He said this is something that we want to avoid and in connection with
this, we need to amend the Ordinance,the Summary Plan Description and the special tax notice
to incorporate required language. He said he is going to go through the Plan and take out any
mandatory distributions and provide the distribution will be upon written request of the plan
member making it non-mandatory. He added that no bank or custodian knows even the
procedure to follow to do this and that, fortunately, it is not effective for a public plan until the
adjournment of the first Commission meeting that convenes after January 1,2006, so we have
until the end of the year to be sure that we are in compliance.
Attorney Dehner advised that one of the reasons he says it will be near the end of the year before
the Summary Plan Description revision is completed because he is waiting until all of the
required language has been worked out after the Pension Attorney's conference at which they
will be meeting with representatives from Washington to agree on the exact language to be used.
Secretary Grafton reminded that this Board is already several months late in getting this out
and was concerned about getting a new Exhibit B from Foster&Foster. Attorney Dehner said
that the current Summary Plan Description was actually approved in May and it is reasonable to
hold off and when it is prepared, there will be a new Exhibit A because the Trustees on the Board
General Employees Pension Board
Special Session,June 8,2005
Page 9 of 9
have changed and Ward Foster will submit a new Exhibit B which is the actuarial summary of
�r the actual financial data.
Attorney Denner then mentioned to Trustee Reed that he had made available a 50+/-page
outline on Trustee responsibilities which he keeps updated. He explained that it is
comprehensive and would help give him a start. He then reminded all of the Trustees about the
need to file the Form 1 Financial Disclosure, filed in the county of their residence,by July 1. He
said that if the form had not already been sent to the Trustees, it is not a defense for not filing.
He said the forms are available on the internet and at City Hall and he suggested that, if filing in
person,the Trustees get a stamped receipt and, if filing by mail, do it with a return receipt
requested, because there are fines for late filing.
IV. Comments From Trustees
Chairperson Swickerath asked the Trustees for any comments. Secretary Grafton asked
Trustee Hendrix for a verification of his address.
Trustee Hendrix asked if the Pension Board has any say in employee healthcare after
retirement. He said he had been asked about healthcare. Attorney Dehner said no. Trustee
Grafton advised that the City gives them an option to continue on the City's policy at the same
fee that the City has paid for them as an employee. She added that the minutes were full of
discussions about a possible $100 or$200 supplemental benefit and there was even a motion to
add a pro-rated amount after retirement but, because there would be more cost associated with
the supplement, it was never implemented.
Chairperson Swickerath advised all of the Trustees that they do not have to answer any
individual question from an employee about their benefits. Secretary Grafton informed that
they are supposed to put it in writing to the Pension Board, or appear in person to address the
Board. Chairperson Swickerath indicated that, as a full Board,they would be pleased to talk
with any employee. Attorney Denner warned the Board that if mistaken information is provided
to a Plan member,the Plan could be forced under a principal called estoppel,to live with the
mistake.
V. Set Agenda For Next Meeting
Chairperson Swickerath asked if there were any other issues to be added to the Agenda other
than those which are recorded in these minutes. There were none. The Board was reminded that
the next scheduled Quarterly Meeting would be on Wednesday,August 10, 2005, at 10:00 a.m.
VI. Adjourn
There being no other business,the meeting was adjourned at 11:15 a.m.
Respectfully submitted,
Jo Ann Lacey, App •v•d by:
Recording Secretary of the Meeting
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