HomeMy WebLinkAbout02-05-2020 MinutesTHE CITY OF OCOEE POLICE OFFICERS'/FIREFIGHTERS'
RETIREMENT FUND BOARD MEETING — February 5, 2020
Chairman Brown called the meeting of the City of Ocoee Police Officers'/Firefighters' Retirement
Trust Fund to order at 1:00 p.m. in the Commission Chambers of City Hall.
Trustees Present: Chairman Charles Brown, Biyan Pace, Joe Moy, Trey Littlefield
Absent and Excused: William Maxwell
Others present:
Fund Consultant Tim Nash of AndCo Consulting, Board Attorney Pedro Herrera of Sugarman and
Susskind, Fund Actuary Doug Lozen of Foster & Foster and Fund Administrator Pete Prior of
Benefits USA, Inc.
Call to Order:
Roll call and determination of quorum
The roll was called and a quorum declared present.
Approval of Minutes from Regular Meeting dated November 6, 2019
Chairman Brown asked the board if there were any corrections, deletions, or additions to the
minutes. Hearing and seeing none Trustee Littlefield moved to approve the minutes and Trustee
Pace seconded the motion and the motion passed.
Public Comments:
There were no public comments at this time.
Quarterly Investments Update: Q/E 12/31/2019
Mr. Nash addressed the board regarding a letter at the beginning of the report from the CEO of the firm,
Mike Welker. Mr. Welker first expressed thanks to the clients for giving AndCo the opportunity to serve
them. Mr. Welker noted that 2020 is a big year for AndCo as they are celebrating their 20-year
anniversary of serving our valuable clients. He also noted that they are now 89 people strong advising
approximately $92 billion in client assets which is a record high. In 2019 we hired 9 new team members. The
primary reason why they hired 7 new team members in their research group last year was to help promote
investment ideas and support our consultants. Currently they have 19 dedicated research analysts. Mr.
Nash reported that the Company is relocating their office to Winter Park.
Mr. Nash provided a brief report on the economy noting the market was very good for 2019 with indices
posting earnings anywhere from 20-32% for equities and at 8% for fixed income. Broad asset class
returns were positive during the 4th quarter of 2019 with the exception of the US Gov't bond index. The
S&P 500 Index returned 9.1% vs. the Russell 2000 small cap return of 9.9%. US equity markets posted
the highest since 2013 with large cap at 31.5% and mid -cap stocks at 30.5%, respectively and small cap
stocks returned 25.5%. International equity market returns were strong during the 4th quarter. Both
developed and emerging markets posted strong returns over the 1-year period, returning 22.0% and 18.4%
respectively. Mr. Nash noted that although Templeton is underperforming, he is not recommending any
changes at this time. Mr. Nash noted that over the years, Templeton has either been at the top or near the
bottom. Mr. Nash also noted that because of the underperformance, GAMCO lowered their fee for their
clients.
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Mr. Nash reported that the Market Value at 10/1/19 was $57,557,871; the Contributions totaled $980,222;
the distributions totaled $672,232; the management fees and other expenses-$49,658 and-$22,365
respectively; the income totaled $1,123,770; the appreciation/depreciation totaled $1,859,938 for an
ending Market Value at 12/31/19 of $60,777,546.
Mr. Nash reported on the returns noting that the total fund return was 5.09% for the quarter and 18.45%
for the 1-year period vs. the Total Fund Policy 5.57% and 20.20% respectively. Total Equity 7.95%. for
the quarter 27.60% for the 1-year period vs. the equity policy of 9.08% and 28.77% respectively. The
domestic equity return for the quarter was 7.54% and 27.61% for the 1-year period vs. the IM U.S. Core
Equity (SA+CF) Median of 31.02%. GAMCO returned 4.35% for the quarter and 18.91% for the 1-year
period vs. the Russell 3000 of 7.48% and 26.26% respectively. Vanguard returned 9.01% for the quarter
and 30.81% for the 1-year period vs. the CRSP U.S. Total Market TR Index of 9.00% and 30.84%
respectively. Alger returned 10.81% for the quarter and 33.67% for the 1-year period vs. the Russell
1000 Growth Index of 10.62% and 36.39% respectively. Mar Vista returned 7.67% for the quarter and
32.94% for the 1-year period vs. the Russell 1000 Growth IndeXI0.62% and 36.39%. American Funds
Europacific Growth returned 10.09% for the quarter and 27.39% for the 1-year period vs. the MSCI AC
World ex USA of 8.99% and 22.13% respectively. The fixed income returned 0.17% for the quarter and
6.30% for the 1-year period vs the fixed income policy of 0.18% and 8.72% respectively. Garcia
Hamilton returned -0.06% for the quarter and 7.25% for the 1-year period vs. the Barclays Agg of 0.18%
and 8.72% respectively. Templeton Global Bond returned 1.60% for the quarter and 1.01% for the 1-year
period vs. the FTSE World Government Bond Index of -0.35% and 5.90% respectively. American Realty
returned 1.46% for the quarter and 6.31% for the 1-year period vs. the NCREIF index of 1.53% and
6.06% respectively.
Mr. Nash reviewed the large cap value manager report with the board and noted that some of the
recommendations are mutual funds and the others are separate account managers. After much discussion
and review the board chose to select Brandywine and DePrince Race and Zollo. Mr. Nash noted that
Brandywine and DRZ complement each other. The Chairman noted that Brandywine is computer driven
and Mr. Nash acknowledged yes and they are known as a qualitative manager. Chairman Brown noted
that he is partial to Brandywine and the Vanguard find as they seem to be able to coordinate their equites.
Attorney Herrera asked what the fee is and Mr. Nash said Brandywine's fee was 45bps and Vanguard
would be 18 bps. The other trustees noted that they like the top three managers on the list. Trustee Moy
moved to select Brandywine and De Prince Race and Zollo as the new large cap value managers and to
allocate the assets from GAMCO at 50150. Trustee Pace seconded the motion and the motion passed.
Mr. Nash noted as in the past, they use a third -party transition manager such as CAPIS. All the fees are
comparable and CAPIS has all of the information they need from Andco. Trustee Littlefield moved to
engage CAPIS as the transition manager. Trustee Moy seconded the motion and the motion passed.
Mr. Nash reported on the Investment Policy Statement noting that it should be reviewed as the last time
was in 2015. Mr. Nash noted that the changes included the Broad Market Fixed income index was
changed to the Bloomberg Barclay's Aggregate and the Global Fixed income index was changed to the
FTSE (formerly Citigroup) World Gov't Bond Fund at 25% and 5% respectively. Trustee Pace moved to
approve the changes to the Investment Policy Statement and Trustee Littlefield seconded the motion and
the motion passed. The Attorney noted that this will take affect 31 days from the signing of the document.
UNFINISHED BUSINESS:
There was no Unfinished Business discussed.
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NEW BUSINESS:
Presentation of 10/1/19 Actuarial Valuation
Mr. Lozen reviewed the valuation with the board noting the required contribution from the
combination of City and State sources for the year ending September 30, 2021, is 28.40% of the
actual payroll realized in that year which is an increase from last year of 23.01 %. Mr. Lozen
noted that the City has a prepaid contribution of $529,581.02 to offset a portion of the stated
requirements for the fiscal year ending September 30, 2020.
Mr. Lozen noted that for the Police Plan, under the default position, the first $223,377.02
received from the State will offset the City's contribution requirement. Future State Monies
received for the Police Officers' in excess of $223,377.02 will be split 50150, to be allocated to
the newly established Share Plan, and as a credit to the City's annual contribution requirements.
For the Firefighters, per Mutual Consent between the City and Firefighter Members, the first
$171,631.09 received annually will offset the City's contribution requirement. Since the Mutual
Consent Agreement did not specify the baseline for determination of excess monies, all future
State monies received for the Firefighters portion of the Plan in excess of $171,631.09 will be
allocated as a credit against the Unfunded Liability. If no Unfunded Liability exists, then
Firefighter State Monies in excess will offset the City's annual funding obligation. Mr. Lozen
reported that the plan had an overall unfavorable experience based on the plan's actuarial
assumption of 7.85%. The loss was due to an unfavorable retirement experience and an
investment return of 7.43%. These losses were offset in part by a gain from the average salary
increase of 4.22% which is less than the salary assumption of 6.14%. Mr. Lozen that the funded
ratio was 92.1 % a slight decrease from the prior ratio due to the change in assumption rate from
7.85% to 7.80% and the payroll growth assumption was reduced from 2.64% to 2.23% to be in
compliance with Chapter 112, Florida Statutes.
Finally, Mr. Lozen reported on the participant data noting that the total membership was 245
with 139 actives, 56 service retirees/beneficiaries, 10 DROP retirees, 7 disabilities and 33 vested
terminated employees. That being said, Chairman Brown entertained a motion to approve the
actuary's report. Trustee Pace moved to approve the 10/1/2019 valuation as presented and
Trustee Littlefield seconded the motion and the motion passed.
The Attorney reminded the Board that the assumption rate needs to be approved for this year and
for the long term. Mr. Nash stated that the current assumption rate is 7.80% for this year and in
the future. Trustee Moy moved to approve the rate of return and Trustee Littlefield seconded the
motion and the motion passed.
Additionally, Mr. Lozen noted that the board should have a new experience study prepared as it
has been 5 years since the last one. Mr. Lozen noted that he would be back at the August meeting
with some new assumptions, such as lowering of the rate of return as soon as possible because
the current assumption rate is on the high side versus other plans. He noted that the fee to prepare
this study will remain the same as the past. Trustee Moy moved to approve the assumption rate
study not to exceed $10,000 and Trustee Pace seconded the motion and the motion passed.
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Detail of Administrative Expenses:
Mr. Prior reported that the actual expenses for fiscal year 9/30/19 were $167,111 and the Fund
did not go over the approved budget of $221,880. No action was needed on this item as it was
just for informational purposes.
Fiduciary Liability Renewal application:
Mr. Prior noted that the Chairman has to sign the application to obtain a quote. Trustee Moy
moved authorize the Chairman to sign the application and Trustee Littlefield seconded the
motion and the motion passed.
Consent Agenda: For Approval: Warrant #189
For Approval: Warrant #189
Benefits USA, Inc. (Flat Monthly Fee for February 2020)
Fiduciary Trust (Q4-19 Custodian Fee-GAMCO Invoice dated 1/16/2020)
Fiduciary Trust (Q4-19 Custodian Fee-GHA; Invoice dated 1/16/2020)
Fiduciary Trust (Q4-19 Custodian Fee -Mar Vista Invoice dated 1/16/2020)
Fiduciary Trust (Q4-19 Custodian Fee -R&D Invoice dated 1/16/2020)
FPPTA (CPPT recertification fee for 5 Trustees @$31 each)
Garcia Hamilton (Q4-19 mgmt. fee -Invoice #31737 dated 1/14/2020)
Mar Vista (Q4-19 mgmt. fee -Invoice #6627 dated 1/10/2020)
Sugarman & Susskind (Legal Fees -Invoice #145071 dated 1/14/2020)
Total
For Ratification: Warrants #187-188
AndCo (Q3-19 Consulting Fee -Invoice #33135 dated 9/27/19)
Benefits USA, Inc. (Flat Monthly Fee for October 2019)
Benefits USA, Inc. (Flat Monthly Fee for November 2019)
Fiduciary Trust (Q3-19 Custodian Fee-GAMCO Invoice dated 10/16/19)
Fiduciary Trust (Q3-19 Custodian Fee-GHA; Invoice dated 10/16/19)
Fiduciary Trust (Q3-19 Custodian Fee -Mar Vista Invoice dated 10/16/19)
Fiduciary Trust (Q3-19 Custodian Fee -R&D Invoice dated 10/16/19)
Foster & Foster (Service Rendered; Invoice 415597 dated 10/28/19)
FPPTA (2020 Annual Membership Renewal)
GAMCO (Q3-19 Mgmt Fee -Invoice #20190930-157-4967-A dated 10/11/19)
Garcia Hamilton (Q3-19 Mgmt Fee -Invoice #31038 dated 10/4/19)
Mar Vista (Q3-19 Mgmt Fee -Invoice #6190 dated 10/11/19)
Sugarman & Susskind (Legal Fees -Invoice #142496 dated 10/10/19)
Total
AndCo (Q4-19 Consulting Fee -Invoice #34046 dated 12/31/19)
Benefits USA, Inc. (Flat Monthly Fee for Dec 2019 plus pension ltr postage 55 x $1.00)
Benefits USA, Inc. (Flat Monthly Fee for January 2020)
FPPTA (Winter Trustees School Registration for Charles Brown)
FPPTA (Winter Trustees School Registration for William Maxwell)
William Maxwell (Hotel and Per Diem for FPPTA WTS)
Sugarman & Susskind (Legal Fees -Invoice #143348 dated 11/13/19)
Sugarman & Susskind (Legal Fees -Invoice #144400 dated 12/16/19)
Total
$2,100.00
$1,310.69
$1,531.01
$795.20
$3,206.04
$155.00
$7,683.45
$7,173.37
$6,510.19
$30,464.95
$6,250.00
$2,100.00
$2,100.00
$1,258.08
$1,531.48
$740.76
$2,918.28
$1,660.00
$620.00
$18,871.00
$7,688.28
$6,689.98
$1,020.00
$53,447.86
$6,250.00
$2,155.00
$2,100.00
$720.00
$720.00
$694.55
$3,867.50
$5,107.69
$21,614.74
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Pension Disbursements for Ratification:
Michael Bryant (Monthly Benefit payments effective 1/l/2020)
$5,818.24
Michael Bryant (Partial Lump sum benefit as a result of retirement)
$94,031.22
Michael Bryant (Share plan distribution)
$6,655.24
Steven Ellis (Monthly benefit payments effective 11/1/2019)
$6,921.04
Steven Ellis (DROP distribution)
$424,363.70
Steven McCosker (Monthly benefit payments effective 10/l/19)
$6,510.76
Steven McCosker (DROP distribution)
$232,754.09
Steven McCosker (Share plan distribution)
$7,491.31
Paul Dunn (Refund of Contributions)
$7,005.63
Diego Gonzalez (Refund of Contributions)
$5,555.65
Spencer Longest (Refund of Contributions)
$5,722.42
Justin Temples (Refund of Contributions)
$11,029.36
Total
$813,858.66
Trustee Pace moved to approve the consent agenda and Trustee Moy seconded the motion and
the motion passed.
Attorney's Report:
Attorney Herrera reported on the new SECURE ACT, noting that this bill is intended for
participants to increase their retirement assets and to save more money. This bill also changed
the age on the Required Mandatory Distributions from 70 %2 to 72.
Attorney Herrera reported on Senate Bill 1270. This bill requires all members in public office
complete 5 hours of training during the term. This bill is still pending.
Attorney Herrera reported on ADA compliance noting that all documents posted on the City's
website must be ADA compliant.
Attorney Herrera also reported on the new notary requirements noting that the block language
regarding remote notary services is allowable however, if you do not perform remote notary
services, that has to be disclosed on the document being notarized.
Attorney Herrera also spoke on the lawsuit regarding the cancer bill in St. Petersburg where the
firefighter won the case regarding the diagnosis. He noted that the City will not appeal.
Finally, Attorney Herrera reported on Senate Bill 1270. This bill requires all members in public
office complete 5 hours of training during the term. This bill is still pending.
Administrator's Report:
Mr. Prior had nothing further to report.
Miscellaneous Correspondence:
No action was needed.
Comments from Trustees:
The Trustees had nothing further to report.
Next Regular Meeting date: May 21, 2020 at 1:00 pm.
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Adjournment: The meeting adjourned at 3:10 pm.
Respectfully submitted by,
Chairma
Contact the City Cleric's Office to listen to an electronic copy of the complete minutes.
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