HomeMy WebLinkAbout05-21-2020 MinutesTHE CITY OF OCOEE POLICE OFFICERS'/FIREFIGHTERS'
RETIREMENT FUND BOARD MEETING — May 21, 2020
Chairman Brown called the virtual meeting of the City of Ocoee Police Officers'/Firefighters' Retirement
Trust Fund to order at 12:15 pm via WebEx.
Trustees Present: Chairman Charles Brown, Bryan Pace, Trey Littlefield and William Maxwell
Others present:
Fund Consultant Tim Nash of AndCo Consulting, Board Attorney Pedro Herrera of Sugarman and
Susskind, Fund Auditors Richard Cristini and Jeanine Bittinger of Saltmarsh, Cleaveland & Gund, 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.
Approval of Minutes from Regular Meeting dated February 5, 2020
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.
Investments Report: Quarter Ending 03/31/2020
AndCo Consulting
Mr. Nash reported on the economy noting that asset class returns declined significantly during the 1st
quarter of 2020 due to the COVID-19 (Corona virus) pandemic. Small cap stocks lost 30% of their value.
Microsoft was up for the period due to their cloud performance. Moderna was up 53% for the quarter due
to their assistance in providing a vaccine for Covid 19. The plan was down 12% or approximately $8
million for the quarter. The fund at the end of May is up $5.2 million dollars $57.6 million vs. $52.3
million at the end of March 31, 2020, a 10.1 % gain during the month. Mr. Nash noted that the real estate
manager usually pays the fund 4% gains from the rentals but currently they have moved the rate down
one percent to 3%. Mr. Nash said he believes that this will be a short-term issue until the real estate
market comes back to normal. Both domestic and international equities experienced significant declines.
Through the quarter, global economic growth turned negative as countries responded to the pandemic by
shutting down the economy. In the US, as a result of the decision to institute social distancing and shelter -
in -place orders, labor markets suffered significant losses as businesses closed or furloughed employees.
As a result, the Federal Reserve (Fed) cut its overnight lending rate to between 0% to 0.25%. The US
government responded with a stimulus package consisting of forgivable loans and other short-term
benefits that is designed to act as a bridge for the economy until businesses can reopen. Large cap stocks
outperformed small cap stocks during the quarter with the S&P 500 Index declining -19.6% versus the
Russell 2000 small cap return of-30.6%. For the 1-year period, the US equity had negative returns as
large and mid -cap stocks returned -7.0% and -18.3% respectively and small cap stocks decline-24.0%.
International markets also declined for the 1 st quarter. The US dollar (USD) strengthened which
appreciated against most major currencies during the period. Developed markets outperformed Emerging
markets for the quarter as the MSCI EAFE Index declined -22.8% vs. the MSCI Emerging Markets Index
of-23.6%. Both markets posted a loss for the 1-year period of -14.4% and -17.7% respectively.
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Mr. Nash reported on the asset allocation noting that the total equities are 59.06% with 49.47% in
Domestic Equity and 9.59% in International Equity; the total fixed income is 27.71% with 23.87% in
Domestic Fixed income and 3.84% in Global Fixed income; Real Estate is 11.84% and cash and
equivalents are 1.72%.
Mr. Nash reported that the Fund due to the pandemic, the Fund lost approximately $8 million dollars as
the market declined from $60,777,546 at the beginning of the quarter to $52,327,469 at 3/31/2020. The
contributions totaled $826,826; the distributions totaled-$1,404,315; the management fees totaled -
$38,647; other expenses were-$42,271; the income generated was $240,453 and the depreciation was -
$8,032,123.
Mr. Nash reported on the Fund performance noting that the total Fund was down -13.01 % vs. the Fund
Policy-12.34%. The total Equity Fund returned-20.54% vs. the Equity Policy-21.49%; the Total
Domestic Equity-20.17% vs. the Domestic Equity Policy-20.90%. GAMCO was down-27.03% slightly
less than the Russell 3000 Value of-27.32%. The Vanguard Total Stock Market Index returned-20.86%
vs. the CRSP U.S. Total Market TR Index of-20.88%. For the Large cap growth component Alger and
Marvista returned-11.23% and-16.89% respectively vs. the Russell 1000 Growth Index of-14.10%. In
the International Equity, American Funds Europacific Growth returned-22.43% vs. the MSCI AC World
ex USA of-23.26%. The fixed income returned 0.73% vs. the fixed income policy of 3.15%. For the
domestic fixed income, Garcia Hamilton returned 1.60% vs. the Barclays Aggregate of 3.15%. For the
global fixed income, Templeton Bond was down -4.40% vs. the FTSE World Government Bond Index of
2.00%. American Realty returned 1.54% vs. the NCREIF ODCE of 0.90%. Mr. Nash reported on the
Compliance checklist noting that the funds did not meet or exceed the benchmark in any respective
period; however, the plan is in compliance with the allocation.
NEW BUSINESS:
Presentation of 9/30/19 Financial Statements
Mr. Cristini and Ms. Bittinger addressed the board regarding the financials of the plan. Mr. Cristini noted
the plan is doing well and found no issues with administration of the plan and is pleased to provide an
unmodified or clean opinion, which is the highest opinion rendered. Mr. Cristini also noted that GASB
excludes smoothing for the purposes of preparing the audit but the plan does use the smoothing method.
Ms. Bittinger reported that the Employer contributions were $3,060,828 and Employee contributions were
$658,066 totaling $3,718.894. The chapter 175 and 185 monies received were $326,660 and $382,608
respectively. The net appreciation was $(204,156), the interest totaled $415,534, the dividends totaled
$1,525,650, the investment expenses totaled $177,359. The benefit payments with service retirees totaled
$2,085,030, disabilities totaling $181,068, DROP retirees totaling $824,250; share plan payments of
$3,310, refunds of contributions totaling $56,599 and the administrative expenses totaled $118,160 for the
total deductions of $2,719,759. Ms. Bittinger noted that the cost of the plan increased to $1,733,023 from
the 2018 cost of $1,597,646.
The benefit payments including refunds of contributions increase to $3,157,250 from $2,800,462 an
increase of $349,795. The net position restricted for pensions was $55,141,074 and at the end of the
fiscal year the net position was $57,860,833. The 2 components of the net fiduciary liability are
$63,501,569 minus the plan's fiduciary position of $57,860.33 resulting in the City's net pension liability
of $5,640,736 or as a percentage 91.12%.
The pension liability of $5,640,736 was calculated using the discount rate of 7.80% and if using the
discount of 1% lower (6.80%) the liability would be $13,152,558 and using the discount rate of 1%
higher (8.80%) the liability would be $(605,017).
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Ms. Bittinger reported on the demographics of the Fund noting that there is a total of 95 retired members
with 69 members receiving benefits and 26 vested terminated members. There are currently 121 active
members with and 63 vested members and 68 non -vested members.
Ms. Bittinger reported on the plan provisions noting that a member may retire with normal benefits after
reaching age 55 and 10 or more years of service or 25 years of service. The benefit multiplier is 3.5% of
the member's final average compensation. The accrual rate for firefighters hired after September 30,
2015 and police officers hired after May 16, 2017 is 3.25%; the maximum benefit is 81.25% of average
final compensation and the vesting of 7 years of service. A member with 7 or more years of service is
eligible for deferred retirement. The benefits begin upon application or after reaching age 45 and the
benefits are computed the same as normal retirement. Disabilities for police officers hired after May 16,
2017 for service or non -service -related disabilities are calculated at 55% of the average final
compensation. Death benefit for any deceased vested employee who is actively employed and eligible for
normal or deferred retirement, the benefit shall be payable to the members' designated beneficiary at least
equal to the annuity of 10 years calculated as of the date of death. Non -vested death benefits are based on
the members' accumulated contributions. Ms. Bittinger concluded her report. That being said, Trustee
Pace moved to approve the 9/30/19 financial statements and Trustee Littlefield seconded the motion and
it passed.
Consent Agenda: For Ratification: Warrants #190-192
Charles Brown (Parking Expense for FPPTA Trustees School)
$27.00
Professional Indemnity (2020 Fiduciary Liability Insurance Renewal)
$4,226.00
Total
$4,253.00
AndCo (Q1-2020 Consulting Fee -Invoice #34780 dated 2/27/2020)
$6,250.00
Benefits USA, Inc. (Flat Monthly Fee for March 2020)
$2,100.00
GAMCO (Q4-19 Mgmt Fee -Invoice #20191231-157-4967-A dated 1/21/2020)
$14,417.00
Sugarman & Susskind (Legal Fees -Invoice #146851 dated 3/10/2020)
$260.43
Total
$23,027.43
Benefits USA, Inc. (Flat Monthly Fee for April 2020)
$2,100.00
Benefits USA, Inc. (Flat Monthly Fee for May 2020)
$2,100.00
Fiduciary Trust (Q1-2020 Custodian Fee-GAMCO Invoice dated 4/16/2020)
$955.83
Fiduciary Trust (Q1-2020 Custodian Fee-GHA; Invoice dated 4/16/2020)
$1,552.89
Fiduciary Trust (Q1-2020 Custodian Fee -Mar Vista Invoice dated 4/16/2020)
A$660.47
Fiduciary Trust (Q1-2020 Custodian Fee -R&D Invoice dated 4/16/2020)
$2,608.09
Foster & Foster (Services Rendered Invoice #16912 dated 4/16/2020
$6,505.00
Garcia Hamilton (Q1-2020 Mgmt Fee -Invoice #32026 dated 4/8/2020)
$7,804.90
Mar Vista (Q1-2020 Mgmt Fee -Invoice #6897 dated 4/13/2020)
$5,946.99
Sugarman & Susskind (Legal Fees -Invoice #147845 dated 4/7/2020)
$1,742.50
Total
$31,976.67
Trustee Pace moved to approve the Consent Agenda and Trustee Littlefield seconded
the motion and the
motion passed.
Attorney's Report:
Attorney Herrera reported on March 20, 2020, the Governor of Florida issued Executive Order 20-69
suspending any Florida Statute requiring a physical quorum to be present for a local government agency's
public meeting. The Executive Order allows for governmental bodies to utilize audio-conferencing and
tele-conferencing to conduct its public meetings through different platforms such as Zoom or Webex. He
noted that his firm drew up a virtual meeting policy for the Board to adopt memorializing the authority
and process to meet virtually. He also noted that the order was extended for 60 days and said as long as
the Order is in effect, the policy will cover future meetings.
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Attorney Herrera also reported on the SECURE act noting that changes were made to the Required
Mandatory distribution age changing the requirement from age 70 '/2 to 72. He also reported on the CARES
act and Families First Relief acts.
Finally, Attorney Herrera reminded the Board that the Financial Disclosure forms are due by 7/1 and if
they are not filed by then a penalty will be assessed. That concluded the attorney's report.
Administrator's Report:
Benefits USA had nothing further to report.
Comments from Trustees:
The Trustees had nothing further to report.
Miscellaneous Correspondence:
No action required.
Next Regular Meeting date: August 5, 2020 at 1:00 pm
Adjournment: The meeting adjourned at 3:10 pm.
Respectfu s tted b ,
Chairman
Contact the i Clerk's Office to listen to an electronic copy of the complete minutes.
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