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HomeMy WebLinkAbout08-19-2009 MinutesMinutes of the Regular Meeting of the CITY OF OCOEE GENERAL EMPLOYEES' PENSION BOARD Held on August 19, 2009 At 150 N. Lakeshore Drive Ocoee, FL 34761 AGENDA ITEM-I. CALL-TO ORDER--Chairman Wagner - - A. Chairman Russ Wagner called the meeting to order at 10:06 a.m. in the Commission Chambers in City Hall. The roll was called (by the chairman) and a quorum was declared present. Present were Trustees David Wheeler, Jean Grafton, Russ Wagner and Wendy West. Absent was Trustee Tom Hendrix. Also present were H. Lee Definer, Attorney and Mike Welker, Bogdahn Consulting. S. Approval of Minutes from Special Session Held on Juiy 15, 2009 Chairman Wagner brought the board's attention to the minutes and asked for the board's pleasure. Upon a motion being made by Trustee Wheeler, seconded by Trustee West, which passed unanimously, the board RESOLVED to approve the minutes for the July 19th special session. AGENDA ITEM II. NEW BUSINESS A. Investment Consultant Report -Mike Welker, Bogdahn Consulting, LLC After distributing the bound report to the board, Mr. Welker reported that the City did well for the past quarter; he went on to give details as he reviewed the written report (pages 4, 7, 8, 9, 10, 1 1, 13, 14, 15) with the board. (Trustee Tim Hendi°ix enter°s the meeting at 10:10 a. m. ) Mr. Welker said that the board should move some money from Agincourt, sell some bonds and move money to Baring while slightly bumping up Rockwood. Attorney Definer confirmed that a motion is not needed in order to proceed with the consultant's recommendation. General Employees Pension Board August 19, 2009 ,Page 2 of 9 (Jim Carnicella and Debbie Bertling enter the meeting At the end of his report, he took questions from the board. Trustee Wheeler stated the there was a story in the Orlando Sentinel that said the market is projected to take a 20% downturn by the end of the year. He asked what the consultant's plan was for Ocoee to mitigate such an outcome.-- Mr:-Welker stated -that the-story definitely-stated-one-side-of- the-coin.- He- ---- - -- continued that he believed that 20% might be overstating the matter. The market is still attractive. Mr. Welker added that Warren Buffet said the market is now off life support. He continued that regarding evaluation, the market is still attractive. He opined that 20% is a little high. Chairman Wagner summarized that if Rockwood continued to underperfonn that the board could make whatever necessary changes at a special session of the board. He thanked Mr. Welker for the report. B. Update Report on Merrill Lynch Lawsuit -Beggs and Lane Chairman Wagner stated that he had spoken with the board's attorney, Mr. Definer, and that he would summarize the conversation. He invited Attorney Definer to feel free to fill in any gaps. Greg Miller (attorney in the consortium investigating suing Merrill Lynch) called the chairman and they talked for about 15 to 20 minutes. Information is included in the trustees' packets. They have gone forward with action against Merrill Lynch. However, in the City's case the City did not have a soft dollar contract, but a hard dollar contract, which means they (Merrill Lynch), got a fixed fee for what they did. Mr. Miller said that the City could have 1.3 million dollar in damages. The problem is that it is not easily actionable given the nature of the City's contract with Merrill Lynch. However, the City could show that given the losses by other cities, Ocoee in fact lost money also. According to Mr. Miller, it is not timely yet for him to jump in, but it may be in the future. Ocoee could potentially get a lot of money out of this if the relationship (mentioned above) can be shown. Attorney Definer added that there were 2 components: liability (or potential) and liability damages. According to Mr. Miller, there is not currently sufficient evidence of liability to file a complaint. The City would not want to file a complaint under these circumstances since the City could be subject to counterclaims; however, as other cases are filed, information may surface whereby the City would have sufficient evidence on which to base a complaint. Chairman Wagner stated that it was interesting to note that the City underperformed not just for one year, but also for 4 or 5 years in a row. They (Merrill Lynch) were not recommending the appropriate actions for the board to take. General Employees Pension Board August 19, 2009 Page 3 of 9 Mr. Carnicella stated that he could not imagine that any other jurisdiction in Florida would not join in to sue Merrill Lynch. He continued that as a layperson, he would defer to the advice by the board's attorney. Chairman Wagner stated that he would like Mr. Dehner to stay on top of the matter, and keep the board advised of any information that might give Ocoee cause to file a claim. Trustee Grafton cautioned that the board not wait until the - -- ------- `well-has-gone-dry'-before-stepping-in-to-recover-Ocoee'-s-share-of-what was-lost.--Attorney- ----------- Delmer agreed that the sooner a sustainable suit is filed, the better. He agreed to keep the board informed. Chairman Wagner noted that he would put the matter back on the next meeting's agenda. Trustee Wheeler asked that the recording clerk give a verbatim reflection of the chairman's statement regarding his conversation with the Attorney Miller since the board had nothing in writing. Chairman Wagner was not completely comfortable with the request given he had only given the board his interpretation of the attorney's statements to him. Attorney Delmer agreed that the board should have something in writing from Attorney Miller, and stated that he would ask for a written statement from Attorney Miller summarizing their conversation. There was no further discussion on the matter. AGENDA ITEM III. OLD BUSINESS A. Finalize Amendments to Summary Plan Description Chairman Wagner called the board's attention to the previously distributed redlined version of the plan, which showed the suggested changes. He noted that many of the suggested changes had to do with the form of the document rather than the content. Trustee Grafton stated that the changes the chairman had made were very good ones since they added clarification to the document. The chairman pointed out particular clarifications he made regarding early retirement without changing the essence of what the document said. Trustee Wheeler commented on the front page of the document, which questions whether the name of the beneficiary is up to date. He asked if the beneficiary could be listed on the yearly statement. Mr. Carnicella stated that HR has attempted to notice the employees as often as possible about the necessity of keeping that information current, and that to have the beneficiary appear on the statement would require the City to get the information to Foster & Foster. This would mean that Ms. Bertling would have to go through 325 employee files. Chairman Wagner suggested that the one page form that contains the beneficiary information be attached to the yearly statement. This would circumvent involving Foster & Foster. Mr. Carnicella stated that they could chat about that later, and that he understood what the chairman was trying to achieve and that it was a good idea. Chairman Wagner noted that the Foster & Foster form is ambiguous. Mr. Carnicella agreed and reiterated that they could talk General Employees Pension Board August 19, 2009 Page 4 of 9 to Foster & Foster about possible changes. Trustee Wheeler asked about the section on the first page of the summary that spoke about what it takes to elect a trustee. It was clarified that to be elected as a trustee it takes a majority vote of those who vote. Mr. Carnicella questioned whether any member can vote, or just vested employees. In the past, all members were eligible to vote, Mr. Carnicella stated. Further discussion ensued. Attorney Delmer - - -- ---stated-that while-one-does-need-to-be -vested-in-or-der-to-be elected-trustee- on--the-board,. alI- members could vote for a trustee candidate. Further discussion ensued. The chairman wants to produce a strike through-underlined copy and asked if the attorney would be doing that. While Attorney Delmer was willing to do it, the chairman determined that he would have his administrative employee make those changes. Trustee Wheeler pointed out a matter on page 5, the question in paragraph 2, A. Trustee Wheeler asked if the DROP program is only seven years or can one do it up to seven years. The chairman answered that one can do up to seven years. Mr. Carnicella added that the employee call leave at any time during those seven years. Mr. Carnicella noted page 5, section 2A, the last paragraph and the addition of the word `disability'. He said that there is no disability provision in the program. In the DROP program, one is not eligible for disability if there was a disability provision in the plan. Given that there is no such provision, it has nothing to do with any benefit that the City would provide. It was agreed that the word `disability' should come out. On page 10, item J, Trustee Wheeler questioned the clarity of the passage. Chairman Wagner stated that by adding the following sentence, `this amount varies each year...' , he was trying to let employees know that the City contributes to their pensions at a rate greater than what the employee contributes. Chairman Wagner posed the question to the board as to whether he should take the sentence out or leave it in. The chairman asked Mr. Carnicella what he thought. Mr. Carnicella stated that he would defer to Attorney Delmer on this one. He did point out that the verbiage was a little cumbersome. He said that he thought the information was good. Chairman Wagner decided to pull the sentence to keep things simple. In paragraph L, `subject to a certain cost of living adjustments ...'. Attorney Delmer noted that the passage reflects a rule from the IRS Code. When the updates come, Attorney Delmer stated that he would make the appropriate changes. Mr. Carnicella noted that there are certain changes in the document that the attorney alone can make. Trustee Wheeler noted that it is not until page 11 that the document tells the employee how many years he needs to be vested in the program. Chairman Wagner asked if there were any other comments or questions on the Summary Plan. He further summarized that he would provide the attorney with the strike through-redlined version of the document so that the attorney could make any further necessary changes. Trustee Grafton remarked that there is a General Employees Pension Board August 19, 2009 Page 5 of 9 place in the document that says the board members should not answer questions independently but have the employee submit their question to the board. Mr. Carnicella stated that once the Summary Plan is ready for distribution, there will be a meeting with the employees so that they can become educated about what their benefits are. He further stated that they hope to develop a small handbook that employees will be able to carry around with them,.-In-addition,--that there are-other-places-that they-can-go-to-in-order-to-obtain-financial-- advice. Chairman Wagner asked the attorney if the changes could be adopted today. Attorney Delmer answered that they could adopt the plan as amended and with the incorporation of the Internal Revenue information. Mr. Carnicella stated that he wants to hold the employee meetings before the pension board's next meeting. A motion was made by Trustee Grafton, and seconded by Trustee West to adopt the summary plan description as amended pending the addition of the required IRS Code additions with the motion carried by a vote of 4 to 1 (Trustee Wheeler dissenting), the board RESOLVED to adopt the Summary Plan as amended and with the IRS code changes. B. Finalize Amendments to Operating Rules and Procedures Chairman Wagner noted that the board has a little more latitude with this document as it is not directly related to the governing ordinance. He thought the appeal process was a bit long and drawn out. He did not make any substantive changes. Attorney Delmer agreed that this is the board's document to adopt and to make changes to from time to time. As far as the claims issue, there must be procedural due process for claims. Chairman Wagner noted that he did make some changes with respect to election procedures. He noted that the City Clerk did not have a problem with remote ballot boxes but she would give the administrative person the rules for the box such as being taped shut, sign-offs, etc. She was willing to try it. Trustee Grafton asked if she understood that if a box did not match the sign-off list that the entire box would be discounted. The chairman responded affirmatively. Trustee Grafton pointed out that this term starts the four-year terms. It was additionally determined that the City Clerk would need to place Trustee Grafton's reappointment on the next agenda for the next commission meeting. Chairman Wagner went over the other changes he suggested. At 1.7, he added the word `monitor' in the fourth line down; in the next line he added the words `one or more ballot boxes'; he added the words `and other locations convenient to city employees who work outside City Hall.' He then added that `ballots will be counted at a special session of the board following the election'. Trustee Grafton asked if the City Clerk will count the ballots or the board. Chairman Wagner answered that the City Clerk's office does not want to General Employees Pension Board August 19, 2009 Page 6 of 9 count the ballots, and that they normally do not count the ballots. The ballots will be counted by the board. Mr. Carnicella added that the board should control the outcome of any discrepancies in the ballots when it concerns whether or not to count a ballot. Chairman Wagner stated that he will clarify the matter later. Another change the chairman made was concerning activities regarding the nomination process. Mr. Carnicella pointed out that ---- ------them-was-another-place-whereby-the-word `vested-'--needed-to-be-removed.-T-r-ustee-Gr-afton --- suggested ways to simplify the election procedure such as making it so that the contender with the most votes wins. This would eliminate the need for run-off elections. The board agreed. Further discussion ensued. Trustee Wheeler pointed out page 8, under 2.9 as it related to minutes. He asked that the word `complete' be stricken. On page 12, Chairman Wagner changed the language to `administrator or other board designee'. On page 14, insurance, Trustee Wheeler asked if the fiduciary insurance issue was resolved. Mr. Carnicella responded affirmatively. Trustee Wheeler then asked if there was travel coverage specific to the board members. Mr. Carnicella answered that he did not believe the board had that type of coverage. On page 15, 7.3. Trustee Wheeler asked if the language reflected something that the board currently does. Since it did not, the board came up with alternative language. Any changes to the separation of an employee for military service, Mr. Carnicella suggested deference to Attorney Definer. Chairman Wagner noted page 20, on section 10.7, he changed the mention of an annual meeting to a quarterly. Further discussion ensued. Trustee Grafton made a motion, seconded by Trustee Hendrix, to approve the Operating Rules & Procedures. The motion carried unanimously; therefore, the board RESOLVED to adopt the Operating Rules & Procedures as amended. Chairman Wagner stated he would see to it that the changes were circulated to the board members. AGENDA ITEM III. OTHER BUSINESS A. Payment of Invoices Trustee Wheeler, having made a motion, seconded by Trustee West and carried unanimously, the board General Employees Pension Board August 19, 2009 Page 7 of 9 RESOLVED to approve all invoices as they have been presented in the packets for the board. B. Board Member Terms Ending 9/30/09 -already discussed. C. Upcoming FPPTA Training Session 10/4-7/2009 Chairman Wagner asked who would be attending the training. All of the trustee other than the chairman will be attending the October 4th through 7th training. AGENDA ITEM IV. DISCUSSION ITEMS A. City Liaison Issues -Jim Carnicella Mr. Carnicella mentioned that there is an employee that is not retirement age but has reached the maximum level of what they can accrue in the pension program. One member would like to retire now but the reduction due to their age is too much of a penalty. Mr. Carnicella asked that the board authorize him to contact the actuary about how to reduce the impact of the age issue. This would determine whether or not the board might want to make a recommendation to the commission to make a change to the pension program. The board had no objection to Mr. Carnicella proceeding with contacting the actuary. He also asked the board authorize him to work with the actuary and the attorney to work up language for the 13th check. The board agreed and the matter will be placed on the next agenda. AGENDA ITEM V. ATTORNEY COMMENTS - H. Lee Dehner, Esquire Asked Mr. Carnicella to contact Chief Brown (with whom the attorney has his next appointment) given the lateness of the hour. State Actuary -Proposed Administrative Rules dealing with actuarial standards and practices which would have increased pending funding expenses. The state has hired an actuary. The project (for the administrative rules) may move forward, although it is not a front burner item Pending legislation HELPS II -would include general employee's benefits heretofore given only to public safety officers. General Employees Pension Board August 19, 2009 Page 8 of 9 IRS - a discussion needs to be had as to whether the board wants to file with the IRS for a favorable determination letter. He directed the board to be on the lookout for a survey coming from the IRS. Senate Bill 538 -City's pension fund has to comply with mandate to divest of stocks to - -------achieve a-social-or-political aim in- Reminder regarding financial disclosures submissions AGENDA ITEM VI. COMMENTS FROM TRUSTEES None. AGENDA ITEM VII. SET AGENDA FOR NEXT MEETING Timing of accounting reports Employees who have reached 81 % in the pension program Thirteenth check Establishing Officers Actuary reports Audits AGENDA ITEM VIII. COMMENTS FROM PUBLIC None. AGENDA ITEM IX. ADJOURN There being no other business, the meeting was adjourned at 12:44 p.m. Respectfully submitted by: Approved by: General Employees Pension Board August 19, 2009 Page 9 of 9 Stella McLeod, M ip ec. Coordinator Russell B. Wagner, Ch irman