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Home My WebLink About11-17-1998 Minutes rrr► THE CITY OF OCOEE POLICE OFFICERS' /FIREFIGHTERS' RETIREMENT BOARD MEETING - November 17, 1998 Chairman REED called the meeting of the City of Ocoee Police Officers' /Firefighters' Retirement Trust Fund to order at 1:14 p.m. in the Commission Chambers Conference Room of City Hall. The roll was called and a quorum declared present. PRESENT: Chairman Reed, Secretary Strosnider, and Member Gledich. Also present were Actuary Foster, Attorney Delmer, Money Manager Senderowitz, and Recording Secretary Lewis. ABSENT: Members Williams and Wilson (excused). APPROVAL OF MINUTES Secretary STROSNIDER, seconded by Member GLEDICH, moved to approve the Minutes of the August 13, 1998, and also, the September 15, 1998 Police Officers'/Firefighters Retirement Trust Fund meetings as presented. Motion carried 3 -0. DISTRIBUTION OF MEMBERSHIP CERTIFICATES *'' While this time had been set aside to distribute certificates to membership, no one was present to receive their certificate, and they would be distributed from the Police or Fire Departments. QUESTIONS /COMMENTS FROM AUDIENCE None DISCUSSION /APPROVAL OF DISABILITY REVIEW PROCEDURES AND SURVEILENCE Attorney DEHNER explained that the Board had a responsibility to periodically review the status of Disability Retirees who may be eligible to return to employment with the City. A copy of Rule 21, Disability Review Procedure, and Rule 22, Surveillance, was distributed for review by the Board. Member GLEDICH pointed out a discrepancy which was later corrected in Rule 21. Member GLEDICH, seconded by Member STROSNIDER, moved to adopt Rule 21, Disability Review Procedure, with a correction in 21.1 Procedure to read "...to return to employment with the City of Ocoee..." rather than "to return to employment with the City of Melbourne..." and Rule 22, Surveillance, as presented. Motion carried 3 -0. Chairman REED removed Agenda Item VI. Discussion/Approval of Amendments to Rules, including Rule 21 and 22 as it had been discussed under Agenda Item V. Police Officers' /Firefighters' Retirement Trust Fund November 17, 1998 Near OTHER BUSINESS AUTHORIZE /RATIFY PAYMENT OF BILLS Chairman REED asked for ratification of payment, and requested approval of the Board the bills that had been presented to present to SunTrust for payment. Member GLEDICH, seconded by Secretary STROSNIDER, moved to authorize and ratify payment of the bills. Motion carried 3 -0. UPDATE RE:Y2K Money Manager SENDEROWITZ reported that he would send Chairman REED a copy of SunTrust's standard letter on the Y2K comprising them of their preparedness on the matter. He said that there were no problems and that they were on track. Upon receipt, Secretary LEWIS will provide a copy to the Board members. DISCUSS /SET 1999 MEETING DATES Meeting dates for 1999 were set for 1:00 p.m. on the following dates: Thursday, February 18, 1999 Thursday, May 13, 1999 %ay Wednesday, August 11, 1999 Wednesday, November 18, 1999 DISCUSSION RE:AMENDING SECTION 1.7 OF THE OPERATING RULES AND PROCEDURES Lengthy discussion by the Board ensued. Member GLEDICH, seconded by Secretary STROSNIDER, moved to adopt the Operating Rules and Procedures with the amendment of Section 1.7 A. to read "...The election shall be conducted by placement of a ballot box in the appropriate department headquarters for three (3) consecutive days from 7:30 A.M. to 4:00 P.M., beginning on a date to be selected by the Board..." Motion carried 3 -0. REPORTS ACTUARY Actuary FOSTER presented the summary of the regular annual actuarial valuation of the Police Officers' and Firefighters' Retirement Trust Fund, performed as of October 1, 1998. The contribution amounts developed in the valuation was applicable to the City's fiscal year ending September 30, 2000. The contribution requirements, compared with those developed in the October 1, 1997, actuarial valuation, are as follows: �.. 2 Police Officers' /Firefighters' Retirement Trust Fund November 17, 1998 Valuation Date 10/1/97 10/1/98 Applicable Fiscal Year 9/30/99 9/30/00 Total Required Contribution $ 871,419 $ 897,494 % of Total Annual Payroll 27.8% 25.9% Member Contributions (Est.) 237,976 262,919 State Contribution (Est. 85,820 111,604 Balance From City 547,623 522,971 % of Total Annual Payroll 17.5% 15.1% The Total Required Contribution had increased as a dollar amount but had decreased when expressed as a percentage of Total Annual Payroll. The increase in the dollar amount was due to the 10% increase in Total Annual Payroll. The decrease in the Total Required Contribution when expressed as a percentage was due to net favorable actuarial experience. The primary components of favorable experience were an investment return of 14.2% (Actuarial Asset basis) which exceeded the 8.0% assumption and average salary increases which were less than the assumed rate. Secretary STROSNIDER, seconded by Member GLEDICH, moved to approve the Actuarial Report as presented. Motion carried 3 -0. Actuary FOSTER announced that he would send the report to the two bureaus. MONEY MANAGER Money Manager SENDEROWITZ said that he believed that the Board had done a very good thing in changing the ordinance as it would enable them with an option to invest in other assets. He explained that it had not been the best of times for the market in the third quarter. The Board had been informed during its last meeting that there might be turbulent times ahead. One of the factors leading to the declines in the third quarter had been the concern that a lot of investors had with lofty valuations. Time had been so good and returns had been so strong. Money Manager SENDEROWITZ gave an overview of the report, and extended an apology to the Board as he had believed that the Plan had been at a 60 -40 at Costs. He had let it move toward 50 -50, and said that he will bring it back into compliance during this quarter. Attorney DEHNER said that the Board could amend its Policy to a 60 -40. The ordinance had been changed but not the Policy. They had changed their policy last meeting to allow 10% of the Equities portion to the Small Mid Caps. Mr. SENDEROWITZ said that it had been the Bonds which had saved them. Mr. SENDEROWITZ reported that they did not think that the trouble that they had had in the past quarter with a recession direction but rather a more financial panic. It was not a result of 3 Police Officers' /Firefighters' Retirement Trust Fund November 17, 1998 high inflation or high interest rates but rather people moving their assets out. Assets are moving back into Stocks. They were recovering significantly and had pretty much made back the losses of the third quarter within the last 45 days. Steps had been taken to address some of the problems in the economy. Interest rates which had been a little high were brought back down a little bit. There will be more drops in the next three months but probably not in the shorter term. The drop and the reduction in the interest rates will provide a boost to the economy. More people are buying homes which caused a big multiplier factor with that. The stronger U.S. dollar was hurting us both in exporting and importing goods from overseas in that imported goods were kind of a cost advantage. The U.S. dollar had declined a little bit against some foreign currencies which made us more competitive. That would help both the exporters and domestic industries here such as car manufacturers. In looking forward, Mr. SENDEROWITZ said that there will probably be more moderate growth in the shorter term, and as Japan starts to recover that will allow growth domestically and Worldwide to continue into the future. Longer term Stocks were going to be still where you wanted to be yet warned that it may get rocky in the shorter term. Money Manger SENDEROWITZ left the meeting at 2:00 p.m. PERFORMANCE MONITOR Performance Monitor FOSTER presented an analysis of the investment performance of the Trust Fund for the period from January 1, 1995, through September 30, 1998. The average annual rate of return for this period was 16.8 %. This rate of return failed to outperform the composite index of market indicators (50% S &P 500 Composite Stock Index, 45% Lehman Brothers Government/ Corporate Bond Index, and 5% U.S. Treasury Bills) which averaged annually a return of 17.9 %. The rate of return of the Total Fund outperformed the composite index (8.5% vs. 10.5 %) and ranked in the 12 percentile of the Cadence Universe of investment managers for the one year period ended September 30, 1998. The equity portion of the Fund failed to outperform the S &P 500 over the trailing one year period (5.1% vs. 9.0 %). This return ranked in the 23` percentile of the Cadence Universe of investment managers. Performance Monitor FOSTER commended SunTrust on doing a great job even though they had not met the actuarial assumption. This had been one of the better returns that they had seen because of the relatively conservative asset allocations. ATTORNEY COMMENTS Attorney DEHNER reported that (1) he would prepared an updated Summary Plan Description in February (next time 2001); and (2) the Actuary Contract with a 2 -year fee guarantee. Mr. DEHNER said that the current contract had expired in September, 1998. The General Plan had revised the former contract in that the Actuarial valuation would be a flat fee of $4500 rather than it would not exceed $4500, plus the hourly rate that was in the current contract for special projects would be universal plus costs. 4 Police Officers' /Firefighters' Retirement Trust Fund November 17, 1998 Chairman REED said that that the Board definitely wanted to talk about the Drop Plan. He also reported that the Employee Committee had directed another concern to him about the disability part of the Plan. Discussion ensued. ADJOURNMENT The next meeting was scheduled for February 18, 1999, 1:00 p.m. There was discussion about scheduling a meeting of the Board and Membership to discuss the Drop Plan and Rules 21 and 22. A meeting was scheduled for January 25, 1999, 6:00 p.m. in the Commission Chambers at City Hall. Secretary STROSNIDER, seconded by Member GLEDICH, moved to adjourn the meeting at 2:30 p.m.. Motion carried 3 -0. Respectfully submitted, Judi ewis, Recording Secretary a:\MSWord\PF111798.M \jl 5