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Home My WebLink About08-03-2016 Minutes THE CITY OF OCOEE POLICE OFFICERS'/FIREFIGHTERS' RETIREMENT FUND BOARD MEETING—AUGUST 3, 2016 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. The roll was called and a quorum declared present. PRESENT: Charles Brown, Joe Moy, William Maxwell, and Bryan Pace Also present: Mr. Tim Nash of Bogdahn Consulting, Lee Dehner Board Attorney, and Livia Giuliani of Benefits USA ABSENT and EXCUSED: William Wagner CALL TO ORDER— Roll call and determination of quorum Roll call was taken and it was determined that there was a quorum. APPROVAL OF MINUTES Approval of Minutes from Regular Meeting dated August 3, 2016. Trustee Maxwell moved to approve the minutes as presented. Trustee Moy seconded the motion and the motion passed. PUBLIC COMMENTS There were no public comments at this time. QUARTERLY INVESTMENT UPDATE: Period ending 6/30/2016 Bogdahn Consulting Mr.Nash reported that the Fund is doing extremely well. He said that developed countries are down 1.5%and Bonds performed better than stocks. Bonds were up 2.2%. For the 12-month period, small cap and mid cap stocks were down quite a bit. The 2nd quarter of 2016 was very volatile as financial market returns were influenced by central bank policy expectations, rising commodity prices,mixed economic data, and increased global political and economic uncertainty caused by the U.K.'s June vote to discontinue its membership in the European Union (EU). Higher risk assets, such as small cap equities, emerging market stocks, and investment grade and high yield corporate bonds,posted the strongest returns throughout the quarter. Mr. Nash said that led by the small cap Russell 2000's return of 3.8%, U.S. stock market indices were positive for the 2nd quarter. For the 1-year period, domestic large cap stock indices were the best performers,posting moderate gains,while domestic small cap indices posted negative returns. Broad international equity indices trailed domestic stock indices for both the quarter and prior year. In U.S. Dollar terms,returns for the MSCI Emerging Markets Index were positive for the quarter returning 0.7% while developed market equities,represented by the MSCI EAFE Index,returned-1.5%. Both indices have experienced double digit losses over the 1-year period, returning-12.1% and-10.2%respectively. Mr. Nash reported on the returns noting that for the quarter the total fund earned 1.76% vs. the policy index of 2.08% and for the fiscal year to date the fund earned 6.21% vs. policy of 7.61%. Page 1 of 4 The Domestic Equity earned 2.35% for the quarter vs. the index of 2.63%, and for the fiscal year to date, the Equity fund earned 8.46% vs. 10.12%. Mr. Nash reported that GAMCO did well earning 3.91% vs. 4.57% and 7.67% and 12.04% for the quarter and fiscal year to date respectively. Vanguard earned 2.67% and 10.13%vs. 2.69% and 10.13% respectively. Sawgrass returned 0.75% vs. 0.61% and 8.03% vs. 8.78% respectively. American Funds Euro pacific was down -0.32% for the quarter vs. the MSCI all world index of-0.40% and 0.27% vs. 2.61% for the fiscal year to date. The fixed income fund earned 1.75% vs. the policy of 2.08% for the quarter and 4.96% vs. 4.71% for the fiscal year to date. Garcia Hamilton earned 2.10% for the quarter vs. 2.21% for the quarter and 5.45% outperforming the index of 4.71% for the fiscal year to date. Templeton was down -0.33% vs. the policy of 3.41% for the quarter and 2.09% vs. 9.39% for the fiscal year to date. American Realty earned 1.26% for the quarter vs. the NCREIF ODCE of 2.18% and 7.08%vs. 8.33% for the fiscal year to date. RFP for Custodian Mr. Nash reported that there have been servicing issues with Fifth Third Bank and the Board asked them to prepare a Request for Proposal. Mr. Nash provided a list of Custodians who have responded and gave a brief report on each of them. After a lengthy discussion, a motion was made by Trustee Maxwell to interview Fiduciary Trust, Salem Trust, and PNC for the next meeting in November. Trustee Pace seconded the motion and the motion passed. NEW BUSINESS: 2017 Proposed Budget Ms. Giuliani reviewed the actual and proposed numbers with the board noting that she increased the 2017 numbers by 5% with the exception of Benefits USA and that the auditor's fee was taken from the contract amount of $15,500. Trustee Maxwell moved to approve the Administrative Budget of$166,522. Trustee Moy seconded the motion and the motion passed. Attorney Delmer noted that the budget be sent to the City to be posted on the website as well as to the State. UNFINISHED BUSINESS: Discussion of Experience Study Mr. Lozen reported on the actuarial study requested by the Board that this study was based on the 2014 valuation. The purpose of this study was to review the current actuarial assumptions and methods to determine which changes are necessary. He noted that currently the investment assumption rate is 8% and changing it to 7.75% is not a recommendation, it would just let them know that it would increase the City's cost by $430,000. The current salary assumption is 6% which consists of the core inflation rate of 3% per year and 3% attributed to merit and longevity increases. Mr. Lozen reported that if they lower the salary assumption, the state will require that they lower the investment assumption. Mr. Lozen provided 3 scenarios for the salary assumption noting that the first year the proposed salary assumption would be 13%; years 5-9; the proposed rate would be 5% and for 10 plus years, the proposed rate would be 4.5%. The impact on the City's funding should they lower the salary assumption would be as follows: using the current assumption of 6% for all years would cost $1,840,000; however, making the proposed changes would cost the City $1,620,000 a savings of $220,000. Mr. Lozen asked if they want the lower investment assumption for the 2015/2016 valuation or if they want it to be effective with the 2016-2017 valuation. Page 2 of 4 He noted that if the changes were made for the 2015 valuation, then a revised valuation would need to be prepared and approved at a special meeting. The trustee agreed that the rate should be lowered for the next valuation 2016-2017 instead of having to revise the 2015 report. It was also noted that a revised investment policy statement would need to be prepared to reflect this change. Mr. Nash said he will revise it to 7.75% for plan year 2016 and will bring it to the next meeting. After a brief discussion,Trustee Moy moved to adopt the 7.75% investment assumption and Trustee Maxwell seconded the motion. The motion passed. CONSENT AGENDA For Approval: Benefits USA, Inc. (Flat Monthly Fee for Aug 2016; Inv#08-2016 dtd 7/15/16) $2,100.00 Fifth Third Bank(2"d Qtr. 16 Mgmt Fee-Inv#4870023 dated 7/5/16) $3,769.06 Foster and Foster(2"d Qtr. 16 Actuary Fee-Inv#9068 dated 7/25/16) $700.00 GAMCO(2"d Qtr. 16 Mgmt Fee-Invoice#20160630-157-4967A dated 7/15/16) $15,473.00 GHA(2"d Qtr. 16 Mgmt Fee-Invoice#27107 dated 7/14/16) $7,039.65 Total $29,081.71 For Ratification: Bryan Pace(Per Diem to attend the Division of Retirement School 5/16-5/18/16) $75.00 Florida State University(Registration for Bryan Pace ID#200372440) $300.00 Springhill Suites(Hotel confirmation for Bryan Pace confirmation#80330075) $373.00 GAMCO(1St Qtr. 16 Mgmt Fee; Invoice#20160331-157-4967-A dated 4/20/16) $14,877.00 Total $15,625.00 Bryan Pace(Reimbursement of expenses from Division of Retirement School) $730.14 Total $730.14 Benefits USA,Inc. (Flat Monthly Fee for June 2016; Inv#06-2016 dtd 6/16/16) $2,100.00 Christiansen&Dehner(Legal Fees-Invoice#28293 dated 5/31/16) $1,277.40 FPPTA(Annual Conference Registration for William Maxwell) $550.00 William Maxwell (Mileage and per diem for FPPTA Annual Conference) $72.12 Total $3,999.52 Benefits USA, Inc. (Flat Monthly Fee for July 2016; Inv#07-2016 dtd 7/15/16) $2,100.00 Bogdahn Consulting(2"d Qtr. 16 Consulting Fee-Invoice#17228 dated 6/30/16) $5,500.00 FPPTA(Trustee School Registration for Maxwell,Moy& Wagner) $1,500.00 Hyatt Regency Coconut Point(Hotel Conf#32G2H54C;N/O William Maxwell) $567.00 Hyatt Regency Coconut Point(Hotel Conf#32G2H4NC;N/O Joe Moy $567.00 Hyatt Regency Coconut Point(Hotel Conf#32G2H657;N/O William Wagner) $567.00 Sawgrass Asset Management(2"d Qtr. 16 Mgmt Fee-Invoice dated 7/13/16) $12,765.20 Total $23,566.20 Pension Payments for Ratification: Cathi Greenhill(Beneficiary payment effective 6/1/16) $6,607.94 Trustee Moy moved to approve the consent agenda as presented. Trustee Maxwell seconded the motion and the motion passed. Attorney' Report: H. Lee Dehner, Esq. Adoption of Proposed IRC Ordinance Attorney Dehner reported on the proposed IRC Ordinance noting that with the recent adoption of Legislature of Chapter 2015-39, Laws of Florida and changes to the Internal Revenue Code and its associated regulations as well as guidance from the Internal Revenue Service there are several Page 3 of 4 proposed amendments to pension plan. Attorney Definer said that the Board cannot adopt this Ordinance until after the Police negotiations are completed. Once complete an impact statement is required to be prepared by the actuary. Ms. Giuliani reported that she had already requested the impact statement. Chairman's report: Chairman Brown had nothing further to report. Trustees: Trustee Maxwell asked if the hotel parking fees were reimbursable. Ms. Giuliani reported that he should submit the receipts for the parking after returning from the Conferences and they will be paid. Mr. Maxwell also said that he wanted to thank Benefits USA for always getting the Trustees set up for the schools and conferences expeditiously. Next Regular Meeting date: November 2, 2016 at 1:00 pm. Adjournment: The meeting adjourned at 3:10 pm. Respectful) omitted by, t; gown Contact the City Clerk's Office to listen to an ctronic copy of the complete minutes. Page 4 of 4