02-04-2015 Minutes THE CITY OF OCOEE POLICE OFFICERS'/FIREFIGHTERS'
RETIREMENT FUND BOARD MEETING
150 N. Lakeshore Drive, Ocoee, FL
February 4, 2015
Trustee Wagner called the meeting of the City of Ocoee Police Officers' /Firefighters' Retirement Trust
Fund to order at 1:05 p.m. in the Commission Chambers of City Ball. The roll was called and a quorum
was declared present.
PRESENT: William Wagner, William Maxwell and Joe Moy
Also present: Lee Dehner, Board Attorney, Tim Nash of Bogdahn Consulting, Greg Holden of Manning
and Napier, Douglas Lozen of Foster and Foster, Gene Williford and Pam Brosonski of Finance, Police
Members Corporal Dewey Mullen and Sgt. Mireya Iannuzzi and Livia Giuliani of Benefits USA.
ABSENT and EXCUSED: Charles Brown and Mark Scalzo
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 from Regular Session dated October 29, 2014
Trustee Wagner moved to approve the minutes as presented Trustee Moy seconded the motion and the
motion passed 3 -0.
PUBLIC COMMENTS:
Ms. Giuliani reported that the Consultant asked if he could be moved ahead of the agenda. Trustee
Wagner moved to amend the agenda and Trustee Moy seconded the motion. The motion passed.
QUARTERLY INVESTMENT UPDATE: Period ending 12/31/2014
Manning and Napier
Mr. Greg Holden reported that he has been with Manning and Napier for about 6 years and is located in
the St. Petersburg Florida office. Manning & Napier currently manages $50 million in assets and they
began relationship with Ocoee in February 2010. Mr. Holden reported that Manning and Napier had
outperformed for 8 quarters. He reported that for the quarter ending 12/31/14 they underperformed the
benchmark by -4.73% vs.- 3.87 %. Mr. Holden said they are currently using the ACWI Index and he feels
that is the appropriate index to be using. Mr. Holden said that the continuing decline in oil prices was the
main factor in global financial markets in the 4` quarter. Global prices fell 40% in the quarter. The
primary drivers for the 3rd quarter of 2014 were energy and a few stocks. Mr. Holden reported on a
holding called TESCO's noting that their underperformance was due to the slowing growth of the
company and the turnover of the CEO of the firm. After a lengthy discussion, Mr. Maxwell asked Mr.
Holding if there were any procedures in place to help with the investing process. Mr. Holden said there is
a secondary review of each asset. Trustee Maxwell asked Mr. Nash if he had any input regarding the
managing process. Mr. Nash said they would never tell the manger how to manage their portfolio. Mr.
Nash further stated that when a manager is on watch, they are not shown to any client who is conducting a
search. He said they have 3 quarters to improve their performance and that this is the 2 " quarter of
underperformance. Mr. Nash said Manning and Napier have 1 more quarter to improve their performance.
Mr. Maxwell noted that this item should be tabled and placed on the next meeting agenda. Trustee
Maxwell moved to place Manning and Napier on the next agenda and Trustee Moy seconded the motion.
The motion passed 3 -0..
Page 1 of 5
Dig) Consulting
Mr. Nash said there were good returns for the quarter. The S &P was up 5 %. Energy across the board is
what hurt. The market value of the Fund was $42,430,894 for the quarter ending 12/31/14. The Fund
return for the quarter was 3.73% and 8.75% for the 1 year period vs. the Policy index of 2.49% and 7.78%
respectively. The Equity fund earned 5.22% for the quarter and 10.28% for the 1 year period vs. the
Equity Policy of 2.93% and 8.38% respectively. The Domestic Equity earned 6.86% for the quarter and
13.97% for the 1 year period vs. the Russell 3000 Index of 5.24% and 12.56% respectively. GAMCO
earned 7.38% for the quarter and 12.09% for the 1 year period vs. the Russell 3000 Index of 5.31% and
12.70% respectively. Sawgrass Earned 8,16% for the quarter and 14.89% for the 1 year period
outperforming the Russell 1000 Index of 4.78% and 13.05% respectively. The Vanguard Stock Market
Index Fund earned 5.22% for the quarter slightly under the US total market TR Index of 5.24 %. The
International Equity was down by -4.73% for the quarter and -9.26 for the 1 year period vs. the
International Equity Policy of - 3.81 %. The Manning and Napier Overseas International Equity was down
-4.73% vs. the MSCI AC World ex USA Index of - 3.81 %.
Mr. Nash reported on the Compliance checklist noting that the Fund is earning 8% and ranked in the 40
for the 3 and 5 year periods. The equities did not meet or beat the index in the 3 and 5 year periods and
they did not rank in the 40 percentile for each of the respective periods. He said that the equity
allocation is less than 70% of the total plan assets and the foreign equity is less than 25% of the total plan
assets. The fixed income met or exceeded the benchmark in the 3 and 5 year periods and ranked in the top
40 percentile. The fixed income investments shall have a minimum rating of investment grade or higher.
Finally, Mr. Nash reported on the change in internal controls noting that Joe Bogdahn relinquished his
shares to Mike Welker who is now the President. He said this was a positive transition. Ms. Giuliani
asked if the name will change. Mr. Nash said that the name will remain the same, however they have to
change from LLC to an S Corporation and he said that a Consent form would need to be approved and
signed. Trustee Maxwell moved to approve the change of internal controls and Trustee Moy seconded
the motion. The motion passed 3 -0.
NEW BUSINESS:
Presentation of 10/1/14 Actuarial Valuation
Mr. Lozen reported on the October 1, 2014 Actuarial Valuation noting that the total City and State
required contribution is 23.9 %. The payroll went down about $300,000 for pension purposes due to the
decrease of active members who entered the DROP. The City's funding will go down about $780,000.
The City over contributed a little of $11,700 so it will be carried forward. There was a credit of $660,158
bringing the Unfunded Actuarial Accrued Liability to $10.4 million from the $11.8 million last year. He
said the liability should go down each year about $500,000. Mr. Lozen said that the state money helps
toward the Unfunded Actuarial Accrued Liability and that the City may use $421,323 of the state money for
determining its minimum funding requirements. Mr. Lozen said one of the advantages of the new GASB
requirement is that the funded ratio is 86 %. The primary components of favorable experience included a
9.7% investment return, exceeding the 8% assumption. There were no changes in methods or assumptions
since the prior valuation. Mr. Lozen reported on the participant data noting that there are 115 active
members; which is less than last year of 124. There are 33 retirees; 7 DROP members; 1 beneficiary; 24
vested terminated employees and 6 disability retirees.
Trustee Wagner asked about the experience study and Mr. Lozen said one was done for this fund a few
years ago. Trustee Wagner asked what is the benefit of having an experience study done. Mr. Lozen said
a study looks at each assumption of what happened in past. Trustee Maxwell asked based on the
frequency of the review would the fund benefit by increasing the assumption.
Page 2 of 5
Mr. Lozen said it is beneficial to increase the assumption. Trustee Wagner asked what the cost of the
study would be. Mr. Lozen said the cost be in the range of $7,000 to $8,000 but will not exceed $8,000.
Trustee Wagner asked that this item be placed on the next agenda. Trustee Moy moved to have the
experience study prepared and Trustee Maxwell seconded the motion. After Mr. Lozen's report, Trustee
Moy moved to approve the October 1, 2014 Actuarial Valuation as presented and Trustee Maxwell
seconded the motion. The motion passed 3 -0.
Mr. Nash stated that based on the Actuary's report, the Board should approve the assumption rate of 8%
for this year, the next several years and long term. Trustee Maxwell made the motion to accept the rate of
return based on the Consultant's recommendation and Trustee Moy seconded the motion. The motion
passed 3 -0.
Personal Time Buyout procedures- Finance this item was tabled to next meeting on May 6, 2015.
Fifth Third Bank
Ms. Kutlenios said that for the General Employees plan, when there is excess money in the Receipt and
Disbursement fund, Fifth Third does a calculation to transfer the money to the appropriate money
manager; however Ms. Kutlenios said that she notified Bogdahn in September that her compliance
department said that they should not be making these calculations. She said that Mr. Nash has been
preparing the calculation for the Police and Fire Fund. Trustee Wagner asked if this was an error or if the
calculation was a function of the bank. Ms. Kutlenios said that there was no error made however; their
compliance department is looking at all the functions of the bank and noted that as Custodian, they should
not be making the calculations. Ms. Giuliani suggested that a blanket authorization be prepared as a
standard letter to allocate contributions to and disbursements as needed. Ms. Giuliani said that they could
use a standard dollar amount until it changes. Mr. Nash said that it's what is normally being done but
the issue is that the mutual fund needs to have an authorized signor for the trade ticket and must be dated
for the day of the trade. Ms. Kutlenios suggested that in the future, the trade tickets can be pre- signed by
the Chairman and dated for the day of the trade. Ms. Kutlenios thanked the Board for their business.
UNFINISHED BUSINESS:
Union Representative discussion of Actuarial Stud!
Corporal Mullen addressed the Board noting that the Police members are asking for a 1% COLA each
year and would like a study to be done to see what the cost would be. Mr. Lozen said that they have to get
Board direction to prepare the study and to work directly with the City. Mr. Lozen said that the study
would need to consist of all 3 plans. Mr. Lozen said the cost would be in range of $2,500- $3,000 not to
exceed $3,000. Trustee Moy said he is not opposed to the study and asked if the cost of the study would
be shared by the City or does the Board have to bear the cost, solely. Mr. Gene Williford, the Human
Resources director reported that because of the recession, the City manager would not approve any
additional expenses. Mr. Williford also said that the implementation would have to be negotiated. Trustee
Maxwell asked if there was a time frame for this study. Mr. Lozen said that it would take about 5 months
and they would use the current 10/1/14 valuation and project the future benefits. Trustee Moy moved to
have the study prepared based on the terms of the letter presented and that the Board pay the cost of the
study to be completed within the 5 months and authorize the Board's actuary to prepare the study; not to
exceed $3,000. Trustee Maxwell seconded the motion and it passed 3 -0
CONSENT AGENDA:
For approval: Warrant #97
Benefits USA, Inc. (Admin Services -Flat Monthly Fee for February 2015) $2,100.00
Foster and Foster (Services Rendered- Invoice #6864 dated 1/30/15) $14,615.00
GAMCO (4`" Qtr. 14; Mgmt Fee - Invoice dated 1/15/15) $15,469.00
Total $32,184.00
Page 3 of 5
For Ratification: Warrants #90 -96
FPPTA (2015 Annual Membership Dues) $600.00
Total $600.00
Benefits USA, Inc. (Administration Services for November 2014) $2,100.00
FPPTA (2014 Re- Certification Fee for Charles Brown) $30.00
Total $2,130.00
Christiansen & Dehner (Legal Fees - Invoice #25589 dated 10/31/14) $2,070.55
FPPTA (2014 Re- Certification Fee for Wagner and Maxwell @$30 each) $60.00
Total $2,130.55
Benefits USA, Inc. (December 2014 Fee; plus copying and shipping charges) $2,705.38
Total $2,705.38
Benefits USA, Inc. (Flat Monthly Fee for January) $2,100.00
FPPTA (Trustee School Registration for William Maxwell) $450.00
William Maxwell (Mileage to attend the FPPTA Trustees School) $36.98
Total $2,586.98
Bogdahn Group (4 Qtr. 14 Consulting Fee - Invoice #11280 dated 12/4/14) $5,500.00
Christensen & Dehner (Legal Fees- Invoice #25873 dated 12/31/14) $37.90
Total $5,537.90
Davidson Jamieson & Cristini (Progress Billing- Re: 9/30/14 Audit Inv #R7300) $6,500.00
Garcia Hamilton (4 Qtr. 14 Mgmt Fee - Invoice #25525 dated 1/23/15) $6,612.00
New York Marriott East Side (Hotel Res /C Brown; Conf #89471317) $1,733.01
Total $14,845.01
Pension Pavments for Ratification:
Casey Athearn (Refund of Contributions) $18,839.00
Angel Ortiz (Refund of Contributions) $35,305.28
George Trotter (Refund of Contributions) $9,336.26
Trustee Moy moved to approve the Consent Agenda and Trustee Maxwell seconded the motion. The
motion passed 3 -0.
ATTORNEY'S REPORT:
Mr. Dehner reported on Senate bill 534 noting that this law applies to all publicly funded Dcfined Benefit
Retirement Plans in the State of Florida, with the exception of the Florida Retirement System (FRS) this
bill is effective beginning with the October 1, 2014 actuarial valuation report requiring preparation of the
financial statements using the 2% up or 2% down factor and the reports have to be filed within 60 days
after valuation report was approved and must be posted on city's website.
Mr. Dehner reported on SB 242 which would require utilization of the same Mortality Table used by FRS
which is a blended Mortality Table that takes in to consideration gender /blue collar worker and other
factors. This would require a change in the assumption which would impact funding.
Mr. Dehner reported on SB 172 which relates to the League of Cities and union coming to an agreement
as the League of cities is now opposed to this bill. This bill could determine the allocation of 175/185
money.
Mr. Dehner that the bill most important is #248 noting that if this Bill passes, the State money may stop.
TRUSTEE'S REPORT:
Trustee Maxwell reported that FPPTA provides a listing of all classes and conferences for Certified
Trustees to attend.
Page 4 of 5
NEXT REGULAR MEETING DATE: Ms. Giuliani reported that the next regular meeting is May 6,
2015 at 1:00 pm.
ADJOURNMENT: The meeting was adjourned at 3:45 pm.
Resp ' bm itted by,
i d Char e G row , Chairman r illiam ; gner, S .cretary
Contact the City Clerk's Office to listen to an electronic copy of the complete minutes
Page 5 of 5