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HomeMy WebLinkAboutMinutes Fire Pension 033020CITY OF PALM BEACH GARDENS FIREFIGHTERS' PENSION BOARD OF TRUSTEES SPECIAL MEETING MINUTES Governor Ron DeSantis signed Executive Order 20-69 which suspends all statutes that require a quorum to be present in person or require a local government body to meet at a specific public place. It also provides that local government bodies may utilize communications media technology, such as telephonic and video conferencing, as provided in section 120. 54(5) (b)2, Florida Statutes. Under Executive Order 20-69, the board meeting was held via video conference using Zoom Meeting. Monday, March 30, 2020, at 2:OOPM TRUSTEES PRESENT: TRUSTEES ABSENT: Ed Morejon (via phone) Rick Rhodes (via phone) Jon Currier (via phone) Frank Spitalny (via phone) Eric Bruns (via phone) None. OTHERS PRESENT: Michelle Rodriguez, Foster &Foster (via phone) Siera Feketa, Foster & Foster (via phone) John Thinnes, AndCo Consulting (via phone) Pedro Herrera, Sugarman and Susskind (via phone) 1. Call to Order —Rick Rhodes called the meeting to order at 2:04pm. 2. Roll Call — As reflected above. 3. Public Comments —None. 4. New Business aF Plan Investment Discussion i. John Thinnes gave an overview of the changes in the market since the last board meeting commenting the plan was still relatively close to targets. ii. John Thinnes commented the plan was down around 10.0%, not including the current day, which was positive. John commented some plans were down around 20.0%, so the plan was not in bad shape compared to some of its peers. iii. John Thinnes gave a brief overview of the preliminary performance and allocation update based on the Salem Trust balances as of March 27, 2020. iv. John Thinnes reviewed the concerns of the trustees commenting they wanted to ensure there was enough cash to make benefit payments. v. John Thinnes gave a brief overview of the cash flow over the last year as of February 28, 2020. vi. John Thinnes and the Board discussed the cash flow of the plan and discussed how much cash they should have to cover benefit payments. vii. Ed Morejon asked if they should raise cash now since this was an unprecedented situation. John Thinnes reviewed the process to raise cash, commenting they needed to determine if they wanted to have more cash in the portfolio for times like these. John gave an overview of the portfolio and where they could raise cash from, commenting when they had to raise cash, they had to sell stuff. viii. The Board discussed how much cash they currently had in the portfolio. John Thinnes commented they had $300,000. 1 ix. Frank Spitalny asked if they should raise cash by $7 million now to cover payments for the year. John Thinnes commented there was a lot that happened behind the scenes and cash was raised as needed. John Thinnes reviewed the process to raise cash and naturally rebalance the portfolio. x. Rick Rhodes asked Michelle Rodriguez what the normal operating costs of the plan were, not including DROP distributions. Michelle commented she did not have it broken down monthly, but she did have the quarterly amount from the last quarter commenting it was about $140,000. Michelle reviewed the items in the amount commenting it included some annual fees and investment manager fees, which were billed quarterly. Rick confirmed with Michelle this amount did not include benefit payments and asked Michelle to provide the benefit amounts. A Frank Spitalny and John Thinnes discussed the amount of cash the plan would need for the current fiscal year. John Thinnes commented he did not have the exact amount as it was not possible to predict lump sum distributions. xii. Michelle Rodriguez commented the monthly benefit payments were about $220,000 per month. Frank Spitalny and Michelle Rodriguez discussed the amount of cash needed to make benefit payments. Michelle commented it was hard to anticipate lump sum payments as they could change. Michelle reviewed the instances in which members could request lump sum payments. xiii. Rick Rhodes and Michelle Rodriguez discussed the quarterly costs including consultant fees and monthly benefit payments. xiv. Pedro Herrera and John Thinnes discussed the concerns of the Board and what they were trying to accomplish. John Thinnes commented the concern was whether they should make a policy change to increase the amount of cash kept on hand. xv. Pedro Herrera asked John Thinnes if he thought there needed to be a policy change. John commented he understood the concerns of the Board but did not feel a policy change needed to be made at this time. xvi. Eric Bruns commented the concern was they may have to sell low to raise cash on hand. John Thinnes, Pedro Herrera, and the Board discussed the possible risks associated with raising cash versus not raising cash. xvii. John Thinnes and Eric Bruns discussed the different investment managers they could pull cash from. John commented they have four managers that had a certain amount of cash available. xviii. Ed Morejon asked if the policy was appropriate for the times. John Thinnes commented the policy was appropriate as it was a long-term plan and helped to avoid from making irrational changes during uncertain times, like now. John commented the policy was reviewed at the meeting on January 29, 2020. xix. Rick Rhodes commented he wanted to call the meeting to determine the cash on hand and expenses, and to review the policy to make sure we were still adhering to it. Rick commented he felt it was prudent to get everyone together, but he did not feel any changes needed to be made right now. Rick commented if things changed drastically, they could call another meeting. xx. Rick Rhodes reviewed the historical downturn in 2008 commenting the plan had weathered the storm before. A. Frank Spitalny asked if they should have a policy to have more cash on hand. John Thinnes reviewed the history of how much cash the plan had kept on hand. John commented when money came in, they were usually around 0.5-2.0%, which he thought was fine for now. A. John Thinnes, Michelle Rodriguez, and the Board discussed a recent situation where cash needed to be raised for a lump sum payment. John reviewed the 2 process to raise cash and commented there may be a scenario where they would have to raise cash at some point again. xxiii. John Thinnes commented the plan made the payments for April 01, 2020. xxiv. John Thinnes reviewed the current market environment commenting he and other investment managers thought the market would settle down in a couple weeks. John felt they should let things settle down and let things work themselves out, then continue operations as normal. xxv. Frank Spitalny commented he was concerned they did not have enough cash and this mess could go on for months. John Thinnes commented they did not want to sell, but if they needed to, they had things they could sell. xxvi. Frank Spitalny asked if the policy should have more cash. John Thinnes commented from what he was hearing things were going to calm down here. John reviewed the Investment Policy Summary (IPS) and how the funds were allocated according to the policy targets. John commented the plan was technically not out of range of the policy targets. xxvii. Frank Spitalny asked John Thinnes if they had enough cash on hand to last the rest of the year. John commented no, and stated Salem Trust would contact them when cash needed to be raised. John reminded the Board this happened often behind the scenes. John felt the Board would be better off waiting a couple weeks before raising cash as he anticipated the market would be better then. xxviii. Frank Spitalny and John Thinnes discussed the possibility of raising cash now and the pros and cons associated with both. xxix. John Thinnes commented the Board can continue the discussion in the future, to evaluate raising the cash allocation in the policy moving forward but did not feel a change needed to be made now. John Thinnes and Frank Spitalny discussed how cash was raised. xxx. The Board discussed where the contributions came from for the plan, commenting those funds were invested. John Thinnes commented generally the plan has had more coming in than going out. xxxi. Frank Spitalny asked if the City and State would be short funds to make the contributions. John Thinnes commented the actuary evaluated this information and the City was responsible to contribute. John gave a brief overview of the smoothing technique used by the actuary. John commented the City was aware of the contribution amount about a year in advance, but the increased costs could be difficult budgetarily. xxxii. Frank Spitalny and John Thinnes discussed the assumptions for the plan. John commented the plan had a more conservative assumed rate -of -return, which was 7.15%. xxxiii. John Thinnes commented if the market did not improve, they may need to raise cash again before May 1 st, but based on his discussions he felt things would settle down. John recommended waiting a few weeks and calling another special meeting if needed. xxxiv. Ed Morejon asked John Thinnes if he had enough room to maneuver or if more direction was needed from the Board to move cash. Michelle Rodriguez reviewed the process to raise cash if needed commenting the turnaround was usually less than a day and it was done quickly. xxxv. John Thinnes commented if the board wanted to have 1.0-2.0% cash on hand they would need a motion from the Board. xxxvi. The Board and John Thinnes discussed the investment managers they could raise cash from. xxxvii. Ed Morejon asked John Thinnes if he was comfortable with the current direction. John commented he was comfortable with the current direction, but they could Q keep the conversation open and have another meeting if needed. John commented the Board could discuss having a target cash of 1.0-2.0% as opposed to 0.5%. xxxviii. John Thinnes and the Board discussed the amount of cash they had with the four different investment managers. xxxix. Rick Rhodes commented unless something drastically changed, the plan could continue as usual. b. Electronic Meeting Discussion i. Pedro Herrera briefly reviewed the policy he provided commenting there was nothing too controversial on it. ii. Pedro Herrera reviewed the Sunshine Law and the Public Records Law. Pedro reviewed the changes to the Sunshine and Public Records Laws under the executive order of the Governor. iii. Pedro Herrera commented for the time being this was how public meetings would be held. Pedro commented the policy was not too restrictive but governed how things would be done. iv. Frank Spitalny asked to confirm if he could continue to call in. Pedro Herrera confirmed that was correct. v. Michelle Rodriguez reviewed the way members of the public could call in. The board voted to adopt the administrative policy governing the use of audio -video or telephone conferencing to conduct virtual public board of trustee meetings, upon motion by Ed Moreion and second by Jon Currier. The board conducted a roll call vote: Ed Moreion — yes; Jon Currier — yes• Frank Spitalny — yes; Eric Bruns — yes; Rick Rhodes — yes; motion carried 5-0. vi. Pedro Herrera commented he just received word the Ryan White Act, a federal program that essentially listed potentially life-threatening infectious diseases to which emergency and first responders could be exposed, had been updated to include COVID-19. Pedro commented this helped firefighters obtain testing but did not necessarily affect the Workers' Compensation statutes in Florida. vii. Ed Morejon asked if that meant COVID-19 could be a presumptive cause for disability and death benefits in the plan. Pedro Herrera commented it did not necessarily mean that, but it was being discussed. Pedro commented it likely did not, as the statute was very specific in terms of what qualified and what did not, but they were working with Senator Rodriguez to see if he could write to the Governor to try to get that written as part of an emergency legislation. viii. Pedro Herrera reviewed the facts that would lead to a service -connected disability. Pedro commented there was a lot of uncertainty, but they were looking into it. ix. Ed Morejon asked about the FPPTA. Michelle Rodriguez commented they had paid their membership dues. Ed commented his concern was regarding the FPPTA Wall Street trip. Pedro Herrera, Michelle Rodriguez, and the Board discussed the FPPTA's request to hold the cash and save the funds for next years' registration. Michelle and Pedro commented the Board could decide to request a refund if they wanted. The Board discussed the fees for the registration. Jon Currier commented the FPPTA had no issue in refunding the amount he paid for his spouse. Pedro commented he agreed the trustees should be able to request what was paid for a guest. x. Jon Currier commented he would be fine with letting the FPPTA keep the registration for the following years' Wall Street Program. Ed Morejon commented his only concern was that some of them may not be on the Board next year. xi. The Board agreed by consensus to let each individual trustee to decide whether to request a refund. Pedro Herrera commented it should be noted on the record of what money was received back. Michelle Rodriguez commented it could be mentioned at the meeting and noted in the minutes. xii. Frank Spitalny commented he felt the Board should meet again if things did not calm down. xiii. Michelle Rodriguez asked the Board if they wanted to meet as initially scheduled via Zoom on April 29, 2020. The Board agreed by consensus to meet via Zoom on April 29, 2020, as originally scheduled. 5. Adiournment — The meeting was adjourned at 3:22pm. 6. Next Meeting,— April 29, 2020, at 1:00pm, quarterly meeting. R spectfully submitted by: ASierafteketa,—Pl�ahAa--ministrator Date Approved by the Pension Board: 04/29/2020 5 Abid o K Rhodes Digitally signed by Richard K Rhodes DN: cn=Richard K Rhodes, o, ou, email=rrhodes@myffbeneflts.com, =Us Date: 2020.04.3011:50:31 -04'00' Rick Rhodes, Chairman