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.
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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
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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
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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
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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