HomeMy WebLinkAboutMinutes Fire Pension 0429201
CITY OF PALM BEACH GARDENS
FIREFIGHTERS’ PENSION BOARD OF TRUSTEES
QUARTERLY 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.
Wednesday, April 29, 2020, at 1:00PM
TRUSTEES PRESENT: Ed Morejon
Rick Rhodes
Jon Currier
Frank Spitalny
Eric Bruns (arrived at 1:58pm)
TRUSTEES ABSENT: None.
OTHERS PRESENT: Michelle Rodriguez, Foster & Foster
Siera Feketa, Foster & Foster
John Thinnes, AndCo Consulting
Alison Wester, Mauldin & Jenkins
Pedro Herrera, Sugarman and Susskind
Allen Owens, City Finance Director
Member of the Public
1. Call to Order – Rick Rhodes called the meeting to order at 1:01pm.
2. Roll Call – As reflected above.
3. Public Comments - none
4. Approval of Minutes
a. Frank Spitalny briefly read section 5(a)(i)(5) of the quarterly meeting minutes, commenting
he did not understand what it meant. Siera Feketa briefly reviewed, commenting John
Thinnes reviewed the schedule of investable assets at the last quarterly meeting. John
Thinnes gave a brief overview of the schedule of investable assets. Frank Spitalny
commented the statement was correct, but he preferred it to be further explained in the
minutes.
The Board approved the January 29, 2020, quarterly meeting minutes as presented, upon motion
by Ed Morejon and second by Frank Spitalny; motion carried 4-0.
The Board approved the March 30, 2020, special meeting minutes as presented, upon motion by
Frank Spitalny and second by Jon Currier; motion carried 4-0.
5. Reports
a. Mauldin & Jenkins, Alison Wester, Plan Auditor
i. September 30, 2019 Audit
1. Alison Wester introduced herself and reviewed the items she would be
discussing.
2. Alison Wester reviewed the independent auditor’s report commenting it
was a clean unmodified opinion on the financial statements. Alison
commented there were not any issues.
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3. Alison Wester reviewed the Management’s Discussion and Analysis
commenting this was the management team’s opportunity to state what
happened in the plan with more detail than what was included in the
financial statements.
4. Alison Wester reviewed the statements of fiduciary net position. Alison
commented the total assets increased in the plan by about $9 million.
Alison commented this was further detailed in the statements of changes
in fiduciary net position.
5. Alison Wester reviewed the notes to financial statements.
6. Alison Wester reviewed the required supplementary information
commenting it included the schedule of changes in the net pension liability,
schedule of contributions, and schedule of investment returns for a 10-
year period.
7. Alison Wester reviewed the other supplementary information commenting
the administrative expenses were requested to be included.
8. Alison Wester reviewed the independent auditor’s report on internal
control over financial reporting and on compliance and other matters
based on an audit of financial statements performed in accordance with
government auditing standards. Alison commented they did not do a full
audit of the internal controls.
9. Frank Spitalny asked Alison Wester if they were satisfied with the audit of
internal controls. Alison commented they were satisfied, but they did not
do an audit of all internal controls, they obtained the understanding. Alison
commented nothing came to their attention during the course of the audit
that led them to believe there were any issues.
10. Ed Morejon commented the schedule of contributions reflected an actual
employer contribution of $7,559,404 commenting it appeared to include
State monies. Ed asked if it was common practice to include State monies
in the employer contribution as he felt it should be separate. Alison Wester
commented the reporting was consistent with how it had been done in
previous years and the breakdown of the contributions could be found in
the statements of changes in fiduciary net position. Ed expressed his
concerns with having the contributions reflected as one figure on the
schedule of contributions commenting a large part of his concern was it
appeared the City’s contribution was 92.58% of payroll when that was not
their actual contribution as a percentage of payroll. Alison commented she
preferred not to make a change now but would make the change to future
reports. Ed was satisfied with the figure being broken down in future
reports.
11. Pedro Herrera explained why the State monies could be included in the
employer contribution commenting the City could use a portion of the State
monies to offset their contribution.
12. Frank Spitalny asked who received a copy of the audit report. Pedro
Herrera reviewed the parties that received a copy of the audit report
commenting it was also public record.
13. Allen Owens commented Ed Morejon was correct in that the contributions
reflect a high amount, commenting the City made 50% of the current year’s
contribution early. Allen stated this contribution was recorded on the fund’s
books as of September 30, 2019. Allen commented he would ensure the
contribution for next year did not get booked until October 1st, which would
make next year’s contribution a lot lower. Allen Owens and Ed Morejon
discussed the City’s contribution in further detail. Ed thanked Allen for the
City making an early contribution.
14. Allen Owens thanked the Board for their service commenting they did a
great job.
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15. Allen Owens commented Alison Wester and her team were great to work
with.
16. Ed Morejon asked where the early contribution was reflected on the report.
Alison Wester commented it was reflected on the schedule of
contributions. Alison commented the early contribution was driving the
high employer contribution as a percentage of payroll. Rick Rhodes asked
if they could add a footnote stating that the figures included an early
contribution by the City. Alison Wester commented it was reflected as an
excess on the schedule of contributions.
17. Rick Rhodes commented they were including all Foster & Foster fees as
actuarial, but it should be broken down as actuarial and administrative.
Rick commented he did not think there was going to be a large impact to
the financial statements, but it should be corrected in the future to show
the breakdown of actuarial and administrative fees. Alison Wester
commented the management team gave them the determinations and that
was how they were grouped for presentation and asked Michelle
Rodriguez if she had anything to add. Michelle Rodriguez commented it
was the Board’s preference as to how the fees were listed. Rick Rhodes
and Michelle Rodriguez discussed the administrative expenses and
agreed the actuarial and administrative fees should be separated.
18. Frank Spitalny asked why the actuarial fee had doubled. Michelle
Rodriguez and Rick Rhodes reviewed the increase in actuarial fees
commenting the fee included administrative and actuarial services, and
there were several “one-time expenses” during the year.
The Board voted to approve the September 30, 2019 audit as presented, upon motion by Frank
Spitalny and second by Ed Morejon; motion carried 4-0.
The Board voted to provide the City with a copy of the September 30, 2019 audit, upon motion by
Ed Morejon and second by Jon Currier; motion carried 4-0.
b. AndCo Consulting, John Thinnes, Investment Consultant
i. Quarterly report as of March 31, 2020
1. John Thinnes reviewed the market environment for the quarter.
2. The preliminary market value of assets as of March 31, 2020, was
$101,390,797.
3. John Thinnes commented as of yesterday the plan was just south of $107
million, so there had been a nice bounce back in April. John commented
the plan was not back at peak, but close.
4. John Thinnes briefly reviewed the asset allocation by asset class and the
asset allocations versus target allocations. John commented he pulled the
same information as of yesterday and domestic equity was no longer at
45.7% of the allocation, it was now 48.2%, international equities were
about the same, and the plan was still slightly overweight in broad market
fixed income.
5. John Thinnes commented, behind the scenes cash was just raised from
Agincourt Capital Management and Garcia Hamilton & Associates (GHA).
John commented when they had to take cash, they took it from where the
plan was overweight.
6. The preliminary total fund gross returns for the quarter were -14.67%,
underperforming the benchmark of -12.43%. The total fund trailing gross
returns for the 1, 3, 5, 7 and 10-year periods were -5.29%, 3.47%, 4.37%,
6.75% and 7.59% respectively. Since inception (5/1/98), total fund gross
returns were 5.70%, slightly outperforming the benchmark of 5.61%.
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7. John Thinnes commented in the long term the plan was ranked amongst
the highest in the State and the Country for the 3, 5, 7, and 10-year
periods.
8. John Thinnes commented things went wrong for many investment
managers the last quarter, but in the long term the plan was within the
Investment Policy Statement (IPS) and this had worked out tremendously.
John commented he did not know when we would get through the virus,
but when we do, with all the stimulus being pumped into the system, we
should see a substantial recovery in equities.
9. John Thinnes reviewed the returns for the investment managers and the
factors that impacted their returns during the quarter. John commented the
growth stocks did better than value stocks.
10. John Thinnes commented he spoke with Gilbert Garcia from GHA and
shared how Gilbert had adjusted the portfolio. John commented GHA was
already starting to bounce back.
11. John Thinnes commented they were going to need to continue to monitor
Templeton, but they usually bounce back significantly. John reviewed the
factors that impacted the global bond market. John commented once they
bounce back, the Board may want to consider getting a less volatile
manager.
12. John Thinnes gave a brief update on the impacts to real estate
commenting they would get those figures in about two weeks. John
commented the biggest impact would be on rent.
13. John Thinnes commented although he did not like the figures, he was not
overly concerned with them because they had already seen improvements
in April.
14. Frank Spitalny asked John Thinnes if there were any concerns from his
advisors regarding a recession. John reviewed the definition of a recession
in terms of Gross Domestic Product (GDP). John reviewed the current
market environment commenting GDP for the quarter was not going to be
good.
15. Frank Spitalny asked John Thinnes if he was concerned about a recession
and if they should raise cash. John and Frank discussed how and when
cash was raised. John Thinnes commented he still supported the long-
term plan outlined in the IPS and was comfortable with evaluating the
portfolio on a monthly basis. John commented he was not recommending
moving to 5.0% cash.
16. Jon Currier asked if there was any rebalancing going on and if they should
rebalance with things turning around. John Thinnes reviewed the asset
allocation for the plan as of March 31, 2020 in comparison to the
allocations of the day before the meeting. John commented he did not feel
any rebalancing needed to be done at this time as the portfolio was
rebalanced naturally on a monthly basis when cash needed to be raised.
Note: Eric Bruns arrived at 1:58pm.
c. Sugarman and Susskind, Pedro Herrera, Plan Attorney
i. Financial disclosure forms
1. Pedro Herrera briefly reviewed the requirement to file the financial
disclosure forms commenting they were due by July 1, 2020.
ii. Secure Act and Annual Limits special report
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1. Pedro Herrera reviewed the emergency bills that were enacted on March
27th commenting it was a large piece of legislation. Pedro commented
most of it was regulatory and the special report provided outlined the
changes. Pedro commented in the CARES Act there were some changes
that were permissible to pension plans, but they were not mandatory or
required. Pedro commented if the Board wanted to enact any of the
permissible changes, they would have to go through the standard
procedures of an Ordinance amendment. Pedro briefly reviewed the
permissible changes.
2. Jon Currier reviewed the emergency pay sick leave under the CARES Act
commenting it stated employers could exempt first responders from the
Act. Jon asked why first responders could be exempted by their
employers. Pedro Herrera commented he was unsure why they could be
exempt, but he would imagine it was because this was something first
responders were required to do as a responsibility of their job.
iii. Cancer Assumption Proposed Ordinance update
1. Pedro Herrera commented the City’s pension counsel, Jim Lynn, opined
on the Ordinance, stating the City felt since it was part of the State statute
there was no need to amend the Ordinance. Pedro commented it was not
significant, and the members were still eligible for the benefit as it was a
State statute.
iv. Disability application update
1. Pedro Herrera asked Michelle Rodriguez if the IME was scheduled.
Michelle commented it was scheduled for May 6, 2020. Pedro commented
once Janet Rudd had the IME, they would obtain the report, which would
take approximately a week. Once the IME was received, the Board could
choose to have a special meeting or wait until the July 29, 2020 quarterly
meeting to review. The Board agreed by consensus to hold a special
meeting in advance of the quarterly meeting for the initial disability hearing
for Janet Rudd.
2. Frank Spitalny asked Pedro Herrera about the $2 trillion fund added to the
Country by the government, asking if the firemen were entitled to a piece
of those funds. Pedro Herrera commented they could be but not because
they were a firefighter or working for the City of Palm Beach Gardens and
reviewed the eligibility requirements. Pedro and Frank discussed the
benefit further.
3. Ed Morejon asked Pedro Herrera about the extra billing hours in his
invoices. Pedro Herrera reviewed the items he typically billed for,
commenting there was a lot that happened between meetings. Pedro
commented he did not normally include this information in his report during
the meeting for the sake of time. Pedro commented he could review this
information moving forward. Ed commented if Pedro was going to bill for
items, he would like for the Board to be informed.
4. Ed Morejon requested Pedro Herrera elaborate on the issue with the City
Attorney. Pedro reviewed the issue and time spent corresponding with the
City Attorney, commenting there was some initial disagreement as to
whether the Board could hold a meeting via Zoom.
5. Ed Morejon asked Pedro Herrera about the hours billed in relation to
Salem Trust. Pedro commented there was an email to the Plan
Administrator from the State claiming the Plan was holding assets in a
non-qualified public depository. Pedro reviewed the requirements under
the law and correspondence that took place to handle the issue,
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commenting it was a misunderstanding. Pedro confirmed this issue had
been resolved.
6. Pedro Herrera commented he copied the Plan Administrator on any
correspondence regarding plan business, so the plan had record of
everything he did, and he was happy to discuss these items moving
forward.
6. New Business
a. Frank Spitalny asked if the Board could meet in another location while City Hall was closed.
Rick Rhodes commented it was easier to meet in person, but there was nowhere to meet
in the City while they were closed as they have closed all facilities.
b. Ed Morejon asked about the Dana Investment Advisor quarterly report included in his
packet. Michelle Rodriguez commented typically these were distributed at the meetings,
but not reviewed unless Dana was present. Michelle commented she just forwarded the
report for informational purposes. John Thinnes confirmed Michelle was correct and
commented annually Greg Peters with Dana attended a meeting and reviewed the
quarterly report.
c. Ed Morejon asked John Thinnes to review the benchmark for Dana Investment Advisors.
John Thinnes briefly reviewed the benchmark fund and why it was different between
Dana’s report and the AndCo report. Ed and John discussed further. John commented they
would add the S&P as the index for Dana and take out the custom.
d. Eric Bruns confirmed with the Board and John Thinnes no changes were made regarding
the investments. John briefly reviewed the investment managers he had a closer eye on.
7. Old Business – None.
8. Consent Agenda
a. Jon Currier asked what the IME fee of $5,000 was. Michelle Rodriguez briefly reviewed
what the IME was and commented they required a $5,000 pre-payment.
i. Payment ratification
1. Warrant #26, #27, #28, #29, #30 and #31
ii. Payment approval
1. None
iii. Fund activity report for January 23, 2020 through April 22, 2020
The Board voted to accept the Consent Agenda as presented, upon motion by Jon Currier and
second by Eric Bruns; motion carried 5-0.
9. Staff Reports, Discussions and Action
a. Foster & Foster, Michelle Rodriguez, Plan Administrator
i. Travel Policy
1. Michelle Rodriguez requested clarification of the travel policy, specifically
the section regarding expenses for the food. Michelle reviewed the
wording regarding the food portion of the travel policy asking if they should
be requesting receipts and reimbursing the exact amount up to $60 or just
pay $60 per day for food. Rick Rhodes commented it had always been
paid as $60 per day. Michelle commented they would continue with past
practice. Frank Spitalny and Eric Bruns asked if the travel policy should
be amended. Pedro Herrera commented he could review the policy and
clean up the language for the next meeting. Ed Morejon commented the
policy had been reviewed and it did not need to be addressed. Ed and
Michelle discussed the travel policy. Ed commented the travel policy did
not need to be reviewed and the per diem was $60 per day, which had
been done historically.
ii. Annual Report update
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1. Michelle Rodriguez commented the Annual Report was submitted and
accepted by the State.
2. Frank Spitalny asked what the Annual Report was. Pedro Herrera
reviewed the State Annual Report and requirement for it to be filed on an
annual basis. Frank asked if the Board should get a copy of the Annual
Report. Pedro commented they could have a copy. Frank asked if the
whole Board should receive a copy. Michelle Rodriguez commented if
anyone wanted a copy, they could request it from her office.
iii. Foster & Foster cybersecurity memo
1. Michelle Rodriguez briefly reviewed the memo prepared by the CEO of
Foster & Foster outlining the steps they took to protect their data.
iv. Educational Opportunities
1. Michelle Rodriguez briefly reviewed the FPPTA’s 36th Annual Conference
from October 4, 2020 through October 7, 2020, which would replace the
Fall Trustee School. Eric Bruns asked if they were combining the two
events or just cancelling the Fall Trustee School. Michelle commented it
was replacing the Trustee School. Siera Feketa commented she had
reached out to the FPPTA for confirmation and would update the Board
when she received an update.
v. Jon Currier requested Michelle Rodriguez send an email to all participants when
the Share Plan balances were updated quarterly. Michelle commented she would
email the membership when the Share Plan balances were updated.
vi. Jon Currier requested to have the meeting minutes done within a couple weeks of
the meeting. Michelle Rodriguez requested a three-week period. Jon commented
three weeks was acceptable.
vii. Jon Currier commented he would like to tentatively hold an educational session on
the same day as the last meeting of the year. Michelle Rodriguez commented that
would be fine, and they would tentatively schedule it for October 28, 2020.
viii. SB534 posting requirements
1. Michelle Rodriguez briefly reviewed the SB534 posting requirements
commenting it was sent to the City for posting.
ix. Eric Bruns asked if Michelle Rodriguez could send a calendar invite for Zoom
meetings moving forward. Michelle Rodriguez commented she would be happy to.
x. Eric Bruns and Jon Currier briefly discussed the pension workshop. Jon
commented he would bring an update to the next meeting.
10. Trustee’s Reports, Discussion and Action – None.
11. Adjournment – The meeting was adjourned at 2:53pm.
12. Next Meeting – July 29, 2020, at 1:00pm, quarterly meeting.
Respectfully submitted by: Approved by:
______________________________ ________________________________
Siera Feketa, Plan Administrator Jon Currier, Secretary
Date Approved by the Pension Board: ___________________________________