Loading...
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. 2 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. 3 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%. 4 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 5 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, 6 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 7 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: ___________________________________