HomeMy WebLinkAboutMinutes Police Pension 12092111 City of Palm Beach Gardens Police Officers' 11
Pension Fund
Minutes of the Meeting Held
December 9, 2021
The regular meeting of the Board of Trustees of the City of Palm Beach Gardens
Police Officers' Pension Fund was called to order at 9:06 AM by Jay Spencer in the
Council Chambers at the Palm Beach Gardens City Hall at 10500 North Military Trail,
Palm Beach Gardens, Florida. Chairman Jay Spencer stated that the Board will
modify the Agenda to accommodate the Disability Hearing for Robert Hughes.
TRUSTEES PRESENT
Jay Spencer, Chairman
Brad Seidensticker, Secretary
Marc Glass, Trustee
Greg Mull, Trustee
Allan Owens
OTHERS PRESENT
Scott Baur (Resource Centers)
A.C. Lovingood (Resource Centers)
Bonni Jensen (KKJ&L)
Tonya Oliver (Oliver & Fox
John McCann (AndCo Consulting)
Jennifer Gainfort (AndCo Consulting)
Robert Hughes (Plan Member)
Pete Strong (GRS Consulting)
Steve Stack (Highland Capital)
Brian Escobedo (Highland Capital)
Richelle Cook (American Realty)
ROBERT HUGES INFORMAL DISABILITY HEARING
Attorney Bonni Jensen explained that the Board has a In -Line Duty Disability, the
Independent Medical Examination (IME) Report finds that Mr. Robert Hughes is
disabled; however, the IME states that the disability could possibly be hereditary and
not duty related. The Board must decide if Mr. Hughes is totally disabled, will remain
so permanently and continuously, and that the disability resulted from the
performance of his duties as a police officer. The Board must determine if the
presumption statue applies to this disability case. Mrs. Jensen also reminded the
Board that the Plan also requires that a member must be disabled for a minimum of
six months before the Board grants a disability benefit. Mrs. Jensen then reviewed
the presumption statute with the Board in detail to determine if the presumption
applies to this case. Mr. Hughes must have passed a pre -hire physical and that
comprehensive and substantial evidence does not exist to indication the disability
resulted from some other cause.
Tonya Oliver addressed the Board on behalf of Robert Hughes, stating that Mr.
Hughes has coronary artery disease, when Mr. Hughes started his employment with
the Palm Beach Gardens Police Department, the pre -employment physical required
an EKG and that the EKG results from that pre -employment physical gave no
indication of coronary artery disease. Mrs. Oliver then referenced Florida Statute
112.18, which details the presumptions for heart disease. Mrs. Oliver reviewed when
Mr. Hughes's disability occurred and when Mr. Hughes last day of employment was
with the Board and informed the Board that Mr. Hughes is currently receiving
Workers Compensation Benefits. Dr. Shaw's medical findings that Mr. Hughes has a
57% impairment was reviewed with the Board and Mrs. Oliver noted that the IME
physician found Mr. Hughes to have a 55% impairment and Mr. Hughes employment
Minutes 12/09/2021
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with the Palm Beach Gardens Police Department was terminated due to his medical
impairments. There were some findings that indicate the Mr. Hughes was
predisposed to have a heart condition; however, the pre -employment physical did
not provide any indication of hypertension.
Chairman Jay Spencer stated that he believes that the facts of this case are fairly
simple and that he believes that Mr. Hughes met the threshold for a duty disability
benefit. The Board discussed the IME and availability of any permanent light duty
accommodations for Mr. Hughes.
• Greg Mull made a motion that Robert Hughes is unable to perform the
functions of a police officer. The Motion received a second from Marc Glass
and was approved by the Trustees 5-0.
• Allan Owens made a motion that Robert Hughes disability is to remain
permanent and continuously. The Motion received a second from Bread
Seidensticker and was approved by the Trustees 5-0.
• Marc Glass made a motion that Robert Hughes disability occurred in line of
duty as a police officer. The Motion received a second from Greg Mull and
was approved by the Trustees 5-0.
ACTUARIAL EXPERIENCE STUDY — GRS CONSULTING
Pete Strong appeared before the Board to present the Experience Study that was
performed on updating several assumptions for the Plan. Mr. Strong began his
presentation by reviewing the purpose of the Study and noted that the Plan had no
impact so far from COVID-19 related deaths, noting the Federal and State COVID-19
death presumptions on the State and Federal Level. Mr. Strong stated that his firm
does not recommend making any changes to the inflation expectations at this time
due to these expectations are for the long-term and not short-term. Mr. Strong then
went into detail on the recommended adjustments to the salary increase rates,
retirement rates, separation/turnover rates, and the Plan's disability rates. The net
impact for all the adjustment taken together do not change the required
contributions for the City. Mr. Strong then address the Assumed Rate of Return,
noting that long-term capital market assumptions are lower, and the Board
considered lowering their Assumed Rate of Return. Mr. Strong noted that he will
apply assumption updates for the October 1, 2021, Actuarial Valuation Report. The
Board then discussed the current schedule to lower the Assumed Rate of Return and
the consideration of accelerating the process based upon the current year's gains.
• Marc Glass made a motion upon the advice of the Actuary to lower the
Assumed Rate of return to 6.15% this year and accept the recommended
Assumption Changes identified by the Experience Study with a further
reduction of the Assumed Rate of Return to 6.00% in 2022. The Motion
received a second from Brad Seidensticker and was approved by the Trustees
4-0.
Allan Owens informed the Board that the City of Palm Beach Gardens is interested in
doing a feasibility study to give current members of the Palm Beach Gardens Police
Officers' Pension Fund the option to go into the FRS Pension Fund and close the Plan
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to future hires. The City would like to engage Pete Strong for this study and would
like to have the study performed for due diligence reasons.
Greg Mull made a motion to allow GRS to communicate and engage in the
completion of the FRS Feasibility Study for the City of Palm Beach Gardens.
The Motion received a second from Marc Glass and was approved by the
Trustees 5-0.
FRS FEASIBILITY STUDY — CITY REOUEST
Richelle Cook with American Realty Advisors started her presentation by reviewing
her firm while noting that there have been no changes and that they are sloly
bringing employees back into the office. Mrs. Cook then reviewed the American Core
Realty Fund with the Board, noting that the fund is open-end with a total of $6.87
Billion in assets. The American Core Realty Fund has a target return rate of 7-9%,
gross of fees and the fund has a quarterly liquidity. The American Strategic Value
Realty Fund was then reviewed with the Board with Mrs. Cook noting that the fund is
open-end with $2.18 Billion in assets under management. The return target for the
Fund is 11-104% and has a quarterly liquidity. The outlook for property sectors was
reviewed in detail with the Board with the mention of industrial and residential being
the biggest movers. Within the specialty sectors, hotel occupancy improvement is
advancing, though there remains considerable weaknesses that are expected to
persist through year end. Preleasing for fall 2021 student housing has lagged along
with a long-term downward trend in postsecondary enrollment. The demand for live
science space has accelerated by the pandemic, creating opportunities for developers
and investors. Mrs. Cook noted that within the retail sector, neither Fund is invested
in malls, only supermarket anchored retail space.
As of March 31, 2021, the American Core Realty Fund has a total of 67 investments,
cash is at 1.3$, the leverage ratio is at 22.1%, total commercial space is 15.2 million
square feet with 482 tenants. The fund has a total of 2,673 residential units, with
92.3% of them currently leased. There are currently 461 investors in the fund, with
$47.0 Million in the contribution queue and $203.0 Million in the redemption queue.
For Palm Beach Gardens Police, the Fund earned a net 1.59% for the quarter ending
March 31, 2021. The one-year net return is 0.78%, three-year returns are 4.21%,
the five-year returns are 5.00%, and since inception, the Fund has earned 7.76%
net of fees. Mrs. Cook then reviewed the strong rent collection results with the
Board, noting that the Fund has a 44% less rollover on leases in office space
compared to the competition. Mrs. Cook then reviewed the recent transactions
within the Fund. Trustee Brad Seidensticker asked what the lease acceleration rate
is for the fund, which Mrs. Cook stated was 2-3.5%. Mrs. Cook also stated that
inflation is causing some constraints due to the increased costs, thus forcing the
Fund to change the leverage from 20% to 30%. Mrs. Cook concluded her
presentation by reviewing the Fund Snapshot with the Board. Chairman Jay Spencer
asked Mrs. Cook where the Plan is in the queue for the American Realty Value Fund.
Mrs. Cook stated that there will be two capital calls in the next two quarters and
expects that all the allocated funds will take approximately three quarters to call.
HIGHLAND CAPITAL
Steve Stack started his presentation by reviewing the current market environment in
detail with the Board along with the inflation, employment, and mortgage refinancing
trends. Mr. Stack then reviewed the typical corrections over the years with the
Board, noting that volatility in the markets should not be surprising. For the quarter
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ending September 30, 2021, the Growth Fund had an ending Market Value of
$13,883,562 with a cumulative return of 0.39%, Fixed income Fund had a ending
Market Value of $27,458,517 with a cumulative return of 0.29%, and the 1-3 Year
Fixed Income Fund had a ending Market Value of $6,921,314 with a cumulative
return of 0.31%. For the Fiscal Year, the Growth Fund had a cumulative return of
26.45%, Fixed income Fund had a cumulative return of 1.03%, and the 1-3 Year
Fixed Income Fund had a cumulative return of 0.62%.
INVESTMENT CONSULTANT REPORT - ANDCO
Jennifer Gainfort reviewed the results as of September 30, 2021. Going all the way
back to 1992, the Plan has total assets of $126,699.689 compared to $26,509,048 in
contributions into the Plan. The Plan earned 0.18% for the Quarter Ending
September 30, 2021, compared to the 0.50% benchmark. The Plan's Fiscal -Year -To -
Date return is at 22.71% compared to the benchmark rate of 22.00%, which the
Board was pleased to hear, the three-year returns were 10.45% versus the
benchmark of 11.06%, and the five-year return were 11.16% compared to the
11.31% benchmark. Since inception, the Plan has had a net investment return of
8.12% compared to the benchmark rate of 9.00%. Mrs. Gainfort then reviewed how
each manager in detail with the Board along with each of the allocations. Mrs.
Gainfort then reviewed the Updated Investment Policy Statement with the Trustees.
Brad Seidensticker made a motion to approve the Investment Policy
Statement presented to the Board. The motion received a second from Allan
Owerns and was approved by the Trustees 5-0.
Mrs. Gainfort informed the Board that The American Realty Strategic Value Fund has
another Capital Call and she recommended funding the Capital Call from the
Highland Capital Core Fixed Fund.
Marc Glass made a motion to fund the American Realty Strategic Value Fund
Capital Call from the Highland Capital Core Fixed Fund. The Motion received a
second from Brad Seidensticker and was approved by the Trustees 5-0.
John McCann thanked the Board for allowing him to be their Investment Consultant
ATTORNEY REPORT
JENSEN MEMO - Legal Updates: Attorney Bonni Jensen informed the Board that a
bill filed in the Florida Legislature will make COVID-19 infection resulting in death as
presumed to have occurred in the line of duty. The Federal COVID-19 Death Benefit
increased to $590,000.00 and extended the presumptions to December 31, 2023 or
when the COVID-19 Pandemic is declared over.
Aristotle Agreement: Mrs. Jensen informed the Board that the Aristotle Agreement is
ready for signature.
Chairman Jay Spence inquired if the Board could have a farewell lunch for John
McCann at a future scheduled date. Mrs. Jensen stated that the Board could do that
if they wish and reminded the Board that they are subject to Sunshine Law and to be
careful on what is spoken about at the lunch. The Board then discussed the possible
location and expected cost for the farewell lunch along with an expected cost of
approximately $600.00.
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Greg Mull made a motion to approve a farewell lunch for John McCann with an
expected cost of no higher than $600.00jeri. The Motion received a second
from Brad Seidensticker and was approved by the Trustees 5-0.
JENSEN MEMO — LEGAL UPDATES: ATTORNEY BONNI JENSEN
ADMINISTRATOR REPORT
Active DROP Participants 11-30-2021: Mr. Lovingood presented the Board with the
Active DROP Participants List as of November 30, 2021.
Fiduciary Liability Insurance & Cyber Security Insurance Quotes: Mr. Lovingood gave
the Board an update on the pending Fiduciary Liability Insurance and Cyber Security
Insurance Quotes.
Marc Glass made a motion to authorize Chairman Jay Spencer to renew the
Cyber Security and Fiduciary Liability Policies when the quotes are received.
The Motion received a second from Brad Seidensticker and was approved by
the Trustees 5-0.
Website Shae Allocation Worksheet: Mr. Baur reviewed his Firm's investigation into
the Share Allocation Worksheet that was posted on the Plan's Website and reviewed
the IP Addresses of those who accessed the file and when the file was accessed. The
Board, Mr. Baur, and Attorney Bonni Jensen reviewed the potential risks and the
recommendation was to send out letters to all members explaining what had
happened and how the issue was resolved along with offering credit monitoring if the
member wishes.
MINUTES
The September 9, 2021 minutes were presented in the Trustee packets for review.
Trustee Brad Seidensticker noted a few minor changes to the minutes presented.
Brad Seidensticker made a motion to approve the September 9, 2021,
minutes as amended. The Motion received a second from Greg Mull and was
approved by the Trustees 5-0.
DISBURSEMENTS
The Disbursements through December 9, 2021 were presented in the Trustee
packets for review. Mr. Lovingood informed the Board that the Klausner Invoice
#28871 which had the incorrect total had been corrected out with a refund from the
provider.
Marc Glass made a motion to approve the Disbursements as amended. The
Motion received a second from Allan Owens and was approved by the
Trustees 5-0.
FINANCIAL STATEMENTS
The interim financial statements were provided for informational purposes.
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BENEFIT APPROVALS
The Benefit Approvals for December 9, 2021 were presented in the Trustee packets
for review. Mr. Lovingood noted the DROP Distributions in excess of $35,000.00
have been processed but are pending Board Approval before distribution. Mr.
Lovingood noted that this was due to the blackout dates for End of Year Accounting.
• Brad Seidensticker made a motion to approve the Benefit Approvals as
presented for December 9, 2021. The Motion received a second from Greg
Mull and was approved by the Trustees 5-0.
OTHER BUSINESS
Jay Spencer
PUBLIC COMMENTS
There were no public comments at this time.
ADJOURN
There being no further business, the Trustees officially adjourned the meeting at
12:10PM. The next meeting is scheduled for Thursday March 10, 2022, at 9:00 AM.
Respectfully submitted,
Brad Seidensticker, Secretary
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