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08/16/1999 (2) , , , . ,.::" " ~ ,...:... v' , ' ".". " . t, : .,' ., , J '" I j~~"~::;' ;:,<<,.;~;".l';~t>'}::'":(".:,, .::,' <.-. :,:' "; '.:"':.",::', ~' " k ?~r',' " .f' , > " , "; < ' . .' /, " ~ . " " ' . ," '1. ~ . ~ '. I , PENSION , (TRUSTEES) " Board of Trustees of the Employees' , Pension Fund Minutes i> " , , I" " .~. ..' " ":.\" . ..<, -' " " ., I . ~ ,. , " , ' Date q'l ~ c. . " I I I I I : g2 ~.:aiJ~';).i!"""""""'.~ :, < -...~. ~\~'!:..<+ _.. . p. ...,~ l . >< j . .' I ~ '1 . .. .... I .'. ~ . " ,'. :'" '. + ~I ,.,....:".. "'.. . , I "I. ,. > . !, .....' I 'I~"." ~., ".'" t. >- , . ,. . " .-' :} W ':~ ACTION AGENDA Board of Trustees of the Employees' Pension Fund August 16, 1999 1. Call to Order N 9:21 a.m. 2. Approval of Minutes: 7/12/99 - Approved as submitted. 3. Request for acceptance into membership: Theresa McNeela, Edward Hartman, Daniel Harrison, Earl Ashley, Elizabeth Lancara, Lori Metzner, George Sanores, Antoinette DeLuca, Sylvia Walls, Eric Jenkins, Luther Mack, Robert Mock, Mark Crellin, John Wald~an, Lisa Authier, Chance Anderson & Matthew Johnson - Approved. Regular Pension to be granted: Duane E. Smith N Approved. 4. 5. Pension to be vested: Nancy Yankus - Approved. 6. Waive Vested Pension: Lori Metzner - Approved. 7. Approve recommended administrative expenditure budget for Fiscal Year 1999~2000 totaling $127,088 for City of Clearwater Employees' Pension Plan - Approved. 8. Approve increase in amount authorized to be spent with PriceWaterhouseCooper, LLP for actuary & other related services by $15,000 for total of $120,000 for 3 year period ending 12/31/2001 - Approved. 9. Accept Actuarv's Report for Employees' Pension Plan for plan year beginning 1/1/99 - Accepted. 10. Approve Legal Services Agreement with Christiansen & Dehner. P.A., for pension attorney services - Approved. 11. Other Business - Authorized City Attorney to hire outside counsel. Thompson, Sizemore & Gonzalez. to represent Trustees in lawsuit initiated by Officer Krieger v. Pension Trustees & City. 12. Adjourn - 9:41 a.m. " , '~cH '. ~ \ ~;!~<,',' ; or"." : '.'-~ ': .i '.'i . : t~: ~ . '.. c ,', .1, i..' ~ "0, f'.."'~ W . :. , , >,' " ".' , i! to" ',. ;. " " " <, ' " , TRUSTEES OF THE EMPLOYEES' PENSION FUND MEETING CITY OF CLEARWATER August 16, 1999 Present: Brian J. Aungst Ed Hooper J. B. Johnson Robert Clark Ed Hart Chair Vice-ChairlTrustee Trustee Trustee Trustee Also Present: Michael J. Roberto Pamela K. Akin Paul O'Rourke . Cynthia E. Goudeau Patricia O. Sullivan City Manager City Attorney Human Resources Administrator City Clerk Board Reporter The Chair called the meeting to order at 9:21 a.m. at City Hall. To provide continuity for research, items are in agenda order although not necessarily discussed in that order. ITEM #2 - Approval of Minutes Trustee Hart moved to approve the minutes of the July 12, 1999, meeting, as recorded and submitted in written summation by the City Clerk to each Trustee. The motion was duly seconded and carried unanimously. ITEM #3 - Reauest for Acceptance into Membership The City Manager presented the recommendation of the Pension Advisory Committee to approve membership for the employees listed below: Theresa McNeala , Edward Harman Daniel Harrison Earl Ashley Elizabeth Lancara Lori Metzner .. George Sanores Antoinette DeLuca Sylvia Walls Eric Jenkins Luther Mack Robert Mock Mark Crellin John Waldman mpf0899 1 08/1 6199 .' ,., '. I , .: ~ , , "~ ' , (.: ~. o ~ Lisa Authier , Chance Anderson Matthew Johnson Trustee Johnson moved to accept the recommendation of the Pension Advisory Committee. The motion was duly seconded and carried unanimously. ITEM #4 - Reaular Pensions to be Granted The City Manager presented the recommendation of the Pension Advisory Committee that Duane E. Smith be granted a regular pension under 5ection(s) 2.393 and 2.397 of the Employees' Pension Plan. Duane E. Smith IV was employed on May 3, 1 976, and his pension service credit is effective on November 3, 1976. His pension will be effective August 1, 1999. On July 14, 1999, the' PAC (Pension Advisory Committee) approved this pension. Based on an average salary of approximately $60,433 per year over the past five years, the formula for computing regular pensions, and Mr. Smith's selection of the Joint & Survivor Annuity, this pension will approximate $37,753 annually. Section 2.393 (p) provides for normal retirement eligibility when a participant has completed twenty years of credited service in a type of employment described as "hazardous duty" and further specifically defines service as a Police Sergeant as meeting the hazardous duty criteria. Mr. Smith qualifies under the hazardous duty criteria. Trustee Hooper moved to accept the recommendation of the Pension Advisory Committee. The motion was duly seconded and carried unanimously. ITEM #5 - Pensions to be Vested The City Manager presented the recommendation of the Pension Advisory Committee that Nancy Yankus be allowed to vest her pension under Section(s) 2.397 and 2.398 of the Employees' Pension Plan. Nancy Yankus was employed on June 30, 1985, and her pension service credit is effective on that date. The Employees' Pension Plan provides that should an employee cease to be an employee of the City of Clearwater after completing 10 or more years of creditable service (pension participation), then such employee shall acquire a vested interest in the retirement benefits. Vested pension payments commence on the first of the month following the month in which the employee normally would have been eligible for retirement. Ms. Yankus would have reached age 55 and completed at least 20 years of service on February 16, 2008. The PAC approved this request on July 14, 1999. Her pension will be effective March 1, 2008. mpf0899 2 08/16/99 " ," ~ Trustee Hooper moved to' accept the recommendation of the Pension Advisory Committee. The motion was duly seconded and carried unanimously. ' c1r;"'\ ~)..~"I ~, ri\~~'...~;:,.. '. .. ITEM #6 - Reauest to Waive Vested Pension Lori Metzner, librarian I, Library Department, was employed by the City from October 25, 1982, to October 30, 1992. The PAC and Pension Trustaes approved her formal request to vest her pension. On September 6, 1994, Ms. Metzner returned to City employment part-time. On June 5, 1999, she converted to full-time and is again eligible for participation in the Pension Plan. Based on a Legal Department recommendation, Ms Metzner has requested waiving her vested pension. The PAC approved the request on July 14, 1999. Upon approval, Ms. Metzner will be credited with her previous period of employment. She will be eligible for retirement upon completion of 20 years of creditable service and age 55. Trustee Johnson moved to allow lori Metzner, Librarian I, Library Department, to waive her vested pension rights. The motion was duly seconded and carried unanimously. ITEM #7 - Approved recommended Administrative Expenditure Budoet for FY 1 999/00 tot8lino $1 27 .088 for City of Clearwater Emplovees' Pension Plan The proposed budget for FY (fiscal year) 1 999/00 includes historical numbers. Medical Bills refer to PAC authorized medical services. Travel and Training covers expenses related to the Pension Investment Committee's attendance at a training seminar at Callan, the Plan's performance measurement firm, visit to Callan, and a due diligence visit to one money manager. Printing and Binding covers the statutorily required annual distribution of information to Plan members. Reimbursements to the General Fund cover Plan oversight and check issuance costs. Trustee approved contracts for Money Manager, Safekeeping Service, Pension Administrator, and Actuary fees are not included in this budget. Changes from the current budget: 1) update of General Fund reimbursements reflects costs more accurately. Increase to $65,838 includes $10,800 - Payroll, $21,285- Finance, $2,325 - legal, and $31,428 - Human Resources and 2) costs related to providing the Pension Fund with its own attorney. The current budget covers half of the estimated annual costs as the attorney was hired mid-year. In response to a question, the City Attorney said the Legal Department continues minimal involvement with the Pension Plan related to administration issues. The department had prepared the contract for pension attorney services and has some involvement in the Krieger lawsuit. General Fund reimbursements for legal Department Services have been decreased. mpf0899 3 08/16/99 . Trustee Johnson moved to approve the recommended administrative expenditure budget for FY 1999/00 totaling $127,088 for the City of Clearwater Employees I Pension Plan, and that the appropriate officials be authorized to execute same. The motion was duly seconded and carried unanimously. ITEM #8 - Aoorove Increase in Amount Authorized to be Spent with PriceWaterhouseCoooers. LLP for Actuarv & Other Related Services bv $15.000, for total of $120.000, for 3-vear oeriod endina 12/31/01 The Pension Plan's actuary, PriceWaterhouseCoopers, LLP, was selected by the RFP (Request for Proposals) process. On February 16, 1999, the Trustees approved a $105,000, 3-year contract, which included 3 annual actuarial reports ($16,000, $16,500, and $17,000), annual pre-retirement workbooks, individual employee retirement benefit statements, quarterly retirement seminars, employee retirement counseling, and minimal actuarial advice to staff, ',-./ Unanticipated needs have been identified: 1) on July 14, 1999, the PAC recommended a study determine the cost of an option allowing retirement at age 65 after at least 10 years of service with no reduction in benefits. The current plan requires the benefit to be actuarially reduced; 2) recent legislation requires plan changes, An actuarial analysis will determine which changes should be implemented; and 31 during negotiations, the unions have suggested the Pension Plan include a cost of living adjustment. Cost estimates range from $1,500 to $2,000 to study the age 65/10 year issue, from $3,000 to $6,000 to evaluate the legislation, and from $2,000 to $7,000 to determine costs associated with cost of living adjustments. In response to a question, Financial Services Administrator Margie Simmons reviewed the process used to select PriceWaterhouseCoopers. She will negotiate the cost of each additional item. Concerns were expressed that it had been thought Clearwater was exempt from recent legislation regarding police and fire pensions. It was reported Trustee Attorney lee Dehner will report on the impact of the legislation. Trustee Hart moved to increase the amount authorized to be spent with PriceWaterhouseCoopers, LLP for actuary and other related services by $15,000, for a total amount authorized of $1 20,000, for the 3-year period ending December 31, 2001. The motion was duly seconded and carried unanimously. ITEM #9 - Accept Actuarv's Reoort for Emplovees' Pension Plan for olan vear beQinnina 01/01/99 The January 1, 1999, actuarial report for the Employees' Pension Plan indicates no City contribution is required. The City ordinance governing the pension plan, however, requires the City to contribute at least 7 % of the compensation of all employees participating in the Plan, approximately $3,476,657. The difference between the required \J mpf0899 4 08/16/99 .: :, . .' . \'. ..... ~, . I . ". : . .' ',', . t'. ': ~ o ,-J \~~'~)' ~ ~.. and actuarial determined contributions will be added to the credit balance of $6,812,956. The new credit balance is estimated to be $10,289,613. The Plan's funded status increased from 165% at January 1, 1998, to 174% at January 1, 1999. The Plan experienced another year of excellent Investment performance. The market value basis performance for the last four years has been 23.36%, 14.8%, 17.49%, and 16.74%. In response to a question, Pension Plan Actuary Steve Metz said State law does not require the City to make this contribution. In 4 years, an $800,000 annual charge will be amortized and paid in full. Trustee Hooper moved to accept the Actuaryts Report for the Employees' Pension Plan for the plan year beginning January 1, 1999. The motion was duly seconded and carried unanimously. ITEM #10 - Aoorove leaal Services AQreement with Christiansen & Dehner. P.A.. for oension attornev services The City Attorney submitted a legal services agreement for pension attorney services with Christiansen & Dehner, P.A. The City Attorney reported the Krieger lawsuit had been served. As Christiansen and Dehner do not handle litigation, Assistant City Attorney Dick Hall is preparing an answ(;.r, 'The City Attorney recommended the Trustees hire the firm of Thompson, Sizemore, and Gonzales, which has represented the City in previous litigation. In response to a question regarding litigation costs, the City Attorney said an estimate has not been made. She said the firm's fees are reasonable. In response to a question, the City Attorney said her department does not charge the Pension Plan an hourly rate but bases charges on actual costs. Concern was expressed the contracted law firm does not handle litigation. The City Attorney said when the firm was questioned regarding litigation, they had indicated none of the pension plans they served had been sued. Concern was expressed the PACts intent had been to contract with a law firm that would handle all associated legal work. In response to a qUAstion, the City Attorney said the firm, concerned with the hourly fee, had struck out extensions in the contract to the one-year agreement. If the Court concludes the case is tertiary, Christiansen & Dehner can handle the associated paperwork. It was noted most pension specialists do not handle litigation. In response to a question, the City Attorney said it is a burden for staff to handle this litigation. She expressed concern a conflict of interest may arise. Trustee Hooper moved to authorize the City Attorney to hire outside counsel for litigation related to the Krieger case and to allow the Trustee Chair to sign the associated contract and to approve the legal services agreement for pension attorney services with Christiansen & Dehner, P.A. The motion was duly seconded and carried unanimously. mpf0899 5 08/16/99 I, """1 :....., _. ' . . . , " c ; , ~ : 1.:.~;;!J'~ :~~.;. ~:::\~ ~~~~.. ~~;.~, ~'" ~ : ~.;i. ~ ;/:.,~ . ::.: .' :"~' '\" ,: >~.~., ,+ ~ i~ ~\" ,!." >>It, ":I" "," ,. .." "",. '''" " " , " " , ," f('1~"'~\':~~;;~l'1!;J\:! ;.\:::':? ,iC'."'. .',', '9.G'Oj ',:; "", 1r:';<':' ;;~r'~ . ~':,: ;' .' ~,:(,: ,';;. c ~ . .; i . , ~~:. ': '" ~f~:'.'" ". '., ~':i .:'.' :.b-t'-:I . ~:..., . . ',' . I ~t? , 1,j{, .', >> :~r<".: . I.," l,..,'. , 0"" ~'. ,\ ~ .; c I "'ir' -n"l<'" ~t' ',' " , .' . ~ > ITEM #11' ~ 'Other Business - None. ITEM #1 2 Adiournment ',;The meeting adjourned at 9:41 a.m. ATTEST: ' , , , ' " " , .u ~ \ ' ; , ,\ ,\ mpf0899 i, : ,,'~'. t ~. '. ,~. fL dQQ~ City Clerk " .\' ,(' " 6 " I ,,' c " ~<" . 11- , Chair " , + . ~ ' , ! '.' ',' 4~ '"" IT" - I:, 08/1 6/99 -- ! I ,I I 11- ,!. I"';,>.... c 1< .~.;.. I." ~"i .';