04/04/1988 TRUSTEES OF THE EMPLOYEES' PENSION FUND MEETING
April 4, 1988
The City Commission, meeting as the Board of Trustees of the Employees
Pension Fund, met in regular session at the City Hall, Monday, April 4, 1988, at 9:10 a.m., with the following members present:
Rita Garvey Mayor/Commissioner
James Berfield Vice Mayor/Commissioner
(arrived at 9:16 a.m.)
Lee Regulski Commissioner
Don Winner Commissioner
William Nunamaker Commissioner
Also Present were:
Ron H. Rabun City Manager
Joseph R. McFate, II Planning & Urban Development
Director
Milton A. Galbraith, Jr. City Attorney
Cynthia Goudeau City Clerk
ITEM #2 Minutes Commissioner Winner moved to approve the minutes of the
March 14, 1988, meeting. `Motion` was duly seconded and `carried` unanimously.
ITEM #3 Request for Acceptance into Membership
The City Manager presented the recommendation of the Advisory Committee to approve membership for three (3) employees listed below:
`Name` `Classification` `Department`
Dennis Allen Electrician Traffic Engineering!
Anthony Pattakos Pub. Ser. Tech. Pub. Wks./Pub. Ser.!
Celeste Marshall Accounting Clerk I Police
Commissioner Winner moved to accept the recommendation of the Advisory Committee. `Motion` was duly seconded and `carried` unanimously.
ITEM #4 Request for Pension
The City Manager presented the recommendation of the Advisory Committee, General Employees' Pension Fund that the employees listed below be granted a regular pension under Section 26.34
of the Employees' Pension Plan.
1) Gerald Weimer, Assistant City Manager, City Manager's Department, to
be effective upon his date of resignation, at an amount to be calculated by the Finance Department.!
2) Betty Russell, Senior Legal Secretary, Legal Department, to be effective
March 23, 1988, at an amount to be calculated by the Finance Department.!
Commissioner Regulski moved to accept the recommendation of the Advisory Committee. `Motion` was duly seconded and `carried` unanimously.
ITEM #5 Approval of Pension Contribution and Authorization to Request Proposals for Actuarial Services.
The Ogle and Waters valuation report determined a required City contribution for the current (87 88) fiscal year of $2,916,784.00. This amount was less than originally budgeted and
the corresponding savings will be reflected in the mid year budget review.!
Staff is also recommending that the City proceed with the request for proposals to provide the January 1, 1988 actuarial valuation, which will determine the required City contribution
for fiscal year 88 89. Ogle and Waters have prepared the last two valuations and also performed three special studies relating to the pension rewrite project. In virtually every case,
staff has had difficulty in obtaining the reports by the agreed upon time, and in resolving billing disputes over charges for additional work that was neither anticipated nor authorized
by the City. It is felt that it is in the best interest of the Pension Plan to consider all available actuarial firms at this time. The Pension Advisory Committee concurs with this recommendation
and will be represented on the committee to review the proposals and recommend to the trustees an actuarial firm to prepare the current valuation.!
The Finance Director indicated that the Trustees should actually be recommending to the City
Commission to make the contribution, and in response to a question indicated that the contribution equates to approximately 11% of employee salaries. !
Commissioner Winner moved to recommend to the City Commission that they contribute $2,916,784.00 to the Employee Pension Fund as determined by the Ogle and Waters January 1, 1987 actuarial
report. The `motion` was duly seconded and `carried` unanimously.!
Commissioner Winner moved to authorize request for proposals to perform the January 1, 1988 actuarial valuation. The `motion` was duly seconded and `carried` unanimously.
ITEM #6 Appointment of Callan Associates to replace SEI Funds Evaluation as performance measurement vendor.
Performance measurement services can best be defined as the production of comparative statistical data that assists the City and the equity investment advisor in the review and analysis
of the plan's performance. The services of our current performance measurement vendor, SEI Funds Evaluation Service, have not been totally satisfactory, especially in the area of measuring
our fixed income investments. As an example, their September 30, 1987 report referenced the $10 million which was withdrawn from the equity market in August, but made no attempt to include
the resulting internally managed treasury portfolio in the overall plan performance data. Several other problems with the firm have been documented and were summarized in a letter from
John Willoughby, Equity Investment Advisor.!
After meeting with representatives of Callan and Associates, City staff concurs with Mr. Willoughby that Callan and Associates will provide us with a more useful product, including
a report format that will include both GIC's and internally managed treasuries as well as equities. Their proposed fee is identical to that previously charged by SEI, and does not impact
the plan financially because all fees are paid through directed brokerage commissions, usually referred to as "soft dollars." !
Concerns were expressed regarding the directed commission fees and it was explained that this is a common practice throughout the industry. !
In response to a question, the Finance Director indicated that as of December 31, 1987 Aetna is performing in the 35th percentile and Denver in the 60th percentile placing them in median
performance.!
Commissioner Winner moved to approved the appointment of Callan Associates, Inc. to perform performance measurement services for one year(four calendar quarters) at an annual fee of
$20,500 in directed brokerage commissions ("soft dollars") and that the appropriate officals be authorized to execute the same. `Motion` was duly seconded and `carried` unanimously.!
ITEM #7 Investment of Existing Cash Balance in Pension Fund. !
The cash which has accumulated since August was generated from employees, at 8% of salaries, and from the City, whose contribution was accelerated this year to comply with a request
from the State. Since there will be no additional City contributions after March 31, we believe that some cash should be kept to meet benefit payments, but that $3 million is reasonably
available for reinvestment. The Investment Committee has recommended the current 40 40 20 allocation as agreed to in August.!
Discussion ensued regarding whether or not the 40 40 20 mix is appropriate in light of the stock market climate. !
Commissioner Winner moved to continue this item to the meeting of the trustees of May 2, 1988. `Motion` was duly seconded and `carried` unanimously.
ITEM #8 Other Business!
The Personnel Director reported that Mr. Cary Singletary, Attorney for John Welch, has submitted a voluminous set of documents to the four psychiatrists who have evaluated Mr. Welch
stating that the City will pay for their evaluation of said documents. There was concern that when the Trustees authorized payment of the psychiatrists it was for the approximately 17
page document submitted by the City.!
There were concerns that the charge by the psychiatrists to review all of the papers submitted by Mr. Singletary would be expensive. Direction from the Commission was that Mr. Singletary
and the psychiatrists be advised that the City would pay for evaluation of material submitted by Mr. Singletary that was of the same volume as that submitted by the City. !
ITEM #9 Adjournment, 9:34 a.m.