08/16/1999
TRUSTEES OF THE EMPLOYEES' PENSION FUND MEETING
CITY OF CLEARWATER
August 16, 1999
Present: Brian J. Aungst Chair
Ed Hooper Vice-Chair/Trustee
J. B. Johnson Trustee
Robert Clark Trustee
Ed Hart Trustee
Also Present: Michael J. Roberto City Manager
Pamela K. Akin City Attorney
Paul O'Rourke Human Resources Administrator
Cynthia E. Goudeau City Clerk
Patricia O. Sullivan 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
motion
and submitted in written summation by the City Clerk to each Trustee. The was duly
carried
seconded and unanimously.
ITEM #3 - Request for Acceptance into Membership
The City Manager presented the recommendation of the Pension Advisory Committee
to approve membership for the employees listed below:
Theresa McNeela
Edward Harman
Daniel Harrison
Earl Ashley
Elizabeth Lancara
Lori Metzner
George Banores
Antoinette DeLuca
Sylvia Walls
Eric Jenkins
Luther Mack
Robert Mock
Mark Crellin
John Waldman
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Lisa Authier
Chance Anderson
Matthew Johnson
Trustee Johnson moved to accept the recommendation of the Pension Advisory
motioncarried
Committee. The was duly seconded and unanimously.
ITEM #4 - Regular Pensions to be Granted
The City Manager presented the recommendation of the Pension Advisory Committee
Duane E. Smith regular pension
that be granted a under Section(s) 2.393 and 2.397 of the
Employees' Pension Plan.
Duane E. Smith IV was employed on May 3, 1976, 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
motioncarried
Committee. The was duly seconded and unanimously.
ITEM #5 – Pensions to be Vested
The City Manager presented the recommendation of the Pension Advisory Committee
Nancy Yankusvest her pension
that be allowed to 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.
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Trustee Hooper moved to accept the recommendation of the Pension Advisory
motioncarried
Committee. The was duly seconded and unanimously.
ITEM #6 - Request 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 Trustees 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
motion carried
her vested pension rights. The was duly seconded and unanimously.
ITEM #7 – Approved recommended Administrative Expenditure Budget for FY 1999/00 totaling
$127,088 for City of Clearwater Employees' Pension Plan
The proposed budget for FY (fiscal year) 1999/00 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.
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Trustee Johnson moved to approve the recommended administrative expenditure
budget for FY 1999/00 totaling $127,088 for the City of Clearwater Employees' Pension Plan,
motion
and that the appropriate officials be authorized to execute same. The was duly
carried
seconded and unanimously.
ITEM #8 – Approve Increase in Amount Authorized to be Spent with
Actuary & Other Related Services
PriceWaterhouseCoopers, LLP for by $15,000, for total of
$120,000, for 3-year period ending 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 3) 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
motion
amount authorized of $120,000, for the 3-year period ending December 31, 2001. The
carried
was duly seconded and unanimously.
Actuary's Report
ITEM #9 - Accept for Employees' Pension Plan for plan year beginning
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
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.
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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 Actuary's Report for the Employees' Pension Plan
motion carried
for the plan year beginning January 1, 1999. The was duly seconded and
unanimously.
Legal Services Agreement with Christiansen & Dehner, P.A.
ITEM #10 – Approve , for
pension attorney 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 answer. 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 PAC's intent had been to contract with a law firm that
would handle all associated legal work. In response to a question, 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
motion carried
Christiansen & Dehner, P.A. The was duly seconded and unanimously.
ITEM #11 - Other Business - None.
ITEM #12 - Adjournment
The meeting adjourned at 9:41 a.m.
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