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10/13/2014Monday, October 13, 2014 1:00 PM City of Clearwater City Hall 112 S. Osceola Avenue Clearwater, FL 33756 Council Chambers Pension Trustees Meeting Agenda October 13, 2014Pension Trustees Meeting Agenda 1. Call To Order 2. Approval of Minutes 2.1 Approve the minutes of the September 15, 2014 Pension Trustees meeting as submitted in written summation by the City Clerk. 3. Citizens to be Heard Regarding Items Not on the Agenda 4. New Business Items 4.1 Approve the new hires for acceptance into the Pension Plan as listed. 4.2 Approve the following request of employees Patricia Cooke, Police Department, Allen Del Prete, Human Resources Department, Charles Kindred, Solid Waste General Services Department, Karen Miles, Finance Department, and Tina Wilson, Office of Management and Budget, for a regular pension as provided by Sections 2.416 and 2.424 of the Employees’ Pension Plan. 4.3 Recommend approval of the following request of employees Nancy Oakley, Parks and Recreation Department, Samuel Taylor, Police Department and David Weitzel, Parks and Recreation Department, to vest their pensions as provided by Section 2.419 of the Employees’ Pension Plan. 4.4 Approve an amendment to the agreement with Gabriel Roeder Smith and Company for actuarial services for the Pension Plan, to extend the agreement for two years, to December 31, 2016, add additional services for an additional not-to-exceed amount of $71,500, and authorize the appropriate officials to execute same. 5. Adjourn Page 2 City of Clearwater Printed on 10/9/2014 Cover Memo City of Clearwater City Hall 112 S. Osceola Avenue Clearwater, FL 33756 File Number: ID#14-595 Agenda Date: 10/13/2014 Status: Agenda ReadyVersion: 1 File Type: MinutesIn Control: Pension Trustees Agenda Number: 2.1 SUBJECT/RECOMMENDATION: Approve the minutes of the September 15, 2014 Pension Trustees meeting as submitted in written summation by the City Clerk. SUMMARY: APPROPRIATION CODE AND AMOUNT: USE OF RESERVE FUNDS: Page 1 City of Clearwater Printed on 10/9/2014 Pension Trustees Meeting Minutes September 15, 2014 City of Clearwater City Hall 112 S. Osceola Avenue Clearwater, FL 33756 Meeting Minutes Monday, September 15, 2014 1:00 PM Council Chambers Pension Trustees Page 1 City of Clearwater Draft Pension Trustees Meeting Minutes September 15, 2014 Roll Call Present 5 - Chair George N. Cretekos, Trustee Doreen Hock-DiPolito, Trustee Jay E. Polglaze, Trustee Bill Jonson, and Trustee Hoyt Hamilton Also Present: Rod Irwin - Assistant City Manager, Pamela K. Akin - City Attorney, Rosemarie Call - City Clerk, Nicole Sprague - Official Records and Legislative Services Coordinator To provide continuity for research, items are listed in agenda order although not necessarily discussed in that order. Unapproved 1. Call To Order The meeting was called to order at 1:26 p.m. at City Hall. 2. Approval of Minutes 2.1 Approve the minutes of the August 18, 2014 Pension Trustees meeting as submitted in written summation by the City Clerk. Trustee Hock-DiPolito moved to approve the minutes of the August 18, 2014 Pension Trustees meeting as submitted in written summation by the City Clerk. The motion was duly seconded and carried unanimously. 3. Citizens to be Heard Regarding Items Not on the Agenda - None. 4. New Business Items 4.1 Approve new hires for acceptance into the Pension Plan as listed. Name, Job. Class, & Dept./Div. Pension Elig. Date Wayne Daniel, Fleet Mechanic, General Services Department 06/30/2014 Douglas Hunt, Solid Waste Equipment Oper., Solid Waste Dept 06/30/2014 Charles Flounoy, Solid Waste Equipment Oper., Solid Waste Dept 06/30/2014 Sarah Rachel, Utilities Chemist, Public Utilities Dept 06/30/2014 Lori Burdell, Recreation Programmer, Parks & Recreation Dept 07/12/2014 W. David Barnhart, Industrial Pretreatment Tech, Public Utilities Dept 07/14/2014 John Beebe, Fire Inspector II, Fire Department 07/14/2014 Page 2 City of Clearwater Draft Pension Trustees Meeting Minutes September 15, 2014 Scott Boeckel, Police Officer, Police Department 07/14/2014 Christopher Cleveland, Solid Waste Equipment Oper, Solid Waste Dept 07/14/2014 Raniel Heredia, Police Officer, Police Department 07/14/2014 Ryan Hobert, Police Officer, Police Department 07/14/2014 Joshua Gibson, Police Officer, Police Department 07/14/2014 Steven Venezia, Police Officer, Police Department 07/14/2014 Amber Priester, Library Assistant, Library Department 07/26/2014 Christa Smith, Librarian I, Library Department 07/26/2014 Belen Rubin, Library Assistant, Library Department 07/28/2014 Joshua Sherman, Solid Waste Equipment Operator, Solid Waste Dept 07/28/2014 Jonathen Trafford, Field Service Representative, Customer Service Dept 07/28/2014 Trustee Polglaze moved to approve new hires for acceptance into the Pension Plan as listed. The motion was duly seconded and carried unanimously. 4.2 Approve the following request of employees Michael Duffey, Police Department, Willie Porter, Engineering Department, and Ken Sides, Engineering Department, for a regular pension as provided by Sections 2.416 and 2.424 of the Employees’ Pension Plan. Michael Duffey, Police Officer, Police Department, was employed by the City on October 2, 1995 and his pension service credit is effective on that date. His pension will be effective August 1, 2014. Based on an average salary of approximately $72,003.19 over the past five years, the formula for computing regular pensions and Mr. Duffey’s selection of the 50% Joint and Survivor Annuity, this pension benefit will be approximately $38,490.84 annually. Willie Porter, Street Sweeper Operator, Engineering Department, was employed by the City on August 8, 1994 and his pension service credit is effective on that date. His pension will be effective October 1, 2014. Based on an average salary of approximately $42,318.86 over the past five years, the formula for computing regular pensions and Mr. Porter’s selection of the 50% Joint and Survivor Annuity, this pension benefit will be approximately $21,175.08 annually. Ken Sides, Senior Professional Engineer, Engineering Department, was employed by the City on January 5, 1998 and his pension service credit is effective on that date. His pension will be effective September 1, 2014. Based on an average salary of approximately $71,504.38 over the past five years, the formula for computing regular pensions and Mr. Sides’ selection of the 75% Joint and Survivor Annuity, this pension benefit will be approximately $32,513.76 annually. Section 2.416 provides for normal retirement eligibility for non-hazardous duty employees hired prior to the effective date of this reinstatement (January 1, 2013), a member shall be eligible for retirement following the earlier of the date Page 3 City of Clearwater Draft Pension Trustees Meeting Minutes September 15, 2014 on which a participant has reached the age of fifty-five years and completed twenty years of credited service; the date on which a participant has reached age sixty-five years and completed ten years of credited service; or the date on which a member has completed thirty years of service regardless of age. For non-hazardous duty employees hired on or after the effective date of this restatement, a member shall be eligible for retirement following the earlier of the date on which a participant has reached the age of sixty years and completed twenty-five years of credited service; or the date on which a participant has reached the age of sixty-five years and completed ten years of credited service. Mr. Porter and Mr. Sides have met the non-hazardous duty criteria. Section 2.416 provides for normal retirement eligibility for hazardous duty employees, a member shall be eligible for retirement following the earlier of the date on which the participant has completed twenty years of credited service regardless of age, or the date on which the participant has reached fifty-five years and completed ten years of credited service. Mr. Duffey has met the hazardous duty criteria. Trustee Hamilton moved to approve the following request of employees Michael Duffey, Police Department, Willie Porter, Engineering Department, and Ken Sides, Engineering Department, for a regular pension as provided by Sections 2.416 and 2.424 of the Employees’ Pension Plan. The motion was duly seconded and carried unanimously. 4.3 Approve the following request of employees Marsha Beall, Parks and Recreation Department and David Humphrey, Police Department, to vest their pensions as provided by Section 2.419 of the Employees’ Pension Plan. Marsha Beall, Staff Assistant, Parks and Recreation Department, was employed by the City on December 1, 2003, and began participating in the Pension Plan on that date. Ms. Beall terminated from City employment on July 12, 2014. David Humphrey, Police Service Technician, Police Department, was employed by the City on January 23, 1995 and began participating in the Pension Plan on that date. Mr. Humphrey terminated from City employment on July 23, 2014. The Employees’ Pension Plan provides that should an employee cease to be an employee of the City of Clearwater or change status from full-time to part-time after completing ten or more years of creditable service (pension Page 4 City of Clearwater Draft Pension Trustees Meeting Minutes September 15, 2014 participation), 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. Section 2.416 provides for normal retirement eligibility for non-hazardous duty employees hired prior to the effective date of this reinstatement (January 1, 2013), a member shall be eligible for retirement following the earlier of the date on which a participant has reached the age of fifty-five years and completed twenty years of credited service; the date on which a participant has reached age sixty-five years and completed ten years of credited service; or the date on which a member has completed thirty years of service regardless of age. For non-hazardous duty employees hired on or after the effective date of this restatement, a member shall be eligible for retirement following the earlier of the date on which a participant has reached the age of sixty years and completed twenty-five years of credited service; or the date on which a participant has reached the age of sixty-five years and completed ten years of credited service. Ms. Beall and Mr. Humphrey will meet the non-hazardous duty criteria and begin collecting a pension in March 2016 and February 2015, respectively. Trustee Jonson moved to approve the following request of employees Marsha Beall, Parks and Recreation Department and David Humphrey, Police Department, to vest their pensions as provided by Section 2.419 of the Employees’ Pension Plan. The motion was duly seconded and carried unanimously. 4.4 Approve the proposed class action settlement regarding Maxwell Technologies Class Action. In April 2013, the Pension Trustees approved the Employees’ Pension Plan of the City of Clearwater to serve as Lead Plaintiff with regard to the securities fraud class action re Maxwell Technologies Inc., Securities Litigation, C.A. No. 3:13-cv-00580-BEN-RBB (S.D. Cal.). This action was taken regarding alleged fraud and mismanagement on the part of Maxwell that resulted in a significant loss of stock value. While the City Pension Plan would not recover a significant amount, this action was taken to fulfill the Trustees fiduciary obligations to the plan. The parties engaged in a full-day mediation session on August 21, 2014 before Jed Melnick, Esq. of JAMS in New York City. During the mediation, the parties discussed various issues concerning Lead Plaintiff’s claims, including the amount of damages that could potentially be proven in the litigation. Prior to Page 5 City of Clearwater Draft Pension Trustees Meeting Minutes September 15, 2014 the mediation, Lead Plaintiff’s Counsel Saxena White P.A. consulted with a damages expert and a forensic accountant to discuss whether a large drop in Maxwell Technology, Inc.’s stock price that occurred on April 26, 2012 could be attributable to the alleged fraud, which would result in larger damages to the Class. Both experts opined that the information released in April 2012 could not likely be tied to the alleged fraud that was ultimately disclosed a year later in March 2013, resulting in potential maximum damages to the Class that could be proven at trial of approximately $24 million. Defendants countered that maximum damages in the action were $20 million, and that even this damage figure was susceptible to further challenges later in the litigation that could dramatically reduce the potential recovery for the Class. At the conclusion of the mediation session, Mr. Melnick delivered a mediator’s proposal to the parties that contemplated a resolution of the Class’s claims in exchange for a settlement fund of $3.3 million, which represents a recovery range of approximately 13.75% to 16.5% of maximum provable damages. This is an excellent result that greatly exceeds the median shareholder recovery in securities fraud litigation, which is a mere 2.1% of total estimated damages for all securities fraud actions and 8.9% for actions where damages were estimated between $20 and $49 million. Given these and other considerations, Lead Plaintiff’s Counsel Saxena White P.A. recommends that the Board of Trustees approve of the proposed settlement. The City will recover approximately $20,000 and a possible additional $20,000 for serving as lead plaintiff. Trustee Hamilton moved to approve the proposed class action settlement regarding Maxwell Technologies Class Action. The motion was duly seconded and carried unanimously. 4.5 Approve IRS required changes to Clearwater Employee Pension Plan. Current Internal Revenue Service regulations require two amendments to the Clearwater Employee Pension Plan. These changes will require action by City Council in the form of a City Ordinance. However, before such action is taken, the changes must be approved by the Pension Trustees. The changes to Section 2.398 and restated in Section 2.424-Time and manner of payment which requires the plan administrator to deposit any lump sum payout exceeding $1000 into a individual retirement plan designated by a trustee should the distributee not make an election otherwise. The changes to Section 2.393 and restated in Section 2.412 add additional Page 6 City of Clearwater Draft Pension Trustees Meeting Minutes September 15, 2014 language to the definition for compensation to include severance payments and overtime. Trustee Polglaze moved to approve IRS required changes to Clearwater Employee Pension Plan. The motion was duly seconded and carried unanimously. 5. Adjourn The meeting adjourned at 1:33 p.m. Chair Employees’ Pension Plan Trustees Attest City Clerk Page 7 City of Clearwater Draft Cover Memo City of Clearwater City Hall 112 S. Osceola Avenue Clearwater, FL 33756 File Number: ID#14-470 Agenda Date: 10/13/2014 Status: Agenda ReadyVersion: 2 File Type: Action ItemIn Control: Pension Trustees Agenda Number: 4.1 SUBJECT/RECOMMENDATION: Approve the new hires for acceptance into the Pension Plan as listed. SUMMARY: Pension Name, Job. Class, & Dept./Div .Elig. Date Stacie VanNostrand, Devel Review Tech I, Planning and Devel Dept.07/28/2014 Patrick Shackton, Parks Service Technician I, Parks and Rec Dept 08/04/2014 James Pleasant, Recreation Leader, Parks & Recreation Department 08/09/2014 Kelly Callihan, Communications Operator, Police Department 08/11/2014 Tracy Garcia, Communications Operator Trainee, Police Department 08/11/2014 Gregory Seymour, Communications Operator, Police Department 08/11/2014 Kevin Kerrigan, Industrial Pretreatment Technician, Public Util Dept 08/11/2014 Sharon McAtee-Knight, Accounting Clerk, Finance Department 08/18/2014 Tina Burdo, Customer Service Representative, Customer Service Dept 08/25/2014 Paul Chouinard, Construction Inspector 2, Engineering Department 08/25/2014 Leigh Anne McLain, Service Dispatcher, Gas Department 08/25/2014 Christopher Brown, Gas Technician I, Gas Department 08/25/2014 Jhimmy Vargas-Salinas, Public Utilities Technician I, Public Util Dept 08/25/2014 Seth Eigenmann, Parks Service Technician I, Parks and Rec Dept 08/25/2014 Cedric Foster, Parks Service Technician I, Parks and Recreation Dept 08/25/2014 APPROPRIATION CODE AND AMOUNT: N/A USE OF RESERVE FUNDS: N/A Page 1 City of Clearwater Printed on 10/9/2014 Cover Memo City of Clearwater City Hall 112 S. Osceola Avenue Clearwater, FL 33756 File Number: ID#14-471 Agenda Date: 10/13/2014 Status: Agenda ReadyVersion: 2 File Type: Action ItemIn Control: Pension Trustees Agenda Number: 4.2 SUBJECT/RECOMMENDATION: Approve the following request of employees Patricia Cooke, Police Department, Allen Del Prete, Human Resources Department, Charles Kindred, Solid Waste General Services Department, Karen Miles, Finance Department, and Tina Wilson, Office of Management and Budget, for a regular pension as provided by Sections 2.416 and 2.424 of the Employees’ Pension Plan. SUMMARY: Patricia Cooke, Police Office Specialist, Police Department, was employed by the City on July 24, 1995 and her pension service credit is effective on that date. Her pension will be effective October 1, 2014. Based on an average salary of approximately $34,929.43 over the past five years, the formula for computing regular pensions and Ms. Cooke’s selection of the Single Life Annuity, this pension benefit will be approximately $18,418.68 annually. Allen Del Prete, Human Resources Manager, Human Resources Department, was employed by the City on February 11, 1991 and his pension service credit is effective on that date. His pension will be effective October 1, 2014. Based on an average salary of approximately $74,987.60 over the past five years, the formula for computing regular pensions and Mr. Del Prete’s selection of the 10-Year Certain and Life Annuity, this pension benefit will be approximately $48,160.92 annually. Charles Kindred, Fleet Mechanic, Solid Waste General Services Department, was employed by the City on April 28, 1986 and his pension service credit is effective on that date. His pension will be effective February 1, 2015. Based on an average salary of approximately $61,922.36 over the past five years, the formula for computing regular pensions and Mr . Kindred’s selection of the Single Life Annuity with a 10% Partial Lump Sum Distribution, this pension benefit will be approximately $44,044.68 annually. Karen Miles, Accounting Manager, Finance Department, was employed by the City on September 22, 1986 and her pension service credit is effective on that date. Her pension will be effective October 1, 2014. Based on an average salary of approximately $81,443.29 over the past five years, the formula for computing regular pensions and Ms. Miles’ selection of the Single Life Annuity, this pension benefit will be approximately $63,540.60 annually. Tina Wilson, Budget Director, Office of Management and Budget , was employed by the City on September 10, 1984 and her pension service credit is effective on that date. Her pension will be effective October 1, 2014. Based on an average salary of approximately $108,851.94 Page 1 City of Clearwater Printed on 10/9/2014 File Number: ID#14-471 over the past five years, the formula for computing regular pensions and Ms. Wilson’s selection of the Single Life Annuity, this pension benefit will be approximately $89,886 annually. Section 2.416 provides for normal retirement eligibility for non -hazardous duty employees hired prior to the effective date of this reinstatement (January 1, 2013), a member shall be eligible for retirement following the earlier of the date on which a participant has reached the age of fifty-five years and completed twenty years of credited service; the date on which a participant has reached age sixty -five years and completed ten years of credited service; or the date on which a member has completed thirty years of service regardless of age. For non-hazardous duty employees hired on or after the effective date of this restatement, a member shall be eligible for retirement following the earlier of the date on which a participant has reached the age of sixty years and completed twenty -five years of credited service; or the date on which a participant has reached the age of sixty -five years and completed ten years of credited service. Ms. Cooke, Mr. Del Prete, Mr. Kindred, Ms. Miles and Ms. Wilson have met the non-hazardous duty criteria. Section 2.416 provides for normal retirement eligibility for hazardous duty employees, a member shall be eligible for retirement following the earlier of the date on which the participant has completed twenty years of credited service regardless of age, or the date on which the participant has reached fifty-five years and completed ten years of credited service. APPROPRIATION CODE AND AMOUNT: N/A USE OF RESERVE FUNDS: N/A Page 2 City of Clearwater Printed on 10/9/2014 Cover Memo City of Clearwater City Hall 112 S. Osceola Avenue Clearwater, FL 33756 File Number: ID#14-472 Agenda Date: 10/13/2014 Status: Agenda ReadyVersion: 2 File Type: Action ItemIn Control: Pension Trustees Agenda Number: 4.3 SUBJECT/RECOMMENDATION: Recommend approval of the following request of employees Nancy Oakley, Parks and Recreation Department, Samuel Taylor, Police Department and David Weitzel, Parks and Recreation Department, to vest their pensions as provided by Section 2.419 of the Employees’ Pension Plan. SUMMARY: Nancy Oakley, Accountant, Parks and Recreation Department, was employed by the City on May 3, 2004, and began participating in the Pension Plan on that date. Ms. Oakley terminated from City employment on August 9, 2014. Samuel Taylor, Senior Communications Operator, Police Department , was employed by the City on January 12, 2004 and began participating in the Pension Plan on that date. Mr. Taylor terminated from City employment on August 23, 2014. David Weitzel, Recreation Program Support Technician, Parks and Recreation Department, was employed by the City on January 3, 2000 and began participating in the Pension Plan on that date. Mr. Weitzel will terminate from City employment on October 25, 2014. The Employees’ Pension Plan provides that should an employee cease to be an employee of the City of Clearwater or change status from full -time to part-time after completing ten or more years of creditable service (pension participation ), 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. Section 2.416 provides for normal retirement eligibility for non -hazardous duty employees hired prior to the effective date of this reinstatement (January 1, 2013), a member shall be eligible for retirement following the earlier of the date on which a participant has reached the age of fifty-five years and completed twenty years of credited service; the date on which a participant has reached age sixty -five years and completed ten years of credited service; or the date on which a member has completed thirty years of service regardless of age. For non-hazardous duty employees hired on or after the effective date of this restatement, a member shall be eligible for retirement following the earlier of the date on which a participant has reached the age of sixty years and completed twenty -five years of credited service; or the date on which a participant has reached the age of sixty -five years and completed ten years of credited service. Ms. Oakley, Mr. Taylor and Mr. Weitzel will meet the non -hazardous duty criteria and begin collecting pensions in December 2023, February 2034 and November 2017, respectively. Page 1 City of Clearwater Printed on 10/9/2014 File Number: ID#14-472 Section 2.416 provides for normal retirement eligibility for hazardous duty employees, a member shall be eligible for retirement following the earlier of the date on which the participant has completed twenty years of credited service regardless of age, or the date on which the participant has reached fifty-five years and completed ten years of credited service. APPROPRIATION CODE AND AMOUNT: N/A USE OF RESERVE FUNDS: N/A Page 2 City of Clearwater Printed on 10/9/2014 Cover Memo City of Clearwater City Hall 112 S. Osceola Avenue Clearwater, FL 33756 File Number: ID#14-567 Agenda Date: 10/13/2014 Status: Agenda ReadyVersion: 1 File Type: Action ItemIn Control: Pension Trustees Agenda Number: 4.4 SUBJECT/RECOMMENDATION: Approve an amendment to the agreement with Gabriel Roeder Smith and Company for actuarial services for the Pension Plan, to extend the agreement for two years, to December 31, 2016, add additional services for an additional not-to-exceed amount of $71,500, and authorize the appropriate officials to execute same. SUMMARY: In December 2009, the Trustees approved a five -year actuarial services agreement with Gabriel Roeder Smith and Company for the pension plan, expiring December 31, 2014. The agreement also included annual actuarial services for the City ’s Other Post Employment Benefits (OPEB) liability. Those services and costs were separately approved by the City Council in December 2009. Staff recommends extension of the agreement due to the required implementation of GASB Statements 67 and 68 effective with fiscal years 2014 and 2015. These implementations require significant assistance from the Plan ’s actuary and staff believes it is the Plan ’s best interests to continue with the existing actuary during the transition period. The total not-to-exceed amount includes the following services: $20,500 - annual actuarial valuation as of 1/01/2015 $21,000 - annual actuarial valuation as of 1/01/2016 (prior year increased by CPI not to exceed $21,000) $ 9,000 - actuarial valuation as of 9/30/2014 for implementation of GASB 67 and 68 $ 5,500 - actuarial valuation as of 9/30/2015 per GASB 68 requirement $ 5,500 - actuarial valuation as of 9/30/2016 per GASB 68 requirement $10,000 - contingency for miscellaneous consulting fees @ $5,000 per year $71,500 Requested not-to-exceed The City Council will be considering a similar amendment to the OPEB portion of the agreement on the Council agenda this week, with those costs to be paid from City funds. APPROPRIATION CODE AND AMOUNT: 0646-07410-530100-585-000-0000 USE OF RESERVE FUNDS: N/A [Sample Statement Delete if not needed - Funding for this contract will be provided by a _____ Page 1 City of Clearwater Printed on 10/9/2014 File Number: ID#14-567 budget amendment allocating General Fund reserves in the amount of $_______ to capital improvement project 9xxxx, project title. The balance in General Fund reserves is approximately $______, or ___% of the 2013/14 General Fund operating budget. Inclusive of the $________ used to fund the current operating budget, a total of $_______ of General Fund reserves has been used to date to fund expenditures in the 2013/14 operating budget.] Page 2 City of Clearwater Printed on 10/9/2014