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05/15/2017Monday, May 15, 2017 1:00 PM City of Clearwater City Hall 112 S. Osceola Avenue Clearwater, FL 33756 Council Chambers Pension Trustees Meeting Agenda May 15, 2017Pension Trustees Meeting Agenda 1. Call To Order 2. Approval of Minutes 2.1 Approve the minutes of the April 17, 2017 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 employee Thomas Leonard, Marine and Aviation Department, to vest their pension as provided by Section 2.419 of the Employees’ Pension Plan. 4.3 Approve the following request of employees Cameron Hill, Fire Department, Benjamin McBride, Police Department, Kelly O’Brien, Engineering Department and William Wargin, Fire Department for a regular pension as provided by Sections 2.416 and 2.424 of the Employees’ Pension Plan. 5. Adjourn Page 2 City of Clearwater Printed on 5/10/2017 Cover Memo City of Clearwater City Hall 112 S. Osceola Avenue Clearwater, FL 33756 File Number: ID#17-3496 Agenda Date: 5/15/2017 Status: Agenda ReadyVersion: 1 File Type: MinutesIn Control: Pension Trustees Agenda Number: 2.1 SUBJECT/RECOMMENDATION: Approve the minutes of the April 17, 2017 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 5/10/2017 Pension Trustees Meeting Minutes April 17, 2017 City of Clearwater City Hall 112 S. Osceola Avenue Clearwater, FL 33756 Meeting Minutes Monday, April 17, 2017 1:00 PM Council Chambers Pension Trustees Page 1 City of Clearwater Draft Pension Trustees Meeting Minutes April 17, 2017 Roll Call Present 5 - Chair George N. Cretekos, Trustee Doreen Caudell, Trustee Bob Cundiff, Trustee Hoyt Hamilton, and Trustee Bill Jonson Also Present – William B. Horne – City Manager, Jill Silverboard – Deputy City Manager, Pamela K. Akin – City Attorney, Rosemarie Call – City Clerk, Nicole Sprague – Official Records and Legislative Services Coordinator, and Joe Roseto – Human Resources Director To provide continui ty for research, items are listed in agenda order although not ne cessarily discussed in that order. Unapproved 1. Call To Order – Chair Cretekos The meeting was called to order at 1:08 p.m. at City Hall. 2. Approval of Minutes 2.1 Approve the minutes of the March 13, 2017 Pension Trustees Meeting as submitted in written summation by the City Clerk. Trustee Jonson moved to approve the minutes of the March 13, 2017 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 Accept the January 1, 2017 Annual Actuarial Valuation for the Employees’ Pension Plan. Per the actuary report dated January 1, 2017, a minimum city employer contribution of $8.65 million, or 10.91% of covered payroll, is required for fiscal year 2017. This is a decrease of $285,000 over the fiscal 2016 required contribution of $8.93 million, or 11.13% of covered payroll. The calendar year 2016 investment return was a gain of 6.70%, net of Page 2 City of Clearwater Draft Pension Trustees Meeting Minutes April 17, 2017 investment fees, versus the assumed rate of 7.0%. The five-year smoothed investment return based on the actuarial value of the assets was 8.22% versus the assumed rate of 7.0%. During calendar years 2012 through 2016, investment returns were 13.92%, 16.90%, 7.99%, (0.28%), and 6.70%, respectively. The plan experienced a net actuarial experience gain of $18.1 million for the year. The gain is primarily due to the actuarial gain from the actuarial investment return of 8.22% versus the assumption of 7.0%. The Plan's funded ratio at January 1, 2017 was 105.38% (including the credit balance) versus 102.92% for the prior year. The actuarial value of assets exceeds the market value of assets by $22.4 million as of January 1, 2017. The plan's credit balance, which reflects actual contributions in excess of actuarially required contributions for prior years, increased from $15.6 million to $19.4 million during calendar 2016. This $3.8 million increase was due to the City’s budgeted overfunding of the fiscal 2017 required contribution. The City contributed approximately 15% of salaries, versus the actuarially required 11.13%, to increase the plan’s credit balance reserves for future volatility in required contributions. The Employees’ Pension Plan is highly leveraged on investment returns in comparison to most pension plans, which means changes in investment earnings cause significant increases or decreases in required employer contributions. This year-to-year volatility necessitates building reserves, such as the plan’s credit balance, during periods of positive investment earnings experience. This provides the City the ability to subsidize increased employer contributions during periods of negative investment earnings experience with contributions from accumulated reserves. Gabriel Roder Smith Actuary Pete Strong reviewed the actuarial valuation results. The employer contribution requirement decreased from the prior year; from $8,944,103 for fiscal year 2017 to $8,659,427 for fiscal year 2018. The actual employer and State contributions during the year ending December 31, 2016 were $11,729,548, compared to the required contribution of $8,944,103. The excess contribution of $2,785,445 was used to increase the credit balance. The credit balance increased from $15,570,503 to $19,445,883. The Plan continues to be fully funded. Mr. Strong said the mortality assumption rate was revised, as required by state statute, to match the Florida Retirement System's mortality rate for active members. The revised mortality rate increased the required contribution by 0.11% of covered payroll. The City's Plan had been using a more conservative mortality table which would have required a contribution of 11.21% of covered payroll. Page 3 City of Clearwater Draft Pension Trustees Meeting Minutes April 17, 2017 In response to questions, Mr. Strong said the FRS mortality assumption change was effective July 1, 2016. If every year hits the 7% return going forward, the Plan will remain over 100% funded. Unless the contribution requirement is reduced, the credit balance will not need to be used. Mr. Strong said the contribution requirements are expected to remain in the 10-11% of pay range the next couple of years, unless there is a negative experience. The credit balance reserve is to be used when there is a negative experience or an unexpected contribution spike. Once at 110% funded, there is sufficient cushion for the Plan to absorb an average recession. He said most pension plans do not have the luxury to be over 100% funded. The Plan is being conservative in making extra payments but the Plan's mortality experience has been lower than expected; it is always a good idea to make extra contributions. During the past eight years, the Plan's mortality experience has been aggressive as plan participants are living longer. Staff was directed to include supporting legislation that allows individual municipal retirement plans to choose a more conservative mortality table to the City's 2018 State Legislative Agenda. Trustee Cundiff moved to accept the January 1, 2017 Annual Actuarial Valuation for the Employees’ Pension Plan. The motion was duly seconded and carried unanimously. 4.2 Approve the new hires for acceptance into the Pension Plan as listed. Name/Job Classification/DepartmentPension Eligibility Date Nicholas Pryor, Parks Service Technician I, Parks and Recreation02/06/2017 Cory Garakop, Parks Service Technician I, Parks and Recreation02/06/2017 Janelle Saylor, Police Communications Operator Trainee, Police 02/06/2017 Christie Bishop, Police Communications Operator Trainee, Police 02/06/2017 Chelsea Pruess, Police Communications Operator Trainee, Police 02/06/2017 Sean Austin, Police Communications Operator Trainee, Police 02/06/2017 William Kostka, Electronics Technician, Public Utilities 02/06/2017 Stephen Ross, Water Distribution Operator Trainee, Public Utilities 02/06/2017 Don Kelly, Parking, Facility, and Security Aide, Library 02/18/2017 Lisa Alber, Accounting Technician, Engineering 02/21/2017 Jacob Shaw, Stormwater Technician I, Engineering 02/21/2017 Ivan Dimitrov, Engineering Specialist II, Engineering 02/21/2017 Jeremy Brown, Senior Professional Engineer, Engineering 02/21/2017 Page 4 City of Clearwater Draft Pension Trustees Meeting Minutes April 17, 2017 Jessica Pryor, Customer Service Representative, Gas 02/21/2017 Cleophas Lyons, Network Analyst I, Information Technology 02/21/2017 Eric Verhayden, Network Analyst I, Information Technology 02/21/2017 Hailey Bryant, Accounting Clerk, Solid Waste 02/22/2017 Trustee Hamilton moved to approve the new hires for acceptance into the Pension Plan as listed. The motion was duly seconded and carried unanimously. 4.3 Approve the following request of employees Felicia Donnelly, Parks and Recreation Department, Tracey Reed, Library Department and Scott Jordan, Planning and Development Department, to vest their pensions as provided by Section 2.419 of the Employees’ Pension Plan. Felicia Donnelly, Admin Support Manager, Parks and Recreation Department, was employed by the City on April 7, 2003, and began participating in the Pension Plan on that date. Ms. Donnelly terminated from City employment on February 25, 2017. Tracey Reed, Librarian III, Library Department, was employed by the City on November 14, 2005, and began participating in the Pension Plan on that date. Ms. Reed terminated from City employment on December 3, 2016. Scotty Jordan, Development Review Tech II, Planning and Development Department, was employed by the City on October 30, 2006, and began participating in the Pension Plan on that date. Mr. Jordan will terminate from City employment on March 18, 2017. 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 Page 5 City of Clearwater Draft Pension Trustees Meeting Minutes April 17, 2017 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. Donnelly will meet the non-hazardous duty criteria and begin collecting a pension in August 2024. Ms. Reed will meet the non-hazardous duty criteria and begin collecting a pension in April 2026. Mr. Jordan will meet the non-hazardous duty criteria and begin collecting a pension in October 2017. 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. Trustee Jonson moved to approve the following request of employees Felicia Donnelly, Parks and Recreation Department, Tracey Reed, Library Department and Scott Jordan, Planning and Development 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 following request of employee Donald Thomson, Fire Department, for a regular pension as provided by Sections 2.416 and 2.424 of the Employees’ Pension Plan. Donald Thomson, Firefighter/Driver-Operator, Fire Department, was employed by the City on January 6, 1986, and his pension service credit is effective on that date. His pension will be effective March 1, 2017. Based on an average salary of approximately $66,720.71 over the past five years, the formula for computing regular pensions and Mr. Thomson’s selection of the 100% Joint and Survivor Annuity, this pension benefit will be approximately $55,762.20 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 Page 6 City of Clearwater Draft Pension Trustees Meeting Minutes April 17, 2017 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. 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. Thomson has met the hazardous duty criteria. Trustee Caudell moved to approve the following request of employee Donald Thomson, Fire 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. 5. Adjourn The meeting adjourned at 1:44 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#17-3367 Agenda Date: 5/15/2017 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: Name, Job Classification, Department Pension Eligibility Date Angela Campagna, Accounting Clerk, General Services 02/27/2017 Emily Wallace, Recreation Specialist, Parks and Recreation 03/04/2017 Stephen Dellavolpe, Parking Enforcement Specialist, Engineering 03/06/2017 Jessica Kessler, Engineering Specialist III, Engineering 03/06/2017 Floyd Paul Eggleston, Fleet Mechanic, General Services 03/06/2017 Ernest Benton, Parks Streets and Sidewalks Technician I, Parks and Recreation 03/06/2017 Brenda Fontane-Villamil, Customer Service Representative, Planning and Dev. 03/06/2017 Heather Klinefelter, Personnel / Payroll Technician, Public Utilities 03/06/2017 Joseph Haddad, Electronics Technician, Public Utilities 03/20/2017 Scott Holtz, Traffic Sign and Marking Technician, Engineering 03/20/2017 Rafael Castellon, Licensed Electrician, General Services 03/20/2017 Randy Taber, Police Communications Operator Trainee, Police 03/20/2017 Monica Heredia, Police Communications Operator Trainee, Police 03/20/2017 Kerry Martin, Police Communications Operator Trainee, Police 03/20/2017 APPROPRIATION CODE AND AMOUNT: N/A USE OF RESERVE FUNDS: N/A Page 1 City of Clearwater Printed on 5/10/2017 Interoffice Correspondence Sheet TO: Pension Advisory Committee FROM: Joseph Roseto, Human Resources Director SUBJECT: Recommendation for Acceptance into Pension Plan DATE: Subject/Recommendation: Recommend approval of the new hires for acceptance into the Pension Plan as listed. Name Job Classification Department Pension Eligibility Date Angela Campagna Accounting Clerk General Services 02/27/2017 Emily Wallace Recreation Specialist Parks and Recreation 03/04/2017 Stephen Dellavolpe Parking Enforcement Specialist Engineering 03/06/2017 Jessica Kessler Engineering Specialist III Engineering 03/06/2017 Floyd Paul Eggleston Fleet Mechanic General Services 03/06/2017 Ernest Benton Parks Streets and Sidewalks Technician I Parks and Recreation 03/06/2017 Brenda Fontane-Villamil Customer Service Representative Planning and Development 03/06/2017 Heather Klinefelter Personnel / Payroll Technician Public Utilities 03/06/2017 Joseph Haddad Electronics Technician Public Utilities 03/20/2017 Scott Holtz Traffic Sign and Marking Technician Engineering 03/20/2017 Rafael Castellon Licensed Electrician General Services 03/20/2017 Randy Taber Police Communications Operator Trainee Police 03/20/2017 Monica Heredia Police Communications Operator Trainee Police 03/20/2017 Kerry Martin Police Communications Operator Trainee Police 03/20/2017 Cover Memo City of Clearwater City Hall 112 S. Osceola Avenue Clearwater, FL 33756 File Number: ID#17-3368 Agenda Date: 5/15/2017 Status: Agenda ReadyVersion: 2 File Type: Action ItemIn Control: Pension Trustees Agenda Number: 4.2 SUBJECT/RECOMMENDATION: Approve the following request of employee Thomas Leonard, Marine and Aviation Department, to vest their pension as provided by Section 2.419 of the Employees’ Pension Plan. SUMMARY: Thomas Leonard, Marine Facility Operator, Marine and Aviation Department, was employed by the City on March 31, 2007, and began participating in the Pension Plan on that date. Mr. Leonard terminated from City employment on March 31, 2017. 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. Mr. Leonard will meet the non-hazardous duty criteria and begin collecting a pension in September 2018. 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 Page 1 City of Clearwater Printed on 5/10/2017 File Number: ID#17-3368 USE OF RESERVE FUNDS: N/A Page 2 City of Clearwater Printed on 5/10/2017 Cover Memo City of Clearwater City Hall 112 S. Osceola Avenue Clearwater, FL 33756 File Number: ID#17-3369 Agenda Date: 5/15/2017 Status: Agenda ReadyVersion: 2 File Type: Action ItemIn Control: Pension Trustees Agenda Number: 4.3 SUBJECT/RECOMMENDATION: Approve the following request of employees Cameron Hill, Fire Department, Benjamin McBride, Police Department, Kelly O’Brien, Engineering Department and William Wargin, Fire Department for a regular pension as provided by Sections 2.416 and 2.424 of the Employees’ Pension Plan. SUMMARY: Cameron Hill, Firefighter, Fire Department, was employed by the City on October 14, 1996, and his pension service credit is effective on that date. His pension will be effective April 1, 2017. Based on an average salary of approximately $60,084.17 over the past five years, the formula for computing regular pensions and Mr. Hill’s selection of the 100% Joint and Survivor Annuity, this pension benefit will be approximately $32,880.12 annually. Benjamin McBride, Police Lieutenant, Police Department, was employed by the City on August 12, 1985, and his pension service credit is effective on that date. His pension will be effective April 1, 2017. Based on an average salary of approximately $111,052.80 over the past five years, the formula for computing regular pensions and Mr. McBride’s selection of the 100% Joint and Survivor Annuity, this pension benefit will be approximately $94,219.44 annually. Kelly O’Brien, Engineering Specialist III, Engineering Department, was employed by the City on September 23, 1985, and his pension service credit is effective on April 22, 1986. His pension will be effective April 1, 2017. Based on an average salary of approximately $74,274.82 over the past five years, the formula for computing regular pensions and Mr . O’Brien’s selection of the Life Annuity, this pension benefit will be approximately $63,200.16 annually. William Wargin, Fire Lieutenant, Fire Department, was employed by the City on March 3, 1997, and his pension service credit is effective on that date. His pension will be effective April 1, 2017. Based on an average salary of approximately $78,460.55 over the past five years, the formula for computing regular pensions and Mr. Wargin’s selection of the Life Annuity, this pension benefit will be approximately $43,442.64 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 Page 1 City of Clearwater Printed on 5/10/2017 File Number: ID#17-3369 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. O’Brien has 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. Hill, Mr. McBride and Mr. Wargin have met the hazardous duty criteria. APPROPRIATION CODE AND AMOUNT: N/A USE OF RESERVE FUNDS: N/A Page 2 City of Clearwater Printed on 5/10/2017