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10/14/2019 Pension Trustees Meeting Minutes October 14, 2019 City of Clearwater Main Library - Council Chambers 100 N. Osceola Avenue Clearwater, FL 33755 Meeting Minutes Monday, October 14, 2019 9:00 AM Main Library - Council Chambers Pension Trustees Page 1 City of Clearwater Pension Trustees Meeting Minutes October 14, 2019 Roll Call Present 3 - Chair George N. Cretekos, Trustee Bob Cundiff, and Trustee David Allbritton Absent 2 - Trustee Hoyt Hamilton, and Trustee Jay Polglaze Also Present – William B. Horne II – City Manager, Micah Maxwell – Assistant City Manager, Michael Delk – Assistant City Manager, Pamela K. Akin – City Attorney, Rosemarie Call – City Clerk, and Jennifer Poirrier – Human Resources Director To provide continuity for research, items are listed in agenda order although not necessarily discussed in that order. 1. Call to Order – Chair Cretekos The meeting was called to order at 9:14 a.m. in Council Chambers at the Main Library. 2. Approval of Minutes 2.1 Approve the September 16, 2019 Pension Trustees Meeting Minutes as submitted in written summation by the City Clerk. Trustee Cundiff moved to approve the September 16, 2019 Pension Trustees Meeting Minutes 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 the new hires for acceptance into the Pension Plan as listed. Name/Job Classification/Department Pension Eligibility Date Kellie Cramer, Customer Service Representative, Customer Service 08/05/2019 Dion Jones, Field Service Representative I, Customer Service 08/05/2019 Page 2 City of Clearwater Pension Trustees Meeting Minutes October 14, 2019 Jacob Horn, Parks Service Technician I, Parks & Recreation 08/05/2019 Trevor Dorman, Parks Service Technician I, Parks & Recreation 08/05/2019 Darrell Ford, Customer Service Representative, Customer Service 08/19/2019 Samantha Flagler, Customer Service Representative, Customer Service 08/19/2019 Jeh Mohr, Senior Auditor, City Auditor/Finance 08/19/2019 Charlene Peaslee, Gas Sales Representative, Gas 08/19/2019 Brenton Conley, Parks Service Technician I, Parks & Recreation 08/19/2019 Vinod Kadu, Senior Planner, Planning & Development Services 08/19/2019 Matthew Hall, Recreation Specialist, Parks & Recreation 08/19/2019 Charles Kordick II, Gas Technician II, Gas 08/19/2019 Trustee Allbritton moved to approve the 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 Duanne Anderson, Fire Department, Debra Faison, Parks and Recreation Department and Michael Ward, Fire Department, for a regular pension as provided by Sections 2.416 and 2.424 of the Employees’ Pension Plan. Duanne Anderson, Fire Prevention Inspector, Fire Department, was employed by the City on July 7, 1997, and his pension service credit is effective on that date. His pension will be effective August 1, 2016. Based on an average salary of approximately $73,577.05 over the past five years, the formula for computing regular pensions and Mr. Anderson’s selection of the 100% Joint and Survivor Annuity, this pension benefit will be approximately $37,344.72 annually. Debra Faison, Parks Service Technician II, Parks and Recreation Department, was employed by the City on October 18, 1992, and her pension service credit is effective on that date. Her pension will be effective September 1, 2019. Based on an average salary of approximately $43,664.06 over the past five years, the formula for computing regular pensions and Ms. Faison’s selection of the 10 Year Certain and Life Annuity, this pension benefit will be approximately $42,432.24 annually. Michael Ward, Firefighter, Fire Department, was employed by the City on May 5, 2003, and his pension service credit is effective on that date. His pension will be effective September 1, 2019. Based on an average salary of approximately $64,924.84 over the past five years, the formula for computing regular pensions and Mr. Ward’s selection of the 100% Joint and Survivor Annuity, this pension benefit will be approximately $28,197.48 annually. Page 3 City of Clearwater Pension Trustees Meeting Minutes October 14, 2019 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. Faison 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. Anderson and Mr. Ward have met the hazardous duty criteria. Trustee Cundiff moved to approve the following request of employees Duanne Anderson, Fire Department, Debra Faison, Parks and Recreation Department and Michael Ward, 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. 4.3 Approve pension plan expenditures for fiscal year 2020 totaling not-to-exceed $380,700. The Employees’ Pension Plan does not have a legally required budget, however all expenditures must be approved by the Trustees. The following are routine administrative expenditures that staff is requesting approval of for administrative efficiency. The recommended expenditures for fiscal year 2020 reflect a $29,100, or 8.3% increase over the approved fiscal 2019 expenditures, per attached. This increase is primarily due to a $25,000 increase in actuary consulting fees in anticipation of pension negotiations with bargaining units. The balance of the increase is due to salary increases for City employees providing administrative support for the plan. Training and travel are the estimated costs of pension training and related travel, including fiduciary training for the Trustees and Pension Advisory Page 4 City of Clearwater Pension Trustees Meeting Minutes October 14, 2019 Committee (PAC) members. This is a not-to-exceed amount given uncertainty regarding the number of Trustees and PAC members that may elect to pursue training. Reimbursements to the General Fund and Central Insurance Fund are for the cost of oversight and administration of the Plan. The reimbursements are for services provided by Human Resources, Payroll, and Finance personnel, along with related operating expenditures. The firm of Klausner, Kaufman, Jensen and Levinson currently serve as the Plan’s pension attorneys. Annual attorney fees also include medical bills for medical services authorized by the PAC, as well as attorney fees for disability cases and hearings. Money manager, performance measurement consulting, custodial/safekeeping, and actuary fees (other than actuary hourly consulting) are all governed by contracts separately approved by the Trustees and are not included in this agenda item total. APPROPRIATION CODE AND AMOUNT: 646xxxx-5xxxxx (various pension plan expenditure codes) In response to a question, Finance Director Jay Ravins said the expenditures outlined by categories provide a not to exceed amount since the Plan does not have a budget. Trustee Allbritton moved to approve pension plan expenditures for fiscal year 2020 totaling not-to-exceed $380,700. The motion was duly seconded and carried unanimously. 4.4 Approve new fee schedule with the pension plan’s investment custodian, Northern Trust, for an annual fixed fee of $85,000, effective October 1, 2019, and authorize the appropriate officials to execute same. Northern Trust has been the plan’s custodian for safekeeping of investments since November 2002 and has provided an excellent level of service to the plan. A pension plan custodian is tasked with the safekeeping of plan investments. Additionally, Northern Trust provides extensive reporting capabilities for the plan’s investments (by money manager and by individual holding), provides all required regulatory and annual external audit reporting, and files claims on behalf of the plan for all class action lawsuits involving plan investment holdings held by any of the money managers. Northern Trust was selected via a competitive process and has not raised their Page 5 City of Clearwater Pension Trustees Meeting Minutes October 14, 2019 original fixed fee of $85,000 annually since they were hired. In the meantime, the plan has grown from an investment portfolio of $400 million managed by 10 money managers to a portfolio of $1.1 billion managed by 21 money managers. Northern Trust is seeking a 14.7% increase in their annual fixed fee from $87,000 to $97,500. This increase is equivalent to a less than 1% (0.81%) annual inflation adjustment over the past 17 years. Staff recommends approval due to the exceptional level of service that Northern Trust has provided the plan and the nominal increase this represents for the services provided, given the significant increase in plan assets and money managers, with no corresponding fee increases, over the past 17 years. The plan's pension attorney has reviewed and approved the fee schedule agreement for execution. APPROPRIATION CODE AND AMOUNT: 6467410-530100 Trustee Cundiff moved to approve new fee schedule with the pension plan's investment custodian, Northern Trust, for an annual fixed fee of $85,000, effective October 1, 2019, and authorize the appropriate officials to execute same. The motion was duly seconded and carried unanimously. 5. Director's Report — None. 6. Adjourn The meeting adjourned at 9:21 a.m. City of Clearwater •-• crimetvretki9) Chair Employees' Pension Plan Trustees Page 6