Loading...
08/10/2000PENSION ADVISORY COMMITTEE MEETING CITY OF CLEARWATER August 10, 2000 Present: Brian Aungst Chair/Mayor J. B. Johnson Vice-Chair/Commissioner Pat Greer Committee Member – arrived 9:04 a.m. Dick Fitzgerald Committee Member John Lee Committee Member Absent: Ed Hart Committee Member/Commissioner John Schmalzbauer Committee Member Also Present: Paul O’Rourke Human Resources Administrator Lee Dehner Pension Advisory Committee Attorney Debbie Ford Human Resources Analyst Brenda Moses Board Reporter The Chair called the meeting to order at 9:01 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 of July 13, 2000 Member Fitzgerald moved to approve the minutes of the regular meeting of July 13, 2000, as recorded and submitted in written summation to each board member. The motion was duly seconded and carried unanimously. ITEM #3 - Employees to be Heard – None. ITEM #4 - Action Items Review and Action on Employee Requests to Vest Pensions 1. George Denty, Information Technology Member Johnson moved to approve George Denty’s request to vest his pension. The motion was duly seconded and carried unanimously. b) Approval of New Hires as Pension Plan Members As of July 5, 2000, the City had 1682.8 FTEs and 1776.4 budgeted positions. Member Fitzgerald moved to accept the following employees into membership in the Pension Plan: Date of Pension Employment Elig. Date Deane Murray, Cust. Worker Gen. Supt. Svcs. 03/27/00 06/19/00* Raymond Minniefield, Pub Svcs TechI Public Works 07/03/00 07/03/00 Anthony McClaney, Pub Svcs TechI Public Works 07/03/00 07/03/00 Mark Matheny, Plans Reviewer Pl & Dev. Svcs. 07/03/00 07/03/00 Leroy Bostick, Mtc. Worker I Solid Waste 07/01/00 07/01/00 Jamie Abbot, Sr. Auditor Internal Audit 07/17/00 07/17/00 Donald Brown, Custodial Worker Bldg. & Mtce. 07/17/00 07/17/00 Vernon Kearney, Equip. Operator II Parks & Rec. 07/15/00 07/15/00 Kenneth Saleeba, Field Svc. Rep. Customer Svc. 07/17/00 07/17/00 Laura Whitt, Staff Assistant III Public Works 07/25/00 07/25/00 Lochen Wood, Planner Pl. & Dev. Svcs. 07/24/00 07/24/00 * Originally hired as permanent part-time; transferred to full time and pension eligible as of 6/19/00. The motion was duly seconded and carried unanimously. ITEM #5 - Pending/New Business Senate Bill 372 Mr. Dehner said the State legislature passed Senate Bill 372. He has provided the PAC (Pension Advisory Committee) and the Pension Trustees changes for administration of the municipal pension plan. The primary purpose of this legislation is to assist Charles Slavin, the actuary for the Division of Retirement, in monitoring expected returns, set by the Pension Trustees, versus assumed returns, based on actuarial computation. The bill is effective October 1, 2000. The three major aspects of the bill impose specific filing requirements: 1) The investment policy statement is to be filed with the City, the actuary, and with the Department of Management Services. Proof of the filing date of that investment policy statement is required because beginning October 1, 2000, any changes in policy will not become effective until 31 calendar days after it is filed with the City; 2) with the presentation of each evaluation report by the actuary to the Pension Trustees, the Pension Trustees is now charged with determining what the expected rate of return will be for the current period, for each of the next several years, and for the long term; and 3) annual investment reports must be filed with the City. Mr. Dehner recommends that when the actuarial evaluation is delivered, input be obtained from the fund managers regarding the expected rates so that the Trustees can make their evaluations. The legislation requires the PAC and the Trustees receive education regarding investments and their fiduciary responsibilities. The Statute does not specify the frequency of the education, however Mr. Dehner recommends once per term. Board members can either attend an off-site conference or an in-house seminar to meet the requirements. It was remarked an in-house conference is preferable. It was requested the PAC review the policy draft prior to submission to the Trustees. It was remarked that the investment committee members are elected for the supplemental pension plan. Mr. O’Rourke said no policy exists governing the investment committee for the general pension plan. As part of this Senate bill, staff is drafting a written policy for the General Employees’ Pension Plan, but it does not include the methodology for selection of members or who the authority is in terms of that selection. He said the issue is open for discussion, however, the Trustees are accountable for the investment committee. The Commission selects the Trustees membership. It was commented that the General Employees’ Pension Plan investment committee does not include members of the Fire Department and that plan is run completely different than the Supplemental Pension Plan. Financial information on both pension plans was requested. Staff recommends the PAC review issues prior to submission to the Trustees, as the PAC is an advisory board to the Trustees. Steve Moskum, Cash Investment Manager, said staff has already developed a written investment policy. Voters must approve the written policy to the investment section of the ordinance. Mr. Dehner said after adoption, the policy can be changed or updated as the Trustees determine appropriate. The advantage of a final recommended policy before the PAC for adoption in September would provide for an effective date upon adoption. If adopted in October, it would not be effective until 31 calendar days after it is filed with the City. Mr. Moskum said the draft contains no substantive changes in policy. It was suggested that a special meeting be scheduled to discuss the investment policy draft if necessary. Otherwise, the document will be discussed at the next PAC meeting in September. Mr. Moskum said the Investment Committee is open to membership and inclusion. Meetings are held every Thursday at 4:30 p.m. Topics of discussion include investments and the cash pool. He said the pension plan has been outstanding over the life of the pension plan. Clearwater’s plan is ranked number 5, beating 95% of the other government-sponsored pension plans in the area. On Tuesday, interviews will be conducted for international money managers. Mr. Moskum recommended that the City consider directing Callan and Associates to conduct a search for a large cap value manager and a mid-cap money manager to rebalance the portfolio. In response to a question, he said Callan and Associates is the City’s performance monitoring firm, chosen because they are the leader in the industry for performance measurements. Quotes from other firms to provide the same service are significantly higher than fees charged by Callan and Associates. ITEM #6 - Director's Reports Request for Inclusion in Pension Plan Mr. O’Rourke reported Police Chief Sid Klein and Deputy Police Chief Bill Baird have requested to be included in the Pension Plan. Andra Dreyfus, P.A. of Andra Todd Dreyfus, P.A., has submitted a letter to the City Attorney regarding a possible conflict of interest by Christiansen & Dehner, P.A., as the firm represents both the General Employees’ Pension Plan and the Supplementary Pension Plan. Ms. Dreyfus has stated that Mr. Christiansen has already taken a position opposing Chief Klein’s participation in the Supplementary Pension Plan absent his inclusion in the General Employees’ Plan. Mr. Dehner and staff recommend the City consider a third party attorney to render an opinion regarding if a conflict of interest of Mr. Dehner’s firm exists. Mr. Dehner said this is the first time he has encountered an perception of a conflict of interest over the 20 years he has been in the business. Mr. O’Rourke said Police Chief Sid Klein and Deputy Police Chief Bill Baird are not eligible for the Police Supplemental Fund unless they are in the General Employees’ Pension Plan. Before that issue is addressed, staff feels it important to obtain a legal opinion regarding the conflict of interest issue. Ms. Dreyfus said Chief Klein and Deputy Chief Baird are in different situations. She is concerned about a potential conflict regarding Chief Klein, not Deputy Chief Baird. It appears that Mr. Christiansen and his firm have a conflict with respect to further representation of either pension plan in connection with the Chief’s request to be included in them. Chief Klein has applied on numerous occasions for inclusion into the General Employees’ Pension Plan. Mr. Christiansen has indicated that Chief Klein cannot be included in the Supplemental Plan without first being included in the General Plan. The Chief intends to pursue this conflict. Ms. Dreyfus requested an expedient resolution to this matter to avoid litigation. The issue has been ongoing for approximately 18 months. She expressed concern that the issue will be delayed further if a third party attorney is hired to make a determination regarding the conflict of interest by Christiansen & Dehner, P.A. Ms. Dreyfus said when the Chief was originally hired, he made application into the Supplemental Pension Plan and one of the Assistant City attorneys at that time indicated he was eligible for inclusion into the plan, however, the State determined otherwise. Ms. Dreyfus said under Florida Statute 185, all sworn officers should be able to participate in both plans. In response to a question, Mr. O’Rourke said only two police officers are exempt employees, Chief Klein and Deputy Chief Baird. He said the pension plan exempts unclassified at-will employees from the Pension. These two employees were only eligible for the 401A plan at the time of hire. When an employee is hired as a classified employee and is promoted to exempt status, the employee is entitled to pension benefits, however, both of these employees fall into another category. Ms. Dreyfus said if an employee works up through the ranks, the employee is automatically eligible for the plan. In response to a question, Ms. Dreyfus said she felt Deputy Chief Baird should be eligible for the pension plans now, as he was sworn a few years ago. Chief Klein has been sworn all his life. She said Chief Klein is not applying for inclusion without payment. Mr. O’Rourke said the City’s 401A attorney would have to answer questions regarding the status of Chief Klein’s 401A funds relative to the pension application. It was requested that staff determine if any other employees that are not currently included may be eligible for the pension plan. ITEM #7 - Committee Members to be Heard Mr. O’Rourke said staff has identified 6 out of 20 employees who were part-time, but working full-time hours prior to becoming full-time employees. Staff will provide the PAC with recommendations on how to address their concerns and buy-back options. In response to a question, he said there is no cut-off date with respect to applying for full-time benefits. He said most of these cases go back to the 1960’s and 1970’s. Staff will update the PAC regarding a discrimination case at the next meeting. Human Resources Analyst Debbie Ford said 7 Police and Fire employees have retired since the beginning of the year. They will be notified that their retirement benefit options have changed due to the 185, 175-ordinance change in June, which became effective December 1999. The new changes will allow Police and Fire employees a change in beneficiary at any time. The beneficiary choice is based on the birth and mortality rate for the new beneficiary. The plan does not allow for a change in the option chosen, only in the beneficiary. ITEM #8 - Adjournment The meeting adjourned at 9:55 a.m.