04/11/2002PENSION ADVISORY COMMITTEE MEETING
CITY OF CLEARWATER
April 11, 2002
Present: Whitney Gray Vice Chair/Commissioner
John Lee Committee Member
John Schmalzbauer Committee Member
Tom Jensen Committee Member
Hoyt P. Hamilton Committee Member/Commissioner
Frank Hibbard Committee Member/Commissioner
Absent: Empty Seat Committee Member
Also Present: Paul O’Rourke Human Resources Director
Scott Christiansen Pension Advisory Committee Attorney
Margie Simmons Finance Director
Patricia O. Sullivan Board Reporter
The Chair called the meeting to order at 9:00 a.m. at City Hall.
To provide continuity for research, items are in agenda order although not necessarily discussed in that order.
ITEM #2 – Selection of Seventh Member
Consensus was for candidates interested in serving to contact the City Clerk Department.
ITEM #3 - Approval of Minutes
Member Jensen moved to approve the minutes of the regular meeting of March 14, 2002, as recorded and submitted in written summation to each board member. The motion was duly seconded
and carried unanimously.
ITEM #4 - Employees to be Heard – None.
ITEM #5 - Action Items
a) Approval of New Hires as Pension Plan Members
As of March 28, 2002, the City had 1710.15 FTEs out of 1834.7 budgeted positions. Jennifer Shaw originally was hired as part-time; changed to full-time and pension eligible as of March
9, 2002. James Hardin originally was hired as part-time; changed to full-time and pension eligible as of March 9, 2002. Joseph Mack originally was hired as part-time; changed to full-time
and pension eligible as of March 11, 2002.
Member Schmalzbauer moved to accept these employees into membership in the Pension Plan:
Date of Pension Employment Elig. Date
Peggy Franco, Staff Assistant Planning & Dev. Services 02/25/02 02/25/02
Michael Kennedy, Public Utilities Tech. Public Utilities 02/25/02 02/25/02
Nathan Bergstrom, CAD Technician Engineering 03/04/02 03/04/02
Scott Boltz, Communications Technician General Support Services 03/11/02 03/11/02
Carlos Bonilla, Parks Service Technician I Parks & Recreation 03/11/02 03/11/02
Jennifer Shaw, Library Assistant Library 01/14/02 03/09/02
James Hardin, Recreation Leader Parks & Recreation 05/04/92 03/09/02
Joseph Mack, Custodial Worker Library 12/14/92 03/11/02
Joseph Taylor, Parks Service Technician I Parks & Recreation 03/11/02 03/11/02
Calvin Peterson, Field Service Represent. Customer Service 03/11/02 03/11/02
Michele Bergeron, Police Service Tech. Police Department 03/25/02 03/25/02
Melvin Maciolek, Construction Inspector I Public Services 03/25/02 03/25/02
Kevin Richendollar, Parks Service Tech. I Parks & Recreation 03/25/02 03/25/02
ITEM #6 – Pending/ Business
a) Edwin C. Feldhaus – Hearing for Non-job-connected Disability Pension Request
Edwin C. Feldhaus was hired by the City on October 22, 1984. A report from W. Douglas Lazenby, M.D. indicated on April 21, 1998, Mr. Feldhaus underwent an operation for ventral hernia
repair and left inguinal hernia repair. On March 12, 1999, Mr. Feldhaus signed on Action Plan, an itemized agenda to put in focus what was required of Mr. Feldhaus to perform his job
commensurate to his classification. On July 16 and 23 1999, Psychotherapist Steven E. O’Neal, Ph.D., of Professional Psychological Services, evaluated Mr. Feldhaus for fitness to return
to duty. Dr. O’Neal concluded Mr. Feldhaus is unable to fulfill the essential functions of his duties as a Gas Technician II and would need constant supervision to perform simple clerical
or menial tasks.
On August 3, 1999, Edwin C. Feldhaus grabbed a large, falling, propane tank, tried to steady it, and injured his back.
A Workers Compensation report from Our Family Doctors, Darla Broderick, M.D. dated January 18, 2000, indicates Mr. Feldhaus was treated for low back pain and myositis. Other office
visits occurred on March 30 and April 6, 2001. Our Family Doctors completed forms: 1) August 3, 1999 - lumbar sprain, sonatric dysfunction - opinion result of Workers’ Compensation
injury/illness that occurred that day - restricted duty may begin on August 4, 1999; 2) August 6, 1999 - lumbar sprain/strain - restricted duty may begin on August 6, 1999; 3) August13,
1999 - sprain, sonatric dysfunction - restricted duty may begin on August 13, 1999; 4) August 26, 1999 - restricted duty may begin on August 26, 1999; 5) September 8, 1999 - restricted
duty may begin on September 13, 1999; 6) September 22 1999 - full duty may begin on September 22, 1999; 7) October 22, 1999 - sacral sprain, sonatric dysfunction, degenerative disc disease
- full duty may begin on October 22, 1999; 8) December 7, 1999 - full duty may begin on December 7, 1999; 9) December 16, 1999 - restricted duty may begin on December 17, 1999; 10) December
21, 1999 - restricted duty may begin on December 21, 1999; 11) January 4, 2000 - restricted duty may begin on January 4, 2000; 12) January 18, 2000 - full duty may begin on
January 18, 2000; 13) February 1, 2000 - restricted duty may begin on February 1, 2000, and 14) February 16, 2000 - restricted duty may begin on February 16, 2000.
On August 3, 1999, East Bay Diagnostic X-Ray performed a lumbar spine survey which suggested very minimum degenerative changes along anterior margins of L3 and l4, with no signs of
recent fracture or other osseous pathology. On October 13, 1999, a MRI of the lumbar spine found no evidence of a disc herniation.
On April 19, 2000, Stephanie Lynn Fenlon, D.O., Internal Medicine, had an initial consultation a planned to refer Mr. Feldhaus to Dr. Iyer, Chronic Pain Management, for further evaluation
and treatment of patient’s low pack pain. Subsequent office visits occurred on July 20, October 11, November 8, 2000, January 11, April 11, and July 20, 2001.
On April 25, 2000, Jayam K. Iyer, M.D., of Creative Health Center, had an initial consultation regarding low back pain and a sore right shoulder. Subsequent office visits occurred
on May 8, June 12 and 21, July 12, 18, and 25, 2000.
E. Kasper, M.D., of Lakeside Occupational Largo, examined Mr. Feldhaus on August 21, 2000, and felt he was not fit to work as a gas technician at that time, due to the medication the
patient was on.
On September 7, 2000, Michael R. Piazza, M.D., of Morton Plant Mease Health Care Diagnostic Imaging Center, performed on MRI of Mr. Feldhaus’ lumbar spine and determined degenerative
disk disease changes of the L3-4 Disk. Other office visits occurred on August 30 and September 29, 2000,
In reference to his November 26, 2000, examination of Mr. Feldhaus, Joseph E. Haas, M.D. stated Mr. Feldhaus is able to perform his current job of light duty as a Gas Technician II
and should continue on in this status. He should not be allowed to drive a vehicle as he copes with stressors by drinking alcohol.
Records were submitted regarding Mr. Feldhaus’ sessions with Psychologist Robert S. Rose, Ph.D. on March 24, April 5, 10, 21, May 5, and December 14, 2000, and regarding sessions with
Psychiatrist Alice Morales, M.D., of Advantage Behavioral Health on April 6, July 27, September 14, and October 19, 2000.
A form completed by the staff of Craig Schwartz, M.D., Orthopaedic Associates of West Florida, P.A., indicates Mr. Feldhaus visited the doctor on March 15, 2001 and that Mr. Feldhaus
suffers from a condition or illness that is chronic or recurring in nature and requires the patient not lift more than 35 pounds and limit work to 6 hours per day. Other office visits
occurred on October 26, November 1 and 16, December 18, 2000, January 8 and 29, February 12, and April 12, 2001.
On June 15, 2001, Dennis M. Lox, M.D., of the Florida Spine & Sports Medicine Center, performed a lumbar facet joint nerve block and sacroiliac joint injection. Released on light duty
on June 6, 2001. Subsequent office visits occurred on June 15, 25, July 6, 27, August 23, and September 20, 2001.
On July 31, 2001, a certificate of professional initiating involuntary examination indicated Mr. Feldhaus had depression and was suicidal. On August 1, 2001, Robert M. Mayer, M.D.
admitted him to Morton Plan Hospital for crisis stabilization, neurophyschiatic evaluation. He was discharged on August 2, 2001.
Mr. Feldhaus applied for a Disability Pension on August 7, 2001, but did not indicate if his request was for a Non-job-connected or a Job-connected disability pension on his interrogatories,
dated September 17, 2001. Notes from the Creative Health Center: 1) May 1, 2000 - Mr. Feldhaus unable to work on May 8, 2000, to return on May 10, 2000; 2) July 18, 2000 - should be
on light duty for one week; and 3) August 10, 2000 - should be on light duty until further notice.
Psychiatrist Joseph E. Haas, M.D. performed an IME on Mr. Feldhaus on November 20, 2000 and recommended therapy and care with medications. He recommended Mr. Feldhaus’ current job
of light duty as a Gas Technician II continue on in this status.
In his February 13, 2002 letter, Orthopaedic Surgeon Andrew Wolff, M.D. indicated after review of the February 1, 2002 Functional Capacities Assessment for Mr. Feldhaus, he provided
an addendum to the IME he performed on December 21, 2001, which stated that Mr. Feldhaus is totally disabled from performing the duties of a Gas Technician but is capable of performing
sedentary work.
In his January 16, 2002 letter, Psychiatrist Jake Aslanian, M.D. stated he had performed an IME on Edwin Feldhaus on February 7, 2002, and indicated the claimant is not totally disabled
from performing the duties of a Gas Technician II as a result of his psychological condition.
In his February 1, 2002 letter, Thomas M. Reed, Program Manager of Tampa General Hospital Rehabilitation Services stated a Functional Capacities Assessment was performed for Edwin Feldhaus
on January 31, 2002. Results indicated he is functioning with some deficits at the LIGHT duty level. The W.O.R.K. Center interdisciplinary treatment team indicated Mr. Feldhaus currently
functions with some deficits at the light duty level, but would be able to meet the physical requirements of many carefully selected light, as well as most sedentary duty jobs, if afforded
customary break periods and the ability to change positions, stretch, sit or stand when needed.
Pension Advisory Committee Attorney Scott Christiansen reviewed the procedures and operating rules related to processing Pension disability claims. Mr. Christiansen reviewed Mr. Feldhaus’
job injury, previous ailments, and psychological problems. Mr. Feldhaus has been performing light duty assignments. A preexisting condition is not evident as no record of a pre-employment
physical is available. A finding of disability requires the PAC to determine a total and permanent disability exists.
It was noted on his application, Mr. Feldhaus had listed the on-the-job back injury, as the cause of the disability requires. Mr. Christiansen said the PAC would need to determine if
a disability is job-connected or not. Human Resources Director Paul O’Rourke said Mr. Feldhaus’ medical records indicate maladies, substance abuse, psychological, and PTSD issues, which
are not job related. He said Mr. Feldhaus requires close supervision when performing mundane
tasks and has had significant absences unrelated to his job. He said records indicate Mr. Feldhaus’ injury is secondary to his disk disease.
Edwin Feldhaus said he was strong when he started working for the City. He said this was not the first time he pulled a tank off another worker. He said he had just moved a tank weighing
200 pounds, when he grabbed a 400-pound tank, to save a worker. He requested a job-connected disability.
In response to questions, Clearwater Gas System Assistant Director Tom Sewell said Mr. Feldhaus had injured his back when trying to assist another when a LP tank began to roll. He said
Mr. Feldhaus could not perform the functions of a Gas Technician II prior to this accident. Mr. Feldhaus was limited to manual labor and confined to the yard. He said Mr. Feldhaus
was working to resolve deficiencies at the time of the accident. Prior to the accident, Mr. Sewell indicated Mr. Feldhaus was prohibited from operating City vehicles following Mr. Feldhaus’
report of an incident when he lost track of reality.
Discussion ensued regarding Mr. Feldhaus’ ability to perform useful service for the City. Mr. O’Rourke said Human Resources has not been able to find a position for Mr. Feldhaus. Mr.
Christiansen said it is not pertinent that job- and non- job-connected disability pension benefits are computed differently.
It was felt Mr. Feldhaus is disabled and that no meaningful work is available for him with the City. It was stated documents support that Mr. Feldhaus had suffered mental health problems
and substance abuse issues prior to his injury. It was suggested Mr. Feldhaus could perform meaningful work if his back injury was not compounded by mental health problems. In response
to a question, Mr. O’Rourke said the City never had mandated EAP (Employee Assistance Program) psychological therapy prior to Mr. Feldhaus’ injury. Since the injury, the City has referred
him for substance abuse. It was felt the City should have addressed mental issues prior to Mr. Feldhaus’ accident. It was suggested Mr. Feldhaus’ psychological problems may have contributed
to the accident. It was stated Mr. Feldhaus could perform few job duties based solely on his physical condition which limits his ability to stand or sit to 10 minutes at a time. Mr.
O’Rourke said the City is able to make reasonable accommodations for Mr. Feldhaus in the short term, but not in the long term.
Mr. Feldhaus said he never was called for substance abuse on the job. He said he has been treated for depression for 10 years, takes anti-depressant medication, and accepted a demotion
because he could not handle the physical requirements of a Gas Technician III. He said he cannot operate motor vehicles due to pain medications. He said he has had no arrests for substance
abuse or driving under the influence. He said the accident’s location was next to a sea wall. He said when another worker was pinned under a 400-pound tank, he pulled the tank off
of him and felt something snap in his back. He said the accident was not caused by substance abuse. He said he now is on a regime of visiting doctors.
Member Lee moved that Edwin C. Feldhaus be granted a Disability Pension effective on a date to be determined. The motion was duly seconded and carried unanimously.
Member Jensen moved that Edwin C. Feldhaus’ disability is not a result of a pre-existing condition. The motion was duly seconded and carried unanimously.
Member Lee moved that the primary reason for Edwin C. Feldhaus’ disability is not a result of exclusionary factors. The motion was duly seconded and carried unanimously.
Member Schmalzbauer moved that Edwin C. Feldhaus be granted a Job-Connected Disability Pension effective on a date to be determined, based on Mr. Feldhaus’ disability that resulted from
on-the-job circumstances which is described as lower back pain, this injury making him permanently unable to perform his job and documented by numerous medical statements of Douglas
Lazenby, M.D., Steven E. O’Neal, Ph.D., Darla Broderick, M.D. Stephanie Lynn Fenlon, D.O., Jayam K. Iyer, M.D., E. Kasper, M.D., Michael R. Piazza, M.D. Joseph E. Haas, M.D., Robert
S. Rose, Ph.D., Craig Schwartz, M.D., Dennis M. Lox, M.D., Robert M. Mayer, M.D., Joseph E. Haas, M.D., IME (Independent Medical Exam) psychiatrist, Andrew Wolff, M.D. IME physician,
and Jake Aslanian, M.D. IME physician, and a Functional Capacities Assessment performed by Tampa General Hospital Rehabilitation Services, with accompanying dates of all the doctor visits.
The motion was duly seconded
It was felt the disability is job-connected as he would still be working if the accident had occurred. It was stated the subject accident was not a result of mental impairment as Mr.
Feldhaus had functioned with clarity when he moved the heavy tank off another worker.
Upon the vote being taken Committee Members Schmalzbauer, Hibbard, and Vice-Chair Gray voted “Aye’; Committee Members Lee, Jensen, and Hamilton voted “Nay.” Motion tied.
The Pension Advisory Committee recessed from 10:25 to 10:30 a.m.
It was stated approval of the disability requires a preponderance of evidence. It was stated the City had not provided evidence psychiatric issues had affected Mr. Feldhaus’ job performance
prior to the accident. It was stated Mr. Feldhaus was working when he hurt his back. In response to a question, Mr. O’Rourke said the City cannot provide meaningful work for Mr. Feldhaus
based on his physical limitations.
Member Schmalzbauer restated his motion that Edwin C. Feldhaus be granted a Disability Pension effective on a date to be determined, based on Mr. Feldhaus’ disability that resulted from
on-the-job circumstances which is described as lower back pain, this injury making him permanently unable to perform his job and documented by numerous medical statements of Douglas
Lazenby, M.D., Steven E. O’Neal, Ph.D., Darla Broderick, M.D. Stephanie Lynn Fenlon, D.O., Jayam K. Iyer, M.D., E. Kasper, M.D., Michael R. Piazza, M.D. Joseph E. Haas, M.D., Robert
S. Rose, Ph.D., Craig Schwartz, M.D., Dennis M. Lox, M.D., Robert M. Mayer, M.D., Joseph E. Haas, M.D., IME (Independent Medical Exam) psychiatrist, Andrew Wolff, M.D. IME physician,
and Jake Aslanian, M.D. IME physician, and a Functional Capacities Assessment performed by Tampa General Hospital Rehabilitation Services, with accompanying dates of all the doctor visits.
The motion was duly seconded and carried unanimously.
ITEM #7 – Director’s Reports
Approve expenditure in the amount of $9,500 to AON Consulting Inc. for pension consulting services
On August 13, 2001, the Pension Trustees approved the FY (fiscal year) 2001/02 Pension Plan budget to include $30,000 for pension actuary and consulting services (e.g., comparative pension
analysis update, DROP modeling/assessment) related to potential Pension Plan changes.
On March 18, 2002, the Pension Trustees approved a $30,000 expenditure to PriceWaterhouse, LLP for pension actuary and consulting services related to potential Pension Plan changes.
This expenditure covers all pension actuary and consulting services related to potential Pension Plan changes except for the comparative pension analysis update. It will cost $9,500
to conduct a current comparative pension analysis.
In 1999, AON Consulting completed a comprehensive survey for the City that compared the relative net value of current and proposed (e.g., 1.5% COLA) hazardous duty and non-hazardous
pension benefits to those provided by selected government agencies in North/Central Florida and the Tampa Bay area. The survey results indicated that City hazardous duty employees were
ranked in the 1st quartile or third - Fire and fourth - Police respectively, out of the 19 surveyed agencies. By comparison, the City’s non-hazardous employees were ranked in the third
quartile or sixth out of the 10 surveyed agencies.
Staff is reviewing and commencing collectively bargaining negotiations with the five employee organizations over proposed Pension Plan changes. Staff intends to bring forward proposed
Pension Plan changes to the PAC and Trustees in June and July 2002. As part of the staff analysis of proposed changes, AON Consulting will conduct an updated comparative analysis of
the relative net value of the current and proposed hazardous duty and non-hazardous pension benefits to those provided by selected government agencies in North/Central Florida and the
Tampa Bay area.
In response to a question, Mr. O’Rourke said benchmarking relates to the comparative pension analysis. Pension Plan Actuary Steve Metz, of PriceWaterhouse, LLP, could provide this
analysis at a higher cost. Finance Director Margie Simmons reviewed the budget process regarding the Pension Plan. The cost of consulting services related to proposed Pension Plan
changes was underestimated. Pension Trustees must approve all Plan expenditures. This request does not violate the budget.
Concern was expressed regarding cities in the study. It was recommended employee bargaining units negotiate which cities are used in the comparisons. It was recommended comparisons
include Ft. Lauderdale, which is closer to Clearwater than Tallahassee. In response to a question, Mr. O’Rourke said supplemental pensions are included in the whole when comparing similar
retirement benefits with other governments. In response to a question, Mr. Christiansen reviewed requirements that all State money related to 175 and 185 be deposited in supplemental
plans.
Committee Member Jensen moved to recommend approval of an expenditure in the amount of $9,500 to AON Consulting Inc. for pension consulting services. The motion was duly seconded and
carried unanimously.
Committee Member Jensen moved that City management and labor union representatives meet to agree on survey comparisons related to employee benefits. The motion was duly seconded and
carried unanimously.
Mr. O’Rourke said staff will work with union representatives but could not guarantee consensus.
Resolution #02-10 authorizing conversion of 24,700 shares of Metro-Goldwyn-Mayer, Inc. common stock from physical form to Depository Trust Corporation eligible electronic form, approve
the 'Irrevocable Stock/Bond Power" form
On May 23, 2000, Denver Investment Advisors participated in a Stock Purchase Program for Metro-Goldwyn-Mayer, Inc. for 24,700. The shares were delivered in physical form to the Pension
Plan’s safekeeping custodian in the name of the City of Clearwater. These shares should have been delivered in a Depository Trust Corporation electronic format.
Conversion from physical form to electronic form requires Pension Trustee approval of Resolution #02-10 and the Irrevocable Stock/Bond power form. Without exception, all other stock
owned by the Pension Plan is in Depository Trust Corporation electronic format. Denver Investment Advisors cannot trade this security while it is in physical form in the name of the
City.
Committee Member Lee moved to recommend approval of Resolution #02-10 authorizing the conversion of 24,700 shares of Metro-Goldwyn-Mayer, Inc. common stock from physical form to Depository
Trust Corporation eligible electronic form, approve the 'Irrevocable Stock/Bond Power" form. The motion was duly seconded and carried unanimously.
Authorize staff to conduct a search for a custodian for the Employees Pension Fund, authorize Callan & Associates to assist with the search, authorize the cost of the search, including
staff travel of approximately $3,500 and Callan’s fee of up to $30,000 to be paid from the pension fund
The Employee’s Pension Fund uses a third party custodian for safekeeping various securities/assets of the Pension Fund. On December 31, 2001, the Employee’s Pension Fund had assets
of $441,921,590. SunTrust is the fund’s custodian for $307,508,467, or 70% of those assets. State Street is the custodian for $60,050,193, or 14%. The remaining balance is in the
form of mutual funds held in trust by the corresponding money manager. The Plan has used SunTrust since 1985 and State Street since 1993 as custodians
During the past year, two separate problems at our custodian have occurred, which have caused staff significant concerns. In researching industry standards regarding one problem, staff
consulted with four leading providers of custodian services and learned the Pension Plan can obtain services superior to current levels. One service provides online access to custodial
records. Currently, staff must wait three weeks to receive a printout through the mail. Online access would significantly benefit staff. The Investment Committee unanimously recommends
the search for a new custodian.
The City contracts with Callan & Associates to provide performance measurement and information on investment managers. The firm has extensive knowledge and experience with all custodians.
Callan’s search fee is $25,000, plus travel expenses, not to exceed $5,000. Until now, Callan’s fees are paid by directing investment trades through a selected broker. Plan money
managers use this selected broker only if they cannot get better execution someplace
else. If necessary, the Pension Plan may have to supplement these directed trades with a cash payment.
The cost of committee member travel to investigate/research top-ranked custodians is estimated at $3,500. The location of custodians and the number requiring research will affect the
actual cost. Staff also may use the trip to visit money managers located in a city staff already is visiting. The Investment Committee will come back to the Trustees in late summer
or early fall with the results of the search for approval.
In response to a question, Ms. Simmons said the top 8 or 10 custodians will be presented to the Investment Committee for review and decision on top three or four for interviews. In
response to a question, she said Lee Dehner, Attorney for the Pension Advisory Committee/Trustees/ Investment Committee, had recommended travel to the custodians is necessary for due
diligence.
Committee Member Hibbard recused himself, as SunTrust is his employer.
Committee Member Jensen moved to recommend staff be authorized to conduct a search for a custodian for the Employees Pension Fund, authorize Callan & Associates to assist with the search,
authorize the cost of the search, including staff travel of approximately $3,500 and Callan’s fee of up to $30,000 to be paid from the pension fund. The motion was duly seconded. Committee
Members Lee, Jensen, Schmalzbauer, Hamilton, and Vice-Chair Gray voted “Aye’; Committee Member Hibbard abstained. Motion carried.
Budget
In reference to budget preparation, Ms. Simmons requested Committee Members submit their requests for training during the next fiscal year. It was request staff forward training information
to committee members.
PAC Election
It was stated Committee Member Lee’s term expires in June 2002. Nominations for the seat are requested by April 30, 2002.
The next PAC meeting is scheduled for May 9, 2002.
ITEM #8 - Committee Members to be Heard
Vice-Chair Gray welcomed new members. She thanked former Chair Fitzgerald for his service and requested he be contacted regarding his interest in reappointment.
ITEM #9 - Adjournment
The meeting adjourned at 11:12 a.m.