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01/09/2003PENSION ADVISORY COMMITTEE MEETING CITY OF CLEARWATER January 9, 2003 Present: Whitney Gray Acting 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 Empty seat Committee Member Also Present: Joe Roseto Human Resources Director Lee Dehner Pension Advisory Committee Attorney Leslie Dougall-Sides Assistant City Attorney Cynthia Bender Human Resources Manager Debbie Ford Human Resources Analyst Brenda Moses 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 Chair & Vice-Chair (Tabled) See Item #8. ITEM #3 - Approval of Minutes of December 12, 2002 Member Lee moved to approve the minutes of the regular meeting of December 12, 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) Review and Action on Employee Requests for Years of Service Pensions. 1. Lawrence R. Browett – Fire Department 2. Belinda C. Massey – Gas Department 3. Dianne L. Burkhammer – Police Department Member Jensen moved to approve Years of Service Pensions for Lawrence R. Browett, Belinda C. Massey, and Dianne L. Burkhammer. The motion was duly seconded and carried unanimously. b) Review and Action of Employee Requests to Vest Pensions 1. Brett M. Ward – Police Department Brett M. Ward has resigned his position after being employed by the City for more than 17 years. He will qualify to receive his reduced pension beginning October 1, 2005. Member Schmalzbauer moved to approve the request by Brett M. Ward to vest his Pension. The motion was duly seconded and carried unanimously. c) Approval of New Hires as Plan Members. As of January 2, 2003, the City had 1744.01 FTEs out of 1844.9 budgeted positions. Member Hibbard moved to accept the following employees into membership in the Pension Plan: Pension Elig. Name, Job. Class, & Dept./Div. Hire Date Date Sam Swinton, Jr., Warehouse Clerk/Gas 12/2/02 12/2/02 Jere Gunderman, Recreation Leader/Parks & Recreation 12/2/02 12/2/02 Jessica Stephens, Police Comm. Operator Trainee/Police 12/16/02 12/16/02 Amy Roberson, Police Comm. Operator Trainee/Police 12/16/02 12/16/02 Scott Fowler, Police Recruit/Police 12/16/02 12/16/02 Nathan Burnside, Police Recruit/Police 12/16/02 12/16/02 Jeffery Richardson, Police Recruit/Police 12/16/02 12/16/02 Amanda Edmunds, Rec. Programmer/Parks & Recreation 12/16/02 12/16/02 Shannon Anderson, Police Cadet/Police 12/2/02 12/2/02 Brian Jerard, Police Officer/Police 12/2/02 12/2/02 Anthony Mills, Police Cadet/Police 12/2/02 2/2/02 Carlene Gabehart, Solid Waste Worker/Solid Waste 12/16/02 12/16/02 Marc Shen, Police Cadet/Police 12/30/02 12/30/02 Juan Fontella, Police Cadet/Police 12/30/02 12/30/02 Michael Rodriguez, Police Cadet/Police 12/30/02 12/30/02 Kristina Pupke, Police Cadet/Police 12/30/02 12/30/02 The motion was duly seconded and carried unanimously. ITEM #6 – Pending/New Business a) Camille Motley – Hearing on Job-connected Disability Pension Request The Chair noted that at the December 12, 2002, the PAC (Pension Advisory Committee) had requested additional information from the applicant. PAC Attorney Lee Dehner said the only information received since the December meeting was a new disability application form. The new application indicates the reason for the disability was due to lifting of boxes. The initial application filed by Ms. Motley stated she had fallen off of a couch. A Notice of Injury form was not attached to the application, as required and no medical evidence was included; therefore the new application is incomplete. The PAC had asked for additional information regarding whether or not the termination was a result of the alleged disability or something else. The PAC had requested information regarding whether the injury was incurred in-service or not-in-service due to conflicts in the record, some of which was based on the claimant’s statements. Mr. Dehner said there has not been reasonable time for him or the applicant’s attorney to submit all the forms requested by the PAC. In response to a question, Assistant City Attorney Leslie Dougall-Sides said Ms. Motley signed the Voluntary Resignation and General Relief form. The addendum to the form was drafted by her worker’s compensation attorney but was not executed because the parties felt that the general form covered that matter. Ms. Dougall-Sides concurred with Mr. Dehner that the applicant has not submitted the documentation requested by the PAC at the December 12, 2002, meeting. She said there was an amended application filed with new grounds for a job-connected claim, however the required paperwork including the Notice of Injury and two physician opinions were not attached. Code Section 2.397(c)1 of the Pension Plan states there must be evidence that the separation from service is a result of the disability or an on-the-job injury. The Voluntary Resignation that is of record now, and the only document on the resignation paperwork, indicates Ms. Motley resigned in settlement of a worker’s compensation claim. The PAC’s practice regarding amended applications has been to obtain an IME (Independent Medical Examination) report regarding the applicant’s grounds for the disability. As there is an amended application, the City would most likely depose Ms. Motley, Dr. Vega, and a new IME physician who could provide an opinion regarding the on-the-job aspect of the new claim. Mr. Dehner said the PAC chose to hear evidence on all issues at one hearing. As the PAC’s request for additional information as specified at the December 12, 2002, meeting has not been met, he suggested no substantive issues be reviewed today. He said he had contacted both attorneys suggesting that this item be removed from today’s agenda until all the requested information had been received. Kenneth Afienko, attorney for Ms. Motley, said he has been in possession of the Notice of Injury since February 21, 2002. The form was date stamped by the City’s Risk Management department. He said he would like to address the PAC regarding procedural matters. The Chair explained that the PAC would hear all the information from their attorney and staff regarding the matter before making any decisions regarding the case. It was felt that the Notice of Injury form would have great bearing on this case. Ms. Dougall-Sides said she had received a copy of the Notice of Injury form yesterday after requesting it from management; however, it was not signed by either the employee or employer. The PAC’s rules require that the Notice of Injury form be attached to the disability application. In response to a question, Ms. Dougall-Sides said the forms are received by the Risk Management department and are routed through the department in which the employee worked. Mr. Dehner said the requirements for disability claims were provided to Ms. Motley prior to her procuring Mr. Afienko’s services. In response to a question, Mr. Dehner said there are no specific rules regarding length of time for submission of documents. The rules of procedure state the PAC is to act as quickly as possible once all required information is received. The claimant’s attorney largely determines the time required before a meeting is scheduled to hear a claim due to the length of time needed to provide required documentation. Once notified by the attorneys they are prepared to present the information, the PAC’s attorney would request that a meeting be scheduled. Special meetings can be scheduled to expedite the process. It was remarked that more information is required before a decision can be made on the claim. Mr. Dehner said the PAC needs Dr. Vega to render an opinion regarding the alleged job-connected injury or have another IME perform an examination on Ms. Motley and provide an opinion regarding her job-connected disability claim. The Chair said this matter is still under continuance. Mr. Afienko said he still wanted to make a statement. He said Ms. Motley’s disability application was submitted on December 26, 2002. At the December 12, 2002, PAC meeting, he said he had asked Mr. Dehner what he needed to perfect the record. He said Mr. Dehner told him he needed to submit a signed copy of the settlement agreement between the Worker’s Compensation attorney and Ms. Motley, and file an amended application for benefits, as there was some question as to the type of injury Ms. Motley was claiming. He said he did not understand why the PAC does not have a copy of the first report of injury as he has a date stamped copy by Risk Management of that form. He said less than 24 hours prior to this meeting, Mr. Dehner told him that the City wants an additional IME, depositions, etc. He said the City has spent money on an IME, and a functional assessment exam. Mr. Afienko said both doctors have indicated that Ms. Motley was injured as a result of a job-related claim. He said he has information that would support that claim. It was remarked that the December 12, 2002, PAC meeting minutes state that Ms. Motley needs to submit a signed copy of the Voluntary Resignation and General Release addendum, a Notice of Injury form, information related to the reason for the termination, and an amended application. The PAC attorney has not received this information. In response to a question, Mr. Afienko said he has the items requested. He said he did not know why the City does not have them. He said he attached the IME report and the functional assessment evaluation to his client’s application, as he felt those documents were the most important part of the claim. Ms. Dougall-Sides said the Legal Department received the Notice of Hearing for today’s meeting and the amended application on January 6, 2003. Mr. Dehner said at the December 12, 2002, PAC meeting, there were numerous issues identified to the claimant’s attorney by the City Attorney that needed to be brought back to the PAC. It was not limited to just an application. The Notice of Injury was not attached to the application and that form is an important part of the process. There was considerable discussion at the December PAC meeting regarding whether the reason for Ms. Motley’s termination was for a disability. Additional evidence had to be obtained by counsel by whatever means they chose to obtain it. Counsel is well aware that the discovery device may be a deposition. It also was discussed that due to the change in the basis of Ms. Motley’s claim from non-job connected to job-connected disability, that the issue required discovery. Mr. Dehner said the record infers that there are numerous inconsistencies in Ms. Motley’s own statements to physicians as to the cause of her condition. He said it is the responsibility of counsel to sort through those records by whatever means they chose. Mr. Afienko said he could not have conducted an additional IME during the holidays in time for today’s meeting. He said the need for an IME is not in the record and was not discussed at the December meeting. It was remarked that Mr. Afienko had sufficient time to make the application complete before another hearing was scheduled. The PAC has found that the application is substantially different than the original application and that the matter needs to be continued. Mr. Dehner said at the December 12, 2002, PAC meeting, it was not the motion of the PAC that this matter be continued to today’s meeting. The motion stated that the case be continued until all necessary documentation is received from Ms. Motley. Mr. Afienko asked which items he still needed to produce to the PAC. He said he came to this meeting prepared. He expressed dismay that he had received an e-mail from the City Attorney and a telephone call from Mr. Dehner less than 24 hours prior to this meeting stating he did not submit all the required documentation. Mr. Dehner said the required items were specified at the December 12, 2002, PAC meeting. He reiterated that Ms. Motley filed a new job-connected disability claim, which requires additional information be provided. Mr. Afienko said Mr. Dehner is using a procedural guide to make him produce more evidence in this case. He said Ms. Motley has already been through a functional assessment exam and an IME. He said he was still unclear about the documentation needed. Mr. Dehner repeated that the documentation requested has been provided to Mr. Afienko. He reviewed it again. It was remarked that Mr. Afienko was addressing substantive issues and the PAC has indicated this matter would be continued until the record is complete. Mr. Afienko said he still did not know what was required of him. Ms. Dougall-Sides said the City wishes the matter be continued in order to review the new application in which Ms. Motley is alleging a job-connected disability. Mr. Dehner referred to a comment by Dr. Vega indicating that if certain conditions existed, that the injury could be a result of such a working environment, not that it was. Mr. Dehner said that was the only statement regarding causation Dr. Vega made because a job-connected disability claim was not the issue at that time. The Chair said once Mr. Afienko has all the documentation required by the PAC, a meeting would be scheduled. She requested that he ensure he has all the information needed. Mr. Afienko said besides the deposition of Dr. Vega, he wanted to know what else was required. Ms. Dougall-Sides said Ms. Motley is to provide her deposition regarding the new application, any additional IME doctor depositions, and an evaluation by an additional IME doctor, whether by Dr. Vega or a different IME doctor. Mr. Dehner recommended to the PAC that discovery not be limited at this time. Depositions may indicate more information could be required. It was remarked that the PAC does not want to limit discovery but that Mr. Afienko needs to know the documents are being required in accordance with procedures. Mr. Dehner said Mr. Afienko needs to provide a completed application with an attached Notice of Injury form, a physician’s statement supporting any claim that is being made, evidence that the termination occurred as a result of that disability, and the greater weight of the evidence that the disability was job-connected. Mr. Afienko said he thought he had all of that information. In response to a question from Mr. Afienko, Ms. Dougall-Sides said the City would schedule depositions immediately. Mr. Afienko asked if he would have assurance that his application and documents are procedurally correct before the next hearing. Mr. Dehner said counsel has been provided information regarding what is needed. It was questioned if the claimant’s attorney would be able to resubmit the prior IME’s findings regarding the job-connected disability claim. Mr. Dehner said a new IME report would be required by either Dr. Vega or from a new IME that would address the new job-connected disability claim. (The case was continued to a date uncertain.) b) Selection of the Seventh Member Human Resources Director Joe Roseto indicated the PAC’s (Pension Advisory Committee) consensus at the December 12, 2002, meeting was to begin the selection process to select a seventh member. Only one nominee, Nathan Hightower, has applied. Member Hibbard moved to appoint Nathan Hightower as the seventh member of the PAC. The motion was duly seconded and carried unanimously. Mr. Roseto said Mr. Hightower would be provided with the PAC’s rules of procedure and all pertinent documentation regarding any pending cases before the PAC. c) Approval of Investment Policy The Pension Investment Advisory Committee annually reviews the investment policy to determine if any changes are needed. As a result of the latest review, the Pension Investment Advisory Committee is recommending some minor changes be made. The following is a summary of the most significant changes to be made: The section on Illiquid Investments has been expended to require that a money manager notify the City when an investment becomes illiquid. The membership of the investment committee has been refined. The Fixed Income Segment section has been expanded to require that a money manager notified the City when a security falls below “investment grade” (the credit quality standard for the pension plan). A section on Proxy Voting has been added that requires at least a quarterly reporting to the City on proxy votes. That earning rate of the plan has been increased to 7.5% Christiansen and Dehner reviewed this policy. Concern was expressed about the validity of votes taken at Pension Investment Committee meetings and the lack of a formal structure. Concern was expressed that although this is not a formal advisory board, all the attendees are permitted to vote on recommendations proposed, regardless of their training or educational background in the investment field. Cash and Investments Manager Steve Moskun said the Pension Investment Committee meetings are open to the public. He said because these meeting involve discussion regarding employees’ pensions, those parties who take an interest in attending meetings are permitted to vote. Finance Director Margie Simmons said these meetings also serve as a training mechanism. The meetings provide a forum for additional staff to be trained to avoid interruption of service. Meetings provide employees an opportunity to take a vested interest in pension investment issues. As meetings are lengthy, there is usually a different mix of people at meetings. The official voting members are the Finance Director, Assistant Finance Director, and the Treasurer. Concern was expressed that on-the-job training is a good practice, but as the participation of various other people is inconsistent, the final recommendations to the Pension Trustees are not just from the official voting members of the committee. Ms. Simmons said this is an advisory committee to the Pension Trustees, which is the deciding entity. The financial personnel of the City serving as voting members present the votes to the Pension Trustees. Should they disagree with a vote taken at an Investment Committee meeting, the official voting members of the Committee would advise the Pension Trustees of their recommendations. The votes of the attendees are non-binding. In response to a question, Ms. Simmons said she would present any of the PAC’s recommendations to the Pension Trustees Board regarding changes to the Pension Investment Committee’s membership or policies. Member Hibbard moved to continue this item. Ms. Simmons said if the PAC decides to approve these changes, they could do so with the caveat that they would recommend changes in the future. Member Hibbard withdrew his motion. Member Hibbard moved to approve the proposed changes to the Pension Investment Committee as submitted, with the caveat that the PAC would come forward with a recommendation for change in the future. The motion was duly seconded and carried unanimously. Ms. Simmons said an investment training seminar being held in Tampa on January 24 would qualify for eight CEUs (continuing education units) on investments. She said the cost for the seminar would be covered from Pension Plan funds for members of the PAC or Pension Trustees board. Mr. Dehner said Senate Bill 372, which became effective October 1, 2000, requires that a filing requirement be made to investment policy changes. Changes adopted by the City must be filed with the Division of Retirement, with the City, and with Steve Metz, the actuary for the Pension fund. The effective date of these changes cannot be until 31 days until the filing with the City. ITEM #7 – Director’s Reports Mr. Roseto said an RFP (Request for Proposal) for a Pension attorney was completed January 6, 2003. The deadline for submission of proposals is February 14, 2003. He recommended the PAC postpone the oral presentations and final rankings until March 13, 2003. No objections were raised. ITEM #8 – Committee Members to be Heard Member Lee said his packet for today’s meeting was postmarked on January 6, 2003 and received on January 7, 2003. It was requested that the Human Resources Department send out PAC packets as soon as possible prior to meetings. It was remarked that sometimes holidays, etc. can affect mailings. It was remarked that the selection of a Chair and Vice-chair would commence at the next meeting, now that a seventh member has been selected. ITEM #9- Adjournment The meeting adjourned at 10:18 a.m.