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HomeMy WebLinkAboutDocumentation_Pension Public Safety_Tab 01_08/06/2007SYNOPSIS OF PUBLIC SAFETY OFFICERS PENSION BOARD MEETING 5.7.07 1. Minutes of February 5, 2007 meeting were approved as amended. 2. Presentation was made by Andrew Holtgrieve, Rockwood Capital Advisors, Investment Manager. 3. Police Officer David Cooper was sworn in as a member of the boazd. 4. Presentation was made by monitor Joe Bogdahn, Bogdahn Consulting. 5. Chair Giblin reported second reading was scheduled for the Jupiter Inlet Colony ordinance which would allow Tequesta Firefighters to collect premium tax from that municipality. 6. Chair Giblin announced there was now a full board. 7. Standing Reports -information only -were received and filed, which consisted of new employees Michael Camp, police officer employed 3/5/07 and James L Dyal, police officer, employed 3/19/07; and change of beneficiary for Patrick Malley. 8. The 2007 estimated budget and the 2008 estimated budget for expenses were approved. The 2007 budget was amended to add $2,000 between police and fire as a budgeted amount to cover actuarial expenses. 9. Ratified payments since last meeting: Hanson, Perry & Jensen P.A. $1,200.69 and Gabriel, Roeder and Smith Company $1,937.00/ 10. HR Director Merlene Reid presented a report regarding pension status of Michael Morrill. 11. The board voted to create an employer contribution reserve for the over contributions on behalf of Mike Morrill in the amount of $11,580.52. 12. Discussion was held regarding procedures to consider new participant eligibility for the fund, HR Director Reid advised it would be the responsibility of Human Resources to be sure new hires had properly terminated from FRS. 13. Approved the following payments Business Services Connection $249.15; Bogdahn Consulting, LLC $2,000; Hanson, Perry & Jensen, P.A. $559.04; Salem Trust Fee Advice for Quarter $734.55; Rockwood Capital Advisors $4,949.50, and Federal Express $24.64. SYNOPSIS OF PUBLIC SAFETY OFFICERS PENSION BOARD MEETING 5/7/07 Page 2 14. Voted to have the actuary make an assessment or study of the possibility to reduce the fire department contribution from 6.1 % to 5%, using 175 money. 15. Voted to approve funds for David Cooper to attend FPPTA school for pension trustees in June, 2007. 16. Confirmed the next meeting would be Monday, August 6 at 10:30 a.m. 17. ADV forms were requested from Mr. Holtgrieve and Mr. Bogdahn. END OF SNYOPSIS TEQUESTA PUBLIC SAFETY OFFICERS PENSION TRUST FUND QUARTERLY BOARD OF TRUSTEES MEETING MAY 7, 2007 I. CALL TO ORDER AND ROLL CALL The Tequesta Public Safety Officers Pension Trust Fund Board of Trustees held a regular quarterly meeting at the Tequesta Village Hall, 345 Tequesta Drive, Tequesta, Florida, on Monday, May 7, 2007. The meeting was called to order at 8:05 a.m. A roll call was taken by Betty Laur, Recording Secretary. Boardmembers in attendance at the meeting were: Chair Ray Giblin, Secretary Ken Nielson, Boardmember F,d Sabin, and Boardmember Kevin Pittman. Boardmember David Cooper arrived at 8:15 a.m. Also in attendance were Pension Coordinator Lori McWilliams, Attorney Bonni Jensen, Andrew Holtgrieve of Rockwood Capital Advisors (investment manager), and Accounting Clerk Monica 1Zahim. Joe Bogdahn of Bogdahn Consulting LLC (monitoring consultant), arrived at 8:20 a.m. II. APPROVAL OF AGENDA MOTION: Boardmember Sabin made a motion to approve the agenda as amended by moving item 3, Mr. Holtgrieve's presentation, ahead of item 2. Boardmember Nielson seconded the motion, which carried by unanimous 4-0 vote. III. APPROVAL OF MINUTES Secretary Nielson requested a change on page 5, item 8 - to change fire vacancy to police vacancy; and on page 7 to correct S&P 5000 to S&P 500. 1. MOTION: Boardmember Sabin made a motion to approve the minutes of the February 5, 2007 quarterly meeting as amended with the changes requested by Secretary Nielson. Secretary Nielson seconded the motion, which carried by unanimous 4-0 vote. BOARD OF TRUSTEES TEQUESTA PUBLIC SAFETY OFFICERS PENSION TRUST FUND MEETING MINUTES MAY ~, 200 PAGE 2 IV. PRESENTATIONS 2. Presentation by Andrew Holtgrieve, Rockwood Capital Advisors, Investment Manager Andrew Holtgrieve referred to his report, which showed it had been a good quarter with a positive net change of $218,000-approximately $66,000 contributed by Tequesta and the rest due to investment activity. The return was basically 4%. A handout showed stock market performance each year since 1974, the S&P 500 versus the broad market. Boardmember Cooper joined the meeting at this point. When S&P 500, made up of large companies, was doing well, the portfolio was designed to reflect those types of companies; when small and mid cap stocks were in vogue Rockwood changed the portfolio to those types of companies. During the transition times, there were always quarters when the portfolio underperformed, but the performance over time was good. Mr. Holtgrieve described theme changes in the market since 1974, which were the times Rockwood had changed the types of stocks in their portfolios, and advised it took time to make those changes. Different management styles were reviewed, showing their style over the long term had reaped rewards. The expectation should be 10% per year return in Rockwood's management style. The portfolio was currently 5 points ahead of the S&P 500. Current cash position was approximately 8%. The structure of the portfolio as of March 31, 2007 was reviewed. There had been no purchases or sales in March, which indicated the portfolio was where Rockwood wanted it to be. The P/E ratio was discussed-Mr. Holtgrieve advised it was a little ahead of the market, and the beta had not changed much. Purchases that did not perform as anticipated were dropped, even though they may only have been held for a short time. Fixed income was reviewed. The bond portfolio was providing a solid foundation and good return. Sector income returns were right on top of the index at 6%. Mr. Holtgrieve advised he believed the economy was currently in good shape. Current cash position was approximately 8%, and the money market portfolio was yielding more than the 2-year treasuries. Cash was shown both in equities and fixed income, and it was coincidence that they were almost equal. Mr. Sabin expressed his opinion this was positive news, with Rockwood showing good performance; the board had had conversations and concerns about short-term BOARD OF TRUSTEES TEQUESTA PUBLIC SAFETY OFFICERS PENSION TRUST FUND MEETING MINUTES MAY ~, 200 PAGE g perspective, and appreciated Mr. Holtgrieve presenting the long-term perspective. Mr. Sabin asked if the board could expect to see more consistent results through 2007, assuming there were no unforeseen events. Mr. Holtgrieve responded he hoped the boazd understood they did nothing different a year ago than today, and asked the board not to get caught up in the three-month numbers-it was better to talk longer term and how this quarter fits into it and their system had worked for a number of years and should continue to work. Village Clerk Lori McWilliams swore in Police Officer David Cooper as a member of the board. 3. Presentation by Monitor Joe Bogdahn plus continuation of discussion of comparisons to other benchmark indezes Mr. Bogdahn referred to his report presentation booklet, and reported a total gain after fees of $144,616.44, a 4.04% return for the past quarter. Mr. Nielson expressed appreciation for the executive summary, which provided an excellent snapshot. Mr. Bogdahn explained the accounting methods used. Mr. Nielson asked about unrealized gain; Mr. Bogdahn explained he could run a since inception number, but this unrealized gain of $126,508 was only for the quarter. Mr. Bogdahn noted the actuary only looked at one-yeaz snapshots. Mr. Nielson asked if the market price of bonds reflected accrued interest; Mr. Bogdahn explained it was not in the price reflected in the portfolio-it was in the unit price but not in the mazket price because it was not yet received. Mr. Bogdahn provided a history of what had been done regarding the portfolio since his firm was hired, and explained how they reviewed Rockwood's performance. Performance for the last quarter was reviewed. Mr. Bogdahn distributed a new page 5 for the report, which reflected the past two quarters return of 7.65%, close to the 8% goal for the year; and showed that for the past one yeaz the portfolio was in the top one percentile of their peers. The foreign investments were discussed. Long term focus was stressed, and benchmarks were discussed. Mr. Bogdahn advised that for his next report he could show pure and large and look at the differences in S&P 500 and the Russe113000. Chair Giblin commented at the last meeting the boazd had decided the S&P 500 should be the benchmark, which was in the policy. The risk page showed for one year a higher return without a lot of volatility. Mr. Bogdahn reported Dave West of his company had met with Rockwood to discuss their performance and they felt comfortable with Rockwood's strategy. Mr. Bogdahn BOARD OF TRUSTEES TEQUESTA PUBLIC SAFETY OFFICERS PENSION TRUST FUND MEETING MINUTES MAY ~, 200 PAGE 4 described hedge fund activity and expressed his opinion that hedge fund blow-ups would be the tech bubble of the 2000's. Mr. Nielson asked how the increased merger/acquisition activity at this time would impact the portfolio going forward, to which the response was it was anticipated to be good. Mr. Nielson expressed appreciation for the blue page, and requested addition of bulleted items showing where the portfolio stood against the benchmarks. Mr. Bogdahn clarified with Mr. Nielson that the request was for a brief interpretation of the summary with bullet points. Mr. Bogdahn advised he would a-mail a format to see if it was what Mr. Nielson was looking for, and then add it to the report. V. UNFINISHED BUSINESS 4. Discussion of investment manager performance Boardmember Ken Nielson advised his concerns had been addressed. 5. Status Report Regarding Jupiter Inlet Colony Compliance With House Bill 1159 Permitting Fire Departments Who Provide All Of The Fire Protection Services To Another Municipality Through An Interlocal Agreement To Collect Premium Tai From The Other Municipality Chair Giblin reported a House Bill allowed Fire Departments performing services for another municipality to be entitled to the 175 money for the firefighters pension. Tequesta performed fire services for Jupiter Inlet Colony via an Interlocal agreement, and Jupiter Inlet Colony was required to pass an ordinance in order for Tequesta to receive their 175 money. Chair Giblin reported second reading of the ordinance was scheduled for that evening at Jupiter Inlet Colony. Attorney Jensen advised after passage of the ordinance, the State could be advised, and they would add Jupiter Inlet Colony to the list for Tequesta's funds effective going forward. The deadline for the report for this year's funds had been March 31, so this would be effective for the first time next year. 6. Discussion of vacancy on board Chair Giblin announced there was now a full board. VI. STANDING REPORTS (INFORMATION ITEMS) BOARD OF TRUSTEES TEQUESTA PUBLIC SAFETY OFFICERS PENSION TRUST FUND MEETING MIrTUTES MAY ~, 200 PAGE 5 The following information items 7-9 were received and filed: 7. New applicants for participation in Pension Plan Michael Camp -Police Officer -Date of employment 3/5/07 James L. Dyal -Police Officer -Date of employment 3/19/07 8. Beneficiary and Name Change Patrick Malley -beneficiary changed 9. Request for withdrawal of contributions (employees terminating employment with Village of Tequesta) - .Ratification of withdrawals made since the last meeting on 2 signature basis: None 10. Discussion and Approval of Budget Report Accounting Clerk Monica Rahim presented two budget sheets, one for fire and one for police. Ms. Rahim reviewed the sheets and requested amounts that the board would like to adopt for the 2007 budget. Discussion ensued. It was requested that pension distributions be shown below the line and not included in expenditures; totals would be shown before pension distributions. MOTION: Boardmember Sabin made a motion to approve the 2007 estimated budget and the 2008 estimated budget for expenses for 2008. Boardmember Pittman seconded the motion, which carried by unanimous 5-0 vote. Later in the meeting, during consideration of items to be ratified, the budget was amended: Boardmember Sabin noted the budget showed actuarial services of $1,400 as actual expenses, but now the boazd was ratifying an additional $1,937. During ensuing discussion, Attorney Jensen suggested budgeting $2,000 for actuarial expenses in the off yeazs when an actuarial evaluation report was not prepazed. Chair Giblin called for a motion to amend the budget to add $2,000 to be distributed between fire and police as a budgeted amount to cover actuarial expenses in the off actuarial years, probably $1,500 for fire and $500 for police, since it is only an estimate. BOARD OF TRUSTEES TEQUESTA PUBLIC SAFETY OFFICERS PENSION TRUST FUND MEETING MINUTES MAY ~, 200 PAGE 6 MOTION: Secretary Nielson made a motion to amend the 2007 budget to add $2,000 between police and fire as a budgeted amount to cover actuarial expenses. Chair Giblin seconded the motion, which carried by unanimous 4-0 vote. Boardmember Cooper had left the room. VII. FINANCIAL REPORTS 11. Account Statements There were no questions regarding the account statements. VIII. PAYMENTS TO BE RATIFIED (PAYMENTS MADE SINCE LAST MEETING) 12. Hanson, Perry & Jensen, P.A. Services through February 15, 2007 $ 1,200.69 Gabriel, Roeder, Smith and Company Actuarial Services rendered through 1/31/07 $1,937.00 MOTION: Boardmember Sabin made a motion to ratify the payments as presented. Boardmember Pittman seconded the motion, which carried by unanimous 4-0 vote. Boardmember Cooper had left the room. It was announced that payments to be reviewed and approved would be considered later in the meeting after Mr. Bogdahn had re-computed Rockwood Capital's invoice. New Business was considered next: IX. NEW BUSINESS 14. Report By HR Director Merlene Reid Regarding Pension Status of Michael Morrill Human Resources Director Merlene Reid reported Mike Morrell had retired from FRS in 2004 and joined the Village's pension fund; however, FRS had determined the retirement improper because there should have been a 30-day break in service, so they were saying Mr. Morrell was still in the FRS plan. Mr. Morrell had therefore BOARD OF TRUSTEES TEQUESTA PUBLIC SAFETY OFFICERS PENSION TRUST FUND MEETING MINiTTE.S MAY ~, 200 PAGE ~ terminated his employment with the Village on November 27, 2006, and had received refund of his contributions, reported at the last meeting. The board was now being asked to refund $11,580.52 which was paid by the Village into the Public Safety Officers pension fund. Attorney Jensen advised the pension fund could not make a refund of contributions to the employer; however, there were two ways this contribution could be treated, which had essentially been made in error. One way would be to include the value of these dollars in the assets, so that there would be more money in the fund than required; or the second way was for the board to make a determination they were setting aside $11,580.52 as an employer contribution reserve. An account could specifically be set up with $11,580.52 that was contributions received that were too much, and it could be set aside in Mr. Palmquist's actuarial report, and the Village could then use this as an offset against future municipal contributions; or the other way would be to take $11,580.52 and apply it towards the assets which would potentially offset future municipal contributions but not dollaz for dollaz. Attorney Jensen advised she believed the Village of Tequesta was looking for the pension board to set up a contribution reserve hey would like to take a dollar for dollar offset. Attorney Jensen advised the board's role in this was to act in the best interest of the participants, and this should not affect the participants and beneficiaries in any way since it was a contribution made on the salary of an individual that should not have been in the pension plan. There were two other individuals who did not properly terminate, but they were in the General Employees pension plan. The history of this was that Tequesta had been an FRS employer, part of the State retirement system. In 1997 Tequesta opted out, but let those employees who were with the FRS remain in that plan if they preferred to stay in FRS. All new employees and those who wanted to opt out of FRS could be in the new Tequesta pension plan. In 2004 or a little eazlier, some employees retired for FRS purposes; however, subsequently FRS ruled they had not properly retired since they did not meet the requirements of termination in the Florida Retirement System, having nothing to do with Tequesta's pension plans. Ms. Reid explained they thought they were no longer in the FRS plan, but Tequesta was still considered an FRS employer since some employees were still in that plan. Attorney Jensen clarified that Mike Morrell should never have been allowed to participate in this pension plan, and he had received a refund of his contributions for the period of time for which he should not have participated in this program. Attorney Jensen advised that the employer now was looking for a similar way to have a refund of contributions, because not only did they make contributions to this plan but they were now responsible for making contributions to the Florida Retirement System for the period that Mike Morrell should not have participated. BOARD OF TRUSTEES TEQUESTA PUBLIC SAFETY OFFICERS PENSION TRUST FUND MEETING MINUTES MAY ~, 200 PAGE 8 Ms. Reid reported that had been done-the Village had paid it. Secretary Nielson commented the simple solution would be to take an offset. Attorney Jensen advised a contribution reserve could be set up for contributions received in error or the Village paying too much in contributions. No money would be taken out of the plan, and the employer could apply that and put in less money in a future yeaz. Steve Palmquist would need to be notified that a contribution reserve had been set up. Boardmember Sabin noted that if such a reserve were approved, with monthly contributions it would turn azound fairly quickly. Boazdmember Sabin asked who was responsible for making sure that employees of the Village of Tequesta were properly in the fund, and gave his opinion that the Finance Department had taken responsibility to manage the transactions of the fund and the board was basically on the receiving end; that this situation was not an oversight, and the boazd was just giving back what somebody else determined to be correct. Attorney Jensen advised for purposes of comfort, the boazd could establish a contribution reserve of the improperly made contributions, and could have Steve Palmquist verify the calculations, for purposes of establishing the contribution reserve, so that the board was not on the receiving end but would have someone working for the board to make a determination that the number was correct and accurate and it should be offset. Chair Giblin asked who would pay for the expenditure. Attorney Jensen responded the pension fund would pay for the expenditure but the municipality reimburses the pension fund for all its expenditures. When the actuarial calculation was done, an amount was calculated for the employer to make a contribution and added to that was the expenses. Boazdmember Sabin commented he was just making sure as a board member that the participants were not impacted, and getting on the record what the boazd's responsibility was. Attorney Jensen advised as Steve Palmquist set up the reserve he could provide that information for the boazd. Boazdmember Sabin requested a letter from the Finance Department how they had determined the amount of $11,580.52, and was referred to the spreadsheet provided as backup for this agenda item. Boardmember Sabin indicated he was comfortable with the backup information, and made the following motion: MOTION: Boardmember Sabin made a motion to create an employer contribution reserve for the over contributions on behalf of Mike Morrell in the amount of $11,580.52. Secretary Nielson seconded the motion which carried by unanimous 4-0 vote. BOARD OF TRUSTEES TEQUESTA PUBLIC SAFETY OFFICERS PENSION TRUST FUND MEETING MINUTES MAY ~, 200 PAGE 9 15. Discussion of procedures to consider new participant eligibility for the fund Lori McWilliams, Pension Coordinator, advised that Ms. Reid had looked at some items to assure this did not happen again. Ms. Reid reported she was considering a checklist on an application form, because this could also happen from another organization. Attorney Jensen advised new legislation might change the ability of FRS employers to rehire individuals previously FRS employees-in other words, this circumstance might not be able to happen again. At this time, she had been unable to ascertain whether this law had passed, and she believed the Village should consider doing something to assure this did not happen again. Boardmember Sabin commented the Village had the information they needed to make that determination. Attorney Jensen advised persons coming from outside who were in FRS they would need to observe the 31-day termination. Ms. Reid commented if she saw an applicant was coming from a municipality who was an FRS employer, it would be Human Resources' responsibility to check on the time frame. X. PAYMENTS TO BE REVIEWED AND APPROVED 13. Mr. Bogdahn verified Rockwood's invoice was correct. MOTION: Secretary Nielson made a motion to approve for payment invoices listed under Agenda Item 10. Boardmember Pittman seconded the motion, which carried by unanimous 4-0 vote. Therefore, the following payments were approved: Business Services Connection - 2/5/07 meeting and minutes $ 249.15 Hanson, Perry & Jensen, P.A. Services through 4/15/07 $ 559.04 Bogdahn Consulting, LLC Fee for Quarter 1/1/07 - 3/31/07 $ 2,000.00 Salem Trust Fee Advice for Quarter ending 3/31/07 $ 734.55 Rockwood Capital Advisors, LLC Fee for Quarter 12/31/06- 3/31/07 $ 4,949.50 BOARD OF TRUSTEES TEQUESTA PUBLIC SAFETY OFFICERS PENSION TRUST FUND MEETING MINUTES MAY ~, 200 PAGE io Federal Express $ 24.64 16. Discussion of the possibility of reducing firefighter contributions back to 5% Chair Giblin noted there was an excess of 1.1 % in 175 money on the fire side. Approximately 1-1 /2 years ago the contribution rate had been raised from 5% to 6.1 % to get extra benefits, and with the excess the firefighters would like to reduce that back to 5%/ Attorney Jensen advised the procedure would be to go back to the actuary because a cost determination would be needed. Employee contributions were not necessarily a dollar for dollaz offset, so it might be a little bit more than 1.1 %. When the cost was received from Steve Palmquist, an amendment to the plan would need to be drafted which would decrease the contribution rate from 6.1 % back to 5%, which would then be presented to the Village Council for approval. Chair Giblin noted the police depaztment had remained at 5%, but the fire department was currently paying 6.1 %. Since the fire department wanted the 175 money to offset the cost, Attorney Jensen advised that Mr. Palmquist could be requested to make that analysis as well, to see how many dollars were available. MOTION• Boardmember Sabin made a motion to have the actuary make an assessment or study of the possibility to reduce the fire department contribution from 6.1% to 5%, using 175 money. Boardmember Pittman seconded the motion, which carried by unanimous 4-0 vote. 17. Consideration of Sending a Member to FPPTA Conference -June 24-27, 2007 in Naples, Florida Pension Coordinator McWilliams commented Mr. Nielson had recently attended a school, and the new member of the board, Mr. Cooper, had asked about attending school in order to obtain information regazding being a boazdmember for the pension fund. Secretary Nielson commented he had attended the FPPTA school l-1/2 yeazs ago which was good, and the Police Officers and Firefighters Pension School recently, which he thought was a little better, and there would be another one in Orlando in October. Attorney Jensen stated she would send the contact information for this school. Chair Giblin also expressed interest in attending in October. Attorney Jensen advised the fall conference was usually paid for so that the only expense would be hotel, travel, etc. BOARD OF TRUSTEES TEQUESTA PUBLIC SAFETY OFFICERS PENSION TRUST FUND MEETING MINUTES MAY ~, 200 PAGE 11 Pension Coordinator McWilliams requested those attending schools try to process their payments prior to going whenever possible so that the pension fund did not have to pay sales tax. MOTION: Secretary Nielson made a motion to approve funds for David Cooper to attend FPPTA school for pension trustees in June, 2007. Boardmember Pittman seconded the motion, which carried by unanimous 5-0 vote. XI. ANY OTHER MATTERS The next meeting was confirmed for Monday, August 6 at 10:30 a.m. Secretary Nielson commented at the last meeting the boazd had requested form ADV from Mr. Holtgrieve. Recording Secretary Laur reported it had been requested but not yet received. Secretary Nielson requested form ADV also be supplied by Mr. Bogdahn, and those should be supplied on a regulaz basis, advising that was one of the things brought up at the school. Mr. Bogdahn advised he would send it by a-mail. A couple of other points that had come up were to make sure a waiver of resources was in place, which Attorney Jensen advised she would check to see if that was on the fiduciary liability insurance. It was something she normally asked for, and it basically said the employer was responsible under State law if there was a suit that did not result from person acts outside the scope of acting as a trustee, they were responsible for paying the cost of it, and the waiver of resource meant the insurance company and the employer could not turn around and seek reimbursement from a trustee. Secretary Nielson commented another point that came out in the school was there had to be a majority of the total number of people sitting on the board to vote for an item in order to approve it. XII. COMMUNICATIONS FROM CITIZENS There were no communications from citizens. XIII. ADJOURNMENT There being no further business to come before the board, the meeting was adjourned at 10:15 a.m. BOARD OF TRUSTEES TEQUES'rA PUBLIC SAFETY OFFICERS PENSION TRUST FUND MEETING MINUTES MAY ~, 200 PAGE 12 Respectfully submitted, ~~~,~_ Betty Laur Recording Secretary