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Home My WebLink About06232015 PRB Agenda�' Lf SEBASTIAN HOME OF PELICAN ISLAND PUBLIC NOTICE POLICE PENSION BOARD The Police Pension Board will hold its quarterly meeting Tuesday, June 23, 2015 at 10:00 a.m. in the City Council Chambers, City Hall, 1225 Main St. Sebastian, Florida. AGENDA CALL TO ORDER ROLL CALL AGENDA MODIFICATIONS UNFINISHED BUSINESS A. Approval of Minutes from June 16, 2015 Steve Marcinik, Chairman Steve Marcinik, Chairman Steve Marcinik, Chairman Steve Marcinik, Chairman B. Discussion of Investment Policy and Asset Allocation Board Members and Scott Owens, Morgan Stanley C. Selection of Firms to be Interviewed for Custodian Services Steve Mareinik, Chairman PUBLIC INPUT NEW BUSINESS A. Approval of Invoices: 1. Christiansen & Dehner - $303.20 Invoice for May 2015 Services B. Other Matters C. Next Quarterly Meeting: September 15, 2015 ADJOURN Ken Killgore Administrative Services Director/Pension Board Member City of Sebastian Steve Marcinik, Chairman Steve Marcinik, Chairman Steve Marcinik, Chairman Please note: In accordance with Florida Statue 286.0105: any person who desires to appeal any decision at this meeting will need a record of the proceedings and for this purpose may need to ensure that a verbatim record of the proceedings is made which includes the testimony and evidence upon which the appeal is based. In accordance with Florida Statute 286.26: Persons with disabilities needing assistance to participate in any of these proceedings should contact the Administrative Services Department at 1225 Main Street, Sebastian, Florida 32958, or telephone 772-388-8205. Draft 6/16/2015 Minutes DRAFT Sebastian Police Pension Board Minutes June 16,2015 10:00 a.m. Sebastian City Council Chambers TYPE OF MEETING: Regular ATTENDEES: Board Members: Steve Marcinik, Chair Robert Zomok, Secretary Bruce Hoffman Ken Killgore Richard Snell EXCUSED: CONSULTANTS: Scott Owens Grant McMurry Todd Wishnia Doug Lozen Lee Dehner - excused SUBJECT CALL TO ORDER 10:03 a.m. There being a quorum present, Steve Marcinik, called the meeting to order. Agenda Modifications: None SUBJECT APPROVAL OF MINUTES 10:05 a.m. Bruce Hoffman motioned the minutes of the May 28, 2015 Special Board Meeting be approved. Motioned seconded by Ken Killgore Hoffman and passed unanimously. Draft 6/16/2015 Minutes SUBJECT UNFINISHED BUSINESS Actuarial Cost Study on Change in Expected Rate of Return. Doug Lozen presented the requested information. The Fund is in a positive position with a current funded ratio of 90.25%. This strong position is due to low salary increases and high investment returns. The Board determined that this is a time to consider reducing the investment return assumption from 7.75% to either 7.60% or 7.30%. This enables the Board to better manage the Fund over the foreseeable future thereby precluding any sudden cost increases that would, eventually, become a City responsibility. After discussion, Bruce Hoffman moved to adopt a 7.30% Investment Return Assumption. This change may have an effect on the amount the City budgets for police pension funding in the 2016 -- 2017 budget year. This change will be reflected in the 2016 pension Plan Valuation. The motion was seconded by Ken Killgore and passed unanimously. Custodian Services Reponses to Requests for Proposal The Board determined this topic will require lengthy discussion. Therefore, the Board agreed to a Special Meeting on June 26, 2015 at 10:00 AM in Sebastian City Council chambers. Each Board member is to be prepared to offer their top three (3) choices with a rationale for their choice. (Grant McMurry suggested that if a change is to be made, the preferred time would be at the end of the fiscal year [after September 30, 2015]. The reason is all final reports would have been prepared and any conversion, if necessary, would be facilitated.) One of the RFP respondents was Salem Trust, our current custodian. The precipitating reason for going to the marketplace to explore engaging a new custodian was a significant concern raised when the Board was informed that Salem had received a "qualified" report on a recent audit. Scott Owens was asked to further investigate this and report back to the Board. N Draft 6/16/2015 Minutes Scott reported at this meeting that he had identified four (4) areas of concern. The primary reason for the "qualified" audit report. Next, Salem Trust was unable to produce financial data appropriately due to a computer software conversion they had undertaken. A fraud question was raised because an affiliate of Salem Trust (Pennant) had allegedly engage in some questionable practices. Last, because of the foregoing, several current Salem clients (like us) had issued Requests for Proposals. Discussion of Investment Policy and Asset Allocation The Board recognized that any discussion of our Investment Policy Statement revisions and determining an Asset Allocation Strategy would also be lengthy discussions. Therefore, these discussions will be a part of the Special Meeting on June 23, 2015. A key part of this discussion will be answering the question of what activity needs to take place first. Does the IPS determine asset allocation or do we determine investment "ranges" as part of an asset allocation strategy and then write the IPS? Public Comment: None SUBJECT NEW BUSINESS Approval of Invoices: Municipal Code Corporation - 51,222.07 Bob Zomok motioned to approve payment of the above invoices. Richard Snell seconded the motion and it passed unanimously. Acknowledgement of Retirement Benefits for Officer Paul Graves. The Board reviewed the material presented by Doug Lozen relative to the retirement information being considered by Officer Paul Graves. As of now, he plans to retire on or after July 1, 2015. 3 Draft 6/16/2015 Minutes Contractual Agreement with Highland Capital Services Grant McMurry distributed a copy of the current contract the Board has with ICC Management. It is a two-page document dated 02-16-96. Grant is to contact Lee Dehner and request a draft of an updated contract for the Board's relationship with Highland Capital Services. (A sidebar issue discussed by the Board is the lack of a contract with Christiansen and Dehner Law Offices) Quarterly Review of Investment Portfolio Scott Owens distributed and reviewed the report on the investment portfolio. The Fund continues to experience upward movement. This quarter, the Fund had a net gain of $255,622.95. Quarterly Fund Review Grant was asked by Bruce Hoffman to add a breakout of growth and value performance. Grant agreed to have this accomplished. Grant reported that he is seeing more differentiation in the market even between companies in the same market sectors. He anticipates that Highland Capital will continue to expand its orientation toward the growth strategies.. Legal Updates Summary Plan Description Tabled until Lee Dehner returns. Senate Bill 172 See report from Lee Dehner dated May 29, 2015. Doug Lozen reviewed the required changes and options available under Senate Bill 172. The Bill passed effective July 15, 2015. The City of Sebastian, the Police Pension Board, and the Sebastian Police union all have information to review, decisions to make, and actions to implement. Doug reported that there are several questions raised by this new law that have been presented to the State of Florida. These questions are, to date, unanswered. 11 Draft 6/16/2015 Minutes Other Matters: None Next regularly scheduled meeting is September 15, 2015 at 10:00 a.m. in the Sebastian City Council Chambers. A Special Meeting is scheduled for June 23, 2015 at 10:00 AM in Sebastian City Council chambers. SUBJECT ADJOURNMENT 12:40 PM Having no further business for discussion, Chairman Steve Marcinik adjourned the meeting. Respectfully submitted, Bob Zomok, Secretary 5 Christiansen & Dehner, P. A. 63 Sarasota Center Boulevard Suite 107 Sarasota, FL 34240- 941-377-2200 Phone City of Sebastian Police Pension Fund ATTN: Ken Killgore 1225 Main Street Sebastian, FL 32958 941-377-4848 Fax May 31, 2015 Invoice Number In Reference To; Police Pension Fund 0049 26739 Professional Services Hours Amount 5/14/2015 Preparation of updated forms package. 0.50 189.50 5/2012015 Preparation of revised Administrative Form PF -15, Special Tax Notice 0.30 113.70 Regarding Plan Payments. For professional services rendered 0.80 $303.20 Previous balance $2,985.79 Accounts receivable transactions 5/28/2015 Payment - thank you. Check No. 17496 ($2,985.79) Total payments and adjustments ($2,985.79) Balance due $303.20 Please note that the "Balance Due" figure at the end of this bill reflects both "Total New Charges - Current Period" and any previous balances due. In most cases, if the previous balance(s) have already been approved for payment but not yet received in our office, you should be paying only the "Total New Charges - for services and/or expenses" . Thank you. Please indicate account number(s) with payment. (Please Deduct any payments not reflected in Balance due)