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Home My WebLink About09152015 PRB AgendaMOF SEMST_N HOME OF PELICAN ISLAND PUBLIC NOTICE POLICE PENSION BOARD The Police Pension Board will hold the regularly scheduled quarterly meeting Tuesday, September 15, 2015 at 10:00 a.m. in the City Council Chambers, City Hall, 1225 Main St. Sebastian, Florida. AGENDA CALL TO ORDER Steve Marcinik, Chairman ROLL CALL Steve Marcinik, Chairman UNFINISHED BUSINESS A. Approval of Minutes from July 31, 2015 Steve Marcinik, Chairman B. Consideration of "wrapping" consulting, custodial and Steve Marcinik, Chairman account management services into one "bundled" contract H. Lee Delmer, Pension Attorney C. Report on compliance with required website disclosures Ken Killgore, Board Member D. Report on receipt of State Funds Ken Killgore, Board Member E. Consideration of annual operating budget Bruce Hoffman, Board Member PUBLIC INPUT NEW BUSINESS A. Approval of Invoices: Steve Marcinik, Chairman 1. Morgan Stanley, Smith, Barney - $3,375.00 Fees for Quarter Ending 06/30/15 2. Christiansen & Delmer - $2,573.96 Preparation of Summary Plan Description, preparation and attendance at Board Meeting, travel time, car expense, food expense and hotel charge. B. Withdrawal of pension contributions — Ashley Delaney Ken Killgore, Board Member C. Update on Investment Portfolio since June 30th Scott Owens, Morgan Stanley D. Fund Update since June 301h Report Grant McMurry, Highland Capital Management E. Legal Updates: H. Lee Delmer, Pension Attorney 1. Summary Plan Description 2. Ordinance Amendment for Budget, Share Plan, etc. 3. Requirement to use same mortality assumptions as the State F. Proposed Meeting Dates for Fiscal Year 2016 Steve Marcinik, Chairman March 15, June 14, September 20 and December 13 G. Next Quarterly Meeting: December 15, 2015 Steve Marcinik, Chairman ADJOURN Ken Killgore Administrative Services Director/Pension Board Member City of Sebastian 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 7/31/2015 Minutes Sebastian Police Pension Board Minutes July 31, 2015 10:00 a.m. Sebastian City Council Chambers TYPE OF MEETING: Special ATTENDEES: Board Members: Steve Marcinik, Chair Robert Zomok, Secretary Bruce Hoffman Ken Killgore Richard Snell EXCUSED: CONSULTANTS: Scott Owens Lee Dehner Cindy Watson - Guest SUBJECT CALL TO ORDER 10:00 a.m. There being a quorum present, Steve Marcinik, called the meeting to order. Agenda Modifications: Additions to Unfinished Business The Agenda was modified to permit the approval of seminar attendance by Bruce Hoffman. The seminar delivered information on Florida Statute 112 Section 112.664. Bob Zomok moved to approve reimbursement to Bruce Hoffman. Ken Killgore seconded the motion and it passed unanimously. Draft 7/31/2015 Minutes SUBJECT UNFINISHED BUSINESS APPROVAL OF MINUTES 10:05 a.m. Ken Killgore motioned the minutes of the June 23, 2015 Special Board Meeting be approved. Motioned seconded by Bruce Hoffman and passed unanimously. Consideration of "wrapping" consulting, custodial, and account management services into one "bundled" contract. Three concepts for consideration were discussed in detail — Transparency, Conflict of Interest, and Fiduciary Responsibility. The most important fact, understood by all on the Board, is the critical need to diversify Asset Allocation. With this fact as a given, the discussion proceeded. Scott Owens stated that the issue of Transparency would be addressed via the detailed reports the Board would receive vis-a- vis the performance of each asset manager. Part of the MSG fee is the research done to develop the suggested list of best -in -class asset managers. On the issue of Conflict of interest, Scott Owens pointed out that all transactions are outside the firm of Merrill Lynch Graystone (MSG). That firm collects only their fees for administering the "WRAP" program. All fees of asset managers are paid by the Plan and no fees from fund managers are recovered in any way by MSG Fiduciary Responsibility would be assessed by Lee Definer. His firm has several clients who have converted to the "WRAP" structure to diversify their asset allocation. The WRAP program has the potential to reduce asset manager fees and custodial fees. The fee from MSG would increase. The Board selects the asset manager for each part of asset 2 Draft 7/31/2015 Minutes allocation. MSG would provide the Board with suggested managers; however, the Board retains the final approval in the selection process. Scott will provide the Board and Lee Delmer a copy of the Investor Services Agreement. Lee will review the acceptability of the WRAP program by clients of his firm. Scot is to send Bob Zomok contact information so that Bob can check with three (3) current Plans that have adopted and are using the WRAP program. Action to continue evaluation of firms for custodial services and/or formally discontinue RFP process The Board agreed to table this process and to defer to the consideration of the WRAP program. If the Board opts for the WRAP, the Fund Custodian is a part of that agreement. As and aside, Lee Delmer has been in touch with Salem Trust, (current custodian) and that firm will keep Lee apprised of the results of the next audit that firm will undergo. The reason the Board requested the initiation of the RFP process to replace Salem Trust was the "qualified" audit results they had recently received. Research of actual expenses to use as basis for developing and annual operating budget per Senate Bill 172. Bruce Hoffman has produced a budget for the annual expenses of the Plan as required by Florida Statute 112, Section 112.664 (formerly Senate Bill 172). Public Comment: None 3 Draft 7/31/2015 Minutes SUBJECT NEW BUSINESS Approval of Invoices: Foster and Foster - $7,697.00 Salem Trust - $1,600.00 ICC Capital Management - $16, 576.81 Bob Zomok motioned to approve the above listed expenses. Richard Snell seconded the motion and it passed unanimously. Report on Required Website Disclosures June 26, 2015 email from Foster & Foster on compliance with financial requirements The email received from Doug Lozen of Foster & Foster addressed the requirements of and responses to the unfunded mandates established by FS 112. The Actuarial Summary Sheet fulfills the Plan requirements. Document at link to Division of Retirement's Actuarial Summary Fact Sheet The Actuarial Summary will be on the State web site. Ken Killgore is establishing a link to that web site on the Sebastian City web site. Copy of Florida Statute 112.664 This was included with the email from Doug Lozen. Legal Updates — Lee Delmer Senate Bill 172 Previous Information: 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. 4 Draft 7/31/2015 Minutes 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. Current Information: FS 112 (SB 172) requires, among many other items, a decision on how to allocate the excess State funds. The parties can negotiate the "how-to" as part of the next collective bargaining process. The "default" action established by the State is 50% to the City and 50% to CBA members. Compliance is required by 10-01-2015 or after the next collective bargaining agreement is negotiated. For Sebastian City, negotiations will occur in 2016. Another requirement is to establish a "share plan' for these funds. The "share plan' cannot be a 457 plan. Once the decision is made, an Amendment to the City Ordinance covering the Pension Plan will be required. The Ordinance will also have to be amended per new IRS regulations. SB 242 is now HB1309 and requires local law plans to use the same mortality assumptions as are used by the Florida Retirement System. This requirement is effective 01/01/2016 and will be implemented with the 10/01/2016 Pension Plan Valuation report. Summary Plan Description Lee distributed the revised Summary Plan Description for Board review. We are awaiting the Summary Form that will become Exhibit B from Doug Lozen. Once the SPD is completed and approved by the Board, each plan member is to receive a copy and must sign a statement that the SPD has been received by that person. Cindy Watson noted there is a process for this in place and she will implement it once the SPD is approved by the Board and signed by the Board Chair. 5 Draft 7/31/2015 Minutes Other Matters: None Next regularly scheduled meeting is September 15, 2015 at 10:00 a.m. in the Sebastian City Council Chambers. SUBJECT ADJOURNMENT 12:00 PM Having no further business for discussion, Chairman Steve Marcinik adjourned the meeting. Respectfully submitted, Bob Zomok, Secretary on Investment Advisory Services Client Fee Invoice City Of Sebastian Police Officers' Retirement System ATTN: Ken Killgore 1225 Main St. Sebastian, FL 32958 MorganStantey Smith Barney Date August 18, 2015 Billing Period 2015-04-01 thru 2015-06-30 This service fee for the period indicated is due upon receipt of this notice. Please forward your check for this amount to: Morgan Stanley Smith Barney 100 N. Tampa St. Ste. 3000 Tampa, FL 33602 Attn: Charlie Mulfinger Account Name Account Number Amount Due City Of Sebastian Police Officers' Retirement System 745-038962 $3,375.00 Morgan Stanley Smith Barney LLC. Member SIPC. Consulting Group and Investment Advisory Services are businesses of Morgan Stanley Smith Barney LLC. 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 In Reference To: Police Pension Fund Professional Services 941-377-4848 Fax 7/31/2015 Preparation of revised Summary Plan Description incorporating all plan amendments and updates. Preparation and attendance at Board Meeting. Travel Time For professional services rendered Additional Charges: 7/31/2015 Car Expense Food Expense Hotel Charge Total additional charges Total amount of this bill Previous balance Accounts receivable transactions 7/23/2015 Payment - thank you. Check No. 18452 Total payments and adjustments July 31, 2015 Invoice Number 26977 Hours Amount 1.00 394.00 2.20 866.80 5.00 985.00 8.20 $2,245.80 Qty 1 178.25 1 36.00 1 113.91 $328.16 $2,573.96 $303.20 ($303.20) ($303.20) City of Sebastian Police Pension Fund July 31, 2015 Amount Balance due $2,573.96 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)