HomeMy WebLinkAbout06162015 PRB MinutesDraft 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.
NA
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 - $1,222.07
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.
M
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