Loading...
HomeMy WebLinkAbout06-15-2021 MinutesCITY OF SEBASTIAN POLICE PENSION BOARD MINUTES OF REGULAR MEETING JUNE 15, 2021 Call to Order — Acting Chairman Tim Wood called the meeting to order at 10:03 a.m. Roll Call Present: Board Members: Ms. Andrea Ring Captain Tim Wood Detective Ken McDonough Mr. Paul Williamson Also Present: Bonni Jensen, Klausner, Kaufman, Jensen & Levinson, Attorney for the Board of Trustees Ken Killgore, Plan Administrator Cynthia Watson, Human Resources Manager Andy Mcilvaine, Morgan Stanley (Zoom) Doug Lozen, Foster & Foster Todd Wishnia, Highland Capital Joseph Perez, AV Technical Assistant Janet Graham, Technical Writer (Zoom) III. Vote to Excuse Absent Board Members Acting Chairman Wood announced that there are no absent Board members IV. Vote to Certifv Election of Detective Ken McDonough Mr. Killgore stated that he has talked to Detective McDonough. The ballots were collected from the eligible voters, the result of which showed that Detective McDonough got the majority of the votes. Mr. Killgore stated that there needs to be a vote certifying the election results at this time. A motion certifying the election of Detective McDonough to the Police Pension Board was made by Mr. Williamson, seconded by Captain Wood, and approved unanimously via voice vote. V. Vote to Elect a Chairman Mr. Killgore reviewed that the ordinance requires this to be done every two years. Since the previous chairman resigned, there needs to be a new chairman appointed for the POLICE PENSION BOARD PAGE 2 MINUTES OF REGULAR MEETING DATED JUNE 15, 2021 next two years. Mr. Williamson nominated Captain Tim Wood as Chairman. Ms. Ring seconded the nomination. There being no further nominations, Captain Wood was elected as Chairman. VI. Vote to Elect a Secretary Ms. Jensen described the duties and responsibilities of the Secretary. Captain Wood nominated Mr. Williamson as Secretary. Ms. Ring seconded the nomination. There being no further nominations, Mr. Williamson was elected as Secretary. VII. Aooroval of Minutes: March 16. 2021 WorkshOD Meetinc Chairman Wood called for a motion to approve the Minutes from the March 16, 2021 workshop meeting. A motion to approve the Minutes from March 16, 2021 as presented was made by Mr. Williamson, seconded by Captain Wood, and approved unanimously via voice vote. Vill. Old Business Mr. Killgore reviewed the payments that have been made over the last quarter. He did have a late arrival that he has paid since compiling the Agenda, that being to Boston Partners in the amount of $4,919.61. A. Approval of Payments: I. Highland Capital -- January to March -- Fixed Income $3,341.48 ii. Highland Capital -- January to March -- Value, ADR 6,523.86 III. Fiera Capital -- January to March 3,112.95 iv. Renaissance -- January to March 2,474.41 V. Polen Capital -- March 18, 2021- March 31, 2021 418.11 vi. Foster & Foster — Annual State Report and Disclosures 7,075.00 vii. Klausner, Kaufman, Jensen & Levinson — Mar/Apr/May 1,825.00 viii. City of Sebastian - Janet Graham 3-16-21 Meeting 126.00 ix. City of Sebastian -- January to March 6,000.00 X. Salem Trust — January to March 8,865.00 Mr. Killgore reviewed these payments and asked for a motion for approval. Mr. Williamson asked if there was anything out of the ordinary on this list. Mr. Killgore stated there was not, and he reviewed some of the activity. A motion to approve the payments as listed above was made by Mr. Williamson, seconded by Captain Wood, and approved unanimously via voice vote. POLICE PENSION BOARD PAGE 3 MINUTES OF REGULAR MEETING DATED JUNE 15, 2021 B. Presentation of Study on the Anticipated Long -Terre Rate of Return Mr. Lozen, Foster & Foster, explained why the capital market assumptions and inflation for the long term are reviewed. He pointed out that he is not asking for a decision regarding these items today. He reviewed the study that he delivered in March and explained those results. He then asked for comments/questions from the Board. Mr. Williamson clarified that in the Pension Plan's policy there is currently an expected rate of return of 7.2%, and other pensions like the Florida State are dropping their expected rate of return most likely to reflect the reality of the interest rate situation in the long tens. So, to make sure the Pension is funded appropriately for the long term, we should probably be modeling that after what Florida State is doing and also lower our expected rate of return. Mr. Lozen stated that is a fair summary. Mr. Williamson asked if Mr. Lozen is recommending that this Pension Plan go right to 7% or do it incrementally. Mr. Lozen opined that the Pension Plan will be safe by doing a two-year phase -in. He does not expect any large decreases from the Florida Retirement System. He added that this Board should get some input from the City as well as far as budgeting, and he discussed budgeting. Mr. Killgore also stated that this does have an effect on the City's budgeting. He emphasized that the City is getting hit hard because the voters in Florida stated that we have to get to a $15.00-an-hour minimum wage, and that is over the next three years. There was an in-depth discussion regarding this matter, following which Mr. Lozen asked that the Board come to a decision on this subject by the meeting in September. He further slated that he will continue to bring this matter up to the Board in the future. Chairman Wood made a motion to decrease the amount from the 7.2% to 7.1 % for the fiscal year 2022-2023. Mr. Williamson seconded the motion. The motion was approved unanimously via voice vote. Mr. Lozen stated he will lower the percentage to 7.1 % at the next valuation, and he will plan to be here in December to go over the results, and there can be continued discussion regarding this matter going forward. IX. Public Input There being no one in chambers who wished to speak and there being no one on Zoom who wished to speak, Chairman Wood moved to the next item on the agenda. POLICE PENSION BOARD PAGE 4 MINUTES OF REGULAR MEETING DATED JUNE 15, 2021 _ r- A. Report From Investment Manager Mr. Mcllvaine, Morgan Stanley, stated that he agrees with everything that Mr. Lozen had reviewed. He thanked the Board for allowing him to attend via Zoom, and he plans to attend in person at the next meeting. He reviewed how the markets have reacted during the COVID-19 pandemic and how inflation will affect the economy in the future. He then reviewed and explained the Quarterly Performance Summary for the Pension Plan (SEE ATTACHED). He then called for questions/commentsfrom the Board. There being none, Chairman Wood moved to the next item on the agenda. B. Report from Investment Manager Mr. Wishnia, Highland Capital reviewed what his company did this quarter to get the returns. The numbers look good. He went over the Pension Fund Investment Review (SEE ATTACHED), following which he called for questions/comments from the Board. Mr. Williamson inquired regarding Berkshire Hathaway. Mr. Wishnia stated they are looking at it more as a holdings company. When looking at the holdings within Berkshire, it could almost be an industrials company with what they hold. He opined that what is being looked at is more banks and companies that will react to interest rates and a reopening of businesses. He further opined that Berkshire has not performed well within the financial sector. He is uncertain as to what degree it will be reduced, as it has been the top one or two holdings for years, and they are cutting that back. Regarding International, it is kind of the same story as what is going on in the US. Markets rose on vaccine rollout, stimulus, central bank policies, etc. There was a nice quarter, up 5.5% over the index. XI. Leval Updates A. Plan Amendment to Define Life with 10 Years of Benefits Guaranteed Ms. Jensen reviewed that during the quarter, in looking at the Pension Plan she noted that there was not a provision for the Plan's normal form. She is proposing an amendment to the Plan just to clarify that its normal form of benefit is a 10-year-certain benefit. A member gets their benefit for life, but if they die before they have received 120 payments, they can leave the remainder of those 120 payments to a beneficiary. This just describes the 10-year-certain benefit. It is the minimum benefit that is provided for under the state statute. She is proposing to provide an amendment to City Council so that it can be added to this Pension Plan. Chairman Wood called for a motion on this matter. A motion to POLICE PENSION BOARD PAGE 5 MINUTES OF REGULAR MEETING DATED JUNE 15, 2021 direct Ms. Jensen to draft the amendment to the Plan and present it to City Council was made by Ms. Ring, seconded by Chairman Wood. After added discussion, the motion was withdrawn. Mr. Killgore asked if there are other IRS changes in progress. Ms. Jensen stated she is not aware of any IRS changes that have occurred that need to be made other than the ones that have already been done. She will look at it to make certain that these are the only changes that are needed. Ms. Jensen reminded the Board that their Form 1s are due to the Supervisor of Elections by July 16� There is a three-month grace period to September 16' before they begin to assess any penalties that are due as a result of someone not filing. She cannot give any advice about what to put on the form, but she can answer any questions that anyone has about the instructions. XII. Board Member Reoorts or Comments Ms. Ring stated she has sent her Form 1 in. XIII. Plan Administrator Reports and Commen A. Sergeant Steve Marcinik Elected the Deferred Retirement Option Program (DROP) Mr. Killgore informed the Board that Sergeant Steve Marcinik has elected to go into the DROP program. The actuary did provide the numbers for this DROP. B. Budget Report, Calendar of Board Activities, and Other Administrative Matters Mr. Killgore stated he has updated all the costs through the first three quarters, including the Boston Partners invoice that was added to the payments. So far, approximately 64% of budgeted funds have been spent. He will bring any changes that the Board might need to approve to the meeting in September. He has provided a Calendar of Board Activities, and he opined that the Plan is on target for all of those. Chairman Wood asked if there was anything else the Board needs to do regarding the last meeting (workshop). Ms. Jensen stated that, if there are Minutes that needed to be approved, that should be done. That can be put on the agenda for the next meeting. Those are the Minutes from the December 15, 2020 meeting. She stated that the report POLICE PENSION BOARD PAGE 6 MINUTES OF REGULAR MEETING DATED JUNE 15, 2021 that was received from Graystone for the quarter should be approved at the next meeting. Mr. Killgore stated he will add those matters to the agenda for the next meeting. XIV. Next Scheduled Quarterly Meetino — September 21. 2021 XV. Adiourn There being no further business, Chairman Wood adjourned the meeting at 11:13 a.m. Bv: —Oy� W �✓� Date: Or�2` 12-L jg