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2015-05-04 General Meeting & General Fund MeetingCITY OF OKEEC HOBE• • ��'•, nr�ri� AUTHORITY/POLICE/FIRE PENSION BOARDS 2015 UE Robbert Ellerbee REGULAR MEETING MINUTES, M CITY HALL, 55 SE THIRD AVEN OKEECHOBEE, FL 34974 TRUSTEE ATTENDANCE: CITY OF OKEECHOBEE/OUA POLICE: FIRE: Jamie Mullis, Chairperson Daryl Roehm Jose Santiago Denny Davis, Chairperson Jack Boon John Koepke, Chairperson Adam Crum Bettye Taylor, Secretary Michael Skipper, Secretary OTHERS PRESENT: Scott Christiansen, Attorney Jack Evatt, Bogdahn Group Jay McBee, DiBartolomeo, McBee, Hartley & Barnes, P.A. Theora P. Braccialarghe, Gabriel, Roeder, Smith & Company Mark Rhein, Salem Trust Janet McKinley, OUA Financial Liaison Basil Coule, OUA Financial Liaison 1. CALL TO ORDER REGULAR MEETING: Jamie Mullis called the meeting to order at 5:02 p.m. 2. PUBLIC COMMENT: Jamie asked whether there were any comments from the public. There were none. 3. INVESTMENT REPORTS: The Bogdahn Group Mr. Jack Evatt, of the Bogdahn Group, presented an overview of all three accounts ending March 31, 2015, Each account is ahead of the expected benchmark. 4. PORTFOLIO SUMMARY FROM DANA INVESTMENT ADVISORS, INC: The portfolio's as of March 31, 2015 were distributed at the meeting for all three boards. 5. DIBARTOLOMEO, MCBEE, HARTLEY & BARNES, P.A.: - Mr. Jay McBee reviewed the financial statements and supplementary information ending September 30, 2014, noting that the audit was in accordance with the standards of the Government of Auditing Standards issued by the Comptroller General of the United States. The results disclosed no instances of noncompliance. Each board was asked to approve the audits as presented. 6-10. SALEM TRUST: Mr. Mark Rhein, Chief Operating Officer, of Salem Trust was present to address the board. Referring to item 10 on the agenda, he explained they are in the process of filling Cindy Farrow's position, as she is no longer with the company. In the meantime, any inquiries or concerns may be addressed to him. Item 9, he reviewed the summary letter which explained the fraudulent action against one of their sister companies, Pennant Management, Inc. None of our Pension plans were affected, impacted or compromised. They are continuing to recover their clients assets which had been impacted. Items 8, 7 and 6 were discussed simultaneously. The Service Commitment Letter addressed the challenging transition to the trust accounting system. Due to this transition, there were delays in statements, causing an adverse opinion on the Statements on Standards for Attestation Engagement (SSAE 16) review, which also caused additional fees for this period adjustment. Mr. Rhein informed since we have been a client since 2009, they are willing to offer a fair and equitable compromise to adjust to their proposed fee increase and the additional fees incurred by the transition. The proposed minimum fee was raised to $5,500 from $4,000.00 for all three accounts for three years, effective March 31, 2015. They will credit all three plans $250.00 each, per quarter, for the next two quarters and no increase in fees until October 1, 2015. Also, they will adjust the minimum fee for the first year to $4,750.00, effective November 1, 2015, and then $5,500.00 for the second year. Each board was asked to consider the proposal and then direct Attorney Christiansen to compose a second addendum accordingly. 11-12. GABRIEL, ROEDER, SMITH & COMPANY (October 1, 2014 Actuarual Valuation Report; GASB No. 67— ADDED ITEM GASB 68): Ms. Theora P. Braccialarghe, of GRS, presented the October 1, 2014 Actuarial Valuation Report. She explained GRS determines the liability of the fund by assumptions and probabilities (person by person, plan provision by plan provision, and year by year, etc.), and compares to the smooth value not the market value for a four year period. We are in the third year of phasing into the Mortality Table, and the results have been enviable. The summaries of all three plans were reviewed as follows: the normal benefit rate with a normal form being a 10-year certain and life; the normal retirement date varies according to position (police and fire having an earlier retirement age); early retirement is available at a reduced rate; compensation is the highest five of the last ten years of service; the funding method aggregate (the difference of total future liabilities and the assets is what is funded); there is an employee contribution rate with the Police and Fire having a COLA every other year; the assumption of the mortatity table was determined by RP-2000 Scale AA, but now they are waiting on the action of legislation and their new mandates for the valuation. All three plans had gains due to liabilities. The funded ratios show Police and Fire over 100 percent and General over 90 percent. All three groups Market Value is greater than the Actuarial Value of Assets. The new requirements which began June 15, 2013, GASB 67, included 100 year projection of benefits and expenses; GASB 68 begins this year; the Florida Public Retirment Plan Disclosures — Chapter 2013-100, asks for GASB 67 with different assumptions using mortality table RP-2000 mortality table AA, but showing two percent less. This is the last year for the GASB 27. Each board was asked to consider and approve the valuation. 13. CHRISTIANSEN & DEHNER, P.A.: Administrator's Agreement between the OUA and the Board of Trustees of the City of Okeechobee and the OUA Retirement System for approval and signature. Each board was asked to consider and siqn the agreement. 14. UNFINISHED BUSINESS TO DISCUSS IN OPEN SESSION. Attorney Christiansen gave an update of the legislation. Valuations may have to use FRS mortality table, and Police and Fire Pension Boards may be affected by the Senate Bill 172, which has passed the House and Senate, pending Governor — regarding use and allocation of additional state monies 15. NEW BUSINESS TO DISCUSS IN OPEN SESSION: ✓ Reminder that all Financial Disclosure Forms need to be completed and returned by the end of July to avoid fines. ✓ Approve audit, valuation, 7 % expected rate of return, addendum for Salem Trust ✓ Pension Form Number One — needs to be signed by the City/OUA requesting the Pension Boards maintain confidentiality of Personal Information while acting as Custodian for the Pension Boards. 16. RECESS FROM OPEN SESSION AND CONVENE IN INDIVIDUAL SESSIONS AT 6:54 P.M. CITY GENERAL/OUA PENSION BOARD OF TRUSTEE ITEMS May 4, 2015 A. Motion to dispense with the reading and approve the minutes for the meetings on February 2, 2015 and Special Meeting on February 16, 2015. Jose moved to approve these minutes as presented; seconded by Robbie Motion carried unanimously. B. Motion to approve the financial reports as presented by Basil Coule, Pension Financial Liaison: Robbie moved to approve the financial reports 1-4 as presented on the agenda; seconded by Jose Motion carried unanimously. 1. Check register from January 2015 through March 2015. 2. Statements from Salem Trust that reflect activity for the General Pension Fund for the months January 2015 through March 2015 for the following accounts: Receipt & Disbursement, Dana Investments & Equity. 3. Approve the list of members terminated and/or contributions refunded or rolled over from 1/1/2015 to 3/31/2015: David Carter (City), Donna Bennett (OUA), Richard Meyers (OUA). 4. New members enrolled from 1/1/2015 to 3/31/2015: Willie Hall (City), Nicole Burney (OUA), Josue Castillo (OUA). C. Unfinished Business or New items. ■ Robbie moved to accept the recommendation based upon the advice of Investment Consultant Jack Evatt of the Bogdahn Group, the City General/OUA Pension Board expects to receive a 7% rate of investment return for the next year, the next several years and the long term thereafter• seconded by Jamie Motion carried unanimously. ■ Jamie moved to approve the Financial Statements from DiBartolomeo McBee Hartley & Barnes P.A., for September 30, 2014, as presented by Jay McBee; seconded by Jose Motion carried unanimously. ■ Jose moved to approve the Actuarial Valuation Report from Gabriel Roeder Smith & Company, as of October 1, 2014, as presented by Theora P. Braccialarghe• seconded by Jamie Motion carried unanimously. ■ Jamie moved to approve the Agreement for Pension Fund Administrator between the Board of Trustees of the City and OUA: seconded by Robbie. Motion carried unanimously_. ■ Robbie moved to direct Attorney Christiansen to draft the Second Addendum between Salem Trust for Custodial Sevices, agreeing to the terms to raise the minimum fee to $5 500 00 with the following conditions: a credit of $250.00 per quarter, for the next two quarters effective March 31 2015 (no increase in fees until October 1, 2015), with the first year fee to be $4 750,00 effective November 1 2015 and then $5 500 00 for the second year, seconded by Jamie. Motion carried unanimously. ■ Adjourn meeting. Robbie moved to adiourn the meeting at 7:04; seconded by Jamie Motion carried unanimously.