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FMTF12-19-06 BOARD OF T][2USTEES ' Florida Municipal Trust Fund :Retirement Plan and Trust for the Firefighters and Police Officers Longwood City Commission Chambers 175 West Warren Avenue Longwood, :Florida REGULAR MEETING. MINUTES December 19, 2006 7:00 p.m. Present: James Seibert, Vice Chair Robert Redditt, Secretary ' Jeremiah Brown, Member Chris Kempf, Member Carol Rogers, Director of Financial Services Linda F. Goff, Recording Secretary Absent: Jack Smythers, Chair 1. Call to Order. Vice Chair Seibert called the meeting to order at 7:04 p.m. 2. ~ Approval of Minutes -September 19; 2006 Regular Meeting. Secretary Redditt moved to approve the minutes pis submitted. Seconded by Vice Chair Seibert and carried by a unanimous voice vote with Chair Smythers absent. 3. Review of Agenda Packet Material. A. Plan Account Statements. The 'Plan Account Statements for August, September; and October 2006 were provided for review. The. Plan Aceol~nt Statement for the period of 10/1/2005 through 9/30/2006 was provided for :review. i B. Investment Performance Review. The Investment Performance Review ending September 30, 2006 was provided for review. 4. Other Business. Member Brown said at the last~meetng P?1s. Rogers had stated they fell under the City's purchasing policy when using the pension funds. F[e said he spoke with Patricia Shoemaker and she said that was incorrect, that.the Board elects to spend Pension 12-.15~-06/1 the funds as long as it falls within the statutes. Ms. Rogers .said she had. stated they fall under the same type of policies where the Board would have.to approve purchases before they were expended. Member Kempf inquired if they didn't need approval for the actuary statement. Ms. Rogers explained a single board member did not have authority to expend money on behalf of the board. Member Kempf inquired if $822,000 of the $4,000,000 in the fund was the lump sum amount. Ms. Rogers advised that was the current value.. Member Kempf inquired if the remainder was considered the fixed amount for retirement. Ms. Rogers stated it was the actuarial calculated funding status at this time. Member Kempf inquired to the number of members in the Florida League of Cities plan. Ms. Rogers said she thought approximately 48 plan members; 19 of which were , ~ Firefighters. Member Kempf said he spoke to Mr. Shamoun regarding the funds. above the base amount. He stated Mr. Shamoun told him this was going into the lump sum amount. Ms. Rogers advised that was the supplemental benefit. Member.Kempf stated that Mr. Shamoun said this money was for .the Board to use. however- they .wanted, that it did not have to go into the lump sum. 1VIs. Rogers said the plan that was adopted placed the funds into the benefit. Member Brown inquired if the members wanted to change the benefit could they vote to make. this change. Ms. Rogers said she spoke to Mr. Shamoun today and. that was an issue because the supplemental benefit was given to the participants and all participants would need. to be polled. She advised this plan was an IRS and State gratified plan and would have to go through a process to change anythirig. . Member Kempf inquired if the "means of fixed_rnonthly compensation paid a ~ Pension 12-19-06/2 Firefighter and where, as. in the.case of a Volunteer Firefighter,. compensation was ~ derived from actual service rendered, saaary shall be the total cash compensation received yearly" was in effect now under the Adoption Agreement. Ms. Rogers said it was in accordance with Chapters 175 and 185 of the Florida Statutes. She stated the Police was cash :remuneration and for Firefighters it was monthly salary. She advised they were getting contributed based upon including overtime, but not including special detail work. Vice Chair Seibert inquired about the health insurance benefits at retirement. Ms. Rogers explained that under State Statutes any retiree. can. continue. to participate in the same plan. Member Brown stated the employee pays .100% of the insurance at that point. 13e said other agencies were implementing fixed dollar amounts to help supplement or offset the cost upon retirement. . Member Kempf said the funds going into the lump sum could be revised. Member Brown said they held a conversation with Mr. Shamoun about this and he stated they did not have just-two accounts and. he had a cost certification for the City. He said they asked Mr. Shamoun about the lump sum or obligation account ~ and the amount in the account. Mr. Shanroun told them he would need to see art actuarial review and he would look into the matter. At this time they have not heard back from him. He said it sounded as if there were three different accounts, the retirement account, .obligation fund, and surplus account. He handed out a sheet from the Florida Municipal Pensio~i Trust Fund showing fund balances orr the Excise Tax information. Ms. Rogers explained the calculations depend on years of service. She said they set the calculation date at the first of the ;year because it continuously changes. She stated the Defined Retirement Accumulation Group.Obligation Fund was designed to give something equal to what a DROP would generate. Member Brown said they did not know what the surplus contribution account was. Ms. Rogers said. it was at the lump sum account. Nlember~ Brown said the contribution the City had to put l:orward cannot come from the surplus contribution account if it is the obligation fund. He inquired what the surplus contribution. account-versus the obligation fund was. Ms. Rogers said it was her understanding;'the surplus contribution was anything over and above what the rate was in 96. E~rrything over that goes into the surplus Pension 12-19-06/3 reserve and anything less than or equal to that amount.is used to .fund the City's contribution. ~ - Member Brown said $302,000 was the State base so anything over that would go into the surplus contribution account. •Ms. Rogers responded in the affirmative.. Member Brown inquired if all of that. was supposed to be .going. into the obligation fund. Ms. Rogers responded in~the affirmative, unless there was a~ shortfall:.. Member Brown said when he spoke to Ms. Shoemaker she stated anything over the $302,000 could not be available to be used if there was a shortfall. Ms. Rogers said she thought there was a provision.for this;. but she would need to talk to the actuary that performed the calculations. She advised the State approved the report. Member Brown said if there have. been no benefits purchased since 2001,, then how would the .amount be reduced from $1.4 million to $822',000. Ms. Rogers aaid she would need to review the .document he w.as referring to • before she could give'an'answer. Member Kempf asked what. would happen if they wanted to vote on an ordinance tonight. , ' The Recording Secretary advised they did not have an ordinance before them to vote :on. Member Kempf inquired what if they wanted to present an ordinance to the Commission.. Member Brown said changes would have to go through the union unless the union ' and/or the City waived their right to negotiate. Ms. Rogers advised they would also have to do an.impact study. :.Member Brown inquired when the next Summary Plan would be coming ouf. Ms. Rogers said she asked Mr. Shamoun today and he~assured her that was being done along with the actuarial study which was underway. She advised this needed to be turned into the State by March. Pension 12-'19-06/4 Member Brown inquired if there was an,y word from Mr. Shamoun regarding the u- statements. Ms. Rogers said he told her they were all being done at the same time.. Member Kempf said he wanted to discuss the funds that the Board could use. He said they could put a part of it in the lump sum. Member Brown said they first needed to find out where the actual funds were. He stated Mr. Shamoun made it sound as if there were three separate accounts. He said they already had the cost study done: for the COLA. He suggested freezing the lump sum for now and use the funds to offset the cost. Member Kempf said the lump sum was a great benefit, but it would be better to use the funds in a way they desire. Member Brown said it was his understanding, after going to the conference; the Board would draft language for an ordin~~nce. He said most boards have an attorney that drafts the language for them. He stated he would like to .hire a . pension attorney to come to the pension meetings. Ms. Rogers. advised this generally goes tl.lrough the Pension Plan Administrator. She said they have an attorney on staff. Member Brown said the Board could hire; an independent attorney if they were not comfortable with the Florida League of Cities attorney. He said Ms. Shoemaker suggested they look at their vvebsite where they have a list of attorneys that do this type of work. He stated. he would like to set up three or four attorneys to come to the next meeting anti talk to them. He said Lake Mary has about the same employee size as Longwood, but their Police and Fire pension funds were split. He stated their Police fund currently has $6.3 million dollars a:nd the Fire fund has $3.4 million dollars. Ms. Rogers said the number of participants would have a bearing and make a big difference in the fund. Discussion was held regarding other local municipalities and their Pension funds. Member Kempf reiterated taking some oil the funds and redirect them towards a COLA. Member Brown said the plan members•would like a broad cost study done. He said they would like to see a 20 and out provision and look at changing the multiplier to look at 20 at 60%, 20 at 70%~, 20 at 75% and 20 at 80%. He stated they would like to see the same for a COLA looking at 3% per year, 3% after a 7 year deferment, and 5% every 3 years. He; suggested looking at a broad spectrum Pension 12-19••06/5 to have more of an idea of what would. be affordable. Member Kempf said the cheapest COLA would be the 3% after being deferred at 5 years. Member Brown said he understood Ms. Shoemaker to say waiving the right to negotiate was for complete representation. He stated he would call her to clarify this. He said the pension has never been negotiated through the union. Ms. Rogers said it was an Article that states it will be equal. Robert. Ladoczky stated there wasn't an Article in the Police Department's contract and has never been negotiated. Member Brown said most of the Police Department was on this Pension Plan rather than the State Plan. Member Kempf said he understood that if an ordinance went through the Board and was presented to the Commission. If the Commission denied it, the matter could then be union negotiated. . Ms. Rogers said she had a letter from the Teamsters when this plan was adopted that they approved it and thought it was an excellent plan. She said it was her understanding that the union contracts have a statement that the City will provide , ~ a pension plan equal to or better than FRS. She stated she attended the Pension meetings only as a financial advisory capacity. Member Brown said they have asked the Florida League of Cities and they were not getting any clarification.. . Member Kempf said it would be a good idea to~get someone who can clarify issues. Member Brown reiterated they needed to hire a Pension Board Attorney. He said they could clarify verbiage and they could look at the performance of the fund. He said there have been huge fluctuations in earnings. Member Kempf said this was why he wanted to redirect funds. Ms. Rogers advised they were talking about two separate issues. Member Brown said the way.the lump sum was worded; unless you retire at 55, or 10 to 25 years of service, you don't receive the benefit. He said if you left, early you don't receive it. He inquired if you were vested,, but you. leave after 10 years of service, at what age you would receive the benefit. Pension 12-19-06/6 Ms. Rogers said she believed~'it was age 50. She snid•thei•e was. a conflict and she had. a draft ordinance being reviewed by the labor attorney to present to equalize this. Member Brown said another inconsistency was being vested at- 5 years of service, but not being eligible to receive disability benefits until 10 years of service. Ms. Rogers said that was one of the issues being reviewed. Member Brown said there were several attorneys at the conference, but he would like to interview Lee Dehner. He inquired how they would go about getting in contact with the attorneys.. Ms. Rogers advised the Board could vote, to provide a list to the Recording .Secretary to send out letters. Member Brown moved to provide the Recording Secretary with a list of attorneys to contact and invite thf;m to the next meeting. Seconded by Member Kempf. Member Brown said a concern some of the Police Department.Plan Members l,ad was that these meetings needed to be more frequent. He said they have been asking questions for approximately a year and were, not getting responses in a timely fashion. Member Kempf inquired if there was another conference coming up. Member Brown said there were two a year and the next one would be in Tallahassee. Motion carried by a unanimous v~~ice vote with Chair Smythers absent. 5. Member Comments. Member Brown said the -State Statutes requires there must be a minimum of four meetings. He said they could meet more often if the Board voted on this. Ms. Rogers asked if the meeting schedulE; and times were set by the Commission. The Recording Secretary explained the Commission adopted an Ordinance that stated the Board and Committee meetings would be .held at 7:00 p.m. in the Commission Chambers. She said the Board could schedule a Special Meeting. Discussion was held regarding holding more frequent meetings. may, Viee Chair Seibert said it was obvious thf,re were questions not being answered so Pension 12=19••06/7 they should probably meet morefrequently until:-these questions were answered. Ms. Rogers said they could petition the Commission to meet more frequently. ' Member Brown moved to hold a Special Meeting on January 16, 2007 at 7:00 p.m. to bring forth a list of attorneys to interview. Seconded by Member Kempf and carried by a unanimous voice vote with Chair Smythers absent. - - - - ~ ° 6. Public-Participation. Robert Ladoczkv, Teamsters Loca1385, said he was. also a full time employee with the Longwood Police Department. He said he was under the Florida Retirement System, but. was here on behalf of the. members under the. Florida League of Cities. He said he may have missed it, but they were still looking for the definition of the Surplus Contribution Account. He inquired where the money came from for that account. and why the Board didn't know it existed. if they were in control of those funds. ~ - Member Brown said until he attended the conference he had a lot less knowledge about this which was why they were asking these questions. Mr. Ladoczkv asked if there were two accounts for the pension. or ,three accounts. . Ms. Rogers advised there was one fund. Mr. Ladoczkv .inquired why there was an account that has been identified. to Mr. Brown by 1VIr. Shamoun and the Board did not know about this account.. Ms. Rogers advised there was an accounting of the allocation of the pooled funds broken down by years. Mr. Ladoczkv inquired how long this has been in existence. Ms. Rogers said. it has been existent since 1.999. She advised the information has been available in the actuarial report and the' State, report. Vice. Chair Seibert said there had:never been an issue brought up about this matter. Ms. Rogers said when Mr. Shamoun. attended. the, Board meeting there were lengthy discussions. about the Defined.Refirement Accumulation Group Obligation Fund. Mr. Ladoczkv inquired if that was where the lump sum came from. - Pension 12-19-06/8 Ms. Rogers responded in the affirmative:. Mr. Ladoczkv inquired if the retirement benefit was the defined benefit each. member received upon retirement was v~hat their monthly pension would be. Ms. Rogers responded in the affirmative. Mr. Ladoczkv asked what the Surplus Contribution account was. Ms. Rogers explained that was.where the supplemental benefit came from. Mr. Ladoczkv inquired who had control of that account. Ms. Rogers explained it was not a separate account. It was a fund balance that was part of the entire. pool: 'She said this Pension Plan was aggregated with anybody else that participates with the Municipal Pension Trust Fw1d. She stated there was an accounting for every year fir the surplus money available, plus it earns money while sitting there and has ;gown; as of today, to $822,.1.97.08. Mr. Ladoczkv said he was in the FRS so he was trying to understand this. He said the way it was presented to one of his members was that there was a third account and to the best of Mr. Brown's knowledge it .did not exist. He said. he heard easier during the meeting that the State incentive and the service bonus that the Police: Department members get was not included in their final compensation. Ms. Rogers said they were reading the df;finition out of Chapters 175 and 185 of the State Statutes. Member Brown stated the Police. Department's. was total :pay and overtime. Mr. Ladoczkv said he would like to receive a copy of the letters Ms. Rogers referred to from the Teamsters. He said h.e would assume these were regarding the proposed changes to the fund that were made shortly after the Teamsters took over. He said at no time had the Teamsters or the PBA negotiated the retirement benefits: He declared there was no inforniation in the .contract or Article regarding pension or retirement. He said he would ~.iot say-the union would be willing to waive the rights to negotiate retirement until the members give that- okay. He inquired if there was an answer regarding. the. buy back of military time. Ms. Rogers said she interpreted the buy back for FRS to be specific to designated times. Mr. Ladoczkv said this was irrelevant to ]FRS, he was inquiring to the Florida League of Cities plan regarding military l~uy back. ~ Ms. Rogers advised they have not requested any kind of calculations on it and it Pension 12-19~~06/9 was not a part of the plan. She said one of the- participants had indicated he was interested in buying back time. Mr. Ladoczkv said the member had not received a response as to whether he can or not buy back his military time. Ms. Rogers said she would research the matter,. but. it was her. understanding it was not a part of this plan. Mr. Ladoczkv said the City has had Florida League of Cities Pension since 1.996 and to date he did not know of anybody who has received an annual statement that tells them the value of their~pension. He stated FRS members receive one annually. He said no one he was aware of .had received an annual statement and -had. no idea what their pension was worth: He said they have their check stubs that show how much they have contributed, but this did' not give a value of their pension based on the City's contribution. • Ms. Rogers advised neither the members' contribution nor the. City's contribution was a factor in what their Pension was worth. She said it was a Defined Benefit Plan. " NIr. Ladoczkv said he was aware. of that; .buts the members would like. to see an annual statement. Ms. Rogers said Mr. Shamoun has assured her there would be individual statements provided as a part of this actuarial study being done. Mr. Ladoczkv inquired to the City's contribution in October 2006 being significantly more than the normal contribution over the history of the plan. He said it looks like it was compensation for the questions that were being asked. Ms. Rogers said there was an accounting done at the end of the year. of what the total salaries were and computed what the required contribution was and that was . the catch up contribution. She stated members. can call her with questions. She explained the City's required contribution increased. this year and each year would escalate. She said this was. in the actuarial report. She explained when payroll is done, the estimated rate is set and at the end of the year they go back and calculate to see if they made the required contribution. She said it is sometimes done. quarterly, but this year it was done at the end of the year. Forrest Price,. said he works for the Police Department. He stated he would like this explained so he can understand. The contribution they are talking about has been between $2.,000 and $5.,000 since 1999 and now it was $62,000 because the amount the City contributes. has changed. Pension 12-19-06/10 Ms. Rogers said she did not know where the $62,000 amount they were saying came from. Member Brown said it came from the FL~rida League of Cities website showing employee, state, and city contributions. Ms: Rogers said they entered that information. Mr. Price inquired. if this had. the employee contribution, the state contribution, and the city contribution all listed. Ms. Rogers responded in the affirmative,. Mr. Price. said he was trying to understar.{d and Ms. Rogers ..had stated the actuary showed the City had to contribute more money to the fund. Ms. Rogers said every year the City's contribution would increase. She explained as more members were participating and the longer they have been here had a bearing on the funding status. She added that the performance of the fund was also a factor. Member Brown said the amount the City must contribute would fluctuate. Mr. Price inquired if the Florida League Hof Cities sent out the individual annual statements. Ms. Rogers advised the Florida League of Cities was suppose to send these out. She stated she has never seen one since she has been with the City. She said they have assured her they would provide the statement. She advised she could do a calculation for individuals. Mr. Price said he would like an answer at the next meeting to when he would receive a statement. Ryan Bruce said he works for the Police Department and he was also at the last meeting. He stated he did not think anyo~ie wanted to make any accusations, but there were a lot of questions being asked with no one being given the responsibility to explain the plan and ho~v it works. He said by people saying they are not sure or don't know to questions, they have been given the impression that something. is not right. He said he would like whoever is responsible for the City part of the plan to be at the meetings to answer the questions. He stated Paul Shainoun needed to be held to a higher sl:andard also. He said they were concerned with what was going on and those who are going to be retiring want to know what their benefits are going to be and where. they will stand as they get older. He stated if a COLA was a better way to go, then this needed to be presented to the members to vote upon. 1=1e declared something needed to change Pension 12-19••06/11 and ,it appears that Longwood is lagging behind in their options for benefits. 7. Adjournment. Viee Chair Seibert adjourned the meeting at 8:40 p.m. G~ Jack Smyth rs, Chair ATTEST: Linda F. Goff, Recordi Secretary . Pension 12-19-06/12