FMTF07-21-09 BOARD OF TRUSTEES
Florida Municipal Trust Fund Reairement Plan and Trust
for the Firefighters and Police Offncers
Longwood City Commission Chambers
175 West Warren.. Avenue
Longwood, Fl~~rida •
REGI<1LAR 1V1E:ETIlvG
MINLTTE~' - -
July 21, 2009 7.:00 p.m.
Present: Marc McLarnon, Chair
Chris Kempf, Secretary ~ - ~ •
Robert Redditt, Member - - •
II. Lee Dehner, Board Attornf~y
• Katrina Powell, City Administrator ' -
-Jon=C. Willia>~as, Financial Services Director
Linda F. Goff, Recording Secr•et:~ry ~ -
Absent: Matthew Jammes, Member - •
]Peter Katauskas, Member
1: ~ Call fo ®rder:~ Chair McLarnon ealled~tli~~ meeting to order at 7:.00 ~p.~in.
. -
2:' Pledge of Allegiaatce. Chair McLarnon leil~the Pledge of Allegiance.,
3. • - • Election of Vice Chair. ,
• .
.
- ' ' Chair NlcLarnon•moved'to postx~or'.~ie the'Electioii.ofVke Chair to the
• ~ following'meetrig. Seconded by M:ember~Redditt and-carred'by'a
• ~ - unanimous roll call'vote with Members Jammes and'Katauskas absent.
4. Approval of Minutes June 9, 200!) Regular Meeting.
Chair McLarno~i moved to apprcwE: the Minutes of June '9, 2009' as•
presented. Seconded by Member F:edditt and carried by a unanimous roll
• call vote with Members aamrries ar:~.d-Katauskas°ab'sent.
5. Review of Agenda Packet Material.
• A. Plan Account Statements."~ ' : ~r•-=~=` ~ ~ • ~ " - •
The Plan~AceountStatement for•1VIay 2009-was•reviewed: '
B. Approve payment of Invoices.
•
• ~ • Chair NlcLarnon moved to :approve payment of the invoices from
• • Christiaiisen`& Dehner; l?.~?,: ~dated•Mayt3 L, 2009 and June ~30,
. , 2009: Seconded by: Secre;ta~•y Kempf -and carried by a unanimous
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roll call vote with Members Jammes and Katauskas absent.
6. Other Business..
A. Review ®perating Rules and Procedures.
Mr. Definer said he -reviewed the recommendations to the Operating Rules
and Procedures made by the City Clerk, Ms. Sarah Mirus, in her
Memorandum dated, July 15, 2809, and he had no problems with these
revisions.
Chair McLarnon moved to approve, the Operating Rules and
Procedures as presented with the amendments.. Seconded by
Member Redditt and carried by a unanimous .roll .call vote with
Members Jammes and Katauskas absent:.
Mr. Definer said he would incorporate. these amendments to the Operating
Rules and Procedures and send them to the Recording_Secretary to be
distributed. ~ ,
7. Board Attorney Report. - ~ _ . ,
Mr. Definer said Mr. Scott Christiansen went into great detail at the last meeting
regarding the legislative update.and Senate Bill 538 amending Chapters 175 and
185 which went into effect July 1St. He reported they can now go to 25% in ~
Foreign,Securites and this should be,amended;into the Ordinance.; Secondly, they
have the ability to go to four (4) year Trustee terms rather than two (2) year terms
and he advised this was permissive, not mandatory,.. He recommended the Board. ,
give some thought to this.. The argument in favor of the four (4) year term was
- ,that t~takes a couple of years: to •leanl the:ropes of the.Plan Administration. He
stated;for, over,„thirty (30) years it has been two (2) .year terms and the reason was
so, that:if you had. a Trustee who was not being diligent, you did not have to try
and remove that Trustee.
Mr. Definer said that Mr. Christiansen discussed the expanded buy-back
opportunities and the. pending, Ordinance,for buy-back of service: .
The Recording- Secretary advised that~the_Ordinance was adopted at the City
Commission Meeting last evening.
Mr. Definer said this Ordinance provided.. for buy.;back for a Florida agency with
comparable service. The Statute now allows buy-back to be expanded to cover
comparable,sworn,Police:.Officer~~or,Firefighter,serviee, within the United States.
He stated recruitment was the main reason to offer buy-back.
Mr. Definer reported if the Pension Plan was invested in any non-domestic
compariies'that;do certain business in Iranor:Sudan that is primarily military
related,_or~energy.related, these need to_be,identified-by the managers or ~
; consultant. These need to be divested~between January lst and September 10th of
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next year. He said Mr. Paul Shamoun was aware of this and the Florida League of
Cities would be taking care of this matter. He stated they are now mandating the
sale of these stocks, irrespective of the financial benefit to the Plans. He reported
the other item of significance is the ability to transfer money from the Pension
Plan to an insurance company directly. If this is implemented, it will enable
retirees that do not obtain or maintain their health insurance through the City to
take advantage of the $3,000 Federal Income Tax Disclosure for payment of
premiums. _ .
Chair 1V[cLarnon inquired if this would leave to be adopted by Ordinance.
Mr. Definer advised it would only need to be adopted by a policy of the Board. He
said he originally sent documents necessary for the implementation:
Ms. Powell asked Mr. Definer if he would :reseed this documentation. She
introduced Mr. Jon Williams, Director of Financial Services, and said he would
be attending the Pension Board meeting.
Mr. Definer reminded the Trustees that they needed to have their Financial
Disclosure Forms filed.
. _
1V1[ember Comments.
Secretary Kempf said he would like to touch on what Mr. Shamoun stated at the
last meeting regarding the difference bei:wf;en the total compensation earned and
base salary. He stated this was a huge difference and he had been unaware of this
for some time. He said that overall, the final compensation goes on an average of
your last three (3) years. The Firefighters are only getting their base salary and
Police gets overall compensation. He inquired what the reason for this was.
Mr. Definer said this goes back many years, and the most likely reason was the
difference in the lobbying efforts at the time. The. minimum standard for elements
of salary that needs to be included for Firefighters to meet the Chapter 175
minimum is base pay.
Secretary Kempf said he has seen other :Fire Departments receiving total
compensation. He stated that Mr. Shamoun. said there was a possibility that this
could be changed.:E-Ie said that Mr. Shamoun also stated there were funds over
and above the DRAGO Fund that could be contributed to this without making a
big impact on the City. .
Mr. Definer explained the difference emanates.from the statutory minimums. The
Police statutory minimum. is total compe:ns:~tion and requires inclusion of
overtime up to at least 300 hours. He ad~ris~~d that most Police plans include total
W-2 compensation. He further said moss: Firefighter plans are now total
compensation to have equivalency with the Police Officers.
Secretary Kempf said th.e Firefighters want to be in ba ante with the Police
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Officers in the Plan and reiterated this was a huge difference. He explained that
there was three (3%) percent put in annually and when they serve twenty-five (25) ~
years, they receive seventy-five (75%) percent of the median average of the three
(3) year's earnings. He reiterated that the. Firefighters were at base pay. He
advised that the Firefighters were paying one (1%) percent of this and the one
(1%) percent was from total compensation. He said this was going to be discussed
later during Public Participation by a Plan Member. He requested starting the
process by doing a cost study.
Chair McLarnon inquired who would pay for the cost study.
Secretary Kempf asked the Board Attorney if whenever a cost study was done, it
came from the .fund: : ' ~ - ~ ,
Mr. Definer advised this would be Pension expense.
Chair McLarnon said he wanted to be cautious on this, only because if the fund
was paid by both the Police and Fire, and this was only a benefit to the
Firefighters.
Secretary Kempf said the Police were already receiving this benefit.
Member Redd-itt inquired if the Board Attorney had any idea how much a cost
study like this `would cost.
.Mr. Definer said he would think it would be less than. $500.
Ms: Powell inquired if this Agreement from 2004 that was signed by the previous
Administration was when this went into effect or was it with the original
Agreement in 1997.
Member Kempf said he thought this was from 199b when this was enacted.
Mr. Definer said it was clear that was the provision and the Plan has two different
definitions for Fire and Police.
Chair McLarnon said the Board Attorney had mentioned lobbying efforts. He
inquired if there were different lobhying efforts for the Firefighters and.Police.
Mr. Definer advised there were two different Unions for Fire and Police. Fire is
primarily the International Association of Firefighters (IAFF) and Police is the
Fraternal Order of Police Association (FOPA). The Police lobby for the Chapter
185 minimum requirements and the Firefighter IAFF lobby for the Chapter 175
minimum requirements.
Ms. Powell inquired if the municipalities had the option in changing this to make
it more comparable.
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Mr. Definer responded in the affirmative. 13e said to meet the minimum goes back
to 1980's and it could have been amended to improve the provisions of the
minimum standards.
Ms. Powell said it was obvious that this Buard was not aw~~re of this and it was
never brought forth to them to recognize this fact. She stated this was
unacceptable and should have been addressed long ago.
Secretary Kempf said there was a chart. on the Florida_League of Cities website
showing all of the Fire Departments that hive total compensation earned. He
stated there were.only two (2) or three (3) 'that don't have total compensation.
Chair McLarnon said he had no objection :in looking into this matter. He stated he
needs to spend more time learning and understanding how~we got to where we
are. - - ~ , . .
Secretary Kempf moved to do a co;~t study regarding the Firefighters
going. to total .compensation. Sec;onded by Chair McLarnon and, carried. by
a unanimous roll call vote with Pvlembers Jammes and. Katauskas absent.
9. Public .Participation:.. ~ ~ . ~ ~ ~ ~ .
Tim. BXfield, Firefighter Plan Member,. sai~3 he has some information that may
~ cleanup what Secretary Kempf was talking; about. He distributed information
regarding the Firefighters compensation. being on base salary. He stated. the
Firefighters will make additional salary based on overtime, holiday pay,
longevity, and incentives. He reviewed the information he distributed. He pointed
out that Mr. Shamoun stated at the June 9, 2009 Pension Meeting that the Police
Officers were based on total cash remureration paid for services rendered and the
Firefighters were based on fixed monthly remuneration paid,:not including
overtime. In 1996, when he first started, the~City negotiated with the union for a
retirement plan that. would save them monc;y. He said that every Union Member at
that time was in the Florida Retirement System (FRS) which is total money
earned based oir a three (3 percent mu}ti.plier. He stated i.t was written in the
Union Contract at the time this change was made that it would be comparable. He
advised it was -based on a two percent multiplier at that time .arid it was only based
on the fixed monthly compensation. He said this was definitely not comparable to
the FRS. He affirmed that they are paying :into the fund .for holiday pay, overtime;
and longevity. He showed documentation that the one (1%) percent taken from
their pay was of their total amount, so they are contributing on the total
compensation..He affirned that the incentive pay for paramedic was the only
amount not included. He stated they are contributing, but not receiving the
benefit. He said the Union President told him they would be interested in helping
to pay some on the cost study..
Chair McLarnon clarified that the City was; contributing. two (2%) percent on the
base pay,, but the Plan Member was contributing on the full compensation, except
for the Paramedic pay.
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Mr. Byfield said he did not know what the City was actually contributing. He
stated that has to be something the Finance Director would have to look into.
Ms. Powell inquired if he was saying the City was deducting on the full. amount of
their pay, but not sending the full amount. . .
Mr. B.
fold responded in the negative. He said he was not saying that the City
. was not sending it. He was justcstating.that the Plan Member was already paying
on the total compensation so they should earn the benefit when they retire. He
stated.if the City was paying on the total compensation, then it should just be a
matter of changing the wording.
Ms. Powell said that Mr. Williams can meet~with Mr: B_yfield or Ms. Cindy
Carbonell to get this information out to the Plan Members once he has completed
the Budget.
Mr. Dehner advised that under the Plan, Firefighters should be paying one (1%)
percent. of their salary. Salary, as defined in the .Plan, does not include overtime
pay. He said they need to find out what is being done. He stated the benefit is
based on average final compensation, which is based on salary, and this is' the
same definition for benefit purposes as it is for the percentage of Member
contribution. He said as far as the City's funding requirement is concerned.,
unlike the Member contribution, which is a fixed percentage, the City's si
contribution amount is variable based upon what is required to be funded by
actuarial soundness in accordance to Chapter 112 of the Florida Statutes. He
stated theyneed to find out what the City is putting. in. He advised it could be that
the City was actually reporting higher salary figures for the actuarial valuation
purpose than what is provided in the Plan. He said where that occurs; it was
simply a matter of amending the Plan to conform to what was actually being
done. He stated they would,take:that into consideration when determining what
the cost would be.
ChairMcLarnon said before moving forward with the cost study, the Board needs
to learn more with regards to what. amount the City has been contributing. He
stated he would like to postpone moving forward with the cost study until the
Board determines exactly where they are based on this information presented. He
said the Finance Director will look into this and get with the membership after he
has finished with the Budget.
It was the consensus to postpone the cost study until it has been determined what
the City was actually contributing.
Mr. Dehner advised the place to start would be for the Finance Director to check
on what amounts have been reported at Fiscal Year End to the actuary for use in
the valuation~report. He said if the total compensation has been. reported, .and this ~
was used for the valuation report; it was then. simply a matter of amending the
Plan to conform to what the practice has been. He stated if that were the case it
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would then result in a letter of no impact.
Cindy Carbonell, Union President for the Fire Department, said she was not a
Member of this Plan. She stated she wanted to clear up two (2) things since they
were on record. She stated the offer Mr. B;yfield was making, if they find that total
remuneration was going to be a burden on the City; then the Union would like to
offer that the membership be charged aii increased percentage; perhaps matching,
so that it eases that burden. They want this Plan to be well funded and sound. She
said they are willing to take on the additio~.ial responsibility, if it is shared
between the City and the Membership. Shf; stated comparability was brought up
and they have a valid issue. She said the:re was one other point to be made. As an
FRS Member, she receives a statement every quarter predicting exactly what she
can expect for current and the future. She .Mated the Members of this Plan do not
receive a statement and have no idea what was in the Fund. She said she would
like that they start receiving their statements.
Ms. Powell said at the last meeting she asked Mr. Shamoun about the statements
and he said that he would send out anotl.ier copy. She stated this clearly didn't
happen and she would send the Florida :League of Cities an electronic mail
tomorrow regarding this matter. She said all the City receives is a financial
statement on the overall Plan.
Mr. Definer said he was not aware of any flan where Members do not receive a
projected statement at least once a year.
Robert Ladowski said he represents T eam~;ters Loca1385 and Members at the
Police Department. He also is in FRS and •wanted to congratulate the Board on the
recent buy-back ordinance. He stated to reiterate on what Ms. Carbonell was
stating regarding individual statements, this issue came up approximately two (2)
years ago and statements were actually :~en.t. However, they all went to the
Finance Director at the time and the individual Plan Members had to go see her to
receive their statement. He affirmed than. was the first and only statement the Plan
Members received. He reiterated that FF:S sends out statements on a quarterly
basis and the Members don't contribute to FRS. He said he would also like to see
these Plan Members receive individual statements.
10. Adjournment. Chair McLarnon adjourned the meet' gat 8.:10 p.m.
ar
A'T'TES'T':
Linda 1F. Goff, Cl!'TC, lie rding Secretary
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