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Pension_11-03-2021Min BOARD OF TRUSTEES City of Longwood Police Officers and Firefighters Pension and Trust Fund Longwood City Commission Chambers 175 West Warren Avenue Longwood, Florida REGULAR MEETING MINUTES November 3,2021 6:00 P.M. Present: Robert Redditt,Chair Kevin Little, Secretary Chris Eichler, Member Pedro Herrera, Board Attorney(Via Zoom) Michelle Longo, City Clerk Absent: Bruce Kubec,Vice-Chair Cole Copertino, Member Judith Rosado, Financial Services Director 1. Call to Order. Chair Redditt called the meeting to order at 6:01 p.m. 2. Pledge of Allegiance. 3. Approval of Minutes: August 4,2021, Regular Meeting Member Eichler moved to approve the minutes as presented. Seconded by Secretary Little and carried by a unanimous voice vote with Vice-Chair Kubec and Member Copertino absent. 4. Review of Agenda Packet Material. A. Quarterly Performance Review (Report ending June 30, 2021). Mr. Langley went over the quarterly report and noted the ending balance was just over$27,000,000.00. He said he had the September numbers and the beginning balance was just over$27,000,000.00, the Contributions were$578,000.00,the Losses were$194,000.00 the Distributions were $67,500.00, the Fees and Expenses were$12,000.00, and the Ending Balance was $27,372,734.89. Discussion ensued on the September numbers and the financial state of the Fund at the end of the fiscal year. B. Plan Account Statements (June 2021,July 2021,and August 2021). The Beginning Balance for June 2021 was$27,029,499.62, the Pension 11-03-2021/1 Contributions were$4,196.74,the Earnings were$57,389.61,the Distributions were $22,522.60,the Fees and Expenses were$225.00, and the Ending Balance was$27,068,338.37. The Beginning Balance for July 2021 was $27,068,338.37, the Contributions were $67,636.09,the Earnings were $95,877.17,the Distributions were $22,522.60, the Fees and Expenses were$9,133.54, and the Ending Balance was $27,200,195.49. The Beginning Balance for August 2021 was$27,200,195.49,the Contributions were $242,480.31, the Earnings were $313,127.14,the Distributions were $22,522.60,the Fees and Expenses were $0.00, and the Ending Balance was$27,733,280.34. Secretary Little moved to accept the Plan Account Statements as presented. Seconded by Member Eichler and carried by a unanimous voice vote with Vice-Chair Kubec and Member Copertino absent. Mr. Langley mentioned there were a couple of Plan Members who mentioned they have to come into the Finance department to get their annual benefit statements and did not like that. He said he wanted to bring it up to the Board to see if they had any desire to look at a different option for disseminating that information. He also asked if anyone has heard anything within the Fire or Police departments. Member Eichler noted he has not heard anything and did confirm that is how the statements are picked up. Discussion ensued on how various Plans disseminate their statements and if there was a reason to change the current process. It was decided to leave the current process in place and if any further concerns are brought up bring them back to the Board for further discussion. C. Expense Report. Member Eichler moved to approve the Expense Report as presented. Seconded by Secretary Little and carried by a unanimous voice vote with Vice-Chair Kubec and Member Copertino absent. D. Approve proposed 2022 Pension Board Meeting Dates. • February 2, 2022 • May 4, 2022 • August 3, 2022 • November 2, 2022 Pension 11-03-2021/2 Member Eichler moved to approve the meeting dates as presented. Seconded by Secretary Little and carried by a unanimous voice vote with Vice-Chair Kubec and Member Copertino absent. 5. Other Business. A. Discussion regarding salary and overtime compensation for pension purposes. Ms. Longo said this item is related to the 1%contribution and the 300 hour overtime cap related to the pensionable wages and will read a statement from Magdala Ridore, HR & Risk Management Director who was unable to attend the meeting. Unfortunately, due to prior commitments, I am unable to attend tonight's Pension Board Meeting. Since I am unable to attend, I want to send this statement through Michelle Longo to address the board's concerns regarding exclusion of the excess 300 hours of OT from the pensionable salary for Police& Fire. The board appeared to be concerned that since the City had not implemented a cap to exclude OT hours in excess of 300, the cap would be applied retroactively at the time of retirement. Clarification to your concerns are provided below: • Our payroll system, Edmunds, is not currently designed to apply a cap once 300 hours of OT has been reached. Currently, all excess hours are calculated towards the pensionable salary for Police & Fire. A report of pensionable wages is sent to FLOC without any reference to OT hours. • The City has not and does not plan to retroactively apply a cap to your reported pension calculations at the time of retirement. The implementation of a cap will be applied going forward. • HR is currently working with our payroll software programmer to configure the system and add a feature that will enable us to add the 300 hour cap to the OT. Once this is implemented, excess hours over 300 will no longer be included in the calculation of pensionable wages. • Edmunds is optimistic they are able to add an enhancement feature to address the excess of the 300 hour cap while also considering the built-in overtime for Fire. This new feature should be available by the end of the year. We will work with Edmunds to begin implementation of the cap as soon as the feature is available. Again, I apologize for not being able to make the meeting tonight, but hope to meet with you in the future. Thank you for brining your concerns to us regarding the 300 excess hours and I will keep you updated on progress of the new feature as we get closer to implementation. Pension 11-03-2021/3 Please do not hesitate to call or email me. I am happy to meet with you personally to further discuss any questions or concerns you may have regarding this topic. Mr. Herrera said he understood the issue to be that the pension contributions were still being made on all overtime whether it was in excess of the 300 hours or not. What he is hearing from the HR Director is they are not implementing the 300-hour cap on overtime therefore it is all being included as pensionable. He would like to confirm with the city this is what they are doing and change the software system to implement the cap accordingly. He was not able-to follow entirely,the statement read. Ms. Longo said it is her understanding the system has no way to apply a cap on overtime and once 300 hours is reached,the 1% is still being deducted. They are working to put the cap in place going forward. She said HR is working with Edmunds, on the payroll system, and they hope to have this in place by the end of the year. Mr. Herrera asked since pension contributions are currently being paid on all overtime, is that all being reported as pensionable salary. Ms. Longo replied yes, that was her understanding. Member Eichler said he did speak with the HR Director and they are keeping it as is and not retroactively changing anything for those who have already retired. Starting January 1 they will be implementing the cap on the overtime hours and once the 300 hours of overtime is reached the 1%will not be taken out. Mr. Herrera asked how the payroll data is given to the actuary for valuations and benefit calculations for retirement. Will there be a mechanism the finance/payroll department will be able to send only up to the 300 hours as pensionable salary or is this something that still needs to be figured out? Ms. Longo noted she is not involved in this process, but from what she understands once they can implement the cap they will be able to clearly define what would be a pensionable salary. Mr. Herrera said he wanted to be clear and maybe suggest that while finance/payroll are working out this process for the overtime, the 300 hours cap, they also clearly define the data for the actuary. Member Eichler also noted that Ms. Ridore said the 300 overtime hours do not include the Garcia hours or FLSA which is the built-in overtime Pension 11-03-2021/4 hours. Discussion ensued on 300 hours and the purpose of the cap. Mr. Herrera stated this is State Statute. It was noted that in the past people were taking every ounce of overtime they could get in their last few years and running up their benefit payment. Mr. Herrera noted there was a practice which was called "pension spiking". In the last few years, someone would work a lot of overtime to drive up their average final compensation so that their pension was a higher amount. In an effort to try and curb this practice, the state law was amended several years ago to restrict pensionable salary in such a way so that anything over 300 hours of overtime would no longer be pensionable. Similarly, anything that is accrued for sick and vacation leave time, at a certain time, based on each location, would not be included as pensionable either. The basis for this is the change in the statute. Discussion ensued on accrued unused sick and vacation time and being included as pensionable salary, along with the change in the law which took place July 1, 2012. Secretary Little brought up the off-duty detail pay they have in the Police Department and how they are currently contributing the 1%. He said per their union contract this pay is not considered pensionable income and should not contribute the 1%. He said they still do not have an answer from HR on this and it needs to be addressed. He asked Mr. Herrea if there is anything in state statute that addresses off-duty detail pay like a cap on overtime. Mr. Herrea replied no. He said there is no restriction from a Florida Statutory perspective. He said it may be restricted from the local ordinance since it sounds like it is restricted by the collective bargaining agreement. He said the ordinance should mirror the agreement. Ms. Longo asked to clarify what needs to be addressed by HR. She asked would this be any payments that are received for an off-duty detail are not included in the pensionable salary and the 1%should not be deducted per the Police Collective Bargaining Agreement. Secretary Little confirmed that was correct. He also confirmed this pay is included in their regular paycheck, there is not a separate check. He explained the third party who is hiring the officer pays the city, and the city pays the officer. He also confirmed that 1%is currently being deducted for off-duty detail pay. B. Approve Amended Budget for all administrative expenses for fiscal year Pension 11-03-2021/5 2021-2022. Ms. Longo noted what was amended was the removal of the accidental death insurance that was included and it should not have been. This was discussed and the previous meeting. Mr. Langley mentioned looking at actuary costs since Mr. Carr did just make an increase in his fees. He suggested increasing this now so that the Board would not have to come back and make amendments at a later date. Ms. Longo noted this can be changed now since they are already approving an amendment. Discussion ensued on the increase in the actuary expense from $13,000.00 to$16,000.00. Secretary Little moved to approve the amended administrative expenses for the fiscal year 2021-2022 with the actuary expenses being changed from $13,000.00 to$16,000.00. Seconded by Member Eichler and carried by a unanimous voice vote with Vice- Chair Kubec and Member Copertino absent. C. Approve the actual administrative expenses for fiscal year 2020-2021. Secretary Little moved to approve the actual administrative expenses for fiscal year 2020-2021 as presented. Seconded by Member Eichler and carried by a unanimous voice vote with Vice- Chair Kubec and Member Copertino absent. Discussion ensued on adding a miscellaneous line to the 2021-2022 budget going forward to account for any unforeseen expenses that may come up. Mr.Langley said some Boards do this. Secretary Little moved to amend the budget for all administrative expenses for the fiscal year 2021-2022 to add a line for miscellaneous expenses under Other Plan Expenses for a total of $7,590 with a new overall total of$78,749.00. Seconded by Member Eichler and carried by a unanimous voice vote with Vice- Chair Kubec and Member Copertino absent. D. Discussion on setting a date for Special Meeting regarding the Joshua lamaio Disability Case. Mr. Herrera gave an update on the case and noted all the new documents have been received and the Board will need to set a date for the special meeting. Pension 11-03-2021/6 Discussion ensued on potential dates to hold the meeting. There were some issues with schedules in the next couple of months. It was decided to look at January after the holidays for a potential date to be sure they have a full board. 7. Member Comments. Member Eichler said the Fire Union Members brought to him a request to have an actuarial study for a COLA, different years and amounts. This would be a term COLA for after you retire. Different percent of COLA for different time lengths that it would last(1, 1%Z, 2, 2%2 percent and 5, 10, 15 years). Discussion ensued on the actuary expense, who would pay the cost, the Board or the Union. Also discussed was getting a quote for the report, sharing the results with the membership and the city, different benefits for Police and Fire, benefit options, having a Drop program, and having the two Unions meet to discuss. Further discussion was held to wait closer to when the Unions would be negotiating their contracts to have the report done in order to have more current costs. Ms. Longo addressed a previous question brought up at the last meeting about Anthony Morse's payment. She said he is getting one payment and he chose to have it split and go into two different accounts. He is not getting double paid. 8. Public Participation. None. 6. Board Attorney Report. Mr. Herrera reminded the Board of the state ethics requirements. He said this is the beginning of the gift-giving season and serving on this Board members are technically considered public officials and subject to the state ethics laws. If you do receive a gift, something of value that is being given to you to influence your decisions on the Board you should reject or return to sender. If you have given something of value at$25 or less,you can accept that and there is no reporting requirement. If you receive something of value of between $25 to $100 you can accept it and there is a reporting requirement on behalf of the gift giver,the person or company should file a form with the Ethics Commission advising of the gift, its value, and who it was given too. Anything over$100 you should reject, return to sender, or donate it, and he recommends that you file a report with the state advising who gave the gift, its value, and the disposition of the gift. Mr. Herrera said what they have historically done is give holiday gifts to their clients valued at less than $25. Last year with COVID his law firm made charitable donations on behalf of their clients and this year they will be doing the same thing. This year the charitable donation will be made to a cancer research fund, it was established with the University of Miami, the Sylvester Cancer Pension 11-03-2021/7 Research Center. He said it was established by his partner Mr. Bob Suggerman in memorial of his late wife who passed away three years ago from cancer. He set up this charitable fund in her name. If there were no objections from the Board he would make the donation in the Boards name. There were no objections from the Board. Mr. Herrera went over upcoming educational opportunities. 9. Adjournment. Chair Redditt adjourned the meeting at 7:33 p.m. Minutes approved by the Board of Trustees: 02-0 -2022 Robert Redditt,C .it A ES . Michelle Lon o, Recording Secretary Pension 11-03-2021/8