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HomeMy WebLinkAbout2016 05 10 Consent 300 Unapproved Minutes from February 9, 2016 Regular MeetingBOARD OF TRUSTEES AGENDA ITEM ITEM 300 May 10, 2016 Regular Meeting REQUEST: Informational Consent X Public Hearings Regular The Office Of The City Clerk Is Requesting The Board Of Trustees To Review And Approve The February 4, 2016 Board Of Trustees Regular Meeting Minutes ATTACHMENT(S): Unapproved Copy Of The February 4, 2016 Board Of Trustees Regular Meeting Minutes (7 Pages) CITY OF WINTER SPRINGS, FLORIDA MINUTES BOARD OF TRUSTEES REGULAR MEETING FEBRUARY 9, 2016 CALL TO ORDER The Regular Meeting of Wednesday, February 9, 2016 of the Board of Trustees was called to Order by Vice - Chairperson Frank Mundo at 5:41 p.m. in the Commission Chambers of the Municipal Building (City Hall, 1126 East State Road 434, Winter Springs, Florida 32708). Roll Call: Vice - Chairperson Frank Mundo, present Board Member Geoff Kendrick, present Board Member Robin Paris, present Board Member David Withee, present Assistant to the City Clerk Antonia Della Donna, present No changes to the Agenda were mentioned. REGULAR AGENDA - PART I REGULAR 500. Office Of The City Clerk The Office Of The City Clerk Is Requesting The Board Of Trustees Hold An Election For The Position Of Chairperson For Calendar Year 2016. "I WOULD LIKE TO NOMINATE VICE - CHAIRPERSON MUNDO." MOTION BY BOARD MEMBER KENDRICK. SECONDED BY BOARD MEMBER PARIS. DISCUSSION. VOTE: BOARD MEMBER PARIS: AYE VICE - CHAIRPERSON MUNDO: AYE BOARD MEMBER WITHEE: AYE BOARD MEMBER KENDRICK: AYE MOTION CARRIED. CITY OF WINTER SPRINGS, FLORIDA MINUTES BOARD OF TRUSTEES REGULAR MEETING - FEBRUARY 9, 2016 PAGE 2 OF 7 REGULAR 501. Office Of The City Clerk The Office Of The City Clerk Is Requesting The Board Of Trustees Hold An Election For The Position Of Vice - Chairperson For Calendar Year 2016. FOR THE POSITION OF VICE - CHAIRPERSON, "I WOULD NOMINATE ROBIN [PARIS] FOR THAT SINCE I BELIEVE SHE IS THE NEXT SENIOR MEMBER OF THE BOARD." MOTION BY CHAIRPERSON MUNDO. SECONDED BY BOARD MEMBER KENDRICK. DISCUSSION. VOTE: BOARD MEMBER KENDRICK: AYE BOARD MEMBER PARIS: AYE BOARD MEMBER WITHEE: AYE CHAIRPERSON MUNDO: AYE MOTION CARRIED. The Pledge of Allegiance was held. AWARDS AND PRESENTATIONS AWARDS AND PRESENTATIONS 100. Not Used INFORMATIONAL AGENDA INFORMATIONAL 200. Not Used PUBLIC INPUT Chairperson Mundo opened "Public Input ". No one spoke. Chairperson Mundo closed "Public Input ". CITY OF WINTER SPRINGS, FLORIDA MINUTES BOARD OF TRUSTEES REGULAR MEETING - FEBRUARY 9, 2016 PAGE 3 OF 7 CONSENT AGENDA CONSENT 300. Office Of The City Clerk The Office Of The City Clerk Is Requesting The Board Of Trustees Review And Approve The Thursday, November 19, 2015 Board Of Trustees Regular Meeting Minutes. RELATED TO THE NOVEMBER 19, 2015 BOARD OF TRUSTEES REGULAR+ MEETING MINUTES, MOTION TO APPROVE. MOTION BY VICE- CHAIRPERSON PARIS. SECONDED BY BOARD MEMBER KENDRICK. DISCUSSION. VOTE: BOARD MEMBER KENDRICK: AYE VICE - CHAIRPERSON PARIS: AYE BOARD MEMBER WITHEE: AYE CHAIRPERSON MUNDO: AYE MOTION CARRIED. PUBLIC HEARINGS AGENDA PUBLIC HEARINGS 400. Not Used REGULAR AGENDA — PART II REGULAR 502. Finance And Administration Services Department The Finance And Administrative Services Department Is Requesting The Board Of Trustees Receive From Gabriel, Roeder, Smith & Company The 2014 Actuarial Valuation Report And To Enter Into Discussion. Mr. Larry Wilson, A.S.A., Senior Consultant and Actuary, Gabriel, Roeder & Smith Company (GRS), One East Broward Boulevard, Suite 505, Fort Lauderdale, Florida: gave an overview of the information within the 2014 Actuarial Valuation Report and the 2014 Chapter 112.664 Compliance Report. Continuing, Mr. Wilson addressed contributions, investment returns, and demographic gains. Chairperson Mundo noted, "The additional contribution the City made was for which fiscal year ?" Mr. Wilson stated, "It was for [fiscal year] [20'] 13/[20'] 14." As to the amount, Mr. Wilson remarked, "About fifty -two thousand [dollars] ($52,000.00)." CITY OF WINTER SPRINGS, FLORIDA MINUTES BOARD OF TRUSTEES REGULAR MEETING - FEBRUARY 9, 2016 PAGE 4 OF 7 Mr. Wilson spoke of assumptions and disability contributions further and said, "The Government Accounting Standards Board (GASB) [No.] 68 Accounting Statement changes the way pension is expensed and what's reported." Additional discussion ensued on the No. 68 Accounting Statement. Referencing a certification letter in the 2014 Actuarial Valuation Report, Mr. Wilson stated, "We're in compliance with F.S. (Florida Statutes) — Chapter 112 which is the requirement for this program, and we're certifying to that." Mr. Wilson further commented on the process of the 2014 Actuarial Valuation Report's approval at the State level and noted, "We've never had one not be accepted, so we — believe this is in compliance with everything they do." Further remarks. "I WILL MAKE A RESOLUTION THAT WE ACCEPT — ACTUARIAL VALUATION AS OF FISCAL YEAR ENDING 10/01/2014." MOTION BY CHAIRPERSON MUNDO. SECONDED BY VICE - CHAIRPERSON PARIS. DISCUSSION. VOTE: BOARD MEMBER WITHEE: AYE BOARD MEMBER KENDRICK: AYE CHAIRPERSON MUNDO: AYE VICE - CHAIRPERSON PARIS: AYE MOTION CARRIED. Mr. Wilson addressed new Florida Statutes requirements including the Government Accounting Standards Board Nos. 67 and 68 Accounting Statements, a run -out date, and calculations for required contributions based on varied mandated mortality assumptions, funding assumptions, and return investment assumptions. Much discussion ensued on the 2014 Chapter 112.664 Compliance Report, various financial figures, funding assumptions, fiduciary net positions, investment returns, impaired mortality rates, total and net pension liabilities, market value assets, mortality assumptions, investment return assumptions, current assumptions and investments in the portfolio, lowering the investment return assumption and its associated benefits. Mr. Dave West, Senior Consultant, The Bogdahn Group, 4901 Vineland Road, Suite 600, Orlando, Florida: commented on the new Florida Statutes requirements and various financial figures based on six percent (6 %), eight (8 %), and ten (10 %) investment return assumptions. Additional remarks followed on the current investment return assumption, the required contributions from the City based on the investment return, the effects of altering the investment return assumption, numerous studies and analyses that Mr. Wilson could perform, various situations and the effects burden of funding on the City's behalf, and the impact of the City's portfolio. CITY OF WINTER SPRINGS, FLORIDA MINUTES BOARD OF TRUSTEES REGULAR MEETING — FEBRUARY 9, 2016 PAGE 5 OF 7 Mr. Shawn Boyle, Director, Finance and Administrative Services Department discussed the City's budget, budget amendments, and the budget calendar. Continuing, Mr. Boyle commented on how altering the investment return assumption can have adverse effects on the viability of the Pension and the City's Budget and stated, "We discussed a little bit about early on about how the City is aggressively attacking the outstanding liability from the past — so, we're doing things proactively anyway to address whether the pension is funded or not." Comments followed. Further, Mr. Boyle indicated, "In the last three (3) years, we put almost a million dollars ($1,000,000.00) in excess of what we were supposed to or required because we do care." Additional comments followed as Mr. Wilson addressed the 2014 Chapter 112.664 Compliance Report. Tape 1 /Side B REGULAR 503. Finance And Administration Services Department The Finance And Administrative Services Department Is Requesting The Board Of Trustees Receive From The Bogdahn Group The First Quarter Investment Return Report And To Enter Into Discussion. Mr. West began the discussion on this Agenda Item and referenced an Asset Allocation chart, and mentioned a typo to which he stated, "If you'll please scratch out the May 7th, 2012 header typo on there, that actually should be as of January 31St, 2016; that was the evaluation date." Mr. West then covered the benefits of the diversity of the portfolio, various asset allocations and funds. Additional comments continued. Next, Mr. West remarked about the management of portfolios and stated, "We are at forty -seven percent (47 %) versus our policy target of fifty percent (50 %), so I'd like to recommend — in conclusion of this meeting, I'd like to recommend that we rebalance - our domestic equity to the policy target." Chairperson Mundo stated, "Which we are not required to do unless it goes under forty -five (45), right ?" Mr. West confirmed, "Correct, which effectively would move approximately one million dollars ($1,000,000.00) into the Vanguard Total Stock Index Fund, and I suggest we use our current R &D (Research and Development) cash balance — and the remainder we need to get Galliard [Intermediate Bond Fund] to raise additional money from the court bond fund to fund that. And, as you're aware, that fund has monthly liquidity, so we effectively can't get funds from the Galliard [Intermediate] Bond Fund until about the 7h or 81h day into the month. So, we can fund most of it from current cash and then we need to put the sell order in so that we can get the cash later in the next month, so that we can get our R &D (Research and Development) balances back up." i CITY OF WINTER SPRINGS, FLORIDA MINUTES BOARD OF TRUSTEES REGULAR MEETING - FEBRUARY 9, 2016 PAGE 6 OF 7 Further discussion followed on various financial figures followed. Mr. West summed up his recommendation and stated, "Rephrase the recommendation to rebalance - our domestic equity to policy targets using cash as the primary source and the Galliard Global Bond Fund as the secondary source of funds." Board Member Geoff Kendrick „: commented on equity exposure and noted, "I say we do it." Chairperson Mundo discussed the long term approach of the portfolio and mentioned, "I think there's some merit to Dave's [West] recommendation."° Additional discussion followed on sources of funding and alternative investments. - "I WILL MAKE A RESOLUTION THAT WE ACCEPT [DAVE WEST'S] RECOMMENDATION AND WE BRING OUR EQUITY ALLOCATION BACK TO THE PLAN TARGET." MOTION BY CHAIRPERSON MUNDO. SECONDED BY BOARD MEMBER KENDRICK. DISCUSSION. VOTE: CHAIRPERSON MUNDO: AYE VICE - CHAIRPERSON PARIS: AYE BOARD MEMBER KENDRICK: AYE BOARD MEMBER WITHEE: AYE MOTION CARRIED. Mr. West indicated, "We will get - we will send out the appropriate direction letters to get that done in the course of normal business here." Next, Mr. West spoke of the poor state of the economy at the point in time the Quarterly Investment Report was created, geopolitical positioning overseas, second and third derivative effects of declining commodity prices, and liquidity. Mr. West noted, "So, despite the volatility in the quarter, we ended up with some good numbers to a least start the fiscal year." Mr. West addressed interest rates, the structure of the bond portfolio, and net investments. Additionally, Mr. West referenced Pages 18 and 19 of the Quarterly Investment Return Report, reviewed the total fund net returns, and pointed out the projected numbers for one (1), three (3) and five (5) years. Mr. West added, "So, our strategic move - to maximize the allocation into real estate — several years ago when interest rates were so incredibly low has really paid off, and then some, and has certainly provided a lot of stability." Further remarks. Discussion on cash flow followed. In addition, Page 42 of the Quarterly Investment Report was referenced and Mr. West mentioned, "In the interest of maintaining an absolutely transparent program, where anyone at anytime can find out any of the fees that are being paid here and also in the interest of - paying reasonable fees here, we've got Page 42 in the book - this appears in every quarterly book." Brief comments. CITY OF WINTER SPRINGS, FLORIDA MINUTES BOARD OF TRUSTEES REGULAR MEETING — FEBRUARY 9, 2016 PAGE 7 OF 7 i".yVr�9k'A�".y 600. REPORTS No Reports were given. PUBLIC INPUT Chairperson Mundo opened "Public Input" No one spoke. Chairperson Mundo closed "Public Input". ADJOURNMENT Chairperson Mundo adjourned the Regular Meeting at 7:03 p.m. RESPECTFULLY SUBMITTED: ANTONIA DELLA DONNA ASSISTANT TO THE CITY CLERK NOTE: These Minutes were Approved at the 1 2016 Board of Trustees Regular Meeting.