ROCKLEDGE FIRE EMPLOYEES RETIREMENT BOARD MEETING MINUTES

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1 ROCKLEDGE FIRE EMPLOYEES RETIREMENT BOARD MEETING MINUTES Thursday, February 16, CALL TO ORDER The Rockledge Fire Employees Retirement Board held its quarterly meeting on Thursday, February 16, 2017 in the Council Chamber of Rockledge City Hall, 1600 Huntington Lane, Rockledge, Florida. MEMBERS PRESENT: MEMBERS ABSENT: STAFF/CONSULTANTS: Chairman Jeptha Sunday, Fifth Member Mike McCaleb, Fire Representative Ed Syfrett, Fire Representative Tim Matson, Resident Member Ed Syfrett, Fire Representative (excused work commitments) Kenneth Harrison, Board Attorney - Sugarman & Susskind Chad Little, Actuary - Freiman Little Actuaries* Dan Johnson, Investment Consultant AndCo Consulting Karan Rounsavall, Plan Administrator Matthew Trine, Finance Director Chairman Sunday called the meeting to order at 9:08 a.m. A quorum was in attendance. Note: There was a vacancy for a resident member. *Due to illness, Mr. Little participated in the meeting remotely via Skype. 2. APPROVAL OF MINUTES A. Joint Quarterly Meeting of November 17, 2016 Member Matson moved to approve minutes for the November 17, 2016 joint quarterly meeting as submitted. Member McCaleb seconded the motion and it carried unanimously. 3. OLD BUSINESS A. Discussion regarding feasibility of combining the Rockledge Police and Fire Retirement Plans At the November 17, 2016 quarterly meeting, City Council Member Frank Forester suggested combining the boards as a cost-saving measure. Attorney Harrison advised that while the boards were allowed to combine from a legal perspective, there would not be any significant cost savings due to the fact that retirement benefits differed between the two plans. Thus the work to manage the plans remained basically the same. Further, combining the plans would be subject to collective bargaining with all parties. This was an informational item. The Retirement Board took no action. B. Fee increase for AndCo Consulting for investment advisory services This item was deferred at the November 17, 2016 meeting at the request of City Manager James McKnight. Dan Johnson with AndCo Consulting summarized the firm s request for a

2 QUARTERLY MEETING MINUTES Page 2 of 5 fee increase from $17,500 to $19,500 annually. This was the first fee increase requested by AndCo (formerly The Bogdahn Group) since being hired by the Fire Retirement Plan in January AndCo continued to provide institutional consulting services on a hard dollar, full retainer, flat-fee basis for all of its clients. As assets in the Retirement Plan grew, the fee, expressed as a percentage, decreased. The proposed fee was guaranteed for three years. Member Matson moved to approve the fee increase for AndCo Consulting to $19,500 (annually) which would be guaranteed for three years with an effective date of July 1, Member McCaleb seconded the motion and it carried on an all yes vote. Due to the recent name change from The Bogdahn Group to AndCo Consulting, Attorney Harrison recommended that a new agreement be prepared rather than a simple fee addendum. There was no objection to the attorney s recommendation. C. Fee increase for Plan Administrator Karan Rounsavall This item was likewise deferred at the November 17, 2016 quarterly meeting at the request of City Manager James McKnight. Mrs. Rounsavall s monthly fee was currently $900 and had been that amount since October She requested an increase to $1,200 monthly which was less than what she received from other similar retirement plans but recognized the economies inherent with serving all three Rockledge retirement plans. Recent legislative changes increased her responsibilities (e.g. annual administrative expense budget and annual detailed accounting of administrative expenses), as well as a growing number of retirees. Member McCaleb moved to approve the fee increase for Plan Administrator Karan Rounsavall as requested to $1,200 per month, guaranteed for three years, with an effective date of March 1, Member Matson seconded the motion and it carried unanimously. (Note: Mrs. Rounsavall was paid in arrears.) Attorney Harrison would prepare the necessary revision to Mrs. Rounsavall s professional services agreement with the Rockledge Fire Retirement Plan. REPORTS & COMMUNICATIONS A. Report: Actuarial Consultant (Chad Little, Freiman Little Actuaries, LLC) Note: This report was considered out of order due to Mr. Little s illness and remote attendance. 1. Presentation of annual valuation for fiscal year ending September 30, 2016 Board members were in receipt of the Actuarial Valuation as of October 1, 2016 which determined minimum funding requirements for the Rockledge Fire Retirement Plan for the current fiscal year (i.e. 2016/2017) and projected funding requirements for the ensuing fiscal year (i.e. 2017/2018). In preparing the funding requirements, it was assumed that all premium tax revenues from the State of Florida would be used for minimum funding requirements (i.e. offset city contribution). The minimum funding requirement for the current fiscal year (which included contributions from both the City and the State) was $572,077. Expressed as a percentage of pensionable payroll, the total minimum funding requirement was percent. For the first time, the City planned to prefund its contributions (as opposed to contributions submitted throughout the year coincident with biweekly payroll) resulting in interest savings of over $11,000. The minimum funding requirement for Fiscal Year 2017/2018 was $623,628 which included contributions from both the City and State.

3 QUARTERLY MEETING MINUTES Page 3 of 5 The investment return on the market value of assets was 9.14 percent; the return on the actuarial/smoothed value of assets was 6.98 percent which was less than the 7.9 percent assumed investment rate of return. There were unrecognized investment losses yet to be absorbed. Favorable actuarial experience included payroll growth which was less than expected. The mortality table was revised from the prior year to the mortality assumption used for special risk employees by the Florida Retirement System (legislative requirement). The unfunded accrued liability (UAL) was $3,646,497. The Plan s funded status was percent, representing a slight decrease over the previous year s funded percentage of The valuation report also included required disclosures under Florida Statutes (1). Reporting disclosures required by Governmental Accounting Standards Board (GASB) 67 and 68 were provided as a supplemental report. Member McCaleb moved to approve the annual actuarial valuation as of October 1, 2016 as presented. Member Matson seconded the motion and it carried on an all yes vote. 2. Declare expected annual rate of investment return for assets of Rockledge Fire Employees Retirement Plan for short term and long term thereafter in accordance with Section Florida Statutes The Board sought input from its actuary and investment professional as to an expected investment rate of return going forward. Both were comfortable with the 7.9 percent assumed investment rate of return. Member McCaleb moved to approve a 7.9 percent expected rate of return on investments going forward (based on advice of the investment consultant and actuary). Member Matson seconded the motion and it carried unanimously. 4. NEW BUSINESS A. Acknowledge receipt of detailed accounting report for Fiscal Year 2015/2016 Board members were in receipt of the detailed accounting report for Fiscal Year 2015/2016 prepared by the plan administrator. It reflected all expenses that were actually paid on behalf of the plan during the fiscal year. Total plan expenses were $97, which was $3,109 more than the adopted budget for the fiscal year of $94,245. The slight overage was due to the timing of payments by Salem Trust which paid the recurring October 1 st payments to the administrator ($900), investment consultant ($4,375), and actuary ($1,500) on September 30, Member Matson moved to accept the detailed accounting report for Fiscal Year 2015/2016 as presented. Member McCaleb seconded the motion and it carried on an all yes vote. A copy of the report would be posted on the City s web site and bulletin boards at each fire station. B. Ratify travel expense reports/reimbursements Trustees Ed Syfrett, Tim Matson, and Mike McCaleb attended the Florida Public Pension Trustees Association (FPPTA) Winter Trustees School in Orlando (February 2017). Travel expenses were also submitted for Trustee Syfrett s attendance at the FPPTA Fall Trustees School in Bonita Springs (September 2016). Each trustee was enrolled in the Certified Public Pension Trustee (CPPT) Program. Plan Administrator Rounsavall advised that the expense reports included school registration fees, CPPT enrollment fees, hotel accommodations, mileage and meals.

4 QUARTERLY MEETING MINUTES Page 4 of 5 Member McCaleb moved to approve travel expense reports as set forth below: Trustee Tim Matson FPPTA Winter Trustees School - $ Trustee Mike McCaleb FPPTA Winter Trustees School - $1, Trustee Ed Syfrett FPPTA Winter Trustees School - $1, Trustee Ed Syfrett FPPTA Fall Trustees School - $1, Member Matson seconded the motion and it carried on an all yes vote. 5. REPORTS & COMMUNICATIONS B. Report: Performance Monitor & Investment Advisory Services (Dan Johnson, AndCo Consulting) 1. Performance Report for quarter ended December 31, 2016 Mr. Johnson announced that The Bogdahn Group recently changed its name to AndCo Consulting. The new name reflected the firm s ongoing commitment to its clients and its philosophy that the client came first in all its services. AndCo remained a truly independent institutional consulting firm. Mr. Johnson went on to deliver the Investment Performance Report for the first quarter of Fiscal Year 2016/2017. Asset class returns were mixed for the quarter. Domestic equity indices posted positive performance while international equity and fixed income benchmarks were negative for the period. Small capitalization outperformed other equity indices with a quarterly return in excess of eight percent. The quarter was dominated by the presidential election and the anticipated interest rate hike by the Federal Reserve in December. In fact, interest rates rose dramatically during the quarter. Total market value as of December 31, 2016 was $9,980,753 up from $9,790,730 for the previous quarter ended September 30, On a percentage basis, the composite portfolio was up 1.32 percent for the quarter (gross) which ranked in the 22 nd percentile of public plans. For the trailing 12 months, the fund was up 8.24 percent (ranking in the 27 th percentile of public plans). Over the past three years, the fund was up 5.44 percent, ranking in the top 14 th percentile. Mr. Johnson noted that the fund s value as of the previous day was $10,624,300. While this amount included some investment earnings, there had been several large contributions from the city since the beginning of the year as part of its new prefunding initiative. Accordingly, he recommended that the board rebalance its portfolio at this time by transferring $250,000 from the cash account to fixed income (specifically Garcia Hamilton & Associates domestic fixed income). Member McCaleb moved to authorize rebalancing the portfolio pursuant to policy by transferring $250,000 from cash to domestic fixed income (Garcia Hamilton) as recommended by the consultant. Member Matson seconded the motion and it carried unanimously. Quarterly performance results (i.e. quarter ending December 31, 2016) for the various investment styles/managers represented in the portfolio were as follows: Vanguard Total Stock Market Index Fund (domestic equity) positive return of 4.12% (41)* American Funds - Europacific Growth (international) negative return of -4.15% (91)* Garcia Hamilton & Associates (fixed income) negative return of -1.30% (15)*

5 QUARTERLY MEETING MINUTES Page 5 of 5 PIMCO Diversified Income Fund (global fixed income) negative return of -0.93% (18)* Blackrock Multi-Asset Income Fund (global tactical asset) positive return of 0.55% (33)* ASB Allegiance Real Estate Fund positive return of 0.78% (99)* (*Percentile rankings) The Fire Retirement Board acknowledged receipt of the investment performance report as presented. C. Report: Board Attorney (Kenneth Harrison, Sugarman & Susskind) 1. Status report on restatement of retirement plan document Board members were in receipt of a preliminary draft restatement for the Rockledge General Employees Retirement Plan. There would be similar changes to the Police and Fire retirement plan documents. The purpose of the restatement was to eliminate redundancies, clarify administrative procedures, etc. There were no changes to benefits. The more involved persons that reviewed and commented on this document, the better the end result. The attorney hoped to have a more formal document available for review at the May meeting. *** Mr. Harrison announced that he would not be at the next quarterly meeting. Dustin Watkins, his associate, would be in attendance in his stead. D. Report: Plan Administrator (Karan Rounsavall) 1. Joint quarterly meeting scheduled for May 18, 2017 at 10:00 a.m. The next quarterly meeting would be a joint meeting of all three retirement boards. 6. PUBLIC COMMENT - None 7. ADJOURN The meeting adjourned at 10:46 a.m. Submitted by: Karan Rounsavall Plan Administrator Approved by: Jeptha Sunday, Chairman

ROCKLEDGE FIRE EMPLOYEES RETIREMENT BOARD MEETING MINUTES

ROCKLEDGE FIRE EMPLOYEES RETIREMENT BOARD MEETING MINUTES Thursday, August 17, 2017 CALL TO ORDER The Rockledge Fire Employees Retirement Board held its quarterly meeting on Thursday, August 17, 2017 in