MINUTES OF THE MEETING OF THE BOARD OF TRUSTEES OF THE TAMPA FIRE & POLICE PENSION FUND 3001 North Boulevard Tampa, FL 33603 (813) 274-8550 July 22, 2015 1:30 p.m. The Board of Trustees of the City Pension Fund for Firefighters and Police Officers in the City of Tampa met in the Pension Office Conference Room on Wednesday, July 22, 2015 at 1:30 p.m. for a regular meeting with the following members present: Mark Bogush, Chairman Richard Griner, Vice Chairman Ocea Lattimore, Secretary Doug Burkett John Cannon Sharon Fox P. J. Gray Gregory Reed Dennis Rogero Also present were Mr. Jay Bowen, Investment Manager, Mr. Mark Lenker, External CPA, Mr. Robert Klausner, General Counsel, and active and retired plan members. Public Comments Pursuant to Florida Statutes, Section 286.0114(4) members of the public may comment on items requiring Board action, other than ministerial matters. Speakers are limited to two minutes each, and not more than 20 minutes will be set aside for comments, without further Board approval. Speakers shall fill out a card identifying the speaker and the agenda item(s) they wish to address. Speakers may also submit a card supporting or objecting to an item without speaking. Rules of conduct are available from the Plan Administrator. The statements made by speakers under Public Comments are solely the opinion of each speaker and do not necessarily reflect the views of the Board of Trustees, its staff, or its profossionals. 1. Approved the minutes of the June 24,2015 regular board meeting. It was moved by Mr. Gray, seconded by Mr. Cannon and by unanimous vote to approve the minutes of the June 24, 2015 regular board meeting. 2. Approved the minutes of the July 8, 2015 committee #3 meeting. Ms. Corry advised that the corrections made to the committee 3 minutes are as follows: 1) in the paragraph beginning "Regarding policy 425", the word "meeting" was added after "Board" and 2) in the paragraph beginning "The committee discussed", the phrase "the committee authorized" was changed to "the committee recommended". It was moved by Mr. Gray, seconded by Mr. Cannon and by unanimous vote to approve the minutes of the July 8, 2015 committee 3 meeting as amended. Consent Agenda Items on the consent agenda shall be acted upon in one motion. If an item requires additional discussion, that item shall be removed from the consent agenda for discussion. [Items 3-5] It was moved by Mr. Gray, seconded by Mr. Griner and by unanimous vote to approve consent agenda items 3 through 5. 3. Ratified pension benefits.
July 22,2015 Page2 4. Approved billing for services rendered by Klausner, Kaufman, Jensen & Levinson during June 2015: a. General Counsel - $10,542.45 b. Parker- $570.00 c. Pena- $1,290.00 d. Ribaya - $6,960.00 5. Noted that Retirement & Financial Plarming Educational Workshops are to be conducted by Jeff Helms as follows. Recalled that these workshops are free, open to the public, and can apply towards continuing professional education (CPE). Monday Tuesday 08/03/2015 08/04/2015 10:00 a.m. and 2:00p.m. 10:00 a.m. and 2:00p.m. DROPtions: Valuable Strategies to Maximize your DROP Plan Benefits 6. Investment Management Presentation by Jay Bowen of Bowen, Hanes & Co. Inc. Noted receipt of the following: a. Investment management report for the month ended 06/30/2015. Market value of investments as of 06/30/2015 was $1,879,135,516.79. Investment return has been +3.3% on the total portfolio so far this fiscal year. b. Investment Summary dated 07/02/2015 written by Jay Bowen. c. Bond portfolio information and recommendation to hold. d. Proxies voted during quarter ended 06/30/2015. e. Addendum distributed at meeting. Market value of investments as of07/21/2015 was $1,887,716,034. Investment return has been +3.7% on the total portfolio so far this fiscal year. Mr. Bowen re-visited the issue regarding the CIO magazine article, noting that the same reporter has returned to the pension office requesting public records. Regarding the market, Mr. Bowen advised that there are three major trends coming to a close: multiple expansion, profit margin expansion, and the strong U.S. dollar. Mr. Bowen advised that the string of double-digit earning years is probably ending, at least for the short term. It was noted that international issues with China and Greece, as well as commodity deflation moving through the market is concerning. He explained that there are many changes being made to the portfolio this year as opposed to previous years. Mr. Bowen advised that some of this movement is due to the consolidation of common stock holdings. No action required. Item 6 was received for filing. 7. Financial Reporting Presentation. Noted receipt of Accountant's Compilation Report prepared by Mark Lenker, CPA of Nobles, Decker, Lenker & Cardoso for: a. Month ended 03/31/2015- market value of assets as of03/31!2015 was $1,943,117,522. b. Month ended 04/30/2015- market value of assets as of04/30/2015 was $1,930,453,270. Mr. Lenker distributed and reviewed the financial highlights. He noted that the fund is over 99% invested. He reviewed the operating results, noting that the net investment income was volatile, contributions varied in the third month due to the expected quarterly match from the City, and benefits paid were fairly consistent. Mr. Lenker advised that he has reconciled the investment adviser's report to the custodian's report. He explained that advisory fees have gone up based on the fact that the size of the portfolio has increased. Mr. Lenker advised that the fund has a strong nucleus which will allow for long-term planning. He noted that the May and June reports are forthcoming. No action required. Item 7 was received for filing.
July 22, 2015 Page 3 Medical Disability 8. Initial hearing for LOD disability applicant M. Pease, TFR. Noted receipt of disability application, qualifying letter, notices of injury, pre-employment physical, job description, disability process timeline, summary review outline by independent medical case manager, sample letter to Medical Board, Medical Board reports, and Medical Director's summary. Mr. Pease was sworn in and thanked the Board and staff for their assistance in the disability application process. There were no questions from the Board. It was moved by Mr. Cannon and seconded by Mr. Gray that the Board finds that there is a disability which permanently incapacitates the applicant from the regular and continuous duties of a firefighter. Upon voting, the motion passed unanimously. It was moved by Mr. Cannon and seconded by Mr. Gray that the Board finds that the disability was incurred in the line of duty (LOD). Upon voting, the motion passed unanimously. It was moved by Mr. Cannon and seconded by Mr. Gray that the Board grant a line of duty (LOD) disability pension to Mr. Pease due to a right shoulder and spine injury effective close of business today. Upon voting, the motion passed unanimously. [Mr. Griner exited the meeting at 2:19p.m.) [Brief recess from 2:19p.m. to 2:26p.m.) Old Business 9. Committee #3 report. a. Policy 425-13th Check- recommended revisions b. Policy 808- Furnishing of Plan Members' Addresses- recommended revisions c. Administrative expense budget Ms. Fox advised that the committee met at 10:30 a.m. on July 8, 2015. Regarding policy 425, Ms. Ernst advised that since some of the language was verbatim from the contract, it was simplified and duplicate language was deleted. She continued that the language was rearranged to make sense to the reader, but no major content changes were made. Ms. Fox recommended that the Board approve this policy as corrected. It was moved by Mr. Gray, seconded by Mr. Burkett and by unanimous vote to approve the amended policy 425. Regarding policy 808, Ms. Ernst advised that the policy has been changed to allow pension office staff to provide plan members' addresses to the City for mailings and any other pension business handled by the city. Mr. Klausner advised that the pension office should be allowed to exchange such information with other city departments. It was moved by Mr. Gray, seconded by Mr. Cannon and by unanimous vote to approve the amended policy 808. Ms. Fox advised that the committee also discussed the creation of an administrative expense budget per SB 172. She recommended that Ms. Ernst coordinate with the City to develop a draft budget for the August meeting. Ms. Ernst requested clarity from the Board regarding how much of a margin she should build into this budget. Mr. Klausner recommended that Ms. Ernst add a "contingency reserve"
July 22, 2015 Page4 item and factor in a 10-15% increase over last year's budget, due in part to an increase in staff members. Ms. Fox and Mr. Rogero discussed whether the pension budget will be incorporated into the City budget. Mr. Lenker advised that he can provide staff with additional information to assist with the drafting of this budget. I 0. Executive committee report. Nothing new to report. II. Steering committee report. Ms. Ernst noted that a meeting has been scheduled at I 0:30 a.m. on August 13,2015. 12. Update on withholding benefits for incapacitated plan member. Mr. Klausner advised that the plan member's daughter has obtained a verbal power of attorney and it meets the requirements under Florida law. The member's daughter was present and thanked the Board and staff for their assistance in this process. 13. Update on request received 06/12/2015 from F. Jensen, retired police officer, regarding Retirement Election- Optional Forms of Payment form mailed to retirees in 2005. Mr. Klausner advised that Mr. Kaufman was unable to establish contact with a former pension office employee regarding this matter. He recommended that the Board table this item to a future meeting. It was moved by Mr. Gray, seconded by Mr. Rogero and by unanimous vote to table item 13. New Business 14. Noted receipt of listing of upcoming conferences. Disclosure of planned attendance, if any. Mr. Cannon, Mr. Burkett, and Mr. Reed all disclosed that they will be attending the FPPTA conference in October in Naples. Ms. Fox disclosed that she will be attending the Division of Retirement conference in November in Kissimmee. 15. Noted receipt of not-to-exceed fee quote from Buck Consultants for implementation of additional state disclosure requirements under HB 1309. Mr. Klausner advised that although there is no penalty for being late, he recommends being on time since chapter money is involved. Ms. Ernst advised that the fee is not to exceed $20,000 and this includes the cost to set up the report, which the Board will need to do this year. She continued that since this is an upfront cost and the fee going forward should be less. It was moved by Mr. Gray, seconded by Ms. Fox and by unanimous vote to approve item 15. 16. Chair's call for any new business items from trustees to be placed on next agenda. None. 17. Chair's report. Nothing to report. 18. Attorney's report. Nothing to report. 19. Plan Administration. a. Disability process timeline. b. Pre-retirement and financial planning workshops update. Ms. Ernst distributed the disability timeline and noted that many recent disability applicants have asked staff to either speed up or slow down the process. She advised that staff are unable to intercede and they process each applicant as quickly as they can, given their workload. Ms. Lattimore asked whether the applicant is able to review the timeline. Ms. Ernst advised that they review it at their initial
July 22,2015 Page 5 appointments. She continued that with regards to many steps on the timeline, such as collecting medical records, the timing is beyond staffs control. Mr. Bogush noted that certain applicants prefer to delay the process for financial reasons, but this is not allowable. Mr. Gray agreed that to do so would be unethical. After discussion, it was requested that the timeline be part of the consent agenda each month. There was discussion regarding the replacement of Jeff Helms for the pre-retirement and financial plarming workshops. Mr. Gray recommended that presentations be held at the end of the August meeting. He continued that there should be fifteen minutes allotted for presentation and fifteen minutes for questions and answers. The presenters should cover knowledge of the fund and the DROP plan. Ms. Fox advised that she would want assurances from each presenter that they will not try to sell their firm to attendees. She continued that this is meant to be an educational tool, not a sales forum. It was noted that presenters should also cover whether they worked with other municipalities or not and give their cost. [Mr. Gray exited the meeting at 3:03 p.m.] Litigation 20. Parker Lawsuit Florida Supreme Court Case No. SC13-890 2nd District Court of Appeals Case No. 2Dll-4825 07-007198 Noted receipt of: a. Notice of Hearing dated 06/01/2015. b. Plaintiff's Memorandum in Opposition to Defendant's Motion for Partial Summary Judgment on Plaintiffs Motion for Determination of Amount of Appellate Attorney's Fees dated 06/22/2015. c. Update by plan attorney, if any. Mr. Klausner advised that the hearing to discuss appellate attorneys' fees has been cancelled and will be rescheduled at a later date. No action required. Items 20 a-c were received for filing. [Mr. Gray returned at 3:04p.m.] 21. Pena Lawsuit 2nd District Court of Appeals Case No. Noted receipt of: a. Re-notice of Hearing dated 05/19/2015. b. Update by plan attorney, if any. 2D13-3540 08-013997 Mr. Klausner advised that Mr. Pena has filed for bankruptcy but because this case involves a governmental liability, it is not dischargeable. He noted that he sent an opinion to Ms. Ernst. Mr. Klausner continued that the original case has been stayed but he will make an appearance in the bankruptcy case in order to discuss how the Board can settle this matter in a cost-effective way. No action required. Items 21 a-b were received for filing.
July 22, 2015 Page 6 22. Artz Lawsuit 2nd District Court of Appeals Case No. Update by plan attorney, if any. 2015-1342 07-012048 Mr. Klausner advised that there will be a hearing on August 5, 2015. He continued that the plaintiffs' attorney has asked to withdraw but since the new attorney only represents about half of the plaintiffs, it is not confirmed whether he will be allowed. Mr. Klausner recommended that since he is already representing the union, Mr. Gonyea should represent the pension fund in this matter. 23. Ribaya Lawsuit 2nd District Court of Appeals Case No. Update by plan attorney, if any. 2013-4549 12-013928 Mr. Klausner advised that the fund's settlement offer was rejected and depositions for Mr. Gray, Mr. Griner and Ms. Campbell will go forward as scheduled. 24. Noted receipt of legal fees paid to date on each case. No action required. Item 24 was received for filing. Motion to adjourn was made by Ms. Fox at 3:09p.m. ~kbog~an Notice No verbatim record by a certified court reporter will be made of this Board meeting, except as noticed for any executive sessions. Any person who desires to appeal any decision of the Board of Trustees with respect to any matter considered at this Board meeting will be responsible for providing a record of the proceedings and for this purpose, may need to ensure that a verbatim record of the proceedings is made, which includes testimony and evidence upon which the appeal is based. Persons needing a special accommodation to participate in any noticed meeting should contact the F&P pension office at (813) 274-8550 or (888) 335-8550 - toll free, or the Florida Relay Service at (800) 955-8770 -toll free, or dial 711 from any phone (regular phone/land line or cell phone) for the Florida Relay Service. Please make your request at least five (5) working days before the scheduled meeting date. 2015 Board meeting schedule - meetings begin at 1 :30 p.m. August 26, 2015 September 23, 2015 October 28, 2015 Monday, November 16, 2015 (early due to holidays and scheduling conflicts) December 16, 2015 (early due to holidays)