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HomeMy WebLinkAbout2009-12-31 MinutesBoard Members Mayor Jordan Chairman Sondra E. Smith Secretary Marion Doss Position 1/Retired Pete Reagan Position 2/Retired Gene Warford Position 3/Retired Ron Wood Position 4/Retired Firemen's Pension and Relief Fund Board of Trustees Meeting Minutes December 31, 2009 Firemen's Pension and Relief Fund Board of Trustees Meeting Minutes December 31, 2009 Page l of 8 A meeting of the Fayetteville Firemen's Pension and Relief Fund Board of Trustees was held at 3:00 PM on December 31, 2009 in Room 326 of the City Administration Building. Mayor Jordan called the meeting to order. Present: Mayor Jordan, Marion Doss, Gene Warford, Pete Reagan, Sondra Smith, City Attorney Kit Williams, Paul Becker Finance Director, Trish Leach, Audience and Press. Absent: Ronnie Wood. Approval of the Minutes: November 19, 2009 Meeting Minutes Sondra Smith: I made a change to the minutes per Marion's request. Marion Doss moved to approve the November 19, 2009 Firemen's Pension and Relief Fund Board of Trustees meeting minutes. Pete Reagan seconded the motion. Upon roll call the motion passed 5-0. Ronnie Wood was absent. Approval of the Pension List: January, 2010 Pension List Pete Reagan moved to approve the January, 2010 Pension List. Marion Doss seconded the motion. Upon roll call the motion passed 5-0. Ronnie Wood was absent. Old Business: Osborn, Carreiro & Associates, Inc. actuarial study invoice Kit Williams: They want $2,900.00. 113 West Mountain 72701 (479) 575-8323 TDD (Telecommunications Device for the Deaf) (479) 521-1316 Firemen's Pension and Relief Fund Board of Trustees Meeting Minutes December 31, 2009 Page 2 of 8 Pete Reagan: Is that what we approved? Sondra Smith: You authorized $2,200 on March 12th Pete Reagan: I think we would need to write him a letter to say that we approved $2,200 and now we are getting billed for $2,900 and ask the reason why. Mayor Jordan: Do you want me to send him a letter? Pete Reagan: I think so. Mayor Jordan: I will do it. Gene Warford: We asked for three scenarios and he gave us one at that meeting. Kit Williams: When he came up here, he really didn't give you the scenarios you asked for but later he went back revised it. Gene Warford: Right. He mailed it to us. Marion Doss: It took quite a while, but I think after you called him, he finally did come back with scenarios we asked for. Mayor Jordan: Yes, they finally did. Pete Reagan: I don't think I ever got a copy of that. Sondra Smith: It was in the agenda Kit Williams: It was in an earlier agenda. Mayor Jordan: We can get you a copy. Pete Reagan: Thank you. Sondra Smith: At the February l lr' meeting it was talked about at that meeting, the person that quoted that fee was David Clark. Kit Williams: So, that wasn't Carreiro saying the fee? Pete Reagan: I thought we had Jody up here? Sondra Smith: Jody was there during that time. Pete Reagan: I know Jody was there, but we had Jody back up here. 113 West Mountain 72701 (479) 575-8323 TDD (Telecommunications Device for the Deaf) (479) 521-1316 Firemen's Pension and Relief Fund Board of Trustees Meeting Minutes December 31, 2009 Page 3 of 8 Kit Williams: That was the one where he didn't really answer our questions. Mayor Jordan: Yes. Pete Reagan: Exactly. Paul Becker: He was going to send you the other scenarios which he subsequently did after Sondra reminded him. Kit Williams: Right. Sondra Smith: The original estimate was on February 11 David Clark gave the total for the study. David Clark says "for the three additional scenarios it would be $2,200" and then Pete says "on top of the $1,400" and David Clark says "no, that is the total". Just send us a letter clearly stating what your three scenarios would be.' Pate Reagan: And then we talked him into four scenarios, when he came up. Mayor Jordan: I don't remember all the details. Sondra Smith: It may be because he did an extra scenario that he is charging another $700. Marion Doss: He may have forgot. It kinds funny David Clark telling us what Carreiro is going to charge. Kit Williams: We can't hold him to what Clark says. Paul Becker: I don't remember but that would be odd that David Clark would be giving us a number. Kit Williams: How did Clark know? Sondra Smith: Because the actuarial studies go through PRB. Pete Reagan: You have to submit a check to PRB and I guess they forward it or deposit, Sondra Smith: Yes. But this time, the bill came directly from Osborn, Carreiro & Associates. In the past it has always come from PRB. Paul Becker: Right. Pete Reagan: Right. That's because we hired him to answer four questions for us. Paul Becker: You had a separate engagement. 113 West Mountain 72701 (479) 575-8323 TDD (Telecommunications Device for the Deaf) (479) 521-1316 Firemen's Pension and Relief Fund Board of Trustees Meeting Minutes December 31, 2009 Page 4 of 8 Pete Reagan: The one where we actually hired him on a separate point of business was in this room in late summer. Paul Becker: The trip that you're recalling Pete, I think that was his advice where he gave the one scenario if they followed the current plan. Mayor Jordan: I do not know what occurred or why he's charging the extra $700. He obviously feels like he's had to do some extra work. Kit Williams: I think he did more work, than he was planning on. New Business: Mayor Jordan's letter to David Clark at PRB retarding ability to decrease benefits David Clark's response to Mayor's letter regarding ability to reduce benefits Mayor Jordan: We sent a letter to David Clark on a recommendation of the Fire Pension Board to see if the PRB would let us reduce benefits. I think there is a copy of that letter in the agenda. Sondra Smith: Yes there is. Mayor Jordan: We have his response, which he said he agreed with the Attorney General's opinion. He did not feel that you could. Sondra Smith: It says the current law does not permit a reduction in benefits. Kit Williams: His was a lot stronger than the Attorney General. Mayor Jordan: That is what we got back. Marion Doss: The last paragraph in that letter kind of left me with some questions. Kit Williams: What did you need to know about that last paragraph? Marion Doss: He talks about the City sending information as of December 31, 2009, the financial report for the fund, and he says "the completed financial report will assist the actuaries in conducting the referenced evaluation which will be reviewed by PRB at there June 2010 meeting. PRB will then provide a follow up letter informing the fund of actions needed to safe guard the benefits". Kit Williams: That goes with that paragraph above it where it said that it's likely going to be projected to deplete its assets within ten years. That's a thing that kicks in a different statue that says they will then notify the fund and tell them of what there options are. The guarantee fund, which is a fund that would normally help funds that are in financial distress, has two 113 West Mountain 72701 (479) 575-8323 TDD (Telecommunications Device for the Deaf) (479) 521-1316 Firemen's Pension and Relief Fund Board of Trustees Meeting Minutes December 31, 2009 Page 5 of 8 requirements that we can not meet, one of which requires a full mill to be assessed and the second that the benefits are at their minimal amount of 50%. So that fund won't help us. Trish Leach: If you're curious about the report they reference, we do this report every year. The deadline in March 31 and we usually mail it the first week of March. We have already started working on it. When I read that I was surprised, because reading it, if you didn't know we did this report every year, you'd think this was something additional we were doing and it's not. Pete Reagan: David has always complemented Fayetteville on being one of the first ones to get their information in. But we had a situation in West Helena, a couple years ago, where the Pension Review Board held $290,000 from that fund, and their fund is in almost as bad of shape as ours, because they did not have the required reports filled out. So they really push those reports. That's one requirement of funding. Mayor Jordan: Have we sent the reports or is there an issue here? Kit Williams: We can't send them yet. Marion Doss: I guess I misunderstood that because when it said December 31, I thought he was expecting it to be in the mail on that date and I guess he just used that as the final date and then the normal time for getting them in. That's what I was wondering about. Trish Leach: One of the things we do, on the affidavits all the members send in to Sondra, we actually go through those, as per the report, to make sure if a spouse is deceased that we take them off, to get the actuarial report as accurate as possible. So until all the affidavits are in, that holds it up and all the financial information is in. Marion Doss: I see. Sondra Smith: So if you don't turn your affidavits in on time it holds Trish up on getting that report out. Mayor Jordan: Is there any more discussion on the letters. Marion Doss: I was just kind of curious as to what they meant by it. Paul Becker: That's normally the standard information that he's referring to that you are under funded. You're not actuarially sound. Kit Williams: And you're liable to be depleted in ten years. City Attorney memo regarding State statutes 24-11-213 thru 215, 24-11-301 and 24-11-809 Kit Williams: These statues are how state turn back funds get divvied up and if you read these statues and some of the rest of the chapter it's extremely convoluted. It pretty convoluted but 113 West Mountain 72701 (479) 575-8323 TDD (Telecommunications Device for the Deaf) (479) 521-1316 Firemen's Pension and Relief Fund Board of Trustees Meeting Minutes December 31, 2009 Page 6 of 8 they give the responsibility statutorily at the end to the state board and its actuary to determine the proper division between the funds and the State of Arkansas also receives money out of that into its general funds. The City of Harrison was and maybe still is contemplating even legal action to try to see if maybe the funds where not being distributed properly and more should go to the pension funds. Because of that a local attorney had talked to the Mayor of Harrison and talked to me about it and asked me what our position was and obviously if there was likelihood that we could force more money from the turn back funds to be used for our pension plans that would be good for us. We would need that. So that's why I looked at all these particular statues and I've tried to explain in this memo about them. I've shared this information with Dale Evans, who was the attorney that talked to the Mayor of Harrison, and talked to me. When he originally talked to me he hadn't done a whole bunch of research, but I indicated that this board might very well be interested, if in fact it looked like we had a legal claim that we could make. My review on this is it looks like we have a dry hole to me, I can't guarantee you. It's extremely complicated and confusing. If you look at my conclusion on page three, I actually don't think we will probably be successful but I can't be for sure because in order to really know the answer to that we would have to do an actuarial analysis with a complete understanding of the law and the historical distributions. That would be an expensive proposition. I'm not an actuary. We'd have to hire an actuary and we wouldn't be paying $2,200 for this. It would be a lot more than that to go through those statues. So my feeling was that, that was probably not a good bet to try to go forward. I have not heard back from Mr. Evans. I have faxed him a copy of this letter a day or two ago so he could see what I had looked at and he has not gotten back to me at this point in time. I'm and trying to keep an open mind so maybe he'll find something I didn't find, but at this point in time I surely could not recommend that we join a suit with the potential financial cost of an actuary and a lot of legal analysis on this. If they are going forward themselves and want us to go forward on this, then I would invite him to come here and speak to you all and explain what his theory was and then you all could decide whether or not you want to join in or not. But right now it doesn't look very promising to me. Pete Reagan: It's very complex. Kit Williams: The only thing that's more complex is the alcohol laws, those are really complex. This comes in second, I think. Pete Reagan: The thing we went to the governor with last year was the 28% of the total of fire insurance premium tax that was collected that was left over after all distributions were made to all Fire and Police plans both old and LOPFI went to the Governors Discretionary Fund. So we went to the Governor asking for some of that money for the old pension funds that were in distress and the Reader's Digest version of his answer is no. Mayor Jordan: That's what I remember. Kit Williams: I think that was proper for you to ask, because it would be within his discretion. I don't think that we can take him court and force him to do it. I think it's within his discretion, it 113 West Mountain 72701 (479) 575-8323 TDD (Telecommunications Device for the Deaf) (479) 521-1316 Firemen's Pension and Relief Fund Board of Trustees Meeting Minutes December 31, 2009 Page 7 of 8 is state revenue. This would be a legitimate use of state revenue, if he wanted to do it, but I don't know if he's going to do. Pete Reagan: If he did it for one he'd have to do it for all. Paul Becker: I think it's quite clear in the statue Kit that the left over money goes to the general revenue fund. Kit Williams: There are a certain portions of money, in the State turn back, that is supposed to go to the general revenue fund. Pete Reagan: And some how the State Police got in there. Kit Williams: Yes, they got there hands out. Of course State Police is the responsibility of the state so that's why maybe they got the extra money and we didn't because you're not the responsibility of the state at this point. Pete Reagan: Except that we protect state lands. I agree whole heartedly. Moving right along. Kit Williams: I spent a lot of time on this and I kind of regret it. Marion Doss: We appreciate your time though. Kit Williams: I don't think I know much more that I did when I started reading all this. Mayor Jordan: That got pretty complicated. NCPERS membership fee invoice Pete Reagan moved to approve the 2010 NCPERS Dues in the amount of $150. Marion Doss seconded the motion. Upon roll call the motion passed 5-0. Ronnie Wood was absent. Longer Investments: A copy of the monthly investment report was handed out to the board. Informational: 2010 Parking Permits The permits were handed out to the board. 113 West Mountain 72701 (479) 575-8323 TDD (Telecommunications Device for the Deaf) (479) 521-1316 2010 Meeting Schedule Firemen's Pension and Relief Fund Board of Trustees Meeting Minutes December 31, 2009 Page 8 of 8 A copy of the 2010 meeting schedule was handed out to the board. Meeting Adjourned at 3:45 PM 113 West Mountain 72701 (479) 575-8323 TDD (Telecommunications Device for the Deaf) (479) 521-1316