Fort Walton Beach Council agenda — 09-11-2007 regular agenda — reading text

The City Manager clarified that all of the city's free cash is invested in CD' s or state investment, so it does earn some money but it is not being invested in the sense of the asset allocation for the pension fund. She said it goes to the full aspect of cash flow purposes. The Finance Director explained the City sends all the quarterly and bi- weekly amounts to Salem Trust, the Third Party Administrator ( TPA); then Salem cuts the retirement pay checks and takes care of retirement payment. She is trying to improve the contract and the investments with Salem Trust. Mr. Tierney explained that Salem Trust is the custodial trustee, serving administrative functions in terms of making the payments. Mr. Miller moved that the Finance Director investigate and return with a recommendation for Council. The City Attorney expressed her concern that the Charter clearly says that the administrative issues are left to the City Manager so Council would have to be careful how far into the administrative issues they are getting. The City Manager stated the Finance Director is already working on revising the contract and if it is revised then staff will bring it to Council for approval. Mr. Miller withdrew the motion. The Finance Director stated she will revise the contract, give them less money, or choose a custodial trustee. Mr. Linn expressed his belief on recommendation 5 that the Plan should retain professional experts who act in a fiduciary capacity that is already being done. He stated he checked the Merrill Lynch contract and it does not say that Merrill Lynch is acting in a fiduciary capacity, but he expressed his opinion there is no question that anyone who acts as investment advisor to the fund is a fiduciary. He did not believe there is any issue about Merrill Lynch acting in a fiduciary capacity and he would recommend it be put in the contract. He expressed the other professionals fall under the same category. He mentioned that the sub- parts of the recommendation are Council' s call. He said on 5a ~' , recommendation that a competitive selection process should be used for all external service providers that the law does not require a competitive selection process; however, it is a good practice in selecting the professionals. He believed there is some disagreement on 5c that the cost of services should be reviewed and specifically approved by the Board of Trustees. He noted that 5c recommendation that the Plan' s current directed brokerage program should be reviewed is with Merrill Lynch, and it has to do with how they are compensated. He said he spoke with Merrill Lynch about it and he looked at the contract. He mentioned that Merrill Lynch has revised the way they do the directed brokerage which essentially that could be gives them commissions that off-set the fee they are paid under the contract. He thought more transparent so that the City knows exactly what is being paid. He recommended that the contract be reviewed.  8- 22- 07 105 Special Council GENERAL EMPLOYEES PENSION FUND cont Mr. Minich moved to direct the Pension Attorney review the contract and return with his recommendations. Dr. Pullen seconded motion. The Finance Director expressed her understanding that Council is now changing the direction of the Advisory Committee so if she had issues with investments, etc., she would not take them to the Advisory Committee, and staff would bring them to Council. She wished to know if Council would consider looking at acompetitive process in selecting the Financial Advisor. She said choosing a Financial Advisor on performance and there is never a bad reason to go out and compare the performance of the current 1 Financial Advisor with other people. She said before the City automatically renewed a contract with Merrill Lynch she would have to say she would recommend to Council to look around to make sure the services they are getting and what they have now are the best possible services they can have for the pension fund. It was noted the motion is to review, not renew, and the hope was expressed that the City Manager and Finance Directorwould keep Council advised as to the performance ofthe Financial Advisorofthe Plan. The Mayor called for the vote on the motion and it carried unanimously with Holmes, Miller, Reeves, Garvie, Pullen, Hartwell, and Minich in favor. Mr. Linn went over recommendation 6 that continuing education for the Advisory Committee should be made a priority. He commented the point that has been made is that the education should be commensurate with the duties of the committee. He took it that if the consensus of the Council is that the committee does not be performing investment related functions, then it does not make sense to send available any committee members to investment related programs. He said those are typically programs for pension trustees. Mr. Tierney mentioned it is not to say it would not be appropriate for the advisory committee to learn about administrative functions. In response to the question of the impact to the budget for training, the City Manager expressed her out opinion that the expense for the Board of Trustees training would be an allowable expense to come of the pension fund. Mr. Linn asked if Council wished to address the Retirement Plan Options he mentioned in his report. The City Manager mentioned during the budget meeting in Maya variety of different pension options were discussed and Council told staff to stay the course. She suggested in January or February, well in advance of the budget preparation, to look at the options which Mr. Linn to give a comparative analysis on the options at that time, then if Council wanted to change it for the 08/ 09 year they would have the information well in advance. Mr. Linn was requested to also provide information on combinations of the Plans, and any relationship with social security. Mr. Linn acknowledged he will provide information on a combination of plans, and explained that the City is locked in on social security and that is no irrevocable. J The Mayor reviewed that a motion was passed to go to the payment delayed methodology, that there was no action taken on recommendations 1 and 2, a motion was passed to perform a' peer- review every five years, there was no action taken on recommendation 4, on recommendation 5 a motion was passed to direct Mr. Linn to review the current contract with the fiduciary agent, and on recommendation 6 training is available. Mr. Linn, Ms. Balant and Mr. Tierney were thanked for the information provided.  107 MINUTES OF THE REGULAR COUNCIL MEETING OF THE CITY OF FORT WALTON BEACH, FLORIDA AUGUST 28, 2007 INTRODUCTION A regular meeting of the City Council of Fort Walton Beach, Florida, was held on Tuesday, August 28, 2007, at 7: 00 p. m. in the Council Chambers at City Hall, with the following members present: J Mayor Mike Anderson Councilmen: Mike Holmes, Virgil Miller, Bill Garvie, Dr. Wayne Pullen, Jim Hartwell, and Mike Minich Absent: Dennis Reeves Also Present: Joyce Shanahan, City Manager; Helen Spencer, City Clerk; Lisa Absher, Finance Director; Toni Craig, City Attorney; Department Directors and Media. CALL TO ORDER The Mayor called the meeting to order and welcomed everyone. He requested anyone who wished to address Council to approach the podium after being recognized, then state his or her name and address for the record. INVOCATION Pastor Buck Dockery of the Mary Esther Church of God led in the Invocation. PLEDGE Youth from the Mary Esther Church of God led in the Pledge of Allegiance. SPECIAL GUEST Diane Biancanello of Heritage Motorcycles presented a check to the City in the amount of 1, 237. 87 for the American Cancer Society. APPROVAL OF AGENDA Mr. Minich moved to approve the agenda as presented. Mr. Hartwell seconded motion and it carried unanimously with Holmes, Miller, Garvie, Pullen, Hartwell, and Minich in favor ( Reeves absent). CONSENT AGENDA Mr. Miller moved to approve the following Consent Agenda items. Dr. Pullen seconded motion and it carried unanimously with Holmes, Miller, Garvie, Pullen, Hartwell, and Minich in favor (Reeves absent). APPROVAL OF MINUTES J Approval of the minutes of the Special Council Meetings on August 8, 9 and 13, 2007; and the Special Council Meeting on August 10, 2007. RETAIN SERVICES OF CO- COUNSEL To retain the services of Zimmet, Unice, Salzman & Heyman, PA, as co- counsel for the Thirteenth Judicial Circuit, Case No 2003- 5425, Addison & Pettis, as class reps v. City of Tampa, et ai, as class reps. 108 Regular Council Meeting 8/ 28/ 07 2007 EDWARD BYRNE GRANT ACCEPETANCE Approve request by the City of Fort Walton Beach Police Department to submit the 2007 Edward Byrne Memorial Justice Assistance Grant direct award' for acceptance. RES. 07- 16, COMPENSATION FOR THE CITY CLERK A RESOLUTION OF THE CITY OF FORT WALTON BEACH, FLORIDA; PROVIDING FOR AUTHORITY; FORMALIZING SALARY, BENEFITS, AND COMPENSATION FOR THE CITY CLERK; AND PROVIDING FOR AN EFFECTIVE DATE. The following Consent Agenda item was withdrawn from the agenda. NOTIFY PROPERTY OWNERS OF CITY- INITIATED REZONINGS Consideration of a request to direct the City Clerk to notify affected property owners of City- initiated rezonings. ' The following Consent Agenda item was voted on separately. ACCEPTANCE OF GENERAL EMPLOYEES RETIREMENT FUND ACTUARIAL VALUATION Consideration of acceptance of the General Employees Retirement Fund Actuarial Valuation as of October 1, 2006, dated July 2007. The City Manager advised that the initial actuarial report was provided to Council at their June 12, 2007 meeting, and this report is revised to include the recommendations that Mr. Tierney was requested to make at that meeting. Discussion included the City' s buy- back program; the Final Average Monthly Earnings of 2. 50% for employees hired before 1996; and the cost of living adjustment for retirees. The Finance Director noted some discrepancies in the version of the actuarial report in the backup and wanted to ensure the correct information was being voted on. The City Manager requested this item be withdrawn until the September 11, 2007 meeting. Dr. Pullen moved to withdraw acceptance of the General Employees Retirement Fund Actuarial Valuation as of October 1, 2006, dated July 2007, until the meeting of September 11, 2007. Mr. Minich seconded motion and it