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HomeMy WebLinkAbout1995-04-27 FPB MINUTES• • • • • FIREFIGHTERS PENSION BOARD MEETING April 27, 1995 A regular meeting of the Englewood Firefighters Pension Board was called to order by Chairperson Bill Young at 3 :13 p.m. in Conference Room A of the Englewood City Hall , 3400 South Elati Street . Members Present : Members Absent : Others Present : Bill Young, Chairperson, Employee Representative Jay Seay, Employee Representative Willis Resley , Council Appointee Mike Gruninger, Employee Representative Frank Gryglewicz, Director of Financial Services Tom Bums, Mayor Dan Brotzman, City Attorney Carol Wescoat, Recording Secretary Retired Volunteer Firefighters Otto E . Herold Howard Homyak Vince Wertin John Higginson Paul Newport John Jarrett Gil E ggleston Mrs . Clifford Rowland A quorum was present. * * * * * Approval of Minutes MR GRUNINGER MOVED TO APPROVE THE MINUTES OF THE REGULAR MEETING OF JANUARY 12 , 1995 ; AND THE JOINT BOARD MEETING OF FEBRUARY 6, 1995 ; MARCH 1, 1995 ; AND APRIL 4 , 1995 . MR. GRYGLEWICZ SECONDED . Ayes : Nays : Absen t: The motion carried . Young, Resley , Gruninger, Gryglewicz, Seay None Bums * * * * * OLD BUSINESS Review of Firefighters Pension Ordinances Mr. Gryglewicz reviewed the pension ordinances draft and will make suggested changes and forward to Chairperson Bill Young, Mr. Gruninger, and Mr. Seay . Discussion followed regarding the frequency of actuarial valuations . It was agreed that the Municipal Code should indicate a minimum frequency of once every three years . The actuarial valuation is currently completed every two years . NEW BUSINESS Consideration of request by Ron Boston. Ron Boston, a firefighter since January 1, 1967, has resigned effective March 1, 1995 , and requested retirement benefits . MR GRUNINGER MOVED TO APPROVE MONTHLY BENEFITS OF $2 ,274 .27 , FOR RON BOSTON, BEGINNING MARCH 2, 1995 . MR. GRYGLEWICZ SECONDED. Ayes : Nays : Absent: The motion carried . Young, Resley, Gruninger, Gryglewicz, Seay None Bums Consideration of retirement request by James Blumenthal. James Blumenthal , a firefighter since February 1, 1967 , has accepted a position that no longer qualifies him as a firefighter . His final date as a firefighter was March 1, 1995 . Mr. Blumenthal has requested retirement benefits . MR GRUNINGER MOVED TO APPROVE MONTHLY BENEFITS OF $2 ,376 .01 FOR JAMES BLUMENTHAL, BEGINNING MARCH 2, 1995 . MR. GRYGLEWICZ SECONDED . Ayes : Nays : Absent: The motion carried . Young , Resley, Gruninger, Gryglewicz, Seay None Bums 2 • • • • • • • Consideration of retirement request by Homer Richard . Homer Richard, a firefighter since January 1, 1970, has resigned effective April 30 , 1995, and requested retirement benefits . MR GRUNINGER MOVED TO APPROVE MONTHLY BENEFITS OF $1,996.66, FOR HOMER RICHARD, BEGINNING MAY 1, 1995 . MR. GRYGLEWICZ SECONDED . Ayes : Nays: Absent : The motion carried . Young, Resley, Gruninger, Gryglewicz, Seay None Burns Consideration ofretirement request by John Garcilaso . John Garcilaso, a firefighter employed from October 10, 1974, to December 18, 1992, has attained the age of 50 as of March 28, 1995, and requested retirement benefits . MR GRUNINGER MOVED TO APPROVE MONTHLY BENEFITS OF $2, 127 .83, FOR JOHN GARCILASO , BEGINNING MARCH 28 , 1995 . MR. GRYGLEWICZ SECONDED . Ayes: Nays : Absent: The motion carried . Young, Resley, Gruninger, Gryglewicz, Seay None Burns Presentation by William M. Mercer. Inc . Don Mazanec presented the Volunteer Firefighters determined liability . Mr. Mazanec explained the Volunteer Firefighters interest assumption was set at 7 .0% and not the 7.5% that is used for the paid firefighters assumptions . He explained the reasoning for using 7.0% for volunteers was due to no projected salary increases for volunteers . All the volunteer firefighters are retired and therefore will not receive salary increases . Mr. Mazanec reviewed the status of the current actuarial valuation . The actuarial valuation cannot be completed until the total assets are apportioned between volunteer and paid firefighters . 3 Discussion of Volunteer Firefighters Issues. Discussion ensued relating to the allocation of the plan's assets . Mr. Seay questioned the legality of allocating volunteer firefighters' funds in 1993 . Mr. Gryglewicz clarified that the reason behind the action was to reduce the unfunded liability . Mr. Eggleston questioned the legality of transferring funds from the volunteer firefighters fund to the paid firefighter fund . Mr. Brotzman commented that the legality of the transaction was based upon the reason for the transfer. He stated if the funds had been improperly tracked and the transfer was to correct past allocation procedures, it would be legal. Mr. Mazanec stated contributions received from the State were not separated between volunteer and paid firefighters . The City records indicate the allocation split had been based on a calculated percentage of funds. Because of the inability to readily determine the accuracy of the allocation, the decision was made by the Board to allocate for the volunteers portion on the basis of 110% ofliability. This allocation was intended to fully fund the volunteers portion . The allocation was done on the January 1, 1993 , valuation . Discussion ensued regarding the requirement of State Statutes to maintain a separate account for the volunteers' funds . The funds had been accounted for separately, but were pooled in the same account. The volunteers repeated their request for a benefit increase . Mr. Brotzman stated a benefit increase could take place only if the fund is actuarially sound . Potential losses due to market fluctuation also is a factor to be considered when allowing a benefit increase . Mr. Brotzman stated there must be a logical basis for allocating the funds . Chairperson Young commented when funds were transferred to Sheridan, the figure was assigned to address the current level of benefits for the volunteers, and the balance of the fund was allocated to paid firefighters . The action, at the time , seemed to fulfill the needs of both volunteer and paid firefighters . Mr. Mazanec 's recollection of the allocation method for accounting for the separate funds used during the early 1980s, were directed by the auditors . He recalled that the City's auditors devised the allocation method in the early 1980s. Mr. Brotzman reminded the Board of their fiduciary responsibility to both plans . The Board could possibly receive a request in the future to increase volunteer benefits that could not be funded . There seems to be confusion on basis of the allocation method and the Board should not arbitrarily allocate funds between the paid and volunteer firefighters . 4 •• • • • • • Mr. Mazanec had some concerns with the allocation spreadsheets prepared by the City's accounting staff. He suggested researching the calculations and verifying the methodology and accuracy of the results. Mr. Gryglewicz recommended verifying the allocation figures before proceeding with any change in volunteers' benefits. Mr. Brotzman concurred. Mr. Brotzman stated benefits could then be determined after an accurate and logical allocation was made . 4 : 13 p.m . Chairperson Young left . Mr. Mazanec suggested contacting the City's auditors to review the allocation method and the actions of the Board . Discussion followed relating to assets owned by the volunteer firefighters . Mr. Brotzman indicated if clear titles were obtained for the vehicles in question, the City would assist in the recovery of the vehicles . 4 :20 p.m . Mr. Gryglewicz requested a brief recess . 4 :3 0 p.m . Chairperson Young re-called the meeting . MR. SEAY MOVED TO RESEARCH THE ALLOCATION OF VOLUNTEER FIREFIGHTERS PENSION ASSETS AND DEVELOP A LOGICAL METHOD OF ACCOUNTING FOR THE FUNDS ALLOCATED TO THE VOLUNTEER AND PAID FIREFIGHTERS . MR. GRUNINGER SECONDED . Mr. Gryglewicz clarified the volunteer funds will not be placed into a separate fund, but will be separated for accounting purposes . Chairperson Young questioned the ability to create a completely separate fund . Mr .. Gryglewicz restated the reconstruction of the allocation would need to be completed. Discussion followed regarding gains or losses on the funds and the expenses incurred by the plan . Ayes : Nays: Absent: The motion carried . Young, Resley , Gruninger, Gryglewicz, Seay None Bums MR. SEAY MOVED TO INCREASE THE VOLUNTEER FIREFIGHTER MONTHLY BENEFIT AND THE BENEFICIARY BENEFIT PROPORTIONATELY TO $300 .00 PER MONTH AS OF DATE OF VINCE WERTIN'S LETTER (AUGUST 29, 1994), PROVIDED THE ACTUARY AFFIRMS ADEQUATE FUNDING. MR. GRUNINGER SECONDS . 5 • • Mr. Gryglewicz mentioned the possibility of change iffund value, (e.g., a market • correction that would substantially change the fund value) that would no longer allow the fund to be actuarially sound without additional contributions . This scenario could possibly present a TABOR problem . He suggested including a "comfort" level of leeway in the actuarial figures that would allow for market fluctuations . Mr. Gryglewicz suggested a minimum comfort oflevel of 110% of the liability figure . Ayes : Nays : Absent : The motion carried . MEMBERS CHOICE The Boston Company Young, Resley, Gruninger, Gryglewicz, Seay None Bums * * * * * Chairperson Young reviewed recent events at The Boston Company regarding the changes in personnel and the resulting telephone poll. MR. GRUNINGER MOVED TO APPROVE THE TELEPHONE POLL MINUTES OF APRIL 25 , 1995. MR. GRYGLEWICZ SECONDED . Ayes : Nays : Absent: The motion carried . Warrants Young, Resley , Gruninger, Gryglewicz, Seay None Bums Mr. Brotzman responded to the Board's request to review Colorado State Statutes §31- 30-410 . He indicated the City meets the spirit of the Statute although it is not in technical compliance with paragraph (2) of the Statute. To fully comply with the law, the President (chairperson) and Secretary's signatures will be necessary on the warrants . MR. GRYGLEWICZ MOVED TO NOMINATE MICHAEL GRUNINGER AS SECRETARY. MR. SEAY SECONDED . Ayes : Nays : Young, Resley, Gryglewicz, Seay None 6 • • • • • Absent: Bums Abstention : Gruninger The motion carried. Death Benefits Chairperson Young reviewed Mr. Brotzman's opinion of the State Statute providing that the spouse or estate of every active and retired firefighter receive a $100 death benefit. MR. SEAY MOVED THAT VOLUNTEER FIREFIGHTERS NOT RECEIVE THE $100 DEATH BENEFIT. The motion died for lack of second . 5 :03 p .m . Mr. Brotzman and Mr. Mazanec left . Presentation by Carol Wescoat of Public Retiree Benefits Conference . Ms . Wescoat reviewed the Public Retirees Benefit Conference which she attended on the Board 's behalf. A copy of the final travel expense will be provided to the Board at the next meeting . Meeting adjourned at 5 :30 p.m. ~oft~ Carol Wescoat Recording Secretary 7