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1991.10.01_FAB_Minutes_Regular`r TOWN OF HIGHLAND BEACH FINANCIAL ADVISORY BOARD REGULAR MEETING - MINUTES Tuesday, October 1, 1991 9:30 A.M. Chairman S. Myron Browner called the Regular Meeting of the Financial Advisory Board to order in Commission Chambers at 9:30 A.M. Deputy Town Clerk Doris Trinley called the roll. Present were the Chairman, Vice Chairman Victor P. Hadeed and Regular Members Fred Firstenburg, Dennie Freeman and Frank A. Magarace. Also present were Commissioner John F. Rand, Town Manager Mary Ann Mariano and Finance Director Michael Seaman. Mayor Joseph A. Boulay was present for some portions of the meeting. Chairman Browner acknowledged Richard Brunton's contributions to the Board, Mr. Brunton having recently completed the allowable six -year term. He also welcomed Frank A. Magarace, who was recently appointed by the Town Commission as a Regular Member. Mr. Magarace was invited to give a short personal/professional background and did so. Before proceeding to agenda items, Chairman Browner made a statement, saying he was of the opinion that anyone had the right to lobby the FAB; in turn the members could accept, refute or alter in some fashion the interests put forth. Upon MOTION by Mr. Firstenburg/Mr. Hadeed, the Minutes of the July 9 Regular Meeting were unanimously approved. OLD BUSINESS None. NEW BUSINESS Discussion re Workers Compensation, Liability, and Property Insurance Proposal Lee Burke and Thomas R. Salzgeber were present as representatives of Burke, Bogart & Brownell, with Mr. Burke speaking for the firm regard- ing their previously submitted proposal to provide coverage for the Town under Governmental Risk Insurance Trust (GRIT) for Workers Compen- sation and CIGNA for property. Following Mr. Burke's presentation, during which he noted that Liabili- ty was not included due to lack of availability at this time, lengthy discussion took place, with the members posing many questions. Being unable to answer a question regarding rating classifications for re- insurers, Mr. Burke said this information would be requested from his office immediately and made available to the members before the end of the meeting. Financial Advisory Board Regular Meeting - Minutes • October 1, 1991 Page 2 of 6 Mrs. Mariano advised that Burke, Bogart & Brownell already had some ex- perience with the Town in that they carried a specialty line of cover- age on the Town's Police Force. She also noted increasing difficulty in communicating with the current carrier, Florida League of Cities, citing a less than timely approach on their part in getting pertinent data to the Town when needed. She said she would not be adverse to the Town's participation in GRIT and CIGNA through Burke, Bogart & Brownell for Workers Compensation and Property Insurance, particularly since their Boca Raton location would make them immediately accessible when needed; however, because of their historical knowledge regarding ongoing litigation, she would prefer that Liability stay with Florida League of Cities at this time. Mrs. Mariano also advised that the current policy with Florida League of Cities had expired on September 29 and if Workers Compensation and Property Insurance coverage with them was to be renewed, the premium was due October 15. However, because ratings on reinsurers would be forthcoming during the course of this meeting, Mrs. Mariano requested the members withhold a Motion for recommendation until same had arrived and been reviewed. There was no objection to this delay of Motion from the Board. . A copy of Burke, Bogart & Brownell's proposal is attached to and made part of these Minutes. Before moving to the next agenda item, Chairman Browner requested that same be amended to next review State Pooled Funds. There was no ob- jection from the members. Discussion re Disposition of State Pooled Funds. Before discussion began, the Chairman noted Mr. Firstenburg had re- quested to read a prepared statement on the subject. There was no ob- jection from the members. Mr. Firstenburg's remarks were in favor of the Town continuing their investments in the State Pooled Fund. He cited the Fund's being in ex- istence for 15 years with no recorded losses; the Town's impressive re- turns in the four (4) years it has been with Fund; and the extremely small administrative charge to the Town for its participation. The statement contained numerous other financial facts and figures sup- porting Mr. Firstenburg's stand. A complete copy of the statement is attached to and made part of these Minutes. In-depth and lengthy discussion followed, with a great deal of emphasis being given to the fact, as pointed out by Chairman Browner, that the Town Charter calls for "...All public monies shall be deposited in the name of the Town of Highland Beach in a federally insured financial in- stitution located in Palm Beach County..." [Sec. 3.02, 2nd paragraph Financial Advisory Board • Regular Meeting - Minutes October 1, 1991 Page 3 of 6 (copy attached to these Minutes)]. Since it had been previously learned that CD's invested through the Pool in foreign banks were not federally insured, the Chairman noted this would put the Town's par- ticipation in the Fund in direct violation with the dictates of its Charter. Mrs. Mariano offered that in 1987, when the then Town Commission, authorized participation in the Fund through Resolution 504 (copy at- tached), based on an Investment Policy (copy attached) recommended by the then Financial Advisory Board, it would appear it was wrongly as- sumed by all parties concerned that all investments would be federally insured. She did agree there should be an administrative ordinance change to the Charter, based on advice from Town Attorney Sliney, to allow maximum flexibility regarding investments as set forth in Florida State Statute 166.261 (copy attached to and made part of these Minutes). Mr. Sliney's other solution, i.e., keep the Charter as it now is, but recommend a change in the Town's investment policy, was also discussed at this time. Concluding discussion, Mr. Hadeed/Mr. Firstenburg made the following MOTION: . THE FINANCIAL ADVISORY BOARD RECOMMENDS TO THE TOWN COMMISSION THAT THE TOWN CHARTER BE AMENDED (SECTION 3.02, PARAGRAPH 2) TO READ THAT ALL PUBLIC MONIES SHALL BE DEPOSITED IN THE NAME OF THE TOWN OF HIGHLAND BEACH IN FULL ACCORDANCE WITH FLORIDA STATE STATUTE 166.261. The Motion carried with unanimous favorable vote. Having so voted, the members then discussed their decision to recommend that the Town continue or discontinue participation in the State Pooled Fund. In this regard, the following MOTIONS were made: MR. FREEMAN/MR. BROWNER: THE POLICY OF THIS BOARD SHOULD BE TO USE EXTREME CAUTION AND PRUDENCE IN RECOMMENDING IN- VESTMENTS OF PUBLIC FUNDS. THE BEST WAY TO ENSURE THAT IS THROUGH GOVERNMENT OBLIGATIONS, CONFORMING WITH STATE STATUTE 166.261, SECTION b ONLY. CALLED -FOR SHOW OF HANDS VOTE: MR. BROWNER ......... AYE MR. FREEMAN ......... AYE MR. HADEED.......... NAY MR. FIRSTENBURG..... NAY • MR. MAGARACE........ NAY MOTION WAS DEFEATED 3 TO 2. J Financial Advisory Board Regular Meeting - Minutes • October 1, 1991 Page 4 of 6 MR. HADEED/MR. FIRSTENBURG: THE FINANCIAL ADVISORY BOARD RECOMMENDS THAT THE TOWN OF HIGHLAND BEACH CON- TINUE TO PARTICIPATE IN THE STATE POOLED INVESTMENT FUND AND THAT THE BOARD MONITOR THE INVESTMENTS AND RATE OF RETURN ON A.QUARTERLY BASIS. - CALLED -FOR SHOW OF HANDS VOTE: MR. HADEED........... AYE MR. FIRSTENBURG...... AYE MR. MAGARACE......... AYE MR. FREEMAN .......... NAY MR. BROWNER .......... NAY MOTION CARRIED 3 TO 2. Before responding to the action just taken place, Commissioner Rand referred to Chairman Browner's remarks at the beginning of the meeting regarding the right of anyone to lobby the Board. He said he wanted to clarify that his attendance at FAB meetings was due to the fact that the Mayor had assigned Finance to him as his area of interest. The Commissioner, who initiated review of the Fund and is not in favor • of the Town's participation in it, then addressed today's outcome re- garding the favorable vote to continue participation. He said that while he was not in agreement with the vote, he was pleased with the analysis given to the subject. He added that the board was definitely not a "Rubber Stamp" committee. Regarding Commissioner Rand's continued attendance at FAB meetings, the members were unanimous in their support that his presence was most wel- come and that they would like to continue to benefit from his input and expertise. Mrs. Mariano noted that the 1991/1992 fiscal year budget process was one of the easiest ever, thanks to Commissioner Rand's at- tendance at all budget meetings and his ability, as financial liaison to the Town Commission, to clarify decisions and recommendations made during the budget process. Discussion re Workers Compensation, Liability, and Property Insurance Proposal (continued) Messrs. Burke and Salzgeber returned with the requested information on rating classifications and presented copies of "Best's Key Rating Guide - Property/Casualty Edition," which showed data covering 1986-1990. (Attached to and made part of these Minutes.) Discussion followed and it was noted that the reinsurer for Florida League of Cities, i.e., Mead Insurance Corporation, did not fare well in ratings when compared to Skandia and TransAmerica, which are the companies GRIT and CIGNA deal with; both had excellent ratings. r • Financial Advisory Board Regular Meeting - Minutes October 1, 1991 Page 5 of 6 In conclusion, Mr. Freeman/Mr. Firstenburg made the following MOTION: THE FINANCIAL ADVISORY BOARD_ RECOMMENDS THAT,THt FIRM OF BURKE, BOGART & BROWNELL,'INC. BE AWARDED WORKERS COMPENSATION AND PROPERTY INSURANCE COVERAGE FOR THE TOWN FOR FISCAL YEAR 1991/1992. The Motion carried unanimously. Review of Vesting Schedule re Retirement Plan During discussion it was agreed that the 3-year full vesting period now employed by the Town is too short a time, particularly since to become vested should be a reason for an employee to stay for a protracted period of time. It was also noted that federal law states a 5-year vesting period. Mrs. Mariano advised that the change from the 3-year vesting period to a 5-year one could be accomplished through a Resolu- tion by the Town Commission. Emphasis was given to the fact that the 5-year schedule would apply to future employees only. Some time was spent in consideration of how the percentages over the five years would be applied and in conclusion, the following MOTION was made by Mr. Firstenburg/Mr. Freeman: THE FINANCIAL ADVISORY BOARD RECOMMENDS THAT ALL EMPLOYEES EMPLOYED FROM 10/1/91 BE VESTED IN A 5-YEAR SCHEDULE ACCORD- ING TO THE FOLLOWING: END OF FIRST YEAR OF SERVICE ........ N/A END OF SECOND YEAR OF SERVICE....... N/A END OF THIRD YEAR OF SERVICE ........ 33-1/3% END OF FOURTH YEAR OF SERVICE ....... 66-2/3% END OF FIFTH YEAR OF SERVICE ........ 100% The Motion carried with unanimous favorable vote. Budget Transfers Following explanation by Mrs. Mariano and Mr. Seaman, transfers re- lating to the Water Department, Refuse Collection and Law Enforcement were discussed and approved by the members. There being no further business to come before the Board at this time, the meeting was adjourned upon MOTION by Mr. Magarace/Mr. Freeman at 11:55 A.M. dmt •Financial Advisory Board Regular Meeting - Minutes October 1, 1991 Page 6 of 6 ATTEST: DATE: rm t APPROVE: w IMy —ro rowner, Chairman i or gr Hadeed , yl qe Chairman Fred Firstenburg Dennie Freeman F n A. Mag race