Thank you. ¶¶ Thank you. ¶¶ ¶¶ Thank you. The End The End Thank you. Thank you. Thank you. Thank you. The End Thank you. Thank you. Thank you. Thank you. The End Thank you. I'd like to call to order the police and fire pension meeting of January 10, 2018. First on the agenda is the Treasurer's Report. Mr. O'Meara. Thank you. Included in the agenda is the Treasurer's Report. It includes the transfer request. It shows the balances by fund. It shows the statement of net assets, October versus November. It has the activity of those two months as well as bank statements. And then, let's see if I can read this correctly this time, our balance as of this morning, $750,295,937, and that compares to last month of $735,574,383. That's the Treasurer's report. Is there a motion to approve the transfer authorization letter for payroll? Motion to accept the report and approve the transfer letter. Second. There's a motion and a second. All those in favor of the motion? Aye. All those opposed? The motion passes. Next on the agenda is the minutes for the July, September, October, November, and December board meetings. I need a motion, please. Second. Motion. I do make a second. I'm sorry. John, thank you. All those in favor of the motion? Aye. Any opposed? Motion passes. New business item number one is ghost time purchases for Aaron Adams, Christopher Holiday. I need a motion to approve. So moved. Second. All those in favor of the motion? Aye. Any opposed? Motion passes for the purchase of ghost time. I can't multitask, so I'm doing my best. Can we just take a second so I can text message somebody about the TV? Thank you. We are being televised. Item number two, military payback for Matthew Williams, Kelvin Eden, Danny Page, Jeffrey Presley, William Riker, and Matthew Silver. I need a motion, please. So moved. Second. All those in favor of the motion? Aye. Any opposed? The motion passes to approve military Bayback Town. Item number three is request for rehearing for Christopher Branham. I would suggest making the, February is going to be busy with probably two or three presentations, so my suggestion is to move it to March, so March 14th. I need a motion to approve. Motion to approve and set for the March meeting. All those in favor? Aye. Any opposed? Motion passes. Item number four is the IRS determination letter. It's for informational purposes only. The IRS did issue us a favorable determination letter, so we are in good standing. Item number five is the update on the letter regarding the city's stance on the employer contribution rate regarding the firefighters lawsuit. And I believe Roger just handed out a letter. Roger, if you don't mind, can you read that letter, please, just to put it on record? You want me to read? I'm sorry, you want me to read the letter? The letter is dated January 9, 2018 from Wyatt Tarrant & Combs, signed by Douglas L. McSwain, addressed to the Police and Firefighters Retirement Fund, Attention Board of Trustees. Reference or RE inquiry regarding firefighter settlement. Dear board members, this firm represented the Lexington Fayette Urban County Government, LFUCG, in parenthetical, and the litigation filed by numerous current and former firefighters, Stob Blankenship et al., the LFUCG, Fayette Circuit Court Civil Action Number 05CI5024, parenthetical, the lawsuit. As you are aware, the Fayette Circuit Court approved the settlement of the lawsuit on or about May 31, 2017. LFUCG has informed us the board has made an inquiry as to why LFUCG did not pay interest into the Policemen and Firefighters Retirement Fund, parenthetical Retirement Fund, in connection with the settlement of the lawsuit. We were responding to such inquiry on behalf of the LFUCG. Enclosed herewith is a copy of the settlement agreement release, the settlement agreement executed by the plaintiffs, firefighters, and LFUCG, which is filed in the public record with and approved by the Fayette Circuit Court. The settlement agreement specifically notes that LFUCG denied all of the allegations and claims asserted by and denied any liability to the plaintiff firefighters. That remains LFUCG's steadfast position to this day. LFUCG has complied with the terms of the settlement agreement and does not believe it owes any additional monies to anyone associated with the settlement of the lawsuit, including the retirement fund. Sincerely, Wyatt, Taryn, Combs, LLP, Douglas L. McSwain. I will note that the letter indicated I did not hand out a copy of the settlement agreement. That is a public document. If anyone does not have that, I can get that to them after the meeting. Okay, thank you. And Commissioner Omara, the city did end up making a contribution to the fund based upon the settlement amount, correct? That's correct. LFUCG paid into the fund the current rate, 35-something percent, that was in effect on the date of the payment. Okay. Okay. So as a part of the settlement, then it was agreed that monies were due to the, I guess, I guess the city stance was that they did need to contribute to based upon the current arc for the current year. but it is the city's stance that there's no additional interest owed for the fact that some of that money went towards contributions that were made on the part of firefighters going back, I believe, all the way to 1991. Is that correct? Oh, Dave. Yeah. Roger, do you know how far back that went? I do not know how far back or what the specific earmarks were for any of the particular individual payments for particular settlers within that lawsuit, but that could be determined. Okay, but it's my understanding that as a part of that, the firefighters contributed at either 11 or 12 percent based upon the years that those funds were due to them. Is that correct? I'll defer to Mr. O'Mara, but my understanding was that there were amounts earmarked and paid into the fund that were designated as a percentage of. There were earmarks, yes, and it was deducted from the employee's payment, and then the employer, LFUCG, matched that at the current rate. Okay. So then we could, is it safe to say then that the city then can attribute, at least on an annual or fiscal year basis, that those contributions were specific at the 11 or 12 percent rate for those corresponding years? I'm trying to follow your question. I think the statement that you're looking for is, in order to calculate a settlement amount that both parties agreed to, we looked and used calculations based on the litigants' history with their employment as firemen. Is that what you're saying? Right, and then you stated that there were earmarks made for each year, correct? I didn't use the word earmarks. I said that we based our settlement upon the history of the litigants with their time as firefighters at LFUCG. Okay, maybe I misunderstood you, but I thought a second ago you said that there were earmarks made. I think what Sergeant Kennard is trying to ask, for example, Captain Conley, how many years do you have on? 13 years. So a portion of his time would have been at the 11 percent rate, and a portion of his time would have been at a 12 percent rate as far as what the employee should have been contributing. I think what Sergeant Kennard is asking, and if I'm wrong, you can correct me, is, for example, in the case of Captain Conley, did the city differentiate? He had X thousands of dollars that should have been at the 11% rate, and then he had another Y thousand dollars that should have been at the 12% rate, because in 2013 we changed the contribution rate. I'll have to reread the settlement. But what we negotiated was there was discussion about since the terms are we renegotiated. We had a new set of standards for the retirement. At that point, there was a new employee deduction period. Part of that was deducted from the employee. LFUCG put in the difference to make sure that they were putting in the full employee portion for those three, I think it was three years since the change in the state law and the way the fund is calculated. I just confused everybody. Sorry, I'm not using the right terminology. Yeah, that sounds to me like you with, so were contributions withheld from the payouts to these? firefighters okay and was it 11 percent again i'll go back and look i didn't reread the settlement for coming today so okay um i think ultimately my question is we've withheld those contributions from the firefighters going back to then and And I'm not sure whether it was done at the 11% or 12% rate. It almost sounded as if you might have said potentially that it was done at 11% and maybe did the city contribute the additional 1%? That's correct. Okay. For that three-year period. Okay. Thank you. All right. I would like to discuss as a board the fact that the contributions that the city chose just to contribute at the current arc for this current year. But some of those payments were actually due to firefighters way back many years ago when the arc was in fact considerably higher, up in the 40% range. and I think it's worth at least having the discussion of how that's been handled and whether or not we as a board maybe need to look at retaining counsel to see if we agree with what's been done or if we need to look at a possible legal remedy. I don't know if anybody else has any other thoughts. I guess just from a simplistic question, was there any analysis done on what this was going to do from a pension liability standpoint? Because my understanding is there were a lot of firefighters who received additional back pay, which changed their final salaries, changed their retirement payments, and then back payments were made as well. but obviously then those back payments now have current and future fiscal implications as far as, you know, if a person's retirement pension was, say, $3,000 a month when they left, and through all of this it now becomes a $3,800 pension payment per month, there's obviously implications for that. And was any analysis done to see what additional liabilities the settlement imposed on the fund? I didn't review all of these papers before coming, so I'm answering not on top of the game here. I'm not trying to catch up. But if you remember, there was an analysis of anybody who had already retired and a refigure of their retirement, and those dollars were brought to the board, the board voted to make adjustments to those retirements. Yes. That amount was way under what the contribution that was made to the fund at that 35 point something percent. And the arc is self-adjusting each year because we're on a level dollar, I think is the right term. So, again, you look at the actuarial responsibility of the fund, and the rate that is set for each year goes to make sure that that is paid at the end of that closed 20-year period, however far in we're into it, whether there's 16 years left or 17 years or whatever the case may be. So the arc takes that into consideration for all future years, and that is what the LFUCG responsibility is and is set by the actuarial analysis each year. Am I explaining that correctly? I think we understand that portion of it. We understand how the arc is calculated. I think the point, the question we have is that I'm not certain that contributing at the current year ARC is correct. I'm of the opinion that those dollars were earned by these firefighters in previous years when the ARC was at a different rate. Therefore, the city should have contributed at the arc for those years when those dollars were earned, which would then increase our funding level. That money, since it was not put in there at that time, was now not in there during good market years, in which the market's gone up considerably, which would ultimately, had those dollars been in there, would currently reduce our unfunded liability and actually potentially make the ARC for this year less than what it is now because we would have more money in the fund. So that's why I'm kind of questioning this, is that I'm not certain that contributing at the current ARC is exactly what should be done, and I'm of the opinion that it should be looked at calculated differently. Just a point of clarification. When was the settlement finalized? Was it just this past fall, like August-ish? Yeah, it was this past fall because we made adjustments to the retirees, I think, in October. Okay. Excuse me, I think it was earlier than that. We recorded the settlement was by June 30, so it was in last fiscal year, but the actual payments may have occurred after June 30. The letter states May 31st. Okay. Okay. Do we know if Kevin O. MacDonald took the settlement information into account when calculating the recommended arc for this year? Because we transfer a lot of data really before the end of the fiscal year, so I don't know. I mean, I don't disagree with you, Bill, and I just want to, I don't know. I believe they did. I believe they took in account the changes. The additional contribution that was put in was obviously taken into account, as well as any adjustments made to a retiree's pay during that period of time would be reflected in the records that we sent them. So, like you said, if they have an increase of $300 per month, that would have been part of that calculation that they did overall for the total amount that we pay out to retirees. I guess I just want to verify, if we didn't make the payments until August, Would those payments, would that have been reflected in the information that was sent to Kavanaugh? Yes, because it was, as Bill said, it was payments may have been made then, but they were put back into the prior fiscal year. So Kavanaugh, they were accrued back. So Kavanaugh got those records as well as part of whatever financial activity happened in fiscal year 17. I guess the timing of it is where my area of concern is. I don't challenge the notion that either that was the intent or anything like that. But if we're transferring, I mean, Kavanaugh gets all their information in July. But if we don't make the adjustments until August, but then we backfade them into the previous fiscal year, How do we ensure? They get data as of July, but we are constantly sending them information up until usually October is when we are finalizing all our, you know, our CAFRA is not even issued until later in November. So we're finalized. So we are constantly sending them data up until that point. If I could just make a comment, respect Sergeant Kennard's comments and his perception. I just want to give an alternate perception and logic flow. The settlement was paid in 2017. It was taxable as earnings in 2017. It was not taxable as earnings in any other period. And so we treated it as a 2017 payment and used the 2017 arc that was in effect when it was paid. So there's a stream of logic that is different from what you had put forward. I just wanted to put that out there. Can accounting provide the board with a breakdown of what those payments were, I guess attributable to an annualized basis? for I guess basically is what I'm asking for is a fiscal year chart of how much pay there was for each of the individuals. I don't need names but I think that's part of what Roger is saying is part of the settlement that if you wish to have a copy of the settlement all of that's included, I believe. I don't know whether it would show it or not. Obviously, just get with me after the meeting, and I'll make sure to get you a copy. I don't know if it will answer that question in that much detail, though, but we can check. Okay, yeah, if you could forward that to me. And then if that's not in there, I would actually like to get a breakdown of that. Just as a question of clarification, you want the total payments, or do you want to see just what the current and future impact is of those payments? For example, the person who went from a $3,000 monthly pension to an $800 a month pension, at the age of, say, 65, we have another 15 years of liability at $800 a month. whether that person got an $80,000 payout or whatever. No, I was talking about what their earnings were and looking at the 11% or the 12% that would be held back at that time at those rates of pay back on a fiscal year basis. And then also that's just what I'm really wanting right now is at least to have an opportunity to look over that information. Roger, you can forward that and see if that's there or not. I guess I can contact Bill and kind of clarify further. I have a little simpler request. I'd just like to know that Kavanaugh-McDonald did take the firefighter settlement into account when calculating the currently recommended ARC. I'd just like to stay from them to say. We'd be glad to contact them and respond. That way there's no, I mean, I appreciate the thought process, you know, the explanation, but it would just make me feel more comfortable because I do understand your position, Mr. Mayor, and the fact that the ARC should be taking any liabilities that were, you know, any funds that were missed in the past should be taking that into account as far as what's owed for the future. And I accept that on its face. I just want to verify that that's where we are. Thank you. Okay, next on the agenda is the disbursements for January. They're listed on the agenda. I need a motion to approve. So moved. All those in favor of the motion? Aye. Any opposed? Motion passes. Service retirements for police. Officer Michael Cole, retirement effective January 5, 2018 Chief Mark Barnard, retirement effective January 6, 2018 Officer Brian Penix, retirement effective January 6, 2018 Lieutenant Richard Willoughby, retirement effective January 8, 2018 and Commander Jonathan Sherrod, retirement effective January 8, 2018 I need a motion to approve Second All those in favor of the motion? Any opposed? Motion passes to approve all the service retirements for police. Service retirements for the fire department. Major Brian Wood, retirement January 5, 2018. Captain Christian Urich, retirement January 5, 2018. Battalion Chief Mark Harvey, retirement January 6, 2018. Firefighter John Durr, retirement January 6, 2018. Captain Jason Tuttle, retirement January 6, 2018 Firefighter Raleigh Brown, retirement January 6, 2018 Captain Kelly Smith, retirement January 6, 2018 Firefighter Charles Tamper, retirement January 6, 2018 Firefighter Matthew Olmsted, retirement January 7, 2018 Firefighter Trevor Sizemore, retirement January 7, 2018 Captain Roy Highland, retirement January 7, 2018 Firefighter William Easton, retirement January 7, 2018 Firefighter Clifford Birdsong, retirement January 8, 2018 Captain William Norton, retirement January 8, 2018 And Captain Kevin Devine, retirement January 8, 2018 I need a motion to approve, please There's one correction, Susan. I'm sorry? It's number one is Battalion Chief Brian Wood. Oops. Thank you. All those in favor of the motion? Aye. Any opposed? Motion passes for the service retirements for fire. Tributes. We have Roberta Doolin, Division of Fire, widow of Bill Doolin, passed away on December 3, 2017. I did not have the pleasure of knowing Ms. Doolin, but I did know her husband on behalf of this board, the Urban County Government, and the Division of Fire and Emergency Services if we would like to express our condolences to the family. Subcommittee updates. Since Tommy is not here, we will not have an update on the continuation of benefits and the legislative subcommittee. The organizational subcommittee, Larry. We have a meeting scheduled for January 18th at 1. Are there any informational matters? Well, go ahead. I'd just like to congratulate Officer Colt, Chief Barnard, Detective Penix, Lieutenant Willoughby, and Commander Sherrod on their retirements. There's over 120 years of experience there that we've lost, and I wish them all well in their next endeavor. Treve, I do have a question. A number of these people's retirements were prior to this board. If we had voted no, would those people be AWOL today? Okay, besides that, every year at this time I do quick math on an iPhone and it's really tough, but Division of Police and the Division of Fire lost 319 years of service in today's retirements. experience is something that's extremely important to both divisions. I'd like to wish those people the best of success on their retirements and wish them a fond farewell. I, too, would like to wish all the folks that are retiring on service well today. Few people ever get the opportunity to understand the sacrifices that they and their families have made for the time that they've served and those of us that have done that understand that and we really appreciate what you've done for this community and the difference in the quality of life that you've made during your career for our citizens so thank you. And I too would like to thank all the people from the Division of Police and the Division of Fire that and congratulate them on their retirements and I'm going to challenge you Rockley for the Division of Fire it was 316 years and nine months is what we figured so I don't know what maybe you might want to check your iPhone over there Chief I'm sorry I read fire so it's 428 total for police and fire but anyway we want to thank you very much for your service and you will be soily missed on the Division of Fire from all that from what everybody contributed and but we hope they won't be strangers and they will come back and visit us and still contribute to many jobs that we have for retirees so thank you very much entertain a motion to adjourn second second all's in favor aye All opposed? Motion passes to adjourn. you