MINUTES
HULL CONTRIBUTORY RETIREMENT BOARD MEETING
August 27, 2003
The regular meeting of the Hull Contributory Retirement Board, duly posted to be held in the Selectmen's Meeting Room Meeting Room, Town Hall, Hull, MA on the above date was called to order at 9:01 a.m. Present were Maurice Murphy, Chairman, Members Leonard Colten, Ann MacNaughton, and James Yacobucci, and Retirement Administrator Marcia Bohinc.
The Chairman recognized Chris McCabe in attendance at 9:06 for a full Board.
The Board read and attested to the minutes of the July 30, 2003 board meeting without correction.
The Board signed all bill warrants for August 2003.
The Board signed the contributory payroll for July 2003.
The Board signed the contributory payroll for August 2003.
The Board discussed and made comments on the draft audit report from PERAC for the period January 1, 1997 to December 31, 1999. The Board expressed concern because of the period of the audit and the delay in receiving the findings. In general, the administration of the retirement system has changed in personnel, process and system, thereby mitigating the results. The Board directed the following responses:
1. Cash
A. A new retiree payroll account has been opened that is reconciled on a monthly basis.
B. The warrant process has been changed thus eliminating processing delays and the need for reconciling items.
2. Accounting
The Town and the Housing Authority made a total appropriation of $1,050,498 for FY98 for the pension fund appropriation and the expense appropriation. The required pension fund appropriation was $978,352.
3. Membership
A. The Town has a new payroll vendor who provides a System designed monthly contribution report with all the required information.
B. The payroll vendor has instituted procedures to correctly calculate when the additional 2% contribution is required and is monitored monthly by the retirement office.
4. System Administration
A. The Board has established procedures for meeting minutes for all executive sessions.
B. The retirement office has a fireproof cabinet for active and retiree files, and back-up storage disks, as well as off-site storage for computer disks.
5. Investments
The Board is aware of the required disclosure and investment forms and will comply for all future changes.
6. Accounting
The accounting system is now computerized, personnel changes have been made and new monthly accounting procedures instituted. The System is evaluating the feasibility of reviewing the trial balances and source documents from 1997 through 2000.
The Board approved two new member applications:
James R. Lynch, Firefighter
Janis Ford, Financial Assistant, Light Department
The Board discussed Police Chief Donald Brooker's contract regarding using sick leave buy-back as regular compensation.
Chief Brooker was in attendance.
The Chief stated that under G.L. c. 41 §108O, a town may establish an employment contract for its police chief and set the compensation as it deems appropriate. The Chief stated that is an employment contract, and has nothing to do with preparation of retirement.
The Board is questioning whether it was correct and legal for the Town Manager and the Retirement Board to accept the contract dated March 2002 between Police Chief Donald Brooker and the Board of Selectmen.
Chris McCabe made a motion, seconded by Jim Yacobucci to seek a legal opinion on the contract, specifically if it permits the sick leave buy-back as regular compensation, thereby making it pensionable. Voted: Ann MacNaughton, C. McCabe, Maurice Murphy and J. Yacobucci voted yes, Lenny Colten abstained.
The Board discussed regular compensation for motor vehicle usage and the required calculation based on personal use. Chief Brooker questioned whether it is correct to apply actual personal use, or the availability of personal use. He stated that it is practice for the Massachusetts' chiefs to use availability in the calculation. M. Bohinc will research and follow-up. A determination of the time Chief Brooker has had authorized personal use of a motor vehicle also must be determined. If the Board accepts compensation on the vehicle, it must be for the entire period the vehicle was available.
Application for Disability Retirement - David Leary:
J. Yacobucci made a motion, seconded by C. McCabe, to deny convening a Medical Panel in regard to police officer David S Leary's Application for Disability Retirement.
Discussion:
Chief Brooker stated that the Town appointed doctor determined that Officer Leary was physically fit to return to duty, and had been so ordered.
Officer Leary requested and was granted an authorized leave of absence until September 22, 2003. The Chief stated that Officer Leary will be re-examined by the Town appointed doctor prior to that date.
J. Yacobucci withdrew his motion to deny a Medical Panel and the Board.
A. MacNaughton made a motion, seconded by J. Yacobucci, to postpone a vote to proceed with a Medical Panel until after September 22. Voted unanimous, C. McCabe absent for the vote.
Application for Disability Retirement - Gary Taylor:
A motion was made by L. Colten, seconded by J. Yacobucci, to approve the Application for Disability Retirement for Highway Department employee Gary K. Taylor.
Discussion:
The Board reviewed the Medical Panel's clarification. Specifically, the Board reviewed the following responses by the Medical Panel:
the typical recovery period for Mr. Taylor's type of surgery is between three and twelve months
Mr. Taylor's recovery is typical and on track
there is no other information available to determine if the surgery will ultimately prove to be successful
it was the Panel's feeling that the disability evaluation should have been postponed for several months, since the result of the surgery could not be determined
according to the Guidelines, the Panel concluded that the incapacity is likely to be permanent
because the Medical Panel is unable to determine when Mr. Taylor will no longer be disabled, they must consider the disability to be permanent
based on the fact that significant improvement could still occur over the next approximately nine months, the likelihood of Mr. Taylor could return to his job is on the order of ten percent
Conclusion:
Based on statements made by C. McCabe that Mr. Taylor must be allowed to meet a medical end result prior to making a retirement decision:
J. Yacobucci withdrew his second to L. Colten's motion.
J. Yacobucci made a new motion, seconded by C. McCabe to not approve the Application for Disability Retirement for Highway Department employee Gary K. Taylor.
Vote to not approve the Application for Disability Retirement for Highway Department employee Gary K. Taylor: A. MacNaughton, C. McCabe and J. Yacobucci voted yes, L. Colten voted no, M. Murphy abstained.
The stated reasons for not approving are:
1. The Panel's opinion that Mr. Taylor has not reached a medical end following his back surgery in February.
2. Mr. Taylor is in the middle of a typical recovery, and that his recovery is on track and typical.
3. The disability evaluation was premature given the result of the surgery could not be determined within three and a half months of surgery.
The Board reviewed without discussion the year-to-date trial balance and cash accounts' reconciliation.
Investments:
The following investment materials were provided to the Board:
Fund Performance through July 31, 2003
SSgA and PRIT performance updates
Hull Profile - PRIT 11/30/2000 through 03/30/2003
PRIM Board Quarterly Letter - Second Quarter 2003
Freedom Capital Management, Client Update - Second Quarter 2003
The Board is still waiting on the outcome of the MACRS meeting regarding fiduciary insurance. M. Bohinc has been in contact with John Murphy at MACRS and will provide an update at the next meeting.
C. McCabe requested additional information regarding PERAC Memo #26/2003 - Local
Government Pension Holiday Program. M. Bohinc to follow-up.
At 11:23, M. Murphy departed the meeting.
At 11:24, a motion was made by C. McCabe and seconded by L. Colten to go into executive session to discuss strategy in preparation for negotiations with non-union personnel. Roll call vote: L. Colten, yes, A. MacNaughton, yes, C. McCabe, yes, J. Yacobucci, yes.
The Board resumed open session at 11:32.
The Board read all informational mail:
Memo from Ralph White - Re: Governor Signs ERI/Pension Holiday Law
PERAC Memo #24/2003 - Investment Manager List
PERAC News Bulletin - Municipal Relief Bill - August 1, 2003
PERAC Memo #25/2003 - Local Government Early Retirement Incentive Program
PERAC Memo #26/2003 - Local Government Pension Holiday Program
PERAC Memo #27/2003 - Update on Repeal of G.L. c. 32, § 5(1)(e) Spousal retirement provision
Various news items from Pensions & Investments - August 4 and August 18, 2003
The Babson Staff Letter - July 25, 2003
The Babson Staff Letter - August 8, 2003
Segal Bulletin - June 2003
Segal Public Sector Letter - July 2003
Retired State, County and Municipal Employees Association of Massachusetts Newsletter - September 2003
Letter from Kenneth Cowen, Hull Retiree - Dated 7/28/03
The next regular Board Meeting is scheduled for Wednesday, September 24, 2003 at 9:00 a.m. in the Selectmen's Meeting Room.
The Hull Contributory Retirement Board meeting adjourned at 11:35 a.m.
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