Board of Directors Meeting DRAFT

Board of Directors Meeting DRAFT

Rosen Centre Hotel, Orlando, FL

Date:January 28th, 2017

Call to Order:2:10PM

Directors Present:

Pete Prior, CPPT, Chairperson

George Farrell, CPPT, Vice-Chairperson

Ann Thompson, CPPT, Secretary

Steve Aspinall, CPPT, Treasurer

Tim Olsen, CPPT, Director

Dwight Mattingly, CPPT, Director

Christopher Spencer, CPPT, Director

Ken Harrison, CPPT, Director Emeritus

Others Present:

Kim Ryals, CPPT, Chief Executive Officer

Peter Hapgood, CPPT, Education Consultant

Jeanine Bittinger, CPPT, Accountant

Richard Cristini, CPPT, Auditor

Ron Cohen, CPPT, Attorney

Brent Chudachek, CPPT, Attorney

MJ Chwalik, Chief Operating Officer

Sean McKinstry, CPPT, Executive Assistant

Susan Marden, Public Relations Consultant

Fred Nesbitt, Media Consultant

Michael Spencer, Dean of Faculty

Absent: Ray Edmondson, Renee Lipton

Quorum: Verified and Seconded

Consultant reports

Education Consultant – Peter Hapgood

Mr. Hapgood reported that there are over 600 attendees at the Winter Trustee School. Mr. Hapgood reported that special programs at this school include the Individual Retirement Programwith Dee Lee as well as a Certificate Program with a focus on investment consulting-- currently with approximately 40 attendees pre-registered. Mr. Hapgood outlined his intention to build certificate programs with a total of 10 concentrations. So far the FPPTA has hosted two actuarial certificate programs and a fixed income certificate program.

Mr. Hapgood reported the winter trustee school has two breakout rooms and one general session room in CEU. There will be panel discussions in the general session room focusing on a variety of topics.

Mr. Hapgood reported that he was pleased with the study guides for CPPT program. In an effort to emphasize the FPPTA app, there will be just a few hard copies in CEU of presentations in the CEU rooms for those who request a hard copy.

Mr. Hapgood reported that this school’s guest speaker on Wednesday is former Bruins hockey player, Derek Sanderson. Mr. Hapgood knows Mr. Sanderson personally from their time working at Nordea and believes his life story will be one the membership finds interesting and of value. Mr. Hapgood reported that a Boston Bruins hockey shirt will be raffled off and 125 copies of Mr. Sanderson’s book will be handed out before his session. Mr. Harrison voiced that he remembered Mr. Sanderson spoke at the FPPTA back in the 1990’s and remembered he was well received.

Mr. Hapgood reported that he and Ms. Ryals, Dan Kleman, and W.O. Bell held a meeting with Florida Tax Watch, the Florida League of Cities, LeRoy Collins Institute, and the FL Division of Retirement.

Mr. Hapgood voiced his opinion that the stock market, political landscape, new mortality tables, reductions to the rate of return is a perfect storm brewing against DB plans, also noting that the ability to reduce volatility would go a long way in public perceptions of the sustainability of DB plans. Mr. Hapgood said he believes there’s common ground with the League of Cities who expressed to him that they are a pro-DB organization. He also saw opportunity to find common ground with the LeRoy Collins Institute; however the Florida Tax Watchis indeed an adversary to defined benefit plans and mentions their efforts to erode retirement benefits through constitutional amendments. Mr. Hapgood emphasizes a need for FPPTA members to be vigilant for legislation that could impact plans. Mr. Hapgood reported that the idea behind the meetings was to open up a dialogue among these different groups and see there’s a shared goal or possibility for a constructive relationship. Mr. Hapgood reached out to see if the president of the league of citieswould speak at an FPPTA functionas well as Liz Stevens from the Division of Retirement. Mr. Hapgood mentioned that they also spoke with Ash Williams of the Florida State Board of Administration. Mr. Hapgood again reiterated the idea was to open up a dialogue and to see if there was any common ground.

Mr. Prior mentioned that there is a dichotomy in the League of Cities -- that there’s a pro-DB aspect because their management has a great benefit package, but the League of Cities also has been interested in getting the 175-185 money and the unions have given in to that pressure to an extent. Mr. Prior mentioned that Jim Lynn is also going after closed plans is going after closed plans despite the passage of 172 that dictates previously closed plans are not subject to the law. Mr. Prior mentioned that there have been letters sent to the division of retirement on this, but no response has been given.Mr. Hapgood responded that he was surprised to hear the League of Cities say they were pro-DB plans and told them they’ve been considered to be an enemy to DB plans in the past.

Mr. Prior asked if the FPPTA should target the cities the League of Cities have to become FPPTA members. Mr. Prior noted that there’s a lack of transparency in how some of those plans operate.

Mr. Hapgood concluded that he felt the meetings were positive and having an open dialogue with these groups could benefit the FPPTA. Ms. Ryals confirmed it was the most positive interaction the FPPTA has had with the League of Cities.

Mr. Mattingly asked Mr. Hapgood if Ash Williams mention the move to shift to DC plans as the default.Mr. Mattingly mentioned that they continue to want to make a DC plan is the default if a member doesn’t explicitly choose their plan. Mr. Mattingly mentioned there is also the League of Counties - Mr. Hapgood reported that Ash Williams said Jim Lee would be a contact for the League of Counties.

Mr. Mattingly also mentioned there is a constitutional committee that reviews the constitutionan makes recommendations for amendments. Thirty-six people are chosen to serve on that committee and wonders if the FPPTA could be represented on that committee.

Mr. Hapgood reported that the June conference will have a primary focus is on funding. Immediately following the Board of Directors meeting Mr. Hapgood would be meeting with the consultants to brain storm more ideas for the conference.The FPPTA Morning show format will be held on Tuesday of the June program. He reported that the only real complaint he received about the morning show was that it was too long – he’s keeping that in mind in the creation of this year’s conference. Mr. Hapgood complemented the staff and consultants, and praised the constructive culture Ms. Ryals and the team has created.

Public Relations – Susan Marden

Ms. Marden reported that she has been revamping the newsletter with added features like cartoons and quizzes. Ms. Marden reported that she would be surveying attendees at the Trustee School in regards to the newsletter to get a better feel of what the membership likes about it and how it can be improved. Ms. Marden also reported that she has continued to work with FPPTA staff on the new website providing content and organizational descriptions for it. Ms. Marden also expressed a desire to write more op-eds and be more active in traditional media outlets in the coming year.

Ms. Marden reported that she will be working with Ms. Ryals this spring on a campaign to create promotional materials in an attempt to recruit some additional associate members.

Ms. Marden reported that she continues to monitor and maintain the FPPTA’s social media platforms. Ms. Marden worked with Mr. McKinstry to write and produce the “Recipe for a Secure Retirement” video. Ms. Marden reported that videos like this could be useful in generating traffic to the FPPTA’s websites to be shared on social media platforms. Ms. Marden played the video for the board of directors. Ms. Marden discussed various ways to distribute the video to FPPTA membership and beyond reaching out to unions and other organizations like the FPPTA. She would like to follow up with the video by shortly after distributing an infographic to accompany the video’s theme and if the feedback is positive potentially creating a video series.

Mr. Prior asked about the cost of the video. Ms. Marden reported the cost was $2,000. Mr. Prior suggested they could have allocated more money in the budget for projects like these. Ms. Ryals responded that there were funds for this built into the budget for promotional efforts.Mr. Prior and Mr. Spencer complimented the video.

Ms. Marden also reported that she will be working with Mr. McKinstry and Dr. Nesbitt on efforts to revamp the Public Pension Institute website.

Media Consultant – Fred Nesbitt, CPPT

Dr. Nesbitt reported that he will be working with Mr. Hapgoodon creating the program for the Annual Conference. He will also be working with Mr. McKinstry and Ms. Marden in revamping PPI. Dr. Nesbitt reported that he continuesto collect pension clips and refers to a full report in the Board of Directors meeting packet. Dr. Nesbitt talked a little bit about the team efforts on number of projects and complimented his fellow consultants and the FPPTA staff -- considers the totality of everyone’s efforts on each project as a strength and everyone’s personalities compliment the mission of the FPPTA. Dr. Nesbitt reported that media surrounding public pensions are less volatile at the moment, but that could change.

Mr. Prior asked if there was an update on Jacksonville’s situation. Dr. Nesbitt had nothing new to offer at the moment. Mr. Hapgood followed on the topic of Jacksonville asking Ms. Ryals to give an update on the status of having Jacksonville join the FPPTA. Ms. Ryals reported that she has spoken at length with the new administrator and there was an interest once he was able to settle in and wrap his arms around the task at hand. Mr. Hapgood reported that Tim Johnson is from Pennsylvania and with our past assistance to the PAPERS organization; there may be another ally in Mr. Johnson concerning trustee education.

Dean of Faculty -Michael Spencer, CPPT

Mr. Spencer reiterated Dr. Nesbitt’s point that working with the staff and other consultants has been a constructive experience. Mr. Spencer reported that the Winter Schoolis the second iteration of what was offered in the fall. Mr. Spencer will be reviewing andmaking changes to the curriculum after this school for the fall and make sure we’re delivering the best program for the members possible. That process will involve reviewing each presentation for quality of content and to make sure no associates are abusing the speaking opportunity.

Mr. Spencer reported that the CPPT exams are the same exams from October and will again be revamped before the fall school.

Mr. Prior asked Mr. Spencer about the exam reporting with the testing software. Mr. Spenceranswered that the reporting is coming along. He’s been working with Mr. McKinstry to produce the reports and while they have been fairly rudimentary to this point he has some ideas as to how to improve it. For the purpose of the winter school, Mr. Spencer said he was able to run a report to identify questions on the exam that gave classes trouble (where a class may have close to 50% give the wrong answer) and see whether or not the question or answers could be worded better, but after review thought the questions were fair and it was a matter of 50% of the class choosing the wrong answer.

Ms. Thompson reiterated the usefulness of that report and mentioned there were other questions where the entire class would get the answer correct.

Mr. Hapgood noted the degree that Mr. Spencer reviews and provides oversight to presentations and the testing. And that it’s a tedious process to review each presentation to make sure the corresponding questions are covered in the materials in a meaningful way.

Ms. Ryals offered her gratitude to the team of consultants and complimented each of their own unique set of skills and the ways they conduct themselves and work with each other as well as the staff. There are no egos involved -- everyone truly works for the greater good of the organization and the membership. Mr. Prior dismisses the consultants so they can attend their next meeting.

Approval of minutes:

Mr. Aspinall motions to approve the minutes from September 24th, 2016. Mr. Olsen seconds the motion. Motion to approve the minutes passed unanimously.

Ms. Thompson motions to accept advisory report from the fall school. Mr. Olsen seconded the motion. Motion passed unanimously.

Old Business:

None

New business.

None

Officer Reports

Treasurer – Steve Aspinall, CPPT

Mr. Aspinall reported account balances as of 1/23/17 as follows:

BB&T MM $23,221.45

PM Relief Fund $32,041.19

PM MM $53,568.89

PM Operating $464,812.47

Total $573,644.00

Mr. Spencer asked if those totals were after expenses of the winter school. Mr. Aspinall reported that no, these numbers do not reflect the winter school expenses.

Mr. Olsen motions to accept the report, Ms. Thompson seconded the motion. Motion passed.

CEO report – Kim Ryals

1. Ms. Ryals reported that the 2017 membership to date consisted of 128 associates, 252 trustee boards. Ms. Ryals reports there is a difference of 82 associate firms as compared to 2016, but it is still early in the year and she expects more to come in. On the pension board side, membership is a little closer with a difference of 30 boards. Ms. Ryals reported that she will begin a membership campaign after the school targeting the associate membership first. She will target members who have not renewed from 2016 but also revisit some members from years past as well to see if they’d be willing to come back. Mr. Prior suggested that Ms. Ryals also reach out to the League of Cities plans.

Mr. Mattingly asked if anyone can see who are members are and who are not from the FPPTA website. Ms. Ryals stated one would need to be logged into the private section of the website to see that -- Only members can see who else is a member. Ms. Thompson referenced the budget predicted an increase of associate members of 17 so that should be added to the deficit. Ms. Ryals acknowledged that was true, but restated that membership renewals were still coming in almost daily. Ms. Ryals also mentioned that these numbers consist only of those who have paid for renewal and there may be some members who have renewed and just haven’t paid their dues yet. Mr. Mattingly asked if members who have not renewed their membership yet are allowed to log into the website. Ms. Ryals reported that there is a grace period, but as of March 1st their account is locked until membership is renewed. Ms. Chwalik added that the new website will have an automatic expiration date. Mr. Mattingly brought up the possibility of late fees to incentivize more timely renewal. Mr. Mattingly suggested that trustees may not know when their administrator renews membership, and suggested that the earlier the expiration date that blocks members out of the site would push administrator’s to renew in a more timely fashion. Mr. Harrison stated that many pension boards hold their first meeting of the year in February so March 1st was probably a good cut-off date so boards can address due payment at their meeting if necessary.

1. Ms. Ryals reported 609 attendees at the winter school. 382 trustees, 184 associates 566 paying attendees and 34 non-paying attendees (directors, staff, consultants, and some speakers). It’s the largest school to date by at least 50 attendees.

Mr. Prior pointed out that even though membership is down, there is a larger percentage of the membership attending.

1. Ms. Ryals reported that she would be moving forward with the communications and branding initiatives. One of the things Steve and Cindy Cresenzowanted to do is to poll a focus group. Ms. Ryals will provide them with a group of 12 or so members that to be interviewed by the Cresenzosto get an idea what the membership thinks of the FPPTA - strengths and weaknesses, direction, etc.

Ms. Thompson asked if some of these initiatives have already started. Ms. Ryals said that some of the things are already being implemented but others are being postponed to get some direction first. Ms. Ryals mentioned that they had reviewed the new FPPTA website and they had nothing but compliments to share. Ms. Ryals again credited the staff and consultants for their advice and offering meaningful changes and improvements incorporated in the website.

1. Wall Street Program is under way. Ms. Ryals has a meeting with the 15 sponsors on the Monday of the trustee school. The 15 sponsors represent $97,500 in sponsorship revenue. That’s four additional sponsors from 2016.

1. Ms. Ryals reported that one of the topics in the consultant meeting was the need to distribute time sensitive materials (urgent stories, legislation, etc.).

1. Ms. Ryals reported that she will be reaching out to Chad Little and Adam Levinson to provide more content regarding legislation. Ms. Ryals also mentioned that Mr. McKinstry would be working to update and revamp the Public Pension Institute website. Mr. Mattingly asked if the two website would be merged. Ms. Ryals said they would be separate websites but there would be a fair amount of coordination between the platforms. Mr. Mattingly asked what the cost of running PPI was – Ms. Ryals reported that the hosting fee was $1,300 per year and that was the only cost outside of Mr. McKinstry’s salary.

1. Ms. Ryals reported going line by line through the budget with the board of directors at the December budget meeting. The decision was made to increase registration fees for the fall school and the annual conference. The fees for trustees will increase $100 and an increase of $50 for associate members. There was also discussion about raising the fees for the Wall St. Program in 2018, noting that the timing of the program prevented any changes in fees for 2017. Ms. Ryals proposed a Wall Street Program registration fee of $800 for trustees, $400 for guests.

On expenses, Ms. Ryals reported a lengthy discussion about food and beverage at the December budget meeting. Ms. Ryals reported they would be making cut backs where possible, for instance, offering only beer and wine and eliminating liquor from hospitality and other gatherings. Ms. Ryals also reported offering pitchers of water as opposed to bottled water, citing an average price of $4.00 per bottle plus a service fee. Ms. Ryals reported a continued effort to negotiate with the hotels to cut back on costs so the FPPTA doesn’t offer less, but more inexpensive options.