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VLCT Property and Casualty Intermunicipal Fund (PACIF), Inc.
Board of Directors Meeting
Friday, December 14, 2018
VLCT Offices, Montpelier, Vermont

Minutes

Directors Present: Pete Johnson, Carl Rogers, Joshua Powers (by phone), Neal Fox, Aaron Frank, Stuart Hurd, John Lawe, Bruce Urie, Brendan Whittaker (by phone), David Atherton and Patrick Moreland

Staff Present: Joe Damiata, David Sichel, Maura Carroll, Jeremiah Breer, Fred Satink, Kelly Kindestin, Kelley Avery, Jill George, Abby Friedman and Trevor Whipple

Others Present: Magali Welch, Kristen Sharrow and Jillian Mulcahy (Johnson Lambert)

President Johnson called the meeting to order at 9:40 a.m.

Prior to calling the meeting to order, President Johnson presented a gift to David Sichel on behalf of the PACIF Board in appreciation for his many years of service and wished him a happy retirement.

Upon motion (Frank/Fox) duly adopted, the Board voted unanimously to approve the agenda as presented.

Upon motion (Fox/Urie) duly adopted, the Board voted unanimously to approve the minutes from the October 12, 2018 meeting as presented. 

Magali Welch, Kristen Sharrow and Jillian Mulcahey from Johnson Lambert presented plans for the 2018 PACIF Audit Plan to the board, including the timeline for completion.  The firm plans to complete the audit in March of 2019 and report to the board at their meeting that month. Staff left the room in order for the auditor to have a direct discussion with the board.

Joe Damiata provided an update to the board.

  • He showed a video news segment on recent competition. 
  • Our actuary, Chris Kogut from Milliman notified us that she is going to work for Price Waterhouse. Staff is considering going out to bid for these actuarial services.  
  • Peter Elwell was appointed to represent VLCT on the Joint Investment Committee.  
  • Mr. Damiata also updated the board on various staff changes and promotions, and Fred Satink introduced Trevor Whipple as the new Loss Control Law Enforcement Consultant for VLCT.

Mr. Satink updated the board on the 2019 PACIF renewal and new business. Ten members went out to bid, and so far, we have retained all, although we are waiting on a final decision from two. Renewal invoices were mailed to members on December 4th and reinsurance policies are close to being finalized. With respect to new business, there is one new prospect we are quoting, and the quote will be delivered on December 26th. Overall, it was a successful renewal year with excellent member retention.

Jeremiah Breer reviewed the financial statements through September 30, 2018. Net position has increased from year-end 2017 by approximately $6 million. This is largely due to a decrease in reserves of roughly the same amount based on the September 30 roll-forward of the actuary’s mid-year reserve analysis. Mr. Breer noted the Total Reserves figures for Current Fund Year and Prior Fund Year have not yet been updated to show the proper allocations but the sum of both is correct. He will correct the allocations prior to filing with the Department of Financial Regulation and send the corrected copy to the board. Revenues are just .1% higher than last year at this time, and general and administrative expenses are down 3.1% and 6.6% below budget.

Upon motion (Fox/Frank) duly adopted, the Board voted to accept the financial statements through September 30, 2018 as amended.

Mr. Breer also updated the board on the auditing services RFP process. Staff sent the FRP to thirteen firms and three responded. Staff and the committee will be interviewing all three candidates on Monday, December 17th and will bring recommendations back to the board for the phone meeting scheduled in late January.

Jill George reviewed the Q3 2018 PACIF Claims Report. Overall claims frequency was down, with workers’ compensation (WC) claims frequency average compared to prior years. Total incurred for WC was also average for the quarter. Property/casualty claims incurred were down, along with frequency this quarter compared to prior years.

Upon motion (Urie/Hurd) duly adopted, the Board voted unanimously to accept the Q3 2018 PACIF Claims Report.

Abby Friedman provided the board a summary of services provided by the Municipal Assistance Center (MAC) in 2018 and a proposal for services for 2019. The bulk of MAC services consisted of workshops, webinars and training sessions with the remainder spent on special projects and financial training and assistance from staff. The proposed service schedule for 2019 estimates no cost increases for these continued services next year.

Upon motion (Hurd/Urie) duly adopted, the board voted unanimously to approve the Proposed 2019 MAC Loss Control Work Plan as presented.

Mr. Damiata reviewed the VLCT Administrative Support Services Contract Addendum for 2019. The 2019 PACIF total for these services amounts to $4,410,961, which includes $2,229,418 in direct expenses and $2,181,543 in administrative costs.

Upon motion (Urie/Rogers), duly adopted, the board voted unanimously to approve the 2019 Addendum for the VLCT Administrative Support Services Contract and authorized the board President to sign.

Mr. Damiata reviewed the PACIF Proposed Budget for 2019. Fund contributions are decreasing overall of 1.67% compared to the budget for 2018. Workers’ compensation rates are down 2.7% while property and casualty rates are decreasing by 2.9%. The overall budget is increasing by 3.5%, largely due to increases in reinsurance costs. The proposed budget yields an operating surplus of $228,674 and projects an increase to net position of $147,674.

Upon motion (Fox/Lawe), duly adopted, the board voted unanimously to approve the Proposed PACIF Budget for 2019.

Staff provided the board with a brief update on the town of Victory’s probationary compliance period. The town just finished the first year of this period and seems to be making genuine efforts toward improvement. Jim Carrien, the town’s Loss Control Representative, noted the town appears to be sincerely engaged and making progress.

The board reviewed the proposed board meeting schedule for 2019.

Upon motion (Urie/Frank), duly adopted, the board voted unanimously to approve the proposed board meeting schedule for 2019.

The board reviewed the current list of officers and moved to retain the current slate as is with the exception of the Assistant Secretary, as David Sichel will be retiring. The board nominated Fred Satink to fill the Assistant Secretary position.

Upon motion (Urie/Frank), duly adopted, the board voted unanimously to retain the current slate of officers for 2019 and appointed Fred Satink to serve as the new Assistant Secretary.

The board alternate position terms are expiring at the end of the year. Staff is requesting the board reappoint the alternates for another one-year term.

Upon motion (Rogers/Hurd), duly adopted, the board voted unanimously to re-appoint board alternates Patrick Moreland and David Atherton for another one-year term.

Staff is recommending board ratify committee appointments.

Upon motion (Fox/Rogers), duly adopted, the board voted unanimously to ratify the existing committee appointments.

In other business, President Johnson noted he will not be serving out his full term for 2019 as he will be moving out of state next summer. Also, board members asked for an update on the Rebranding Committee. Maura Carroll noted the VERB Trust Board just chose a representative yesterday to serve on the committee, and work will likely begin in January.

The meeting adjourned at 11:44 a.m.

Respectfully submitted,
David Sichel
Assistant Secretary

Board or Committee: 
PACIF Board of Directors
Board Meeting Date: 
Friday, December 14, 2018

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