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VLCT Property and Casualty Intermunicipal Fund (PACIF), Inc.
Board of Directors Meeting
Friday, May 22, 2020
Via GoToMeeting

Minutes

Directors Present: Carl Rogers, Joshua Powers, Aaron Frank, Stuart Hurd, Jerry Storey, Dave Atherton (left at 11:00am), Jackie Higgins, Jared Cadwell, Patrick Moreland, Brannon Godfrey (left at 10:00am) and Erik Wells

Staff Present: Joe Damiata, Fred Satink, Maura Carroll, Jeremiah Breer and Kelley Avery

Others Present: Mike Waterman, James Turner and Isabella Pang (Guy Carpenter & Company, LLC)

President Rogers called the meeting to order at 9:30 a.m.

Staff asked for additions to the agenda to discuss a one-year contract extension for Guy Carpenter, appointment of the Nominating Committee and cancellation of the June board meeting. The board agreed with the stipulation that a special meeting be called prior to the September meeting if needed.

Upon motion (Powers/Moreland) duly adopted, the board voted unanimously to approve the agenda as amended.

Director Storey noted his name was misspelled in one section of the March 27 meeting minutes. Staff will correct the error.

Upon motion (Storey/Powers) duly adopted, the board voted unanimously to approve the minutes of the March 27, 2020 meeting as amended.

Joe Damiata reviewed a memo provided to the board that outlined staff activity during the COVID-19 pandemic, which includes the following items:

  • Staff are still working from home; the office will re-open slowly with critical staff only to start.
  • Staff completed modeling of “worst case” pandemic losses which included claims, contribution, and portfolio impacts. Even in the worst case scenario of $8.4 million, the fund would remain in a strong financial position.
  • There has been little to no negative claims impact to the trust as a result of the pandemic to date.
  • Staff has been tracking and testified on a COVID-19 workers’ compensation presumption bill in the legislature.
  • Staff continues to send weekly communications to all members on COVID-19 related issues and updates.

Maura Carroll updated the board on VLCT’s efforts in coordination with the National League of Cities to campaign for federal aid to local government entities. To date, federal aid has only been provided to cities over 500,000 population in size or directly to states.

Jeremiah Breer provided an overview of the first quarter financials. As of the end of March, net position increased by roughly $1.7 million since the end of 2019. This was largely driven by further reserve reductions from Milliman, which were partially offset by unrealized losses in the portfolio. 

Upon motion (Moreland/Frank) duly adopted, the board voted unanimously to accept the first quarter financial report.

Mike Waterman, James Turner and Isabella Pang presented the Annual Stewardship Report for Guy Carpenter (formerly JLT Re), the Trust’s reinsurance broker. This report provided an overview of the Trust’s 2020 reinsurance renewal with a comparison to 2019, and detailed current reinsurance market conditions and a plan for marketing the 2021 renewal.

Upon motion (Moreland/Powers) duly adopted, the board voted unanimously to accept the 2019 Guy Carpenter Annual Stewardship Report.

Joe Damiata provided a high-level overview of the BCAR (Best Capital Adequacy Relativity) Report produced by Guy Carpenter. This capital adequacy figure was developed using 2019 year-end financial data to assess the Trust’s capital adequacy based on its investment portfolio components and current underwriting metrics. BCAR figures were also calculated for various “risk scenarios” that would stress the Trust, to evaluate financial strength under adverse conditions. The current results indicate that the Trust is in the “strongest financial strength category” and is at the high end of its preferred BCAR range as outlined in the Board’s Target net Position policy. Staff will continue to monitor this range from quarter to quarter as the year progresses.

Jeremiah Breer reviewed the PACIF Ten-Year Analysis of Financial Performance from 2010 to 2019. This report provides a historical analysis of PACIF’s financial trends over a period of time and details a variety of data including net contributions to surplus, change in net contributions, change in net position, contributions credits, investment return, loss ratios and expense ratios.

Upon motion (Hurd/Powers) duly adopted, the board voted unanimously to accept the PACIF Ten-Year Analysis of Financial Performance from 2010 to 2019.

Fred Satink provided a summary of Invest EAP services for 2019. These services included one-on-one consultations, member on-site staff trainings, EAPFirst trainings for first responders and workplace issue mitigations.  Invest EAP also worked to form a first responder peer support group in the southeast region, and they hope to form more peer support groups throughout the state in 2020.

Mr. Damiata and Mr. Satink reviewed a draft of the PACIF Strategic Plan and the Business Plan, as approved by the Strategic Planning Committee, and outlined the process used for developing the documents – which included the use of a facilitator and multiple Strategic Planning Committee meetings. The board members applauded both staff and committee members on their work and the outcome of these two resulting plans. 

Upon motion (Hurd/Powers) duly adopted, the board voted unanimously to approve and adopt the Strategic Plan and Business Plan.

Mr. Damiata noted that Board Alternate, Brannon Godrey has resigned from the board as he has also resigned his position as Town Manager in Hartford effective August 1st. The board was provided a list of nominees and had the opportunity to fill the open alternate board member seat. After discussion, the board decided to postpone action until a later date and requested that staff verify that the current applicants are still interested in serving on the Board.

The board and staff discussed the current Board Compensation Policy regarding phone/electronic meetings. The current policy states board members will not be compensated for phone or electronic meetings unless a meeting is held on site in person and a few call in to attend. As written, the current policy no longer seems appropriate for the current operating conditions. After discussion and input from Maura Carroll regarding the VLCT Board’s actions on this issue, staff was instructed to present a revised policy draft at the next meeting which maintains consistency among the three VLCT Boards in how they address this issue.

In other business, President Rogers nominated Dave Atherton, Neal Fox, Stuart Hurd and Patrick Moreland to serve on the Nominating Committee for the 2020 Annual Meeting.

Upon motion (Storey/Powers), duly adopted, the board voted unanimously to appoint Dave Atherton, Neal Fox, Stuart Hurd and Patrick Moreland to serve on the Nominating Committee.

Also in other business, the contract with our reinsurance broker, Guy Carpenter, is set to expire at the end of June. Guy Carpenter has agreed in writing to a one-year extension at the same annual fee with no increase. Staff has been very pleased with the professional services provided from Guy Carpenter and requests that the board approve the one-year contract extension and authorize Joe Damiata to sign the renewal contract when it is provided.

Upon motion (Hurd/Powers), duly adopted, the board voted unanimously to approve a one-year contract renewal with Guy Carpenter that does not exceed the current annual, and authorized Risk Management Services Director, Joe Damiata to sign it.

As discussed at the start of the meeting, the PACIF Board Meeting scheduled for June will be cancelled.

Upon motion (Hurd/Moreland), duly adopted, the board voted unanimously to adjourn the meeting (12:07 p.m.).

Respectfully submitted,
Fred Satink
Assistant Secretary

Board Meeting Date: 
Friday, May 22, 2020

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