MINUTES OF THE JOINT ANNUAL MEETING OF THE MEMBERSHIP
VLCT PROPERTY AND CASUALTY INTERMUNICIPAL FUND
VLCT EMPLOYMENT RESOURCE AND BENEFITS TRUST, INC.
OCTOBER 6, 2022
KILLINGTON GRAND HOTEL – KILLINGTON, VERMONT
PACIF Directors Present: Carl Rogers, Jackie Higgins, David Atherton, Jared Cadwell, Rob Gaiotti, Stuart Hurd, Patrick Moreland, Bryan Young, Erik Wells, Judy Frazier and Kathleen Ramsay
VERB Directors Present: Bill Shepeluk, Carrie Johnson, Charles Safford and Kathleen Ramsay
A quorum was confirmed for both the VERB and PACIF Trust organizations by participant count.
Executive Director Ted Brady welcomed everyone to the meeting and introduced VERB Trust Board President William Shepeluk.
President Shepeluk called the VERB Trust Annual Meeting to order at 1:15 p.m.
Upon motion (Safford/Cadwell), duly adopted, the agenda was unanimously approved by the membership.
President Shepeluk asked for a motion to approve the 2021 VERB Annual Meeting Minutes.
Upon motion (Safford/Johnson), duly adopted, the minutes of the VERB 2021 Annual Meeting were unanimously approved by the membership.
Seth Abbene reviewed a summary of the 2021 VERB Trust audit. The auditors issued a clean opinion on the 2021 audit with no material weaknesses in internal controls and no adjustments. Net position increased 7.1% to $4.0 million. Contributions were up 17.5% due to a rate increase issued as a result of the pandemic. The board decided not to issue contribution credits to members in 2021 (for disbursement in 2022) due to continued uncertainty regarding COVID’s impact on claims. Claims were down 80.7% due to decreased claims in the second half of the year and continued assistance from the federal government through the CARES Act and ARPA credits issued through September 6, 2021. Investment income was down 89% but general and administrative expenses fell 31.1% due to the shift of benefit related programs to VLCT.
Upon motion (Cadwell/Higgins), duly adopted, the report of the 2021 VERB Trust audit was unanimously accepted by the membership.
President Shepeluk reviewed a brief history of the VERB Trust, stemming from its origins as the Unemployment Insurance Trust in 1978, to its merge with the Health Trust in 2015, to its return in 2021 to solely serving as an Unemployment Insurance Trust. He also highlighted an unprecedented year in 2020 for VERB with unemployment claims due to the pandemic, resulting in $2.3 million in claims, which netted to $1.2 million with federal assistance. However, these large losses still resulted in a sizeable rate increase to members in 2021 of over 29% and no credits returned to members. Rates decreased slightly for 2022 with claims falling, and claims appear to have returned back to normal levels this year. The investment markets are having a tough year, which has impacted VERB’s portfolio, but the Trust still maintains a strong and healthy net position. The board will be meeting next week to set the rates for next year. President Shepeluk mentioned that the staff and board are analyzing how much net position the Trust should hold for responsible operation. He encouraged members to keep an open mind and to think outside the box when considering how excess funds can be used to benefit all members in the future.
Joe Damiata provided the staff report to the membership including background detail on the VERB Trust and its formation. He thanked the board, VLCT staff and VERB Trust members for their involvement in the Trust. Mr. Damiata reviewed some brief history regarding the Trust and noted rates are not yet set for the UI Program for 2023, but staff and the board will be meeting with the actuary next week. Although claims were a challenge during the pandemic, claims have now returned to pre-pandemic levels, and the hope is to return to rate stability. The Trust is still in excellent shape financially despite the high losses experienced during the pandemic and reduced investment income. In an effort to make operations more unified, and to align with VLCT’s Strategic Plan, the VERB and PACIF boards will be working toward board consolidation in the coming year.
President Shepeluk presented the Report of the Nominating Committee and slate of officers.
Upon motion (Wang/Cadwell), duly adopted, the members voted unanimously to accept the Report of the Nominating Committee and the slate of officers as presented with renewed three-year terms for directors Carrie Johnson, Todd Odit and Charles Safford.
President Shepeluk called for a motion to adjourn.
Upon motion (Safford/Johnson) the members voted unanimously to adjourn the VERB Trust annual meeting at 1:37 p.m.
Executive Director Brady thanked President Shepeluk and introduced PACIF Trust Board President Carl Rogers.
President Rogers called the PACIF annual meeting to order at 1:39 p.m.
Upon motion (Wang/Hurd), duly adopted, the agenda was unanimously approved by the membership.
President Rogers asked for a motion to approve the 2021 PACIF Annual Meeting Minutes.
Upon motion (Higgins/Cadwell), duly adopted, the minutes of the PACIF 2021 Annual Meeting were unanimously approved by the membership.
Seth Abbene reviewed a summary of the 2021 PACIF audit. The auditors issued a clean opinion on the 2021 audit with no material weaknesses in internal controls and no adjustments. There was a 2.6% increase in net position to $71.3 million. Contributions were down by 3.6% due to slightly reduced member rates. Member contribution credits were up 106.7% with $1.5 million returned to members as contribution credits in addition to a one-time return of $1.6 million for a total of $3.1 million returned to members in 2021. Claims were up 675%, but the loss ratio was at 54% with a combined ratio of 83%, well within the expected range. Although investment income is down, the Trust maintains a strong financial position.
President Rogers introduced himself and thanked both the board and VLCT staff for their commitment to members. Mr. Rogers went on to note key PACIF programs and services and their proven value to members over the years. PACIF serves 95% of all eligible member municipalities. Since the trust’s inception, over $26 million has been returned to members in the form of contribution credits. Additionally, since 2010 over $2.7 million has been awarded in grants and scholarships to members. Stable rates are a priority for PACIF members, and the Trust is doing very well financially. The Trust is also superior in its coverage and products and excels in customer service. President Rogers reminded members that we are all stronger together, and the more each member works on improving its own risk management procedures, the stronger the Trust will be.
Mr. Damiata described PACIF’s mission and highlighted all of the services and programs that PACIF will continue to provide in 2023 including law enforcement consulting services, HR consulting services and the EPL (Employment Practices Liability) Referral Program along with long standing excellent loss control, and claims services. Staff is working to implement a new Risk Management Information System (RMIS) to replace the current system which will work more efficiently and easily for staff and members. The PACIF Grant Program will continue for next year with $200,000 in available funding and a 50/50 match. The John Lawe Scholarship program will also continue with funding toward member trainings. Members were reminded about the free KnowBe4 cybersecurity training program that currently only 19 members are participating in. Mr. Damiata also reviewed the board approved contribution credits for 2022 (netted off 2023 invoices), 2023 overall rate change, and a new coverage endorsement (all subject to DFR approval). In addition, as previously explained during the VERB Annual Meeting, the PACIF and VERB boards will be consolidating, and this will require a slight change to the PACIF bylaws.
President Rogers briefly reviewed the changes to the PACIF bylaws and pointed out the excerpt provided in the annual meeting booklets. The change denotes that no more than five (5) members of the PACIF Trust may serve on any other VLCT affiliated Trust board. There were also updates to dates in the bylaws and an updated change in the Assistant Secretary to the Board from David Sichel to Fred Satink.
Upon motion (Higgins/Hurd), duly adopted, the PACIF Bylaws were unanimously approved by the membership as amended.
Director Jackie Higgins presented the Report of the Nominating Committee and slate of officers.
Upon motion (Hurd/Wang), duly adopted, the members voted unanimously to accept the Report of the Nominating Committee and the slate of officers as presented with renewed three-year terms for David Atherton, Judy Frazier, Rob Gaiotti and Patrick Moreland.
President Rogers noted that Kathleen Ramsay was also appointed to the PACIF Board at its last meeting as the board’s second alternate. He noted that Director Ramsay’s appointment is the start of board consolidation between VERB and PACF, as she also serves on the VERB Board.
President Rogers called for a motion to adjourn.
Upon motion (Higgins/Young) the members voted unanimously to adjourn the PACIF Trust annual meeting at 2:09 p.m.
Assistant Secretary (VERB)
Assistant Secretary (PACIF)