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VLCT Employment Resource and Benefits (VERB) Trust, Inc.
Board of Directors Meeting
Thursday, December 13, 2018
VLCT Offices, Montpelier, Vermont 
Minutes

Directors present: Bill Shepeluk, Todd Provencher, Todd Odit, Carrie Johnson, Charles Safford, Chris Hoyt, Joel Cope and Kathleen Ramsay (by phone)

VLCT staff present: Maura Carroll, Joe Damiata, David Sichel, Jeremiah Breer, Kelley Avery and Larry Smith

Others present: Carolyn Rice and Laura Macuga (Johnson Lambert)

The meeting was called to order at 10:04 a.m.

A board quorum was confirmed.

President Shepeluk requested item 10.b., Appointment of the Board Alternate, be added to the agenda as Chris Hoyt’s Alternate Board member term expires at year-end.

Upon motion (Cope/Safford), duly adopted, the board voted unanimously to approve the meeting agenda as amended. 

Upon motion (Odit/Johnson), duly adopted, the board voted unanimously to approve the minutes of the October 3, 2018 meeting.  

Carolyn Rice and Laura Macuga from Johnson Lambert presented process plans for the 2018 VERB Trust financial audit including the timeline and pre-audit activities already completed.  The firm will be returning to VLCT in February for completion of the audit and once again in April to review the results of the final audit with the board.

Joe Damiata recognized David Sichel, pointing out this will be Mr. Sichel’s last meeting with the board as he will be retiring at the end of the year, and thanked him for his many years of service to VLCT.  

Mr. Damiata presented the staff report which included recent staff changes and 2019 promotions. He also requested feedback on this year’s venue for Town Fair, noted progress on software and system updates for 2019. He also informed the board of educational opportunities available in 2019.

Jeremiah Breer reviewed the Financial Statements through September 30, 2018. Net position is up $52K from 2017 year-end. Total revenue is down about 10% compared to last year due to lower contributions. Total operating expenses excluding claims are about 6% higher compared to last year.

Mr. Breer also updated the board on the auditor RFP process. The RFP was sent to thirteen firms and three responded, including Johnson Lambert. All three firms will be interviewed on Monday, December 17th, and staff will report its recommendations to the board for the next meeting scheduled in January.

Kelley Avery reviewed the Q3 2018 Unemployment Claims reports. Claims frequency is down both compared to last quarter and to Q3 of 2017. Claims costs are also down substantially compared to last quarter by 15%.  However compared to Q3 of last year, costs increased by 27%. Year to date, including October benefit payments, claims costs have increased by roughly 15% overall.

Larry Smith provided an update on the health insurance renewals and ancillary products new business. Two existing groups in Health Insurance Advisory Services switched to Business Resource Services (BRS) for 2019. We also picked up six new groups under BRS for 2019. In addition, last week the City of Rutland signed a Broker of Record with Hickok & Boardman HR Intelligence for our shared services. Also for 2019, four groups are adding vision coverage, one is adding dental and another is adding short-term disability.

Ms. Avery updated the board on the UI Program renewal. The bills went out to members on December 3rd, a few weeks later than expected due to a required correction to the contribution credit calculation formula. 35 UI Program participating members will only be paying the $100 annual administrative fee for 2019, and 157 out of 208 received cost reductions compared to 2018.

Director Odit asked if Ms. Avery could supply the board with a report showing approved 2019 rates compared to final 2019 rates after applied underwriting adjustments. Ms. Avery agreed to send this information to the board and to supply this information on future renewal updates as well.

Joe Damiata introduced VLCT Communications Director Dean Mudgett to the board. Mr. Mudgett explained staff is looking for representatives from each board to participate in a VLCT rebranding working group. The working group will assist staff in selecting a marketing firm to help with the rebranding process and will also assist in the scope and vision for the project. The board nominated Carrie Johnson to serve on this special committee.

Upon motion (Safford/Odit), duly adopted, the board voted unanimously to appoint Carrie Johnson to the VLCT Rebranding Committee.

Director Ramsay asked for budget detail regarding this new committee. Maura Carroll explained it is not finalized as the committee will also need to determine what work will be done in-house by VLCT staff as opposed to being done by an outside firm.  Any 2019 costs will come from surplus, and an actual budget impact isn’t expected until 2020. The goal, however, is to be as frugal as possible.

Director Odit asked if the agenda item on the Admin Services Contract Addendum could be tabled until after the 2019 budget discussion.  

Mr. Damiata reviewed the highlights for the Proposed VERB Trust Budget for 2019. Contribution revenue is decreasing due to reduced member rates from improved claims experience and the reduction in the annual management fee. Claims are projected to be 15.6% lower in 2019 compared to 2018. Total general and administrative expenses are also down from 2018, largely due to moving the Human Resources Consulting Program from VERB to PACIF. Overall, the 2019 budget yields a deficit of $237,776, which does not include the $350,000 contribution credits.

Director Ramsay asked if it would be possible to review a draft of the budget earlier each year, preferably at the same time the board is approving rates and determining the contribution credit amount for renewal. Staff agreed to supply a draft budget for review at the meeting scheduled for September 26th next year.

President Shepeluk noted a correction required to the draft budget in changing the 2018 HR and Benefit Programs Consulting Services line item from $142,135 as shown in the Proposed Budget to the $118,135 amount from the actual 2018 approved budget. Staff will make this correction and Mr. Damiata will send a corrected copy to the board.

Upon motion (Safford/Odit), duly adopted, the board voted unanimously to approve the 2019 Proposed VERB Trust Budget as amended.

Mr. Damiata presented the annual addendum to the VLCT Administrative Services Contract. The VERB Trust’s cost for VLCT services for 2019 amounts to $475,245 which includes $247,512 in direct costs and $227,733 in administrative costs. Director Odit asked if the board could see a detailed breakdown of what comprises these costs. Mr. Damiata will send this information to the board.

Upon motion (Odit/Cope), duly adopted, the board approved the 2019 VLCT Administrative Services Contract Addendum and authorized the board President to sign the addendum.

The board reviewed the 2019 Proposed Board Meeting Schedule. Mr. Damiata pointed out the phone meeting scheduled for late January for a final decision on auditor selection. The board requested the Trust Annual Meeting at Town Fair also be added to the schedule.

Upon motion (Cope/Johnson), duly adopted, the board approved the 2019 Proposed Board Meeting Schedule as amended.

The board reviewed the current slate of officers to determine positions for 2019. The board elected to move the current slate of officers with the exception of the Assistant Secretary, David Sichel, whose position will be vacant in 2019. Kelley Avery was nominated for the position.

Upon motion (Cope/Provencher), duly adopted, the board voted unanimously to retain the current officers for 2019, with the exception of the Assistant Secretary, and to appoint Kelley Avery as Assistant Secretary to the board for 2019.

Chris Hoyt’s term as Alternate to the Board expires at year-end. Mr. Hoyt agreed to serve another term.

Upon motion (Safford/Cope), duly adopted, the board voted unanimously to re-appoint Christ Hoyt as Alternate to the Board for 2019.

David Sichel expressed his appreciation to the board for all his time working with them. He believed they accomplished a great deal on behalf of members in their time working together, and said it was one of the most rewarding times of his career. The board members likewise expressed their appreciation to Mr. Sichel for his service and his many years devoted to assisting the board and VLCT.

The meeting adjourned at 11:53 a.m.

 

Respectfully Submitted,
David Sichel
Assistant Secretary

Board or Committee: 
VERB Board of Directors
Board Meeting Date: 
Friday, December 13, 2019

Resource Category: