MINUTES OF A REGULAR MEETING OF THE
BOARD OF DIRECTORS
VLCT EMPLOYMENT RESOURCE AND BENEFITS (VERB) TRUST, INC.
MAY 16, 2022
VIA ZOOM MEETING
Directors present: Bill Shepeluk, Charles Safford, Kathleen Ramsay, Carrie Johnson and Todd Odit
VLCT staff present: Joe Damiata, Ted Brady, Seth Abbene and Kelley Avery
Others present: Magali Welch and Taylor Kacur (Johnson Lambert)
A quorum was confirmed, and the meeting was called to order at 10:03 a.m.
Upon motion (Ramsay/Safford), duly adopted, the board voted unanimously to approve the agenda.
Upon motion (Safford/Johnson), duly adopted, the board voted unanimously to approve the minutes of the December 16, 2021 meeting.
Magali Welch and Taylor Kacur presented the results of the 2021 VERB Trust audit. Ms. Welch reported this was an unmodified, clean audit for 2021 with no material weaknesses or adjustments. Taylor Kacur provided a brief overview of the testing process. Ms. Welch pointed out contrary to the significant delays experienced last year during the audit with the Vermont Department of Labor, this year things went quite smoothly.
Joe Damiata provided a brief organizational update to the board including the following items:
- There have been several additions to staff including Amanda Moshinske (who is returning to VLCT) and Heather Hood in Finance, Jeff LaBossiere in Loss Control, Shaina Lyon in Communications, and Kail Romanoff in MAC; also Adam Davis left employment with VLCT and his replacement will be starting within the next few weeks.
- Staff is working on completing the 2021 PACIF and VERB Annual report, which should be released in early June.
- Staff is in the process of reviewing Association Management Systems and hope to have one selected by the end of the year.
- PACIF is putting the current Ventiv claims and underwriting system out to bid. The UI underwriting system is included in Ventiv and staff plans to build a new free-standing UI underwriting system database in order to save roughly $10,000 per year.
- The final VLCT Strategic Plan was completed and recently shared with all VLCT and Trust board members. PACIF has also developed a strategic plan, and the board may wish to initiate strategic planning for VERB Trust as well. Mr. Damiata will contact the board in the coming months to set up a meeting specifically for this purpose.
Kelley Avery reviewed the Q4-2021 UI Report, the UI Annual Summary Analysis through 2021 and the Q1-2022 UI Report. Claims frequency was down 27% compared to Q3-2021, although claims costs rose substantially compared to Q3, totaling $66,126 in benefits charged. This was a 300% increase compared to Q3 costs (net of ARPA credits), however costs were over 50% reduced compared to costs for Q4 of last year (net of CARES Act credits). Both year-end totals in frequency and costs were down drastically from 2020 to 2021. The average claim costs per member also reduced drastically, while average member contributions rose due to the 29.3% rate increase for 2021. Claims costs continue to rise into Q1 of 2022, although claims frequency remains flat compared to last quarter. Claims costs for Q1 totaled $99,763 in benefits charged, an increase of nearly 51% compared to Q4-2021, but this was a nearly 17% decrease compared to costs for Q1-2021 (net of CARES/ARPA credits). Unemployment rates are steadily declining, and costs should start to decline in the second quarter.
In addition, Ms. Avery reported one new member has joined the UI Program for April 1st, the Town of Bethel, and the program retained 100% of its membership from 2021 to 2022.
Upon motion (Safford/Johnson), duly adopted, the board voted unanimously to accept the staff organizational update and unemployment reports as presented.
President Shepeluk presented the report of the Joint Investment Committee. The committee met with representatives from Strategic Asset Alliance and Insight on March 11, 2021. The committee discussed how the war in Ukraine, supply chain issues, global economy stressors, growing inflation and other factors have all combined to negatively impact the Trust investment portfolio performance. The committee also discussed Ted Brady’s proposal regarding the potential for Vermont-based local investments, and subsequently formed a subcommittee to investigate this formed of staff, President Shepeluk and Aaron Frank from the PACIF Board. Mr. Brady noted this subcommittee will meet some time in the coming months.
Upon motion (Safford/Johnson), duly adopted, the board voted unanimously to accept the report of the Joint Investment Committee.
Joe Damiata noted the letter from Trust legal counsel, John Riley, which was included in the board’s packet regarding a proposed Trust name change. Mr. Riley recommends the board keep its existing name in case it decides to once again form a health insurance pool at some point in the future. Mr. Riley also noted a favorable IRS tax ruling which was the deciding factor in merging the former UI Trust into the former Health Trust. Staff has consulted with the auditors and sees no reason to believe a name change would result in an unfavorable IRS tax ruling, but staff agreed it might be prudent to keep the Trust name as is and instead register an assumed name (“dba”) which Mr. Riley’s suggested as a possible alternative. The board agreed this might be a wise option and instructed staff to pursue this course.
Upon motion (Safford/Odit), duly adopted, the board voted unanimously to keep the VERB Trust’s current name and authorized staff to pursue registering “The Unemployment Trust” as the assumed name (“dba”) of the Trust.
Mr. Damiata noted the PACIF Board has decided to hold two meetings in person this year with a hybrid option for anyone who may not feel or well or has been exposed to an illness, and he recommended the VERB Board do the same. Staff recommended holding the August and October meetings in person. The board agreed, and President Shepeluk requested the board members make every attempt to attend these meetings in person unless someone is sick.
Kelley Avery provided a brief legislative update. The only bill which passed this session that impacts unemployment is S.11. This is an omnibus bill which largely deals with economic development and workforce revitalization. One provision in the bill addresses the $25 weekly supplemental unemployment benefit. Last year, this benefit was passed under Act 51, but the federal government deemed it to be non-compliant under federal law. Language in this bill retracts the language from Act 51, putting the state back into compliance, and then further re-enacts the $25 supplemental unemployment benefit in a way that is compliant with federal law by carving out designated funds from the state UI Trust Fund into a “special fund” for the benefit. This new supplemental benefit is slated to begin July 1, 2025, and the VT Department of Labor is instructed to update the legislature each session on their system modernization efforts to ensure this new benefit can go into effect on this date under the new law. The bill has not yet been signed into law by the governor.
Mr. Shepeluk requested that staff include Page 12 of the 2021 VERB Trust Audit in the next meeting packet so staff and the board can review the state’s changes in the taxable wage base.
There was no other business.
Upon motion (Safford/Odit), duly adopted, the board voted unanimously to adjourn the meeting (11:16 a.m.).