MINUTES OF A REGULAR MEETING OF THE
BOARD OF DIRECTORS
VLCT EMPLOYMENT RESOURCE AND BENEFITS (VERB) TRUST, INC.
AUGUST 18, 2022
VLCT OFFICE – MONTPELIER, VT
Directors present: Bill Shepeluk, Charles Safford, Kathleen Ramsay, Carrie Johnson and Todd Odit
VLCT staff present: Joe Damiata, Ted Brady (remote), Seth Abbene and Kelley Avery
A quorum was confirmed, and the meeting was called to order at 10:02 a.m.
Upon motion (Safford/Johnson), 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 May 16, 2022 meeting.
Joe Damiata provided a brief organizational update to the board including the following items:
- Lia Gerrish has been hired as the Administrative Assistant for Risk Management Services, and Denise Ricker has moved from Underwriting to the VLCT Reception/Administrative Assistant position.
- Staff has chosen Euclid ClearVantage for the new Association Management System which will be rolled out by early next year.
- The Ventiv claims and underwriting system is out to bid, and a database will be built to support and administer the unemployment underwriting system independently.
- The investment subcommittee was held in June regarding local, Vermont-based investments. Options discussed with the subcommittee will be brought before the Joint Investment Committee at its meeting in September.
- Town Fair is coming up soon, and the Annual Meeting of the membership will be held jointly with PACIF and VLCT on October 6th.
- Risk Management Services staff presented brief summaries of their respective roles and positions to the VLCT Board at its July meeting.
Upon motion (Safford/Odit), duly adopted, the board voted unanimously to accept the organizational update.
Seth Abbene reviewed the unaudited financial results through June 30, 2022. The second quarter ended with a 7.3% reduction in net position compared to year-end 2021, largely due to investment losses. Total liabilities are down 6.8% compared to this time last year. Revenue is down slightly compared to Q2 of last year due to a modest decrease in member rates resulting in lower contributions for 2022. Total operating expenses are in line with the budget, but up 9.6% from this time last year due to some higher than anticipated board conference costs.
Upon motion (Safford/Johnson), duly adopted, the board voted unanimously to accept the unaudited financials through June 30, 2022.
Kelley Avery reviewed unemployment claims activity through Q2-2022. The state unemployment rate is now back to a pre-pandemic level, and claims have decreased substantially since Q1 falling by roughly 52%. Claims are also down 48% compared to Q2 of last year (net of federal credit). Claims frequency remains relatively stable compared to Q1, but decreased 41% compared to Q2 of last year. Claims costs will likely continue to decline into the third quarter, since Q3 is traditionally the lowest cost quarter of the year.
Upon motion (Safford/Johnson), duly adopted, the board voted unanimously to accept the unemployment claims reports through Q2-2022.
With the upcoming annual meeting, it is time to select the Nominating Committee. The committee normally consists of board members whose terms are not expiring at year-end, which includes Bill Shepeluk and Kathleen Ramsay. Director Ramsay agreed to serve as the committee chair.
Upon motion (Safford/Johnson), duly adopted, the board voted unanimously to appoint Bill Shepeluk and Kathleen Ramsay to the Nominating Committee.
Due to Chris Hoyt’s recent resignation from the board as he is no longer eligible, the Board Secretary-Treasurer position is now open. Kathleen Ramsay nominated Charles Safford, and Director Safford agreed.
Upon motion (Johnson/Odit), duly adopted, the board voted unanimously to appoint Charles Safford as Board Secretary-Treasurer.
Mr. Damiata discussed the prospect of a potential board oversight change for the future. No nominations have been received for the VERB Board, and very few have been received for the PACIF Board. With President Shepeluk’s upcoming retirement, and with year-end vacancies on the PACIF Trust Board, staff held discussions with VERB Trust legal counsel, John Riley, and also PACIF’s in-house counsel, Phil Woodward, regarding the possibility of merging the Trusts or the boards. Due to regulatory, financial and membership differences between the Trusts, legal counsel advised keeping the Trusts independent and instead pursuing PACIF and VERB board consolidation. Management recommended remaining members of the VERB Trust board join the PACIF Board and a few members of the PACIF Board join the VERB Board so that a subset of directors would serve on both boards. Staff held a special meeting with the PACIF Board last week to discuss this recommendation and received their approval. The change requires a small amendment to the PACIF bylaws allowing up to five members to serve concurrently on the VERB Trust board, and the PACIF board approved this bylaw change last week. The VERB bylaws are silent on the issue, so no change is required.
After some discussion, the VERB board agreed to the Trust board consolidation. Staff will send board members a PACIF Nomination form for the PACIF Nominating Committee to review. A few members of the PACIF Board expressed interest in serving on the VERB Board at last week’s meeting, and staff has sent them the VERB Nomination form to complete. Once the membership has approved the PACIF bylaw change and the nominations from both boards have also been approved by the membership at the annual meeting, then final changes can go into effect at the December Board meetings.
Ms. Avery provided some brief training regarding the purpose behind the state’s fluctuating taxable wage base. At May’s meeting, President Shepeluk asked for a review of this item after discussing the results of the 2021 Financial Audit.
Staff and the board briefly discussed the board’s surplus and working with the actuary to determine an ideal or preferred net position. Although the Trust faired well through the COVID-19 pandemic, this was partially due to federal assistance for reimbursers. However, even without the federal assistance provided, funding would still have been adequate to mitigate the cost of our members’ unemployment claims through the pandemic period. Mr. Damiata noted staff will work with the actuary to get a better assessment of the ideal level of surplus to maintain. Mr. Damiata also suggested the board might consider other ways of using the fund’s surplus for the good of all members, rather than by simply offsetting member annual contributions with a credit. Mr. Damiata suggested the board consider this topic for strategic planning next year.
The next scheduled meeting for October 13 conflicts with the VTCMA fall conference. Staff requested changing the meeting to October 10 or 11 instead. The board agreed to the October 11 date, allowing for a remote option, commencing at 10:30 a.m.
There was no other business.
Upon motion (Safford/Odit), duly adopted, the board voted unanimously to adjourn the meeting (11:26 a.m.).
Respectfully Submitted,
Kelley Avery
Assistant Secretary