MINUTES OF A REGULAR MEETING OF THE
BOARD OF DIRECTORS
VLCT EMPLOYMENT RESOURCE AND BENEFITS (VERB) TRUST, INC.
DECEMBER 15, 2022
VLCT OFFICE, MONTPELIER, VT AND VIA ZOOM
Directors present: Bill Shepeluk, Kathleen Ramsay, Carrie Johnson and Todd Odit (remote)
VLCT staff present: Joe Damiata, Seth Abbene and Kelley Avery
A quorum was confirmed, and the meeting was called to order at 1:01 p.m.
Upon motion (Johnson/Ramsay), duly adopted, the board voted unanimously to approve the agenda.
Upon motion (Ramsay/Johnson), duly adopted, the board voted unanimously to approve the minutes of the October 11, 2022 meeting.
Joe Damiata provided a brief organizational update to the board including the following items:
- Staff is working toward a potential sublease option for the VLCT office space.
- Implementation of the new Association Management System is on schedule to be rolled out next year prior to Town Meeting Day. A new web site interface will accompany the rollout which will require member login.
- The board may wish to attend educational conferences scheduled for next year such as the AGRiP Conference March 6 – 8 in Orlando, Florida or the NLC-RISC Conference May 10 – 12 in Portland Oregon.
- VLCT will be holding and all-staff meeting tomorrow in person (weather permitting) followed by the staff holiday party.
- VLCT will be holding upcoming trainings on 1st Amendment Audits starting in January, and the VLCT Advocacy Chat with Karen Horn and Gwynn Zakov will be starting once again next week.
Seth Abbene presented the third quarter financials. Net position has decreased 8.5% from year-end 2021, largely due to investment losses. However, the markets are experiencing a slight rebound recently and the portfolio is starting to recover. Total liabilities are up 14% from this time last year due to increased claims costs compared to Q3-2021 when federal funding was still in place through ARPA. Q3 revenues are down slightly by .9% due to decreased member contributions for 2022.
Upon motion (Ramsay/Johnson), duly adopted, the board voted unanimously to accept the third quarter Financial Statements.
Instead of having the auditors appear in person to discuss the 2022 audit plan, Seth Abbene briefly reviewed the 2022 audit plan outline supplied by Johnson Lambert. The document included the timeline, risks, deliverables, testing details and new auditing guidelines on subscription-based information technology arrangements. There will be a 6% increase in audit costs which was anticipated due to inflation. Mr. Abbene suggested the board review the plan carefully and let him know if they have any questions.
Kelley Avery reviewed the claims reports through the third quarter and briefly summarized the 2023 renewal. Claims were down substantially for Q3 compared to Q2, decreasing by 52% in costs. Claims frequency was also down, but costs and frequency are rising into Q4. The trust retained 100% of its membership for the 2023 renewal and despite a slight increase to the average rate for 2023, costs actually decreased for members by an average of -18% once underwriting adjustments and the $100,000 in contribution credits were applied.
Upon motion (Ramsay/Johnson), duly adopted, the board voted unanimously to accept the third quarter claims reports and renewal summary.
Mr. Damiata reviewed VLCT’s current insurance coverage. In accordance with VLCT’s Administrative Contract, staff will periodically review VLCT’s coverage and limits with the trust boards.
Mr. Damiata reviewed recommended edits to the VLCT Administrative Support Services Agreement. All of the edits were under Section 8 on Indemnification/Bonding to reference VLCT’s specific coverages and limits. Other than that, dates and signees were changed to reflect Ted Brady being the Executive Director. The 2023 Addendum to the agreement was also reviewed which details the administrative cost breakout of direct VLCT trust expenses and VLCT administrative costs for next year.
Upon motion (Ramsay/Johnson), duly adopted, the board voted unanimously to approve the updates to the VLCT Administrative Support Service Agreement as presented and the Addendum for 2023 and authorized the Board President to sign.
Mr. Damiata briefly reviewed the proposed VERB budget for 2023. A draft of this budget was also reviewed at the last meeting, and there have been only a few minor changes. Overall, the budget is relatively flat compared to 2022. General and administrative expenses are down 1.2% or $3,717. Revenues are up 1.1% or $8,711 due to proposed average rate increases. This brings the total budget up just $3,180 or 0.4% compared to the 2022 adopted budget.
Upon motion (Ramsay/Johnson), duly adopted, the board voted unanimously to approve the proposed VERB Budget for 2023.
Mr. Damiata presented a draft Target Net Position Policy to the board. At the last meeting, the Trust’s actuary presented a potential methodology for arriving at a Target Net Position, but his illustration did not take into account the latest Trust financials and also presented a figure which would fluctuate based on changes to unrestricted net position. Staff instead developed this policy based on the current year’s general and administrative expenses combined with gross claims costs from 2020 (thus far, our worst year in claims costs), and adding a $1 million buffer to come up with a target range of $2.675 million to $3.675 million. President Shepeluk also devised a potential methodology to arrive at a target figure of $3.3 million. Since President Shepeluk’s specific target figure falls within the range of the proposed Net Position Policy drafted by staff, the board felt comfortable accepting the policy as presented while also accepting President Shepeluk’s figure as an ideal target. The board can revisit the policy in upcoming years if they decide the methodology should be updated or changed.
Upon motion (Ramsay/Johnson), duly adopted, the board voted unanimously to approve and adopt the VERB Net Position Policy as presented and to accept President Shepeluk’s proposed Target Net Position figure of $3.3 million as presented.
Mr. Damiata reviewed the Draft Conflict of Interest Policy. Both the VLCT and PACIF boards have this policy in place, and staff thought it would be prudent for the VERB Board to also have such a policy and complete the Conflict of Interest forms as the other boards do. The draft policy is modeled after those already in place for the VLCT and PACIF boards. If the board approves and adopts this policy, staff asks that each member complete and return the Conflict of Interest form.
Upon motion (Johnson/Odit), duly adopted, the board voted unanimously to approve and adopt the VERB Conflict of Interest Policy as presented.
Under board governance, the board currently has two vacancies, a full board position which was left open when Chris Hoyt left the board earlier this year and an Alternate position, left vacant since Chris Hoyt was appointed a full Director. As part of the board consolidation efforts, PACIF Board members Jared Cadwell of Fayston and Bryan Young of Orwell have submitted nominations to fill these vacancies. The board decided to appoint Mr. Cadwell to the full board position and Mr. Young as the Alternate.
Upon motion (Ramsay/Johnson), duly adopted, the board voted unanimously to appoint Jared Cadwell of Fayston as full board member and Bryan Young of Orwell as Board Alternate effective immediately.
The board discussed the selection of officers for 2023. Mr. Shepeluk will be retiring as Municipal Manager in Waterbury at year-end, but will be serving as a consultant into March of next year. Although he will remain on the board until that time, the board will not meet again until June, and he will be stepping down as Board President. Traditionally the role goes to the Vice President, currently Carrie Johnson, and she agreed to serve in this new capacity.
Upon motion (Shepeluk/Ramsay), duly adopted, the board voted unanimously to appoint Carrie Johnson as VERB Board President for 2023.
With Carrie Johnson’s appointment to President, the Vice President position is now vacant. The board decided to nominate Charles Safford to this position.
Upon motion (Odit/Ramsay), duly adopted, the board voted unanimously to appoint Charles Safford as VERB Board Vice President for 2023.
With Charles Safford appointment to Vice President, the Secretary/Treasurer position is now vacant. Todd Odit agreed to serve in this capacity.
Upon motion (Johnson/Ramsay), duly adopted, the board voted unanimously to appoint Todd Odit as VERB Secretary/Treasurer for 2023.
The board moved to appoint the remaining slate of current staff officers as is for 2023.
Upon motion (Johnson/Ramsay), duly adopted, the board voted unanimously to appoint VERB Board staff officers as slated for 2023: Ted Brady, Executive Secretary; Kelley Avery, Assistant Secretary; Joe Damiata, Assistant Treasurer.
For committee appointments, the board agreed Bill Shepeluk will remain on the Local Investment Subcommittee. President Shepeluk made the following appointments: Kathleen Ramsay will replace President Shepeluk on the Joint Investment Committee, Charles Safford will replace President Shepeluk on the VLCT Budget Advisory Committee, and Todd Odit will continue to serve on the Joint Investment Committee and the VLCT Budget Advisory Committee.
Joe Damiata presented the 2023 Proposed Meeting Schedule which includes meetings of both trust boards, the VLCT Board, the Joint Investment Committee and the VLCT Budget Advisory Committee. Due to trust board consolidation, VERB Trust Board meetings have been coordinated to take place on the same dates as some of the PACIF Board meetings. Every effort was made by staff to avoid conflict with conferences and training programs.
Upon motion (Johnson/Ramsay), duly adopted, the board voted unanimously to approve the 2023 Proposed Meeting Schedule.
In other business, Carrie Johnson presented a card and gift to President Shepeluk and thanked him for his many years of service to VLCT on the VERB, Health Trust and VLCT Boards and wished him well in his retirement. Staff also expressed their profound gratitude to President Shepeluk and all that he has done for VLCT.
The meeting was adjourned at 2:28 p.m.