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PENSION AND INSURANCE COMMITTEE MINUTES
Wednesday, September 18, 2002
Council Chambers

The meeting was called to order by at 4:00 p.m.

Committee Members Present: Richard Duquette (Mayor's Designee), Eliot
Glassheim, Al Grasser, Gerald Hamerlik.
Committee Members Absent: Vince Liddy

Staff Members Present: Charles Bunce, Sherie Lundmark

Duquette announced that if anyone wishes to speak to any issue to please do so
before the vote is taken on that item by asking to be recognized by the chair,
coming to the front podium, and giving their name and address for the record.

Matter of approval of minutes from August 21, 2002 meeting.

Motion to approve minutes as distributed by Glassheim, Second by Grasser.
Aye: All. Motion Carried.

Matter of Subcommittee Membership.
a) Review of Alternatives for Investment in DB Plan
b) DC Plan Manager/Trustee Contract

Duquette stated that neither of the aforementioned subcommittees has had an
opportunity to meet since they were established. With the change in committee
makeup, the membership is being revisited, in particular to give an opportunity
for inclusion of DC Plan participants in that subcommittee and the employee
reps in either. The DC Plan contract with Bremer was up in January 2002, they
have agreed to keep our fees at the old contract price while we work with them
on establishing new rates.

In regards to the Defined Contribution Plan, Ed Grossbauer, Employee
Representatives group, stated that there is a group of individuals that have
some information on comparative fees and that would be willing to work with the
subcommittee or be a part of the subcommittee to address this item. He further
stated that while the fees are remaining the same, they may not be the best,
given the data that has been collected. A review of the entire plan would be
favorable to participants. In particular, an adjustment up from the current 4%
contribution limits that exist. This has been talked about in the past, but no
action has been taken. The Committee discussed changing the subcommittee to
include two participants from the DC Plan nominated by employee reps and one
from the Committee. Grasser stated that he and Liddy would like to remain as
the contacts for the Committee, they will contact employee reps who will select
a group of participants to research this item. There will be a progress report
at next Pension Committee meeting.

In regards to the subcommittee on the investment alternatives in the Defined
Benefit Plan, the Committee discussed using staff to gather information and
prepare feedback to the Committee. Rick will schedule a meeting for next week
with staff members discuss this item and will have a progress report at the
next meeting.

Grossbauer inquired whether the one time payments have been made into the
Defined Contribution Plan for those participants that were deemed to qualify.
Duquette stated that he could not say for certain, however, he believed that
the payments are still being calculated. There is also a meeting of staff next
week to discuss this item. More information will be available at the next
meeting.

Matter of Comp Time Cap.

Grossbauer stated that the employee reps group would like the committee to hold
this item until the next meeting. This will allow the employee reps to meet
and formulate their request. They had hoped to meet earlier today, but notices
were not sent out in time to allow all to attend. Charles Bunce, Director of
Human Resources, requested that the Committee also seek a determination from
Howard as to whether or not this issue should be decided by the Pension
Committee or if there is a different venue is more appropriate. Grossbauer
stated that the Employee Reps had been directed to bring the item to this
committee by Mr. Hovland, Assistant Director of Human Resources. Glassheim
stated that perhaps since Comp Time is compensation related the matter should
rather be referred to the Finance/Development stand-by committee. The
Committee will seek a clarification from Swanson prior to the next committee
meeting.

Other Business.

Hamerlik made a motion to recommend to City Council that they ask Swanson to
draft a change to the ordinance so that the Chair of this committee be the
Mayor and in his absence his designee will serve as chair. Second by
Glassheim. The committee discussed whether in the absence of the Mayor the
chair should move to an elected official, rather than an employee committee
member, since the employee would be a plan participant. Glassheim made a
friendly amendment to the motion that stated that the chair would be the mayor
or longest standing elected individual. Glassheim made a friendly amendment
that Hamerlik will work with Howard to work out appropriate language. Hamerlik
Amended the motion to read Mayor and in his absence the longest standing
Council member on the committee. Aye: All. Motion carried.

Glassheim stated that he would like to explore an option of investment in local
interests and companies with a small allocation of pension funds, perhaps 1%.
The Committee discussed whether this was of publicly traded companies only, or
if he was also looking at equity financing. Glassheim stated that for
information purposes he would like to look at both options. The Committee
discussed any fiduciary concerns and limitations that may exist. This item
will be on the next agenda.

Motion by Grasser to forward to appropriate staff and Don Carlson a request to
provide information related to investment options in local enterprises. Second
by Glassheim. Aye: All. Motion Carried.


Motion to adjourn by Hamerlik, second by Grasser.

Respectfully submitted,




John M. Schmisek, CPA
Director of Finance and Administrative Services


JMS:SL




NEXT MEETING:

Wednesday, October 16, 2002 at 4:00 p.m. Council Chambers