Board Members present: Dorothy Anderson, Susie Smith, Peter Bartel, Patrick Lanning, and Sandra Bishop.
Others present: Dick Helgeson, JoAnn Andersen, Cathy Bloom, Tom Buckhouse, Deborrah Brewer, Marty Douglass, Eric Hiaasen, Steve Hill, Mike Logan, Jim Origliosso, Mark Oberle, John Yanov, and Krista Hince of the EWEB staff; Frank Nearing, KLCC Ration; Pete Newirth, Gail Hunt, Eric DeFreest, and members of the community; and Ruth Atcherson, City of Eugene Minutes Recorder.
President Anderson called the EWEB Work Session to order at 7:13 p.m.
POOLING OF LOCAL GOVERNMENTS IN RELATION TO THE PUBLIC EMPLOYEES RETIREMENT SYSTEM (PERS)
Pete Newirth of Coates and Kenney, acting as EWEB's Actuary, provided the necessary background information on the pooling of local governments in relation to PERS to aid the Board in its decision on whether to join the pool. He stated that, historically, each government employer has had its contributions to PERS determined by its assets and liabilities and, at a normal cost rate, the cost of benefits that have accrued through the current year. He added that the amortized unfunded accrued liability, which may fluctuate due to policy changes at the legislative level or, more commonly, actuarial gains and losses, also weighs into the PERS contribution equation. He explained that the proposal would allow all local agencies to pool experience and have contributions based on an average drawn from collective data.
Mr. Newirth delineated the governing rules, as follows:
Mr. Newirth asked the Board to consider whether it should join the pooling of PERS resources with other local government agencies and, if so, should join after April 30, 2001. He added that joining the pool will yield more stable contribution rates. He cited the recent investment gains that EWEB has experienced that have caused actuarial losses, as there have not been assets to match the interest credits on the accounts. He stated that joining the pool would prevent that from happening in the future. He said that the key factor to consider is that, due to the current investment environment, in the short run it is not advantageous to join the pool. He recommended that EWEB stay out of the pool for the present, but ultimately join the pool.
Commissioner Smith stated her preference toward a tentative action in the course of the meeting as the investment market is extremely tenuous at present. Mr. Newirth remarked that the risk in inaction would be that the market would bounce back vigorously and EWEB would miss the return. Cathy Bloom, Assistant Treasurer, reiterated that the reason the recommendation is to wait until after April 30 is that the market has given no indication of recovery at this point. She suggested that the formal request to join the pool could occur in July. She recommended that Board members determine at the Regular Meeting of April 3 that the decision to join the pool would be made in July of 2001.
Ms. Bloom provided a handout on Senate Bill 134 and gave a brief overview of it. She said that there could potentially be an advisory committee forming in the next few years to look at PERS.
Ms. Bloom provided a handout on Unfunded Actuarial Pension Liabilities. She explained the various retirement plans in order to give a preview what EWEB will want to be issuing debt for in the fall.
The meeting adjourned at 7:35 p.m.
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Assistant Secretary President