1974-10-08 Special Meeting
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MINUTES OF REGULAR MEETING, OCTOBER 7, 1974 (CONTINUED)
APPOINTMENT OF COUNTY FINANCE OFFICER (CONTINUED)
Comm. Vaughan stated for the record that the fact that the County Manager planned
to use Mr. Cooper in Systems Analysis work, for which he was trained, would be very
productive financially to the County.
ADJOURNMENT
Comm. Davis moved, seconded by Comm. O'Shields, that the meeting be adjourned.
Upon vote, motion carried unanimously.
Chm. Powell adjourned the meeting at 5:40 o'clock p.m.
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Respectfully submitted,
G<u- ,~ ~
Lise K. King
Clerk to the Board
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MINUTES OF SPECIAL MEETING, OCTOBER 8, 1974
ASSEMBLY
The New Hanover Board of County Commissioners met in special session on
Tuesday, October 8, 1974, at 11:00 o'clock a.m. in the llssembly Room, County Com-
mission Building, Wilmington, North Carolina, to meet with members of the Board
of Education and H. Gray Hutchison to discuss the School Pension Program.
Members present were Commissioners Peter R. Davis; 'Claud 0' Shields, Jr. ';
M. H. Vaughan; Vivian S. Wright; Chairman W. Douglas Powell; County Manager,
Dan W. Eller; and Clerk to the Board, Lise K. King. No members were absent.
Members of the Board of Education present were Mr. Charles Wells,
Mrs. Paula Williams, and Mrs. Vera Shands. Dr. Heyward C. Bellamy, Superintendent
of County Schools, and Mrs. Nina Tenuta of the School'~ Accounting Department
were also present.
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Chm. Powell called the meeting to order.
H. GRAY HUTCHISON & ASSOCIATES - SCHOOL PENSION PLAN (For additions~ see page 23.)
Mr. H. Gray Hutchison of H. Gray Hutchison & Associates, Inc., met with the
Board to present a supplement to the June 25, 1974, Actuary's Report of the Public
School System of New Hanover County Supplementary Pension Plan.
Mr. Hutchison requested that the Board of Commissioners modify their action
approving the recommendation for eliminating the contingent liability for terminated
employees to agree with the Board of Education's resolution.
Comm. Vaughan moved, seconded by Comm. Davis, that the New Hanover Board of
County Commissioners herewith amend the resolution adopt,~d at their meeting of
July 15, 1974, by changing from July 1, 1975 to August 6~ 1974 the effective date
for elimination of benefits to terminated employees who had not completed 20 years
of continuous or broken servic~ as of the date of their terminations. Upon vote,
motion carried unanimously.
Mr. Hutchison presented the following alternatives for reducing the annual
cost of the School Pension Plan.
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(1) Discontinue altogether the entire Supplementary Program except for the
ones retired.
(2) Reduce the supplementary formula to a percentage (21%) which, in effect,
would eliminate all active people in that the State Teachers' Retirement
System based on 20 years at l~% and actuarially reduced for payment at
age 60 (85% of age 65 benefit) would provide in full the 21% called for
in the revised formula.
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MINUTES OF SPECIAL MEETING, OC~OBER 8, 1974 (CONTI]~ED)
H. GRAY HUTCHISON & ASSOCIATES ~ SCHOOL PENSION PU\N (CONTINUED)
(3) Move the present requirements of age 60 and 20 years of service to a higher
age of 62 while retaining the 20 years of service and provide an offset for
Social Security. This would eliminate all of the active people and leave
only the retirees as the County's responsibility.
(4) Move the present years of service requirement from 20 to 30 and retain the
age 60 requirement. This would reduce the numbers of people that would
be covered rather substantially and costs from $408,493.53 to $141,947.92.
A total of 212 employees would be eliminated from eligibility for supple~
mentary retirement benefits by this step and the supplementary payments
to those remaining would be greatly reduced by larger offsets for the
State Teachers' Retirement System.
(5) The elimination of the 212 employees for entitlement to any benefit under
alternative (4) can be avoided by setting up dual requirements for entitle-
ment to benefits. These requirements would be: (a) age 60 and 30 years
of service, or (b) age 65 and 20 years of service. This dual requirement
means that the full State Teachers' Retirement System benefit, without
actuarial reduction, will be used as an offset in determining the amount,
if any, of the supplementary pension. Thls does not completely cure the
inequity of benefits between short and longer service employees but is an
improvement over the present plan. This reduces the costs from
$408,493.53 to $234,854.47.
(6) This alternative would provide for full rE:tirement benefits at age 60 with
30 years service with a 5 percent reduction in benefits for each year of
service less than 30 years and a minimum of 20 years service to be eligible
for benefits. This alternative would COVEr 135 retired employess and 642
active emplpyees. The maximum first year contribution would be $363,582
with 20 annual contributions of $299,813. This alternative would reduce,
but not eliminate, the inequity of benefits between short and longer ser-
vice employees.
Chm. Powell stated that he could not go along with any alterations to the Plan
that would significantly change the retirement benefits which were promised to the
teachers at the time of their employment. Comm. Davis and O'Shields stated that
they concurred with Chm. Powell.
Comm. Vaughan moved, seconded by Comm. Wright, that the Board ask the Legisla-
tors in the coming session to so modify the law as to make the basis for calculations
on future retirements the past five years' salaries looking back from July 1, 1975.
Upon vote, motion was defeated as follows:
Voting Aye: Comm. Vaughan and Wright.
Voting Noe: Comm. Davis, O'Shields, and Chm. Powell.
Comm. Wright moved, seconded by Comm. Vaughan, that the Board adopt Alternative
No. 6 and request appropriate legislation in the coming session of the Legislature.
Comm. Vaughan withdrew his second; Comm. Wright withdrew her motion.
Comm. Wright moved, seconded by Comm. O'Shields, that the County conduct a
survey of all its teachers, presenting the facts to them, and ask them for straw
ballot advice on what should be done.
Comm. Vaughan offered the substitute motion, seconded by Comm. Wright, that the
Board defer discussion of the straw ballot to teach'~rs and further discussion of
the School Pension System until approximately Novemoer 15, 1974. Upon vote, motion
was defeated as follows:
Voting Aye: Comm. Vaughan and Wright.
Voting Noe: Comm. Davis. O'Shields, and Chm. Powell.
Upon vote, the original motion to survey the teachers was defeated by a unanimous
vote.
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MINUTES OF SPECIAL MEETING, OCTOBER 8, 1974 (CONTINUED)
H. GRAY HUTCHISON & ASSOCIATES - SCHOOL PENSION PLAN (CONTINUED)
Mr. Hutchison stated that the second part of the r~port on the cost-of-living
increases for present retirees would have to be considered July 1, 1975, due to
the interim actuarial basis the Plan was on.
Comm. Wright moved that the Board authorize payment to Mr. Hutchison for the
overrun on the Study. Comm. Wright withdrew this motion at the request of
Mr. Hutchison.
Mr. Hutchison stated that he felt that, if the Pla~ were to be continued,
there should be some administrative procedures drawn up codifying actions that
had been taken; procedures for handling; and procedure for future annual service
on the Plan, which would involve the auditing of tentative calculations, the
reconciliation of funds, listing of preferred vested benefits, employees coming
up for retirement, the actual valuation in contribution?, and inquiries and
interpretations of the operation of the Plan to be certain it was on a uniform,
non-discriminatory manner. Mr. Hutchison stated further that he felt there should
be an independent Board to administer the Plan.
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Comm. Wright requested that Mr. Hutchison submit a, recommendation on the com-
position of such a Board when he submitted his recommendations on administration.
By common consent, it was agreed that Mr. Hutchison prepare an Annual Service
Agreement for presentation to the Board of Education.
Comm. Vaughan moved that a special meeting be held on the second day after
the second meeting in November to rediscuss the School Pension Plan and pick up
any details that may develop in the intervening period. Motion died for lack of
a second.
ADJOURNMENT
Corom. Vaughan moved, seconded by Comm. Davis, that the meeting be adjourned.
Upon vote, motion carried unanimously.
Chm. Powell adjourned the meeting at 1:10 o'clock p.m.
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Respectfully submitted,
~,~JL
Lise K. King ;j
Clerk to the Board
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MINUTES OF REGULAR MEETING, OCTOBER 21, 1974
ASSEMBLY
The New Hanover Board of County Commissioners met in regular session on Monday,
October 21, 1974, at 9:00 o'clock a.m. in the Assembly Room, County Commission Building,
Wilmington, North Carolina.
Members present were Commissioners Peter R. Davis; Claud O'Shields, Jr.;
M. H. Vaughan; Vivian S. Wright; Chairman W. Douglas Pow,ell; County Manager,
Dan W. Eller; County Attorney, James C. Fox, was present for the last half of the
meeting and his representative, Joseph O. Taylor, Jr., W,1S present for the first
half of the meeting; and Clerk to the Board, Lise K. King. No members were absent.
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Chm. Powell called the meeting to order.
Rev. Graham McChesney offered the invocation.
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