HomeMy WebLinkAbout1999 02 08 Informational Item A
COMMISSION AGENDA
ITEM A
CONSENT
INFORMATIONAL XX
PUBLIC HEARING
REGULAR
February 8, 1999
Meeting
MGR pr;nEPT
Authorization
REQUEST: The City Manager is providing information to the City Commission in response to
an inquiry as to the excessive amount oftime pension funds get transferred to Sun Trust.
PURPOSE: To inform the City Commission concerning an inquiry as to the excessive amount
oftime pension funds get transferred to SunTrust.
CONSIDERATIONS:
A. The Investment Department at SunTrust has a 10:45 AM cut-off time for making
investments the day of the wire transfer.
B. The current investment allocation, with the bulk of the funds' assets invested in
common trust funds, only allows for pricing and trading twice a month, on the 15th
and the last business day of the month. As a result these funds are placed in
money market account until invested twice monthly.
C. We have requested SunTrust to determine ifmore frequent investment dates can
be accomplished and under what terms and conditions this would be possible.
ATTACHMENTS:
1. Copy of memo from the Finance Director to City Manager
1. Copy of letter from Sonya Bums, Trust Representative, SunTrust.
2. Cost of letter from Phillip Senderowitz, Client Service Officer, STI Capital Mgt.
To: Ron McLemore, City Manager
From:
Harry Martin, Finance Director ~
Memo of January 29, 1999 concerning SunTrust Investment
Subject:
Date:
February 4, 1999
The following procedure is followed every Thursday for transferring funds to
SunTrust.
Upon completion of the payroll process, we determine the amount of funds
required to be transferred and then we send a wire transfer thru the ACH and
follow it up with a faxed copy of the contribution breakdown to SunTrust locally.
This process has generally been done prior to 2 PM on Thursday, after all payroll
procedures have been completed, which includes printing reports and checks
and verifying reports for accuracy and processing and distributing paychecks.
According to the letter received from SunTrust, there apparently is a cut-off time
of 10:45 AM for the investment department to make investments that day.
The second problem is since the bulk of our funds are invested in "common trust
funds" the are priced and traded twice per month. However, all of our SunTrust
funds are invested in a money market fund until they are handled by the
investment department.
SunTrust Banks of Florida, Inc.
Mail Code 0-1081
Post Office Box 3808
Orlando, FL 32802
Tel (407) 237-4254
Tel (800) 432-4760 Ex\. 4254
Fax (407) 237-4554
Trust and Investment Services Group
SUNTRUST
February 2, 1999
Harry Martin
City of Winter Springs
1126 E. State Rd. 434
Winter Springs, FI 32708
Dear Mr. Martin,
Per your request, the following correspondence outlines the procedures followed when
receiving a contribution at SUNTRUST BANK.
We receive a faxed copy of the contribution breakdown. The following day we will
receive the wire transfer of funds, which is processed the same day. If the wire is
received after 10:45 am, we are able to process the wire, but the funds will not sweep into
the Money Market until the next business day. Please see the attached letter regarding
how funds are invested.
Please feel free to call with any questions or concerns.
Sincerely,
~::~
Trust Representatiye
.-
STI
Capital
Management
200 SOUTH ORANGE AVENUE
8TH FLOOR
po. BOX 3786
ORlANDO FLORIDA 32802
TEL 800 926 4STI
TEL 407 237 4472
FAX 407 237 5780
February 1, 1999
Dear Mr. Martin,
Per your request, the following correspondence describes the process by which funds are
invested at STI Capital Management for the City of Winter Springs pension funds.
Assets are allocated within the funds according to an allocation that was determined
jointly between STI Capital Management and the pension board. Currently the allocation
in set at 70% equity and 30% fixed income.
Within each of the categories, assets are allocated as follows: Equity-High Grade
Equity Growth-20%, High Grade Equity Income-20%, Small Cap-25%, Mid Cap-25%,
International-l 0%; Fixed Income-High Grade Bond-l00%.
The bulk of the funds' assets are invested in common trust funds, which are similar to
mutual funds, but are priced and traded twice per month, on the 15th and the last business
day of the month. At these times, the account is reviewed to make sure no single
category has had a market value change such that it is significantly different that the
desired allocation. Typically, if an asset is over 1 % away from target allocation, the
account is rebalanced so that the allocations are correct.
Upon receipt of funds, assets are initially credited to the STI Prime Quality Money
Market Fund and typically remain there until the next account review takes place.
If you have any further questions about the investment process for the pension funds,
please feel free to call me at (407)237-5809, or speak to me at the next regularly
scheduled pension board meeting.
S;?t r:/~~/1L
Phillip Senderowitz
Client Service Officer
STI Capital Management
A SunTrust Company