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HomeMy WebLinkAbout_2008 08 13 City Commission Workshop MinutesCITY OF WINTER SPRINGS, FLORIDA MINUTES CITY COMMISSION WORKSHOP AUGUST 13, 2008 CALL TO ORDER The Workshop of Wednesday, August 13, 2008 of the City Commission was called to Order by Mayor John F. Bush at 5:00 p.m. in the Commission Chambers of the Municipal Building (City Hall, 1126 East State Road 434, Winter Springs, Florida 32708). Roll Call: Mayor John F. Bush, present Deputy Mayor Donald A. Gilmore, arrived at 5:08 p.m. Commissioner Robert S. Miller, present Commissioner Rick Brown, present Commissioner Sally McGinnis, arrived at 6:18 p.m. Commissioner Joanne M. Krebs, present City Manager Ronald W. McLemore, present City Attorney Anthony A. Garganese, absent INFORMATIONAL AGENDA INFORMATIONAL 100. Office Of The City Manager Discussion Of State Board Of Administration. Mr. Mark W. Bloss, Participant Consultant -Florida SBA Relationship, Federated Investors, Inc., Federated Investors Tower, 1001 Liberty Avenue, Pittsburgh, Pennsylvania: addressed the City Commission as the new manager of Florida's Local Government Investment Pool (LGIP) Fund and on the merits of his organization. Mr. Bloss then commented on Federated's Investment Management function which includes Analysts, Portfolio Managers, and Traders. Mr. Bloss addressed preservation of capital, liquidity, and yield. Deputy Mayor Donald A. Gilmore arrived at 5:08 p. m. Mr. Bloss continued with his presentation. CITY OF WINTER SPRINGS, FLORIDA MINUTES CITY COMMISSION WORKSHOP -AUGUST 13, 2008 PAGE 2 OF 6 Mr. Bloss explained that "[Rule] 2a-7 is a Rule out of the Investment Company Act of 1940 that applies to Money Market Funds. It does not specifically apply to LGIP's (Local Government Investment Pool) like ours because LGIP's (Local Government Investment Pool) are not registered with the SEC (Securities and Exchange Commission) and they're not subject to that; however, the State of Florida -and this was even before we came in, chose to run this Fund, in a [Rule] 2a-7 manner, which is what a lot of LGIP's (Local Government Investment Pool) have done. They said -we're not registered with the SEC (Securities and Exchange Commission), but all the requirements that you have to do, we will do the exact same thing and kind of mirror [Rule] 2a-7. So - when we say [Rule] 2a-7, that's officially -this Fund is a [Rule] 2a-7 like Fund." Continuing, Mr. Bloss added, "Last year, this was a [Rule] 2a-7 like Fund, but it was not a AAA rated fund and there are definitely differences. AAA takes it one step -takes all the requirements one step further than Rule 2a-7." Discussion followed on Local Government Investment Pool A and Local Government Investment Pool B. Mr. Bloss stated, "I can tell you there's a Release coming out, I think next week on the Website, that is going to talk about what they're doing with respect to these actions that they're going to take." Furthermore, Mr. Bloss noted a review of the recent legislative changes in a document he distributed and explained, "We formalized this language that says that the primary objectives are safety first, liquidity, and then competitive yield." Mr. Bloss added, "This Fund now has to be run in a totally transparent manner." Discussion. City Manager Ronald W. McLemore asked, "What is being put in place to assure that there is a more credible oversight of these Funds and these actions of SBA (State Board of Administration) that don't vary from Election to Election?" Mr. Bloss responded, "I think all of your questions are answered in -the legislative changes that have taken place." Mr. Bloss added, "This is as transparent an operation as you can get now." Further discussion. Tape 1/Side B CITY OF WINTER SPRINGS, FLORIDA MINUTES CITY COMMISSION WORKSHOP -AUGUST 13, 2008 PAGE 3 OF 6 With additional discussion, Commissioner Robert S. Miller asked, "There were a lot of cities, School Boards and Counties that pulled their money out. How many of them are back in now?" With further comments, Commissioner Miller remarked, "I think it would be helpful though if you could provide that to us." Mr. Bloss stated, "Let me see if I can get that number." Further discussion continued. Mayor Bush called a Recess at 6:01 p. m. The Workshop was called back to Order at 6:08 p. m. INFORMATIONAL 101. Office Of The City Manager Discussion Of Florida League Of Cities. Mr. Paul Shamoun, Retirement Services Manager, Florida League of Cities, 301 South Bronough Street, Suite 300, Tallahassee, Florida: addressed the City Commission on what the Florida League of Cities offers and its structure. Discussion. Commissioner Sally McGinnis arrived at 6:18 p.m. Mr. Shamoun was asked about Central Florida members; and he noted that "All the Bonds are AAA rated." Continuing, Mr. Shamoun explained, "In order to join the Trust you do have to pass a Resolution. Each government is a member of the Trust and to be a member requires a Resolution to join." Manager McLemore said to Mr. Shamoun and Mr. Bloss, "Agency funds are also invested in mortgage backed securities, aren't they?" Mr. Shamoun stated, "Correct. There's a lot of mortgage backed securities. I can tell you that in our Portfolios, the ones that are masnaged by Atlantic Capital, there are no direct sub-prime mortgages in our Portfolios." Continuing, Manager McLemore remarked, "Understanding the exposure on the agency's side, how do we get in a comfort zone with your Investment and Agency Funds." Mr. Shamoun responded, "The only way I can answer that is that our Consultant's, as well as our Manager's, have both attested that we do not have any sub-prime." C[TY OF WINTER SPRINGS, FLORIDA MINUTES CITY COMMISSION WORKSHOP -AUGUST 13, 2008 PAGE 4 OF 6 Discussion. Manager McLemore then said, "I think for me Mr. Mayor, I think that's a fair question to ask Federated [Investors, Inc.] also, at the appropriate time." Further discussion followed with Staff. Mr. Shamoun commented, "Those expense ratios do change though. We do not have one set expense and then if we get a lot of money in there, we make a lot more money; our expense ratio floats, so that we only take what we need to pay the expenses. Because the League is anon-profit, we do not have shareholders and things like that to layer on top, so we give that back." On making a final decision, Mayor Bush asked, "Who is going to give us information?" Manager McLemore stated, "We can get you some help on that. That is not a problem." Commissioner Joanne M. Krebs noted, "There are really good -professionals on the Pension Board (Board of Trustees) that -have this kind of background knowledge." Commissioner Krebs added, "We go to them and ask for their opinion -and just as one of the opinions - but I would definitely be contacting -them." Manager McLemore stated, "And that's fine, but I would want you to go to one more step." Commissioner Rick Brown and Deputy Mayor Gilmore also agreed with the suggestion of contacting the Board of Trustees. Furthermore, Manager McLemore added, "They could be - certainly a portion of that Council, but I think you need to go to another step also." Deputy Mayor Gilmore asked, "What is that step?" Manager McLemore remarked, "I need to do a little research on that and I will get back with you." Deputy Mayor Gilmore asked, "Another Consultant?" Manager McLemore responded, "Maybe, but not a lot of money." Commissioner McGinnis also agreed with the Board of Trustees and with going to another level. Commissioner McGinnis added, "There is a big difference between being a citizen's advisory and -being Certified Financial Planner -that's the level I don't think we have represented." Commissioner McGinnis then asked if there might be someone at the University of Central Florida? Manager McLemore commented, "We will give it to you." Mayor Bush inquired of Manager McLemore, "Is what you are recommending then to take these two (2) proposals and run them by somebody else? Is that what you are saying?" Manager McLemore commented, "Yes, I am." CITY OF WINTER SPRINGS, FLORIDA MINUTES CITY COMMISSION WORKSHOP -AUGUST 13, 2008 PAGE 5 OF 6 Tape 2lSide A Mayor Bush asked about Health Insurance and the Florida League of Cities. Manager McLemore said to Mr. Shamoun, "Not being a private sector person -being a Trust Fund, you had the ability to call up at any time and you did, and it put us in a very difficult position." Mr. Shamoun asked, "The quote?" Manager McLemore stated, "No, to call the Contract -just to call the coverage in the middle of the year. In other words, you had the right to review the performance and the rates as compared to losses and call it -end it with thirty (30) days notice at any point in time during the year; and you did that." Mr. Shamoun noted, "The old Healthcare program was completely dismantled and re- built from the ground up about a year ago." Manager McLemore asked, "You still are a Trust?" Mr. Shamoun noted, "We still are a Trust, but I don't know if that provision..." Manager McLemore asked, "...I would like to know the answer to that." Mr. Shamoun remarked, "I will get with Clay (Austin) in the morning and find out, and have him give you a call." Furthermore, Mr. Shamoun noted, "Again, those are things that we really want to know. If there's an issue in the way that one of our programs is designed that would keep you from joining us or cause you heartache, we want to know that and we'll re-design the program to -better fit your needs. I know in our Pension programs, there are plenty of companies out there that have -five (5) year -contracts, ten (10) year contracts. Nationwide, I found one that that had a fifteen (15) years - if you fired them within fifteen (15) years, all these fees triggered within the contract -and in our Pension program we have no fees. So, you tell us thirty (30) days, you can walk away and go somewhere else." Manager McLemore added, "I would like to know the answer - to that provision of the Trust structure." Mr. Shamoun noted, "Absolutely. I will find out." Mayor Bush said to Manager McLemore, "What is our next step here, Mr. McLemore?" Manager McLemore stated, "It is your direction. My suggestion would be that we come back with a recommendation to you for reviewing these proposals and including -who we have locally and is already part of our organization -along with, I would like to see at least one-third parties so you get a really broad prospective from the marketplace." Mayor Bush asked if there are more than these two (2)? Discussion. Manager McLemore then said, "Why don't I bring you back a proposal." CITY OF WINTER SPRINGS, FLORIDA MINUTES CITY COMMISSION WORKSHOP -AUGUST 13, 2008 PAGE 6 OF 6 Commissioner Brown and Mayor Bush asked, "How many cities are in the SBA (State Board of Administration)?" Commissioner Brown added, "Maybe we can get it from you - in [Local Goverrunent Investment Pool] A and [Local Government Investment Pool] B?" Mayor Bush then said to Mr. Bloss, "Send us an email and tell us that." ADJOURNMENT Mayor Bush adjourned the Workshop at 6:42 p.m. RESPECTFULLY SUBMITTED: :EA LORENZO-LUACES, CMC CLERK APPROVED: J HN F. BUSH MAYOR NOTE: These Minutes were approved at the August 25, 2008 Regular City Commission Meeting.