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HomeMy WebLinkAbout1998 10 27 Board of Trustees Regular Minutes MINUTES BOARD OF TRUSTEES - PENSION PLAN OCTOBER 27, 1998 - REGULAR MEETING I. CALL TO ORDER The Board of Trustees - Pension Plan Regular Meeting was called to order by Chairman Jim Ryan, Tuesday, October 27,1998 at 7:31 p.m. in the Commission Chambers of the Municipal Building (City Hall, 1126 East State Road 434, Winter Springs, Florida 32708). Roll Call Jim Ryan, Chairman, present Robert Nippes, Vice Chairman, present Bill Dickey, present Vemon Rozelle, absent Ron Warble, absent Also Present Ronald W. McLemore, City Manager John J. Drago, Administrative Assistant Philip Senderowitz, SunTrust Representative Approval of the October 27,1998 Minutes With a Motion and a Second, it was the consensus of the Board to approve the minutes of October 27, 1998. Motion passed. II. REGULAR AGENDA A. Review of SunTrust's Financial Statements with Mr. Philip Senderowitz, (Client Service Officer with STI Capital Management) Mr. Philip Senderowitz, Account Representative with SunTrust began his presentation by stating that the 3rd quarter was "A pretty difficult investing environment", with many countries abroad having troubles. He spoke about some of the problems that arose when Russia devalued some of their debt, which affected many investors. He said that "A lot of investors just decided - don't want foreign stocks; don't want domestic stocks; I want the 30 year Treasuries in the United States and that was the only thing that they were buying, so stocks of all sorts fell". MINUTES BOARD OF TRUSTEES - PENSION PLAN OCTOBER 27, 1998 - REGULAR MEETING PAGE20F3 Mr. Senderowitz then explained to the Board, that "Stocks of all sorts fell, and really, the smaller you got in the markets, again, the worse you performed - "mid-caps" did worse than "large caps", "small cap stocks" did even worse". Regarding the differences between equities and bonds, he elaborated about bonds outperforming their indexes for the three-month period; and for the year, they had a very stanch performance. Mr. Senderowitz added "Overall, your plan was down 1.9% for the twelve-month period, ending September 30th. A lot of that is due to the weightings that you had in the stocks, and also the fact that you have some exposure in the smaller and mid-cap markets. What we're really seeing in the smaller and mid-cap markets is a divergence in performance, greater than has ever occurred, in terms of large stocks, are trading at price-to-eamings multiples, in the 30's, while their underlying companies are growing 6 - 7 % a year. The inverse is true for small-cap stocks, which are sometimes trading at 8 or lOon a price-to- earnings multiple, yet their earnings are growing 20 to 30 percent a year". The discussion continued with comments about the United States Economy, and the cutting of the Fed.'s fund rates. He further spoke of the potential highs and lows in the market, but overall, their outlook is positive for the next year. He said, "We think that the small/mid cap stocks, while they've been unfairly punished, will recover and continue to recover, catching up to the large-cap.. . overseas, we think that Europe is still better than Asia" . There was discussion about current bank consolidations here in the States and potential bank mergers overseas. The Board asked Mr. Senderowitz about our portfolio and whether our present allocations should be adjusted. Mr. Senderowitz said that he would keep things the way that they are - and in regards to the small and mid-cap stocks, he said that "What we've seen in the past few weeks and will continue to see, encourages us to stay in that area, rather than selling at the bottom, which you would be doing". To illustrate his projections, he gave an example - "The mid-cap fund, since the 8th of October has been up about 20 percent". Mr. Ronald W. McLemore, City Manager added that with the results from the numbers at closing today, it seemed that we were out of the negative numbers, and actually, it has put us where we were earlier in the year. The Board agreed. MINUTES BOARD OF TRUSTEES - PENSION PLAN OCTOBER 27, 1998 - REGULAR MEETING PAGE30F3 Regarding the Defined Benefit Plan, Mr. Senderowitz said that there was some "miscommunication" about the investiture of the funds. However, he noted, that when the monies were invested, it was just about at the peak of the market, so everything worked out very nicely. Discussion. Mr. Senderowitz next spoke of a change of Managers handling the "High-Grade Equity" (Growth fund), and that the "new" manager of this fund, actually managed this fund from 1994 to 1996; however, we should not really notice any significant changes with this fund. There was further discussion about whether there was a need to make any changes, and everyone agreed with Manager McLemore that we should retain the current allocations. The number of "Investment Performance Reports" was mentioned, and it was agreed that Mr. Senderowitz would supply the City with fifteen (15) of these books, as soon as they were ready for distribution. The date of the next meeting was discussed - it is scheduled for January 26th, 1999. Chairman Ryan said that any CD-ROM's (sent from SunTrust) should be sent to the City, and not to him. Mr. Senderowitz noted this. III. OTHER DISCUSSION ITEMS None were mentioned. IV. ADJOURNMENT Chairman Ryan adjourned the meeting at 7:53 p.m. Minutes respectfully submitted by: Andrea Lorenzo-Luaces, Deputy City Clerk City of Winter Springs, Florida DOCS/boards/trustees/fy9798/minutes/102798.doc