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HomeMy WebLinkAbout2007 01 31 Board of Trustees Regular Minutes CITY OF WINTER SPRINGS, FLORIDA UNAPPROVED MINUTES BOARD OF TRUSTEES REGULAR MEETING JANUARY 31, 2007 (RESCHEDULED FROM JANUARY 30, 2007) CALL TO ORDER The Board of Trustees Regular Meeting was called to Order by Vice Chairman A. Mark Sardo on Wednesday, January 31, 2007 (Rescheduled from January 30, ~007) at 5:00 p.m. in the East Training Room of the Municipal Building (City Hall, 1126 East State Road 434, Winter Springs, Florida 32708). Roll Call: Vice Chairman A. Mark Sardo, present Board Member Michael S. Blake, present Board Member Guy DeMaio, present Board Member Byron Giltz, arrived at 5:04 p.m. Board Member Vernon Rozelle, Jr., arrived at 5:40 p.m. After a moment of silence, Advisory Board Member Michael S. Blake led the Pledge of Allegiance. Mr. Kevin Smith, General Services Department Director, stated, "I suggest you might want to move the Consent to the front along with the Election of Officers (Agenda Item '300')." Mr. Smith continued, "Also, from SunTrust (Trusco Capital Management Financial), I have provided you a copy of their Report. They will not be here tonight to present the Report. If the Board would like to have them come at a later date or schedule a Special Meeting - I would be happy to accommodate that." In addition, Mr. Smith noted that there is a City Commission Workshop Meeting on Monday, February 5, 2007 at 7:00 p.m. to review the updated Pension Plan documents. A copy of the Agenda Item for the Meeting was handed out to the Board of Trustee Members. Advisory Board Member Byron Giltz arrived at 5:04 p.m. PUBLIC INPUT No one spoke. CITY OF WINTER SPRINGS, FLORIDA UNAPPROVED MINUTES BOARD OF TRUSTEES REGULAR MEETING - JANUARY 31, 2007 (RESCHEDULED FROM JANUARY 30, 2007) PAGE 2 OF 12 AWARDS AND PRESENTATIONS A WARDS AND PRESENTATIONS 100. Not Used. PUBLIC HEARINGS AGENDA PUBLIC HEARINGS 200. Not Used. REGULAR AGENDA REGULAR 300. Office Of The City Clerk Election Of Officers. "I WOULD LIKE TO MOVE THAT MARK SARDO BE CHAIRMAN." MOTION BY ADVISORY BOARD MEMBER BLAKE. SECONDED BY ADVISORY BOARD MEMBER DeMAIO. DISCUSSION. VOTE: VICE CHAIRMAN SARDO: AYE BOARDMEMBERBLAKE: AYE BOARDMEMBERGILTZ: AYE BOARDMEMBERDeMAIO: AYE MOTION CARRIED. FOR NOMINATION OF A VICE CHAIRMAN "I WOULD - LIKE TO NOMINATE MR. BLAKE." MOTION BY CHAIRMAN SARDO. SECONDED BY ADVISORY BOARD MEMBER DeMAIO. DISCUSSION. WITH CONSENSUS OF THE ADVISORY BOARD, THE MOTION W AS APPROVED. MOTION CARRIED. REGULAR 301. General Services Department Review Of Trusco Capital Management Financial Statements. This Agenda Item was noted earlier in the Meeting by Mr. Smith as an "Agenda Change". CITY OF WINTER SPRINGS, FLORIDA UNAPPROVED MINUTES BOARD OF TRUSTEES REGULAR MEETING - JANUARY 31, 2007 (RESCHEDULED FROM JANUARY 30, 2007) PAGE 3 OF 12 +.:. AGENDA NOTE: THE NEXT TWO AGENDA ITEMS WERE DISCUSSED NEXT, AS DOCUMENTED, FOLLOWED BY THE REST OF THE AGENDA IN THE ORDER AS NOTED. +.:. CONSENT AGENDA CONSENT 400. Office Of The City Clerk Approval Of The November 16, 2006 Regular Meeting Minutes. No discussion. CONSENT 401. Office Of The City Clerk Approval Of The January 4, 2007 Special Meeting Minutes. This Agenda Item was not discussed. "MOVE FOR APPROVAL OF CONSENT AGENDA." MOTION BY VICE CHAIRMAN BLAKE. SECONDED BY CHAIRMAN SARDO. DISCUSSION. WITH CONSENSUS OF THE ADVISORY BOARD, THE MOTION WAS APPROVED. MOTION CARRIED. .:..:. AGENDA NOTE: THE FOLLOWING AGENDA ITEMS WERE DISCUSSED NEXT, AS DOCUMENTED, FOLLOWED BY THE REST OF THE AGENDA IN THE ORDER AS NOTED. .:..:. REGULAR AGENDA REGULAR 302. General Services Department Interviews Of Prospective Investment Managers. Mr. David West, CF A, Bogdahn Consulting, LLC, 340 West Central Avenue, Suite 300, Winter Haven, Florida: commented on the length of each Presentation and stated, "The 'Growth Equity' line up, we have DG [Capital Management, Inc.], Lateef [Asset Management], and Renaissance [Investment Management]. CITY OF WINTER SPRINGS, FLORIDA UNAPPROVED MINUTES BOARD OF TRUSTEES REGULAR MEETING - JANUARY 31, 2007 (RESCHEDULED FROM JANUARY 30, 2007) PAGE 4 OF 12 Lateef [Asset Management], as everyone has been made aware, has notified us that they will not have a Presenter. We regret that - there was a change in the firm policy, prior to our showing this Manager. We've worked with Lateef [Asset Management] successfully in a number of places. The service orientation has been very positive. Again, we presented them - we thought - would be an excellent choice. They did make a policy change. They will no longer physically service assets less than ten million dollars ($10,000,000.00). We would like a minimum of servicing of once a year. We would certainly hope that a Presenter would be physically present to establish- a business." Mr. West continued, "They will honor the commitment that they were shown prior to - establishing - this new Policy. For this relationship and one (1) other relationship, where they had been previously chosen to be a finalist Manager, they will honor the less than ten million [dollar] ($10,000,000.00) commitment." Mr. C. Garrett Williams, DG Capital Management, Inc., 260 Franklin Street, Suite 1600, Boston, Massachusetts: commented on the history of the company and presented the 'Growth' strategy. Discussion. Mr. West asked, "Address - performance of 2000 and 1999. Can you give us a sense of the headwind and the tailwinds." Discussion. Advisory Board Member Vernon Rozelle, Jr. arrived at 5:40 p.m. Chairman Sardo stated, "} was looking at your clients and it had 'Ten (10) and Other' at the end of the year." Mr. Williams stated, "} will get back to you - on what those ten (10) are. " Mr. West commented on the fee and stated, "At ninety (90) Basis Points? Vice Chairman Blake asked, "That is not ninety (90) Basis Points on the entire amount?" Mr. Williams answered, "Based on whatever your asset level is." Next, discussion ensued regarding presenting an overview of Lateef Asset Management without a Representative being present. Tape I/Side B Mr. West gave a brief presentation on Lateef Asset Management and commented on the fee by stating, "100 Basis Points." CITY OF WINTER SPRINGS, FLORIDA UNAPPROVED MINUTES BOARD OF TRUSTEES REGULAR MEETING - JANUARY 3 I, 2007 (RESCHEDULED FROM JANUARY 30,2007) PAGE 5 OF 12 Advisory Board Member Byron Giltz stated. "Do you have anything in writing from them on all of these changes they have made?" Mr. West stated, "I have an email correspondence. But, as far as an official Memorandum, we have not seen that yet." Discussion ensued regarding the process for approving a final Contract. Then, Mr. West continued regarding an official Memorandum, "An official Agreement, if you will, other than documenting it with email correspondence, no. We have worked with the firm. We believe the firm has a high level of integrity. For that reason, we - have every reason to believe that they would honor what they are suggesting." Advisory Board Member Giltz asked, "When we get - Contracts from - Investment Advisors, what are we going to do with them?" Mr. Smith stated, "We will - have our Attorney - review the contract before any signatures are affixed." Mr. James V. Wallerius Senior Vice President, Systematic Financial Management, 300 Frank West Burr Blvd., 1h Floor, Teaneck, New Jersey: introduced himself and stated that he lives in Jacksonville. Ms. Jennifer C. Trowbridge, CF A Director of Client of Services, Renaissance Investment Management, The Baldwin Center, Suite 1200, 625 Eden Park Drive, Cincinnati, Ohio: spoke on the founding of the company and presented the financial strategies. Mr. West asked, "As far as product delivery, this process would be 'Separate'?" Mr. Wallerius stated, "Yes." Then, Mr. West asked, "As far as the fee - proposal seventy-five (75) [Basis Points] on the first five (5)?" Mr. Wallerius answered, "Yes." Board Member Giltz asked if Renaissance Investment Management has Liability Insurance. Mr. Wallerius stated, "Yes - I will verifY." Regarding a 'Wrap Program', Mr. West asked, "You would be willing to work with - one (1), two (2), or three (3) various commission recapture Brokers?" Mr. Wallerius stated, "Yes." Tape 2/Side A Regarding Insurance, Mr. West noted, "We would certainly request with the Contract the appropriate attachments and insurance levels." Advisory Board Member Guy DeMaio stated, "Ongoing from year to year." CITY OF WINTER SPRINGS, FLORIDA UNAPPROVED MINUTES BOARD OF TRUSTEES REGULAR MEETING-JANUARY 31,2007 (RESCHEDULED FROM JANUARY 30, 2007) PAGE 6 OF 12 Chairman Sardo stated, "At this point, do we want to take a look at and have a Motion for a Nomination for a 'Broad Group' Candidate..." Mr. Smith added, .....Recommendation to the [City] Commission." Chairman Sardo added, "We also have a recommendation on the Table to have a ranking." Vice Chairman Blake said, "My ranking is Lateef [ Asset Management]; Renaissance [Investment Management]; and DO [Capital Management, Inc.]. I actually have some distance between one (1) and two (2)." Board Member DeMaio stated, "Renaissance [Investment Management]; Lateef [Asset Management]; and DO [Capital Management, Inc.]." Next, Board Member Rozelle remarked, "Lateef [Asset Management]; Renaissance [Investment Management]; and DO [Capital ~anagement, Inc.]." , Board Member Oiltz stated, "DO [Capital Management, Inc.] - Renaissance [Investment Management] - Lateef [Asset Management]." Chairman Sardo stated, "Lateef [Asset Management] - Renaissance [Investment Management] - and DO [Capital Management, Inc.]." Vice Chairman Blake stated, "Lateef [Asset Management] eight (8), Renaissance [Investment Management] ten (10), and DO [Capital Management, Inc.] twelve (12)." Chairman Sardo asked, "With the lowest number being correct, do I have a Motion?" "I MOVE WE RANK THEM, EIGHT (8), TEN (10), AND TWELVE (12) POINTS. LATEEF [ASSET MANAGEMENT) FIRST, RENAISSANCE [INVESTMENT MANAGEMENT) SECOND, AND DG [CAPITAL MANAGEMENT, INC.) THIRD, PURSUANT TO THE POINTS." MOTION BY VICE CHAIRMAN BLAKE. SECONDED BY ADVISORY BOARD MEMBER DeMAIO. DISCUSSION. WITH CONSENSUS OF THE ADVISORY BOARD, THE MOTION WAS APPROVED. MOTION CARRIED. Mr. Curtis L. Spears, Director, Public Funds, FTAM, Fifth Third Asset Management, 707 Grant Street, Suite 2000, MD AGTB20, Pittsburgh, Pennsylvania: gave a brief history of the company. Mr. Peter M Klein, CF A, Director, Mid Cap Value Strategies, FTAM, Fifth Third Asset Management, 600 Superior Avenue, East, MD A6513C, Cleveland, Ohio: presented the firm's proposal. CITY OF WINTER SPRINGS, FLORIDA UNAPPROVED MINUTES BOARD OF TRUSTEES REGULAR MEETING - JANUARY 31, 2007 (RESCHEDULED FROM JANUARY 30, 2007) PAGE 7 OF 12 Mr. Fred Johnston, Vice President, Institutional Trust Sales, Institutional Client Group, Fifth Third Bank, 200 E. Robinson Street, Suite 900, MD MBLE9B, Orlando, Florida: was introduced as a local member of the financial team. Ms. Kimberly Kutlenios, CRSP, Vice President, Senior Institutional Relationship Manager, Fifth Third Bank Investment Advisors, 200 East Robinson Street, gth Floor, MD MBLE9B, Orlando, Florida: was introduced as a local member of the financial team. Discussion. Mr. West asked, "Delivery of product will be 'Separate'?" Mr. Klein answered, "Yes." Then Mr. West stated, "The fee - eighty (80) Basis Point fee quoted?" Mr. Spears remarked, "Yes. It is." Regarding Custodian Services, Mr. West stated, "Is there an opportunity to blend those services should they be selected and you be selected?" Mr. Spears answered, "Definitely, and give you a break." Mr. Johnston added, "Generally, what we do - we charge you our standard pricing and discount over the minimum." Then Mr. Johnston added, "I believe it would probably be somewhere in the three (3) Basis Points." Ms. Kutlenios commented, "I would handle all of the Custody work for you." Chairman Sardo called a Recess at 7:24 p.m. The Meeting was called back to Order by Chairman Sardo at 7:36 p.m. Mr. Donald Curran, Senior Vice President, Oppenheimer Capital, 1345 Avenue of the Americas, New York, New York: presented the history and financial strategies of Oppenheimer Capital. Discussion. Tape 2/Side B Further discussion. Mr. West asked, "The eighty-five (85) Basis Points again, confirming that." Mr. Curran stated, "That is the standard fee schedule. I will make sure that the fee - we offer you, if you choose us, would - match or would be at the lowest fee offered." Mr. Dave A. Mathews, Principal, Managing Director, Snow Capital Management, LP, 2100 Georgetowne Drive, Suite 400, Sewickley, Pennsylvania: presented his firm's financial strategies. CITY OF WINTER SPRINGS, FLORIDA UNAPPROVED MINUTES BOARD OF TRUSTEES REGULAR MEETING - JANUARY 31, 2007 (RESCHEDULED FROM JANUARY 30, 2007) PAGE 8 OF 12 Discussion. Mr. West said, "As far as fee, eighty (80) Basis Points?" Addressing Mr. West, Mr. Dave A. Mathews stated, "Understanding our relationships that we have with you, we can knock it down to seventy (70) [Basis Points]." Mr. Mathews added, "You saw our client list. There are a number of other Florida entities here." Furthermore, Mr. Mathews stated, "In my effort to come down and service those accounts, Dave [West] and Joe [Bogdahn] - to make it easier for me to come down from Pittsburgh, lined them up - all in a week. So, I will come down for a week." Discussion. Tape 3/Side A Chairman Sardo said, "My ranking looks like; Snow [Capital Management], Fifth Third [Asset Management], and Oppenheimer [Capital]." Vice Chairman Blake stated, "I would concur [Snow Capital Management, Fifth Third Asset Management, and Oppenheimer Capital.]" Board Member DeMaio said, "I am going with Snow [Capital Management], Fifth [Third Asset Management], and Oppenheimer [Capital]." Board Member Giltz stated, "Fifth Third [Asset Management], Snow [Capital Management], and Oppenheimer [Capital]." Board Member Rozelle remarked, "Fifth Third [Asset Management], Snow [Capital Management], and Oppenheimer [Capital]." Mr. Smith stated, "Snow [Capital Management] seven (7), Fifth Third [Asset Management] eight (8), and Oppenheimer [Capital] fifteen (15)." CHAIRMAN SARDO STATED, "DO I HAVE A MOTION TO RECOMMEND THESE NUMBERS TO THE [CITY) COMMISSION?" "SO MOVED - SNOW [CAPITAL MANAGEMENT), FIFTH THIRD [ASSET MANAGEMENT), AND OPPENHEIMER [CAPITAL)." MOTION BY VICE CHAIRMAN BLAKE. SECONDED BY ADVISORY BOARD MEMBER DeMAIO. DISCUSSION. CITY OF WINTER SPRINGS, FLORIDA UNAPPROVED MINUTES BOARD OF TRUSTEES REGULAR MEETING - JANUARY 31, 2007 (RESCHEDULED FROM JANUARY 30, 2007) PAGE 9 OF 12 VOTE: BOARD MEMBER ROZELLE: NAY BOARD MEMBER DeMAIO: AYE CBAIRMANSARDO: AYE BOARD MEMBER GILTZ: NAY VICE CHAIRMAN BLAKE: AYE MOTION CARRIED. Board Member Giltz departed the Meeting at approximately 8:43 p.m. Ms. Carrie A. Callahan, Senior Director, Galliard Capital Management, 800 LaSalle Avenue, Suite 2060, Minneapolis, Minnesota: presented a history of the firm and the financial proposal. Discussion. Brief discussion ensued regarding 'Co-Mingle' and 'Separate' and Ms. Callahan noted, "On the Co-mingle - twenty-five (25) Basis Points." Mr. West stated, "Giving the size of the mandate, if we would ask you to Manage an index like a fixed portfolio for us, could you do that, and what sort of fee arrangement should we expect?" Ms. Callahan stated, "Fifteen (15) on 'Tips' and -let us know." Mr. Thomas N Tight IL Regional Director, MBIA Asset Management Group, 301 East Pine Street, Suite 150, Orlando, Florida: commented on the history of the company and presented the financial strategies of company. Tape 3/Side B Mr. West asked, "It would be Separate. And, the fee?" Mr. Tight answered, "Twenty (20) Basis Points for the entire mandate." Furthermore, Mr. West stated, "At what cost would you run a 'Tips' portfolio, index?" Mr. Tight stated, "Would that be in addition, as part of the existing mandate..." Mr. West stated, "...We would be carving this out as a separate asset class..." Then, Mr. Tight answered, "...Absolutely. We do that for a number of other clients. We would be happy to do that." Mr. Tight added, "Being a fixed portfolio, we would charge a little bit less - fifteen (15) Basis Points, somewhere around there." CITY OF WINTER SPRINGS, FLORIDA UNAPPROVED MINUTES BOARD OF TRUSTEES REGULAR MEETING - JANUARY 3 1,2007 (RESCHEDULED FROM JANUARY 30, 2007) PAGE 10 OF 12 With discussion regarding the Ranking, Vice Chairman Blake remarked, "I like - Galliard [Capital Management] a little bit better in their track record and history." Then, Chairman Sardo stated, "So, you would say right now, Galliard [Capital Management] one (1) and MBIA [Asset Management Group] a close second?" Vice Chairman Blake stated, "Yes." Chairman Sardo stated, "MBIA [Asset Management Group] sticks out to me because of their sophisticated, discipline approach to everything and how successful they have been in that area." Board Member DeMaio said, "MBIA [Asset Management Group] and Galliard [Capital Management]." Board Member Rozelle stated, "The return for Galliard [Capital Management] has been very strong. I would have to say Galliard [Capital Management] first. MBIA [Asset Management Group] second." Mr. West stated, "There is one (1) piece of flexibility that should probably be considered. MBIA [Asset Management Group] will provide a recustomized portfolio. I say that . because we reviewed these Managers on the - aggregate general bond expertise. Should we want to give a different assignment - such as intermediate aggregate, which we had talked about and suggested, the Galliard [Capital Management] product, a co-mingled product - is the intermediate government credit, it is not the intermediate aggregate. It is a close fit, but not an exact fit." Mr. West added, "An intermediate term meaning one to ten (1-10) years." Mr. Smith asked, "Were there any opportunities for Custodial - with Galliard [Capital Management] through Wells Fargo?" Mr. West stated, "We have to look into that. I am not sure that Wells Fargo complies." Chairman Sardo said, "Based on Galliard's [Capital Management] performance, I am going to go over to that side." In addition, Chairman Sardo stated, "I decided to change my Vote to reflect Galliard [Capital Management] as my number one (1) choice based on the cost associated with the trades in the separate account of MBIA [Asset Management Group]. In addition, the rates of return of Galliard [Capital Management] are certainly much, more attractive percentage wise." CHAIRMAN SARDO STATED, "SO ALL SAID, WE ARE GOING TO RECOMMEND TO THE BOARD [CITY COMMISSION]. CAN WE HAVE A MOTION PLEASE?" CITY OF WINTER SPRINGS, FLORIDA UNAPPROVED MINUTES BOARD OF TRUSTEES REGULAR MEETING-JANUARY 31, 2007 (RESCHEDULED FROM JANUARY 30, 2007) PAGE I I OF 12 "SO MOVED." MOTION BY VICE CHAIRMAN BLAKE. SECONDED BY ADVISORY BOARD MEMBER ROZELLE. DISCUSSION. CHAIRMAN SARDO SAID, "WHAT THE MOTION IS, IS TO RECOMMEND TO HAVE GALLIARD (CAPITAL MANAGEMENT) NUMBER ONE (1) AND MBIA (ASSET MANAGEMENT GROUP) NUMBER TWO (2)." VOTE: BOARDMEMBERDeMAIO: AYE CHAIRMAN SARDO: AYE VICE CHAIRMAN BLAKE: AYE BOARD MEMBER ROZELLE: AYE MOTION CARRIED. Mr. West stated, "Procedurally - we have a Pension Attorney who will handle the Manager Contracts. In this case, we will be happy to take direction to have the Managers direct their Contracts to Kevin [Smith] for distribution." After some discussion, Mr. West added, "We will have the Managers forward their Contracts to Kevin [Smith] for distribution for review." Mr. Smith stated, "We will put it through our normal process." "I MAKE A MOTION TO ALLOW THE CHAIRMAN TO SIGN OFF ON THE MINUTES FOR THE COMMISSION PACKET." MOTION BY VICE CHAIRMAN BLAKE. SECONDED BY CHAIRMAN SARDO. DISCUSSION. WITH CONSENSUS, THE MOTION WAS APPROVED. MOTION CARRIED. Mr. West began by stating, "In the interest of - moving this forward, we would like to, as we did, prior to these interviews, we would like to bring forward Custody alternatives." Mr. West added, "Have Interviews. One ofthe potential candidates was here tonight." With discussion, Mr. West stated, "That did go out in the general RFP (Request for Proposal) in addition to the - International." Mr. West stated, "Our recommendation - at the next Meeting; review that grid from the RFP (Request for Proposal); International; Real Estate piece; and followup with Interviews." Chairman Sardo stated, "We do need to have him move on the International piece and that takes about thirty (30) days." Mr. West commented, "We could work on a tighter schedule." Then Mr. West added, "Before we pull the switch, we need to have signed Agreements from at least the Domestic Manager, the Custodian, and preferably the International Manager before we send out the Termination letter and transfer assets." CITY OF WINTER SPRINGS, FLORIDA UNAPPROVED MINUTES BOARD OF TRUSTEES REGULAR MEETING - JANUARY 31, 2007 (RESCHEDULED FROM JANUARY 30,2007) PAGE 12 OF 12 Mr. Smith stated, "Before I take these to the [City] Commission, we would want to have all components prepared." Chairman Sardo said, "That means we need to expedite this decision for the International." Mr. West noted, "One of the three (3) partners - should be able to do that on the 21st..." Mr. West added, "...of February [2007]." Then, Mr. West stated, "We will not be interviewing on the 21 st (February)." With Consensus of the Board, the next Meeting is scheduledfor February 21,2007 at 6:00 p.m. INFORMATIONAL AGENDA INFORMATIONAL 500. Not Used. 600. REPORTS No Reports were given. FUTURE AGENDA ITEMS None. ADJOURNMENT Chairman Sardo adjourned the Regular Meeting at 10:05 p.m. RESPSCTFULLX SUBM/ITED: DEBBIE FR4lLNKtIN, DEPUTY CITY CLERK ...."'~.;;.;, .", .............- -:,...~ "- '''''_.- \.. ..~ /*. .., . -~.... ~ "'- - ......~, '", - - ..:......" z..:.. / ~, .:. :-. -'~ ./ . LQ~~!1ACES, CMC y CLEIiK? _..~- _: .... ~.....~ -.~ .....,,:. --- , ..., ..... NOTE: These Minutes were approved at the April 24, 2007 Board ofTrustees Regular Meeting.