Loading...
HomeMy WebLinkAbout2009 02 17 Board Of Trustees Special MinutesCITY OF WINTER SPRINGS, FLORIDA MINUTES BOARD OF TRUSTEES SPECIAL MEETING FEBRUARY 17, 2009 CALL TO ORDER The Board of Trustees Special Meeting was called to Order by Chairperson Maria Fair on Tuesday, February 17, 2009 at 6:02 p.m. in the East Training Room of the Municipal Building (City Hall, 1126 East State Road 434, Winter Springs, Florida 32708). Roll Call: Chairperson Maria Fair, present Vice Chairman Vernon Rozelle, Jr., present Board Member Ben McMahan, present Boazd Member Max Swaim, present Board Member Bazbaza Watkins, present City Manager Kevin L. Smith introduced Carol Lallathin, Assistant to the City Clerk, to the Boazd. A moment of silence was followed by the Pledge of Allegiance. INFORMATIONAL AGENDA INFORMATIONAL 100. General Services Department General Services Director Providing A Summary Of Pension-Related Expenditures For Fiscal Year 2008 And The First Quarter Expenses For Fiscal Year 2009. Manager Smith discussed this Agenda Item to the Board. Chairperson Fair asked Mr. Dave West, "In terms of the consulting that you do for the Plan, since you are our Plan Consultant, do you periodically give us information or advice on how we can better use Funds to lower those Plan costs and is that something that you can consider looking at for us?" Mr. Dave West, CFA, Bogdahn Group, 340 West Central Avenue, Suite 300, Winter Haven, Florida: replied, "Tasked with that, absolutely, that's something we can do -and we have started an unofficial request because there was discussion on this issue to -come back and -review the Fees, the current Fee Schedules and come back with potential reductions there." Discussion. CITY OF WINTER SPRINGS, FLORIDA MINUTES BOARD OF TRUSTEES SPECIAL MEETING -FEBRUARY 17, 2009 PAGE 2 OF 9 Chairperson Fair remazked, "I would like to see - Bogdahn [Group] work for this Plan and help us do everything we can to lower those Fees and make recommendations - of ways we can lower the cost." Further discussion. Board Member Ben McMahan commented, "If we could get our Fees a little lower - I would be much more comfortable." Board Member McMahan continued, "I think it would be beneficial to the City and the employees if we -really pushed that." Chairperson Fair noted, "And I would agree with that." Chairperson Fair continued, "Outside of Management Fees, do you know of anything that you could just quickly look at that you might direct us towards to help us reduce overall cost for the Plan that we should begin consideration?" Mr. West answered, "One area that we could involve, which is a little bit challenging for this Asset size, but one area that could be evolved is the use of Commission Recapture Programs." Discussion. Mr. West mentioned, "It's a little trickier when we get at this size Asset level, but -it's certainly something that - we can -look at." Further discussion. REGULAR AGENDA REGULAR 600. General Services Department Interviews Of Domestic Equity All Cap Value Managers For Replacement Of Snow Capital Management. Regarding Dalton, Greiner, Hartman, Maher & Co., LLC due diligence, Mr. West stated, "As I communicated in my email - we find no reason to disqualify Dalton Greiner [Hartman, Maher & Co., LLC] for consideration from this interview process. So, my point is - we -completed that last piece of the -analysis there for you, so that you can make a decision tonight and all of the Managers will have been -fully, equally vetted." Discussion. Mr. Robert F. Croce, Senior Vice President, Director of Marketing, Anchor Capital Advisors, Inc., One Post Office Square, Suite 3850, Boston, Massachusetts: introduced himself and William Rice, President and referenced the Anchor Capital Advisors, Inc. "Investment Presentation for City of Winter Springs General Employees Pension Plan" that was emailed and mailed to the Boazd Members prior to the Meeting. Mr. William P. Rice, President, CFO, Anchor Capital Advisors, Inc., One Post Offrce Square, Suite 3850, Boston, Massachusetts: addressed the Boazd rgazding Anchor Capital Advisors, Inc. CITY OF WINTER SPRINGS, FLORIDA MINUTES BOARD OF TRUSTEES SPECIAL MEETING -FEBRUARY 17, 2009 PAGE 3 OF 9 Mr. Rice remarked, "We do talk to or visit every single company that we are going to consider for Investment in your Portfolio; every single company." Further discussion. Board Member McMahan asked, "Can you furnish us a list of clients that we could contact to just discuss your relationship and performance?" Mr. Rice replied, "We can do that." Discussion. Next, Boazd Member McMahan mentioned that he would be interested in knowing how many clients Anchor Capital Advisors, Inc. lost in the past yeaz. Further discussion. Tape 1/Side B Much discussion. Mr. Jeff Baker, CFA, Chief Investment Officer, Dalton, Greiner, Hartman, Maher & Co., LLC, 2001 Tamiami Trail North, Suite 206, Naples, Florida: addressed the Board regazding Dalton, Greiner, Hartman, Maher & Co., LLC and reviewed the Dalton, Greiner, Hartman, Maher & Co., LLC Al1Cap Value Presentation with the Boazd that was emailed and mailed out to the Boazd prior to the Meeting. Regazding Portfolio Managers, Mr. Baker remazked, "We have eleven (11) decision makers who work for this Product. All of our decision makers work on all of our products." Further discussion. Mr. West asked, "The relative performance, that's price momentum of the annual security or is a model metrics?" Mr. Baker replied, "Price momentum versus its peers." Discussion. Mr. Baker commented, "Each sector specialist has full authority to buy or sell stocks within their sector, but it has to be run through the full team first to challenge the idea before it can be -bought in the Portfolio." Further discussion. Regarding risk control, Mr. Baker stated, "If it's in a fourth quartile three (3) months in a row or three (3) review periods in a row. It's automatically sold out of the Portfolio." Discussion continued. Mr. Baker conveyed, "Why should you pick Dalton Greiner [Hartman, Maher & Co., LLC] -because the people, the process and our results over time. We have a very experienced solid team." Mr. Baker continued, "We have a proven capability to pick stocks in good mazkets and down -mazkets. Process, we're very, very structured and disciplined." CITY OF WINTER SPRINGS, FLORIDA MINUTES BOARD OF TRUSTEES SPECIAL MEETING -FEBRUARY 17, 2009 PAGE 4 OF 9 Continuing, Mr. Baker commented, "Results, I think our numbers speak for -themselves. I - am hopefully convening today is that process is repeatable in a go forward basis - we don't have any mazketing reps at Dalton Greiner [Hartman, Maher & Co., LLC] - I am your client contact, the CIO (Chief Investment Officer) of the Firm. We -want our clients to talk to the senior people, so if I am not available, you'll talk to another PM (Project Manager) -who is available." Further discussion. Boazd Member McMahan inquired, "How many clients have you lost in the last yeaz and a half?" Mr. Baker answered, "In the last yeaz and a half, I'd have to get you an exact answer, but - I'm going to say roughly half a dozen." Discussion. Tape 2/Side A Further discussion. Regarding the way Dalton, Greiner, Hartman, Maher & Co., LLC selects stocks, Chairperson Fair asked, "So, it has nothing to do with a sector..." Mr. Baker replied, "...No." Chairperson Fair continued, "It has nothing to do with anything other than just a bottom up, the best ideas within your model?" Mr. Baker answered, "Absolutely." Discussion continued. Mr. Eli S Kent, Principal, Managing Director, Moody Aldrich Partners, 18 Sewall Street, Marblehead, Massachusetts: introduced himself and Ms. Sazah Westwood to the Board and spoke regarding the Moody Aldrich Partners Presentation that was emailed/mailed to the Boazd prior to the Meeting. Next, Mr. Kent stated, "A key strength of our process is the ability to adapt to the changing market inefficiencies and be able to position Portfolios accordingly. And we've proven over time to be able to do that in various mazket phases." Further discussion. Ms. Sarah L. Westwood, CFA, Associate Portfolio Manager, Moody Aldrich Partners, 18 Sewall Street, Marblehead, Massachusetts: discussed with the Board different types of stocks that were currently owned by Moody Aldrich Partners. Discussion continued. Boazd Member Max Swaim asked, "What is your Fee structure?" Mr. Kent replied, "Our Fee is one percent (1%) on the first ten million [dollazs] ($10,000,000.00)." Board Member Bazbaza Watkins inquired, "Is it negotiable?" Mr. Kent answered, "No; it is over twenty-five million [dollazs] ($25,000,000.00)." CITY OF WINTER SPRINGS, FLORIDA MINUTES BOARD OF TRUSTEES SPECIAL MEETING -FEBRUARY 17, 2009 PAGE 5 OF 9 Next, Vice Chairman Vernon Rozelle Jr. inquired, "Over the last year, how many clients has your Firm lost, approximately?" Mr. Kent answered, "I don't know the exact number; I am sure it was included in the RFP (Request for Proposal). I know net, we gained clients last year, particularly on the institutional side. We had a significant increase in our institutional business in 2008." Further discussion. Tape 2/Side A Mr. West reviewed the three (3) Managers with the Board, referencing the "City of Winter Springs General Employees' Retirement System All Cap Value Manager Presentation Supplemental Report Presented February 17, 2009" that was emailed to the Board prior to the Meeting. Regarding Moody Aldrich Partners, Mr. West mentioned, "If we consider that Manager, we would recommend the inclusion of an Index Product." Mr. West continued, "In our opinion, it would behoove us to have a S&P (Standard & Poor) 500 Index Type Product at the core or the middle, which has a larger cap bias." Discussion. Regarding negotiating the Fee structure for Moody Aldrich Partners, Board Member McMahan commented, "I do not know if we will choose them, but if we did, I sure want to push still." Chairperson Fair agreed, "Absolutely." Further discussion. In terms of choosing a replacement for Snow Capital Management, LP, Manager Smith noted, "If you feel comfortable, I would request a decision tonight." Discussion ensued on the different Managers. Regarding Moody Aldrich Partners and the Bogdahn Group's recommendation on an inclusion of an Index Product, Chairperson Fair mentioned, "I would absolutely agree. I could not - in good conscience recommend Moody Aldrich [Partners] without doing what Dave (West) is recommending as a supplement to reduce the volatility of that Portfolio for -the Plan." Further discussion. Chairperson Fair remarked, "Everybody knows how I feel about Moody [Aldrich Partners]." Board Member Swaim added, "I agree with you. I would not consider them." Chairperson Fair said, "I would not either." Chairperson Fair continued, "Can we just go ahead and say Moody [Aldrich Partners] is out?" No objections were noted. Brief discussion. Mr. West suggested, "I'd like to suggest that -you rank the choices, in the event, unlikely event, that there is a problem with the Investment Management Agreement." CITY OF WINTER SPRINGS, FLORIDA MINUTES BOARD OF TRUSTEES SPECIAL MEETING -FEBRUARY 17, 2009 PAGE 6 OF 9 Discussion. Chairperson Fair asked, "Do we have a Consensus that Moody Aldrich [Partners] would be our third choice?" Board Member Watkins replied, "I would not even put them as a choice." Chairperson Fair reiterated, "So, we do not even want to rank them..." Board Member Watkins added, "...No." Chairperson Fair continued, "...As an option." No objections were voiced. Continuing, Chairperson Fair commented, "It think if it came back and the other two (2) fell through with however we chose, we would probably prefer that we go back to the drawing board based on the Consensus that I am hearing." Board Member Watkins agreed, "Right." No objections were noted. Discussion ensued on Anchor Capital Advisors, Inc. and Dalton, Greiner, Hartman, Maher & Co., LLC. Regarding the Fee structure for Dalton, Greiner, Hartman, Maher & Co., LLC, Board Member McMahan asked, "Can we get them to drop?" Mr. West replied, "We can certainly ask." Further discussion. "I WOULD LIKE TO NOMINATE DG(HM) [DALTON, GREINER, HARTMAN, MAHER & CO., LLC] AS OUR CANDIDATE." MOTION BY BOARD MEMBER SWAIM. SECONDED BY BOARD MEMBER McMAHAN. DISCUSSION. MANAGER SMITH REMARKED, "IF THIS MOTION IS SUCCESSFUL, BY DEFAULT, THE ANCHOR [CAPITAL ADVISORS, INC.] GROUP WOULD BE THE SECOND CHOICE, IF -EVERYONE AGREES." NO OBJECTIONS WERE NOTED. REGARDING ASKING DALTON, GREINER, HARTMAN, MAHER & CO., LLC TO REDUCE THEIR FEE, MANAGER SMITH ASKED, "COULD I SUGGEST WE TAKE THAT AS TWO (2) SEPARATE MOTIONS?" CHAIRPERSON FAIR REPLIED, "YES, I THINK THAT WE WOULD NEED TO -BECAUSE GIVEN THE FACTS THAT WE ALREADY HAVE, EVEN IF WE HAVE TO PAY A LITTLE BIT MORE, IT IS PROBABLY WORTH IT TO GET THE DISCIPLINE THAT WE ARE AFTER ON A RISK ADJUSTED BASIS." BOARD MEMBER SWAIM ADDED, "I AGREE." FURTHER DISCUSSION. BOARD MEMBER SWAIM REITERATED, "PROPOSAL TO ACCEPT - DG[HM) (DALTON, GREINER, HARTMAN, MAHER & CO., LLC] SUBJECT TO NEGOTIATIONS SCHEDULED..." NOTE: Due to technical d~culttes, the rest of the Motion was inaudible. CITY OF WINTER SPRINGS, FLORIDA MINUTES BOARD OF TRUSTEES SPECIAL MEETING -FEBRUARY 17, 2009 PAGE 7 OF 9 VOTE: CHAIRPERSON FAIR: AYE VICE CHAIRMAN ROZELLE: AYE BOARD MEMBER Mc11~IAHAN: AYE BOARD MEMBER WATKINS: AYE BOARD MEMBER SWAIM: AYE MOTION CARRIED. Brief discussion. Manager Smith inquired, "Is your direction to Dave (West) to contact DGHM [Dalton, Greiner, Hartman, Maher & Co., LLC] and have that discussion on -potential Fee reduction? However, should he be unsuccessful, I think I'm hearing you say that you still like to proceed with DGHM [Dalton, Greiner, Hartman, Maher & Co., LLC] and not default to Anchor [Capital Advisors, Inc.]." Chairperson Fair answered, "Correct." Boazd Member Swaim added, "Yes." No objections were voiced. Regazding asking Dalton, Greiner, Hartman, Maher & Co., LLC for a Fee reduction, Chairperson Fair stated, "I think what we would like to do is just to simply ask them. If we do not ask, we do not get. So, if DGHM [Dalton, Greiner, Hartman, Maher & Co., LLC] would agree to the sixty-five (65) basis points instead of seventy-five (75) basis points." Manager Smith asked, "Is there any issue with what I just said? Does anybody disagree?" No objections were noted. REGULAR 601. General Services Department Discussion Of The "Fresh Start" Report By Sandra R. Turner Of Retirement Plan Specialists, Inc. Manager Smith presented this Agenda Item to the Boazd. Chairperson Fair asked, "Between now and our normally scheduled Meeting, is there any reason that we will be having any Special Meetings?" Manager Smith replied, "Not inlight of your decision tonight. I don't see a need. If there is one, we'll certainly call, but I think at this point, we're on the regulaz schedule." Further discussion. Regarding the selection of Dalton, Greiner, Hartman, Maher & Co., LLC for replacement of Snow Capital Management, LP, Boazd Member Swaim asked Mr. West, "Did we select the right Candidate?" Mr. West answered, "I believe so." Discussion continued. Discussion ensued on trying to get the recommendation of Dalton, Greiner, Hartman, Maher & Co., LLC from the Boazd to the City Commission for the next Regulaz Meeting. CITY OF WINTER SPRINGS, FLORIDA MINUTES BOARD OF TRUSTEES SPECIAL MEETING -FEBRUARY 17, 2009 PAGE 8 OF 9 Manager Smith mentioned, "I can certainly try." With further discussion, Manager Smith added, "I' 11 make it happen." Further discussion. Chairperson Fair remarked, "If Bogdahn [Group] sees in the future that i.e. Voyager [Asset Management, Inc.], who is the International Manager, because of our structure, I think we need a little bit more advanced notice when things deteriorate." Chairperson Fair continued, "I think you need to let us know more in advance then you would anybody simply because we have a very unique structure that we just can't very quickly make these decisions." Further discussion. Mr. West stated, "Any future decisions we can expedite the communication I would like to continue to do so and make that absolutely a priority." Next, Chairperson Fair asked the Bogdahn Group's position on Voyager [Asset Management, Inc.]. Mr. West answered, "As a matter of objective Policy, they're being washed. Again -we're still comfortable and we're not recommending making any changes to that Manager." Discussion continued. Regazding notifying the Board about any red flags for the current Managers in the Portfolio, Mr. West remarked, "That's what we did last time and we would certainly do that as quickest form of communication." Chairperson Fair asked Manager Smith, "You would notify me and we could - call a Special Meeting at that point?" Manager Smith replied, "You can count on it." Further discussion. Tape 3/Side A Regazding upcoming Contracts to be renewed, Chairperson Fair commented, "I think that those are some things that we need to talk about in the April Meeting and to what our responsibilities as a Boazd that we aze going to have reviewing some of the Contracts with the Pension Administrator as well as the Consulting Firm and the like." Discussion. Regazding the different Plan options, Chairperson Fair remarked, "For the April Meeting, if we have anything come up between now and April, it may be something that we would want to have on the April Agenda to try to cover all of them and look at all of them see there aze any issues that we have." Chairperson Fair inquired, "The - 185 [Plan], that we made a recommendation to the Commission, can you tell us the outcome of that?" Manager Smith answered, "I cannot because I have not brought that recommendation forward." Chairperson Fair continued, "That is okay because -timing may be good that we would consider all of it at that time." Further discussion. CITY OF WINTER SPRINGS, FLORIDA MINUTES BOARD OF TRUSTEES SPECIAL MEETING -FEBRUARY 17, 2009 PAGE 9 OF 9 Manager Smith mentioned, "The Commission, I believe, at it's most recent Meeting, had inquired about the -possibility of having a Pension Workshop." Manager Smith continued, "Come back in sixty (60) days with a -potential date, and I would suggest that it would be -more appropriate to have a Joint Meeting, if that would be the desire of this Board." Manager Smith added, "I would suggest at that Meeting that these types of discussions would be appropriate as to where we stand with the Plan; what options we may have for -amending the Plan; and so on and so forth." Chairperson Fair commented, "That sounds good." ADJOURNMENT Chairperson Fair adjourned the Special Meeting at 9:01 p.m. RESPECTFULLYSUBMITTED BY CAROL LALLATHIN, ASSISTANT TO THE CITY CLERK AND: DANIELLE HARKER ~I71/~'I7TY CfiTY CLERK NOTE: These Minutes were approved at the April 28, 2009 Board of Trustees Regular Meeting.