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HomeMy WebLinkAbout_2008 10 20 City Commission Special MinutesCITY OF WINTER SPRINGS, FLORIDA MINUTES CITY COMMISSION SPECIAL MEETING OCTOBER 20, 2008 CALL TO ORDER The Special Meeting of Monday, October 20, 2008 of the City Commission was called to Order by Mayor John F. Bush at 6:00 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, present Commissioner Robert S. Miller, absent Commissioner Rick Brown, present Commissioner Sally McGinnis, present Commissioner Joanne M. Krebs, present City Manager Ronald W. McLemore, arrived at 6:01 p.m. City Attorney Anthony A. Garganese, arrived at 6:01 p.m. REGULAR AGENDA REGULAR 600. Office Of The City Manager Discussion Of Investments. The Agenda Item which had just been distributed to the City Commission was reviewed individually by the Mayor and each City Commissioner. City Manager Ronald W. McLemore arrived at 6: 01 p. m. Regarding a question brought up by Deputy Mayor Donald A. Gilmore, Mayor Bush asked Manager McLemore, "The very last, it says this past Friday, the rate was down .07%. Should that be .7%?" Manager McLemore replied, ".7%, yes." Mayor Bush said, "Second page, the very last sentence." City Attorney Anthony A. Garganese arrived at 6: Ol p. m. Manager McLemore addressed the City Commission regarding this Agenda Item. CITY OF WINTER SPRINGS, FLORIDA MINUTES CITY COMMISSION SPECIAL MEETING -OCTOBER 20, 2008 PAGE 2 OF 10 Manager McLemore commented, "In our discussions -with Bogdahn [Group], Bogdahn [Group] advised us that he would not give any advice on the proposition of getting into the Gabelli [Fund] or the Vanguard [Group, Inc.] Fund for the reason that that data upon which he made his recommendations was some ten (10) months old and conditions had changed dramatically since that time. And that due to their professional obligations and liabilities, he could not recommend to us that being - an item that they'd be comfortable with, without being able to show their due diligence before they provided that - recommendation or that guidance. And -he's trying to say to you, that you should not rely on that information that's some ten (10) months old now." With further comments, Manager McLemore explained, "So, the questions that we've got to force are these, `Should the City leave its Funds in the Reserve Fund and allow them to mature at the full coupon rate and call upon early redemption at a much lower rate?' In either case, in light of Bogdahn's [Group] recommendation, is it prudent to reinvest in the Funds prior to an updated due diligence process being completed, those Funds being Gabelli [Fund] and Vanguard [Group, Inc.] and these are our important questions that we need to think about. Now, I've listed some options on the next page for you -obviously the first one would be to just carry out the Commission's previous direction which would -leave one-third of these Funds in the Reserve Fund, take one-third of Gabelli [Fund] and one-third in Vanguard [Group, Inc.]. Under a new set of directives, an option would be to leave the Funds in the Reserve Fund until maturity; employ Bogdahn [Group] for three (3) months; to update the Investment options and reinvest based upon revised Bogdahn [Group] recommendations and at the same time, begin the selection process for an idle funds Financial Advisor. Another option would be an early redemption of the Reserve Fund; then re-invest in fifty percent (50%) of Gabelli [Fund] and fifty percent (50%) in Vanguard [Group, Inc.]. Another option would be to leave the Funds in Reserve Funds until maturity; reinvest by direct purchase of Treasuries after maturity -the question there would be in which entity would we do that and start the selection process for an idle funds Financial Advisor. Finally, an early redemption of the Reserve Fund, reinvest in direct purchase of Treasuries and start the selection process for an idle funds Financial Advisor." Manager McLemore remarked, "The cost, or the funding involved in this, Bogdahn's [Group] rate for doing the update, due diligence update, and then continuing to monitor the performance of the Funds, is five thousand dollars ($5,000.00) per Quarter. They are willing to enter into an Agreement where they would only be engaged for one (1) Quarter." On the issue of Compliance, Manager McLemore noted, "I continue to maintain that we are in Compliance with our Policy - we have never been out of Compliance with our Policy." CITY OF WINTER SPRINGS, FLORIDA MINUTES CITY COMMISSION SPECIAL MEETING -OCTOBER 20, 2008 PAGE 3 OF 10 Mr. Michael S. Blake, Member of the Board of Trustees: commented on the previous Commission Meeting that he attended; ideal qualities of a Consultant; and being careful if a Consultant or Advisor is affiliated with a product. Discussion. Ms. Maria Fair, Member of the Board of Trustees: addressed the City Commission on Rule 2a-7; holding Securities in street names; and Broker/Dealers. Manager McLemore remarked, "What's the best route for you in terms of being able to stand up and say, we've done the maximum we could do in due diligence - in relative to our fiduciary responsibility - but, I would like to have that recommendation in our hands within the next few days. I think we can get that from Bogdahn [Group] while you're going through aprocess - again, I am concerned that we're dealing with someone who has a product, that makes me uneasy." Further discussion. Tape 1/Side B Discussion continued. Ms. Fair recommended, "You certainly will eliminate a lot of fees and expenses by going direct to a Broker/Dealer who holds them on street name in your behalf" Continuing, Ms. Fair noted, "I believe the Commission needs to take action to have the words in writing that the public can view that says that you will amend your Investment Policy Statement to have that large of exposure to any one Money Market Mutual Fund, because it is outside of your Investment Policy..." Commissioner Rick Brown added, "...For the next fifty-two (52) days?" Ms. Fair stated, "Yes..." Commissioner Brown then said, "...Until it matures..." Ms. Fair remarked, "...Yes." Manager McLemore suggested, "I will go to the person that you already have authorized to facilitate these things for you and go ahead and have him start developing a list for you - if that is the way you want to go." Commissioner Joanne M. Krebs stated, "Yes. Commissioner Sally McGinnis remarked, "If he is familiar with us." Manager McLemore recommended, "I would prefer -whoever we choose -that they be independent..." Commissioner Krebs inquired, "...You are talking about an Investment person?" Manager McLemore explained, "Not Money Managers, but Money Advisors, a Financial Advisor - not a Money Manager but an independent arm's length Advisor to you on these issues is where I want you to be." Much discussion continued. CITY OF WINTER SPRINGS, FLORIDA MINUTES CITY COMMISSION SPECIAL MEETING -OCTOBER 20, 2008 PAGE 4 OF 10 Manager McLemore explained, "We can relocate those Funds at any point in time within a day or two (2), if necessary. I'm not concerned about that. And like I said, I'll go ahead and start having our person start going through that process and developing some options. So, if it comes down within fifty (50) days or so before this maturity, we can move very quickly. So, I can give you that comfort now." Manager McLemore then noted, "I think we kind of have a Consensus here, don't we?" Commissioner Brown noted, "We do." Furthermore, Commissioner Brown remarked, "I was not suggesting that we don't have Professional Advisors." Continuing, Commissioner Brown recommended, "We can put those Treasuries somewhere and park them. I was just saying, I don't think it is necessary to jump in today in agreement with Bogdahn [Group]. I think now is the time to start that sixty-ninety (60-90) day due diligence and start interviewing Financial Advisors and come to a determination of who is going to work best with us going into next year." Manager McLemore added, "And I will develop that failsafe position for you." Mayor Bush suggested, "I think that the Commission - we should stay one hundred percent (100%) invested in Treasuries." Manager McLemore commented, "Absolutely." Commissioner McGinnis remarked, "Yes." Mayor Bush continued, "And then if the Reserve Fund cashes out on us before December..." Manager answered, "...We'll be ready to go." Mayor Bush added, "Then we're going to buy them direct and keep them on the street with somebody." Continuing, Mayor Bush said, "Here we have got seventeen million dollars ($17,000,000.00) in cash, we want to put them back into Treasuries. Well, which ones - you are talking about maturities here?" Manager McLemore replied, "I'm telling you I'm already going to have those options developed." Mayor Bush continued, "So - I think the Investment Policy gives the Manager the power to do that." Commissioner Krebs stated, "It does." Commissioner Brown also noted, "It does." Mayor Bush sustained, "Then I think the third thing is, we talked about we need to start the RFP (Request for Proposal) process to find the Investment Manager for the City and get it started now." Mayor Bush mentioned, "I think we should have a Resolution changing the Investment Policy about putting a hundred percent (100%) into Treasuries." Attorney Garganese remarked, "And I can bring that Resolution back to you." Attorney Garganese continued, "I don't think anybody questions the City Commission's authority to establish the Investment Policy that you deem fit. And that's what the Commission is doing. There's some question about interpreting the Policy; the Policy is very broad, but we're going to make sure we memorialize it in a Resolution, separate from the Minutes, what you all have just decided." CITY OF WINTER SPRINGS, FLORIDA MINUTES CITY COMMISSION SPECIAL MEETING -OCTOBER 20, 2008 PAGE 5 OF 10 "A MOTION WILL BE TO DIRECT THE CITY MANAGER TO GO OUT TO RFP (REQUEST FOR PROPOSAL) NOW FOR A FINANCIAL ADVISOR - CONSULTANT." MOTION BY COMMISSIONER KREBS. MANAGER McLEMORE SAID, "FOR IDLE FUNDS." SECONDED BY COMMISSIONER McGINNIS. DISCUSSION. MAYOR BUSH EXPLAINED THE MOTION AS, "MOTION BY COMMISSIONER KREBS TO DIRECT THE MANAGER TO GO OUT WITH AN RFP (REQUEST FOR PROPOSAL) TO SELECT AN INVESTMENT ADVISOR FOR THE CITY. SECONDED BY COMMISSIONER McGINNIS." VOTE: COMMISSIONER BROWN: AYE DEPUTY MAYOR GILMORE: AYE COMMISSIONER McGINNIS: AYE COMMISSIONER KREBS: AYE MOTION CARRIED. "AND THE OTHER PART OF THAT IS TO PUT THE MONEY -THAT WE HAVE INTO TREASURY, DIRECT TREASURY." MANAGER McLEMORE SAID, "LEAVE IT IN RESERVE FUNDS..." COMMISSIONER KREBS CONTINUED, "...TO LEAVE IT IN RESERVES UNLESS IT COMES..." MANAGER McLEMORE SAID, "...AND BE PREPARED TO GO DIRECT, IF NECESSARY." COMMISSIONER KREBS SAID, "OKAY." MOTION BY COMMISSIONER KREBS. COMMISSIONER KREBS REITERATED, "TO DIRECT THE MANAGER TO LEAVE THE MONEY RIGHT NOW - IN THE RESERVE TREASURY, AND WHEN OR IF IT BECOMES NECESSARY, TO TAKE IT AND PUT IT DIRECTLY INTO TREASURY." DISCUSSION. REGARDING THE RESOLUTION, ATTORNEY GARGANESE SAID, "ONE WAS DON'T RETAIN [THE] BOGDAHN [GROUP] - ON AN INTERIM BASIS - AS A FINANCIAL ADVISOR -THE CITY COMMISSION'S POLICY IS TO STAY A HUNDRED PERCENT (100%) IN U.S. TREASURIES UNTIL FURTHER NOTICE." CITY OF WINTER SPRINGS, FLORIDA MINUTES CITY COMMISSION SPECIAL MEETING -OCTOBER 20, 2008 PAGE 6 OF 10 ATTORNEY GARGANESE CONTINUED, "THE MANAGER IS GOING TO WORK ON BEING PREPARED TO ACCEPT TREASURIES IF THE FUND SENDS THEM. THE MANAGER IS GOING TO DEVELOP STRATEGIES TO BUY U.S. TREASURIES DIRECT, UNDER THE CURRENT POLICY. RFP (REQUEST FOR PROPOSAL) FOR FINANCIAL ADVISOR, WE SHOULD BE PREPARING THAT NOW; AND -LASTLY, NOTIFY THE FUND THAT THE CITY WILL BE WITHDRAWING ITS -PRINCIPAL AND INTEREST." DISCUSSION. ATTORNEY GARGANESE ASKED, "SHOULD YOU HAVE A SPECIFIC WITHDRAWAL DATE?" MR. BLAKE REPLIED, "I WOULD SAY -GIVE THEM SOME ROOM TO WORK, LIKE GIVE THEM HALF OF DECEMBER MIGHT BE EFFECTIVE." COMMISSIONER BROWN ASKED, "DIDN'T THEY SAY TODAY THEY WERE NOT BUYING ANYMORE SECURITIES IN THAT FUND?" MR. BLAKE REPLIED, "NO, WHAT THEY SAID WAS THAT THEY ARE - ACCEPTING NO NEW PURCHASES INTO THE FUND OTHER THAN REINVESTMENTS OF - ANY KIND." COMMISSIONER BROWN CONTINUED, "IF WE NOTIFY THEM OF OUR DESIRE TO PULL THESE OUT AT THE MATURITY OF THE UNDERLYING OBLIGATIONS, CAN WE ALSO INSTRUCT THEM NOT TO REINVEST?" MR. BLAKE ANSWERED, "NO, I DON'T THINK SO. I THINK ALL YOU CAN DO IS NOTIFY THEM WHEN YOU WILL BE MAKING A WITHDRAWAL." MAYOR BUSH COMMENTED, "MAYBE THEN, IT SHOULD JUST SAY THAT AND I THINK COMMISSIONER BROWN MENTIONED THE 15TH OF DECEMBER?" MR. BLAKE SAID, "IF YOU SAY THE FIRST HALF OF DECEMBER -THAT WOULD NOT GIVE YOU A SPECIFIC DATE." FURTHER DISCUSSION. COMMISSIONER BROWN ASKED, "SHOULD THE MOTION FOR THE RESOLUTION OR DOES THE RESOLUTION ALREADY INCLUDE MODIFYING THE INVESTMENT POLICY STATEMENT TO GIVE THE COMMISSION THE AUTHORITY TO KEEP ALL THAT MONEY THERE?" ATTORNEY GARGANESE REPLIED, "I CAN WRITE IT THAT WAY. I THINK THERE'S AN ARGUMENT -THAT THE INVESTMENT POLICY WAS NOT VIOLATED BECAUSE WHEN YOU READ THE SECTION; IT TALKS ABOUT DIRECT NEGOTIABLE OBLIGATIONS OR OBLIGATIONS TO PRINCIPAL AND INTEREST WHICH ARE UNCONDITIONALLY GUARANTEED BY THE UNITED STATES, INCLUDING, BUT NOT LIMITED TO AND THEN A HUNDRED PERCENT (100%)." CITY OF WINTER SPRINGS, FLORIDA MINUTES CITY COMMISSION SPECIAL MEETING -OCTOBER 20, 2008 PAGE 7 OF 10 ATTORNEY GARGANESE CONTINUED, "BUT, IN AN ABUNDANCE OF CAUTION AND EVERYTHING THAT'S BEEN GOING ON THE LAST COUPLE OF MEETINGS, FOR ALL INTENTS AND PURPOSES, THIS RESOLUTION WILL BE THE INVESTMENT POLICY FOR SURPLUS FUNDS UNTIL FURTHER NOTICE BECAUSE YOU ALL ARE THE DECISION MAKERS AND YOU ALL, CONSISTENT WITH THE STATUTE -HAVE MADE IT VERY CLEAR THAT THE HIGHEST PRIORITY IS ON SAFETY OF PRINCIPAL AND LIQUIDITY OF THE CITY'S RESERVES; WHICH IS THE PRUDENT THING TO DO. SO, THIS IS HOW I'M GOING TO COUCH THIS RESOLUTION." REGARDING PAGE 12 IN THE INVESTMENT POLICY, ATTORNEY GARGANESE STATED, "I'M FULLY AWARE OF THE MUTUAL FUND PROVISION. IF YOU READ THE ENTIRE POLICY, THE TOTALITY OF THE POLICY AND TRY TO MAKE SENSE OF IT - THERE IS, I MEAN, ARGUABLY, AN AMBIGUITY." ATTORNEY GARGANESE CONTINUED, "THE MOST IMPORTANT THING IS THIS COMMISSION SETS THE INVESTMENT POLICY FOR THE CITY OF WINTER SPRINGS AND WHATEVER THAT DECISION IS, NEEDS TO BE FOLLOWED. AND WE'RE GOING TO INCORPORATE THIS INTO THE RESOLUTION SO THERE'S NO QUESTION ABOUT GOING FORWARD. SO, YOU ALL CAN GET A NEW FINANCIAL ADVISOR ON BOARD AND IF YOU HAVE TO SCRAP THIS EXISTING POLICY, SO SCRAP IT." COMMISSIONER BROWN SAID, "WE CAN DO IT." ATTORNEY GARGANESE AGREED, "YOU CAN DO IT. BUT DON'T EVER LOSE SIGHT OF THE FACT THAT THIS COMMISSION SETS THE POLICY." COMMISSIONER KREBS RESTATED, "SO, MY MOTION IS TO -ACCEPT ANTHONY'S (GARGANESE) RESOLUTION?" MAYOR BUSH SAID, "YES, THE RESOLUTION AS OUTLINED BY ANTHONY (GARGANESE)..." COMMISSIONER KREBS CONTINUED, "...AS OUTLINED BY..." ATTORNEY GARGANESE SAID, "...I DREW UP WHAT YOU ALL HAVE BEEN DECIDING..." COMMISSIONER KREBS STATED, "...YOU DID AND YOU DID A GOOD JOB..." ATTORNEY GARGANESE CONTINUED, "...AND I'LL JUST PUT IT IN WRITTEN FORM AND WE'LL PUT IT - ON THE NEXT AGENDA, SO YOU ALL CAN SEE WHAT IT IS." MAYOR BUSH SAID, "THE MOTION WOULD BE TO DIRECT HIM TO WRITE THE RESOLUTION." CITY OF WINTER SPRINGS, FLORIDA MINUTES CITY COMMISSION SPECIAL MEETING -OCTOBER 20, 2008 PAGE 8 OF 10 COMMISSIONER KREBS SAID, "SO, I MAKE A MOTION TO DIRECT ANTHONY (GARGANESE) TO WRITE THE RESOLUTION THAT HE JUST STATED TO US AND BRING IT BACK AT THE NEXT MEETING SO WE CAN VOTE AND ACCEPT IT." SECONDED BY COMMISSIONER BROWN. DISCUSSION. VOTE: DEPUTY MAYOR GILMORE: AYE COMMISSIONER McGINNIS: AYE COMMISSIONER KREBS: AYE COMMISSIONER BROWN: AYE MOTION CARRIED. In other City business, Manager McLemore distributed copies of a Memorandum from Daniel J. Kerr, Chief of Police, Police Department dated Monday, October 20, 2008. Discussion. Regarding the effective date of Chief Kerr's retirement, Manager McLemore commented, "Two (2) weeks, November the 3rd [2008] -and Dan [Kerr] has made a recommendation on an Interim Manager, which I've accepted - an Interim Chief -and it's my recommendation to you that we move right away to begin the process selection of another Chief and I will use exactly the process that brought Dan [Kerr] to us." Further discussion. Tape 2/Side A Manager McLemore stated, "You're not going to spend a lot of money in this process, I'll promise you that." Commissioner McGinnis said to Chief Kerr, "We are going to miss you, but change is always good. I wish you well." Mayor Bush asked Manager McLemore, "So, on this -search committee, are the Commissioners going to appoint people to that committee?" Manager McLemore stated, "You can if you'd like." C[TY OF WINTER SPRINGS, FLORIDA MINUTES CITY COMMISSION SPECIAL MEETING -OCTOBER 20, 2008 PAGE 9 OF l0 Furthermore, Mayor Bush asked, replied, "Kevin..." Mayor Bush McLemore remarked, "That's the stated, "A fantastic selection." "Who is the Interim Chief?" Manager McLemore noted, "... [Captain] Kevin Brunelle?" Manager Chief s recommendation." Commissioner Brown Manager McLemore proclaimed, "We regret to see Dan [Kerr] go -but he's got a new challenge; anew hill to climb and its tremendous opportunities for some new accomplishments." Chief of Police Daniel J. Kerr, Police Department commented on his new position with Seminole Community College. Mayor Bush stated, "We appreciate your service to Winter Springs, Dan [Kerr]. You have done a great job and we hate to see you go, but I know it is a good opportunity for you and -you brought our Police Department from the stone ages up to the best -around here, by far. So, we are very proud of it, and thank you for your good work." Chief Kerr remarked, "Thank you. And I appreciate all your support, the entire Commission; certainly our residents and really everyone in the City. It's been an outstanding ride; it's been a great pleasure and it's something that I'll always cherish." • • AGENDA NOTE: REGULAR AGENDA ITEM "600" WAS FURTHER DISCUSSED, AS DOCUMENTED. • • REGULAR AGENDA REGULAR 600. Office Of The City Manager Discussion Of Investments. "I WOULD MAKE A MOTION THAT WE ASK THE -INDIVIDUAL AT PFM [GROUP] WHO CAME IN TO WRITE THAT POLICY FOR US, COME BACK INTO THE COMMISSION AND DESCRIBE - WHY THESE RECOMMENDATIONS WERE MADE AND IF THEY ARE STILL VALID TODAY." MOTION BY COMMISSIONER BROWN. MAYOR BUSH ASKED, "DO YOU HAVE A TIMEFRAME FOR THAT?" COMMISSIONER BROWN REPLIED, "I WOULD THINK WE SHOULD DO IT WHILE WE ARE GOING THROUGH THE DUE DILIGENCE PROCESS." CITY OF WINTER SPRINGS, FLORIDA MINUTES CITY COMMISSION SPECIAL MEETING -OCTOBER 20, 2008 PAGE 10 OF 10 MANAGER McLEMORE EXPLAINED, "IT'S PROBABLY NOT GOING TO BE FREE, BUT IT WON'T COST MUCH, BUT IT MAY COST SOMETHING." COMMISSIONER BROWN SAID, "ACTUALLY STEVE ALEXANDER WAS THE AUTHOR AND HE -HAS OFFERED TO COME IN AND DO IT FOR FREE." SECONDED BY COMMISSIONER KREBS. DISCUSSION. VOTE: COMMISSIONER KREBS: AYE DEPUTY MAYOR GILMORE: AYE COMMISSIONER McGINNIS: AYE COMMISSIONER BROWN: AYE MOTION CARRIED. ADJOURNMENT Mayor Bush adjourned the Special Meeting at 7:40 p.m. RESPECTFULLYSUBMITTED BY ANDREA LORENZO-L UACES, MMC, CITY CLERK AND ~~ ~ ~ ! DA I LLE HARKER DEPUTY CITY CLERK APPROVLI~: ~ ~~~ ~~~ HN F. FUSF~:. MAYOR NOTE: These Minutes were approved at the October 27, 2008 Regular City Commission Meeting.