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HomeMy WebLinkAbout2009 01 27 Consent 200 Approval of the October 28, 2008 Regular Meeting MinutesCITY OF WINTER SPRINGS, FLORIDA MINUTES BOARD OF TRUSTEES REGULAR MEETING OCTOBER 28, 2008 CALL TO ORDER The Board of Trustees Regular Meeting was called to Order by Chairman A. Mark Sardo on Tuesday, October 28, 2008 at 6:31 p.m. in the Commission Chambers of the Municipal Building (City Hall, 1126 East State Road 434, Winter Springs, Florida 32708). Roll Call: Chairman A. Mark Sardo, present Vice Chairman Michael S. Blake, present Board Member Maria Fair, present Board Member David W. McLeod, present via telephone Board Member Vernon Rozelle, Jr., present Chairman Sardo led the Pledge of Allegiance. A moment of silence followed. Continuing, Chairman Sardo recognized Mayor John F. Bush who was in attendance. Next, Chairman Sardo inquired if there were any Agenda Changes. Mr. Kevin Smith, Director, General Services Department remarked that there were none. INFORMATIONAL AGENDA INFORMATIONAL 100. General Services Department General Services Director Providing A Summary Of Pension-Related Expenditures For The Quarter Ended September 30, 2008. Mr. Smith introduced this Agenda Item to the Board. Brief discussion. ~~~ o, _~ fir, "~: %~ "I MAKE A MOTION WE APPROVE ITEM `100'." MOTION BY VICE CHAIRMAN BLAKE. SECONDED BY CHAIRMAN SARDO. DISCUSSION. VOTE: CHAIRMAN SARDO: AYE VICE CHAIRMAN BLAKE: AYE BOARD MEMBER FAIR: AYE BOARD MEMBER McLEOD: AYE BOARD MEMBER ROZELLE: AYE MOTION CARRIED. CONSENT AGENDA CITY OF WINTER SPRINGS, FLORIDA MINUTES BOARD OF TRUSTEES REGULAR MEETING -OCTOBER 28, 2008 ~. PAGE 2 OF 16 ~-- f-_ CONSENT 200. Office Of The City Clerk Approval Of The July 22, 2008 Regular Rescheduled Meeting Minutes. CONSENT 201. Office Of The City Clerk Approval Of The July 29, 2008 Special Meeting Minutes. CONSENT 202. Office Of The City Clerk Approval Of The September 17, 2008 Special Meeting Minutes. CONSENT 203. Office Of The City Clerk Approval Of The October 1, 2008 Special Meeting Minutes. "I WILL MAKE A MOTION THAT WE APPROVE ALL THE MINUTES FROM JULY 22ND [2008], JULY 29TH [2008], SEPTEMBER 17TH [2008] AND OCTOBER 1sT, 2008." MOTION BY BOARD MEMBER FAIR. SECONDED BY BOARD MEMBER ROZELLE. DISCUSSION. VOTE: CHAIRMAN SARDO: AYE VICE CHAIRMAN BLAKE: AYE BOARD MEMBER FAIR: AYE BOARD MEMBER McLEOD: AYE BOARD MEMBER ROZELLE: AYE MOTION CARRIED. CITY OF WINTER SPRINGS, FLORIDA MINUTES BOARD OF TRUSTEES REGULAR MEETING -OCTOBER 28, 2008 PAGE 3 OF 16 AWARDS AND PRESENTATIONS AWARDS AND PRESENTATIONS 300. Not Used. 400. REPORTS Board Member Maria Fair distributed a copy of `Meeting Your Fiduciary Responsibilities' to the Board Members. Deputy City Clerk Danielle Harker passed out copies of Ordinance 2005-31 and reminded the Board of Quarterly absences; Resolution 2008-51 that Mayor Bush had asked be given to all the Board Members; and letters from the City Clerk regarding the Board Members expiring Terms of Office. PUBLIC INPUT Mayor John F. Bush, 21 Tarpon Circle, Winter Springs, Florida: addressed the Board as a Citizen of Winter Springs and spoke of his concern with the Defined Benefit Pension Plan; that the Defined Benefit Pension Plan puts the taxpayers at risk; and suggested the Board look into a Defined Contribution Plan. Discussion. Mayor Bush suggested, "At some point, I think the Commission needs to know if you are getting nervous about it." Further discussion. Chairman Sardo remarked, "It seems to me that if the Commission gives the Board direction, then we would be more than happy to look into that." Mayor Bush asked, "If the -Commission ever decided to do this, would it be appropriate to send to this Board or actually to put together a new group - to study it?" Mayor Bush continued, "Maybe you should think about it and you just let us know." Discussion continued. Board Member Fair advised, "So, I think that if any of us on this Board are concerned at any time about the Pension Plan in -any way, I think we still have that duty and obligation as a Fiduciary, to let our Commissioners know that we have a concern." CITY OF WINTER SPRINGS, FLORIDA MINUTES BOARD OF TRUSTEES REGULAR MEETING -OCTOBER 28, 2008 PAGE 4 OF 16 Further discussion. Chairman reiterated said, "I think once again - if it is so - a concern of the Commission, then give us a direction to, say, `Listen, look into this' and then we will follow the normal procedure on how to do this." Mayor Bush claimed, "Well, you might be thinking about it. I - do plan to bring it to the Commission at some point - I am going to wait until the Election is over though - so at some point, I think I would like the Commission to at least think about it." Continuing, Mayor Bush stated, "We do appreciate what you do. Believe me, we really do - we rely heavily upon -your counsel and more so now probably than ever before. So, we do appreciate it. At least I do and I think the other Commissioners do as well." PUBLIC HEARINGS AGENDA PUBLIC HEARINGS 500. Not Used. REGULAR AGENDA REGULAR 600. General Services Department Presentation (Regarding Status Update) From Voyageur Asset Management. Mr. David West, CFA, Bogdahn Consulting, LLC, 340 West Central Avenue, Suite 300, Winter Haven, Florida: said, "I would like to introduce Mike Spencer who is the Chief Investment Officer for Voyageur Capital Management [Inc.]. If you recall, Voyageur [Asset Management Inc.] manages the International portion of the Portfolio. In keeping with -good fiduciary governance, I thought it would be appropriate to have Mr. Spencer come to the Meeting tonight and make a direct presentation to you." Mr. Michael M. Spencer, CFA, Managing Director, Senior Portfolio Manager, Voyageur Asset Management, Inc., 1 SS Federal Street, 16`h Floor, Boston, Massachusetts: addressed the Board regarding Voyageur Asset Management, Inc. Much discussion. Regarding the cash flow approach of Voyageur Asset Management, Inc., Mr. Spencer mentioned, "We're very confident that over the long term, it's going to work extremely well." ~~~ ~_~ ~3•a "~ .-- ^ i~ Discussion ensued on the strategy of Voyageur Asset Management, Inc. CITY OF WINTER SPRINGS, FLORIDA MINUTES BOARD OF TRUSTEES REGULAR MEETfNG -OCTOBER 28, 2008 PAGE 5 OF 16 Mr. West asked, "Over the course of this rather trying year -what you're suggesting is there were only three (3) companies whose cash flow came into question by -your analysis." Mr. Spencer declared, "That's right." Mr. Spencer continued, "We found only three (3) instances this year where we thought we were wrong about the cash flows. The rest of the companies, we kept buying them, because we still don't think we're wrong about the cash flows." Much discussion. Tape 1/Side B Discussion continued. Board Member Fair asked, "Is there any other break point levels that you have because in the disclosure it does say that the -Fee - is subject to be negotiated for -are there other levels?" Mr. Spencer replied, "Seventy-five million [dollars] ($75,000,000.00)." Further discussion. REGULAR 601. General Services Department Presentation Of Investment Review Report For The Quarter Ended September 30, 2008. Mr. West asked, "Did you find it helpful having a Manager here? We'd be happy to initiate having one (1) of your Managers attend every -Meeting, if you find that beneficial." Chairman Sardo remarked, "As we discussed -that was a great call when I got that phone call - I meant to say - I received a phone call, `Would you like this individual to come to one (1) of our Meetings?' and I said `Yes'." Mr. West continued, "At the Board's pleasure, I'd be happy to set up -one (I) every..." Chairman Sardo commented, "...That is good. Continue as available." No Objections were voiced. Mr. West remarked, "Okay." Next, Mr. West distributed copies of the `Defined Benefit Plan & Trust for Employees of the City of Winter Springs 3`d Quarter 2008' packet. Discussion. Mr. West reported, "Treasury Bills and U.S. Government Securities, specifically, U.S. Treasury Securities, were really the only place to put -your Funds to achieve a -positive return as far - as the publicly traded markets go." A ~b~ 'Q": Further discussion. ~i~i CITY OF WINTER SPRINGS, FLORIDA ~ MINUTES ~~i BOARD OF TRUSTEES REGULAR MEETING -OCTOBER 28, 2008 PAGE 6 OF 16 Mr. West stressed, "Obviously we're managing a very well diversified Pension program, ~3..i and as Fiduciaries, it would not be prudent for us to put all of the assets into -one (1) area. The program is well diversified and has been put together to deliver a target rate of return with -minimal amount of risk exposure over a term longer period time." Much discussion. Mr. West commented, "Let me get a confirmation just to make sure I'm answering that a hundred percent (100%) correctly on the Fee, but - I believe the Galliard [Capital Management, Inc.] is billed separately." Brief discussion. Regarding what account Voyageur [Asset Management, Inc.] is paid from, Mr. West remarked, "We'll confirm the -Voyageur [Asset Management, Inc.]." Board Member Fair asked, "Anyway to give us a net - in the future for the other costs that are involved because that -really weighs into the overall? And that way we really know more about how we are performing." Mr. Smith mentioned, "It actually brings up a discussion whether or not those -Fees should be paid out of the Pension Fund. And this is a conversation that we've had in the past." Mr. Smith continued, "That may be a conversation that the Board would like to have for potential recommendations to the Commission at some point in time." Discussion. Mr. West stated, "Looking specifically at Lateef [Investment Management, LP], who is our Opportunistic Growth Manager, Lateef had an excellent Quarter." Brief discussion. Next, Mr. West remarked, "Snow Capital [Management, LP] struggled again for the Quarter." Discussion continued. Continuing, Mr. West reported, "Another bright spot in the Portfolio was the Tiffs Allocation Treasury Inflation Protect Securities." Regarding Galliard Capital Management, Inc. TIPS, Mr. West opined, "For the fiscal year, helped the program; [Galliard Capital Management, Inc.] TIPS were apositive - so that was a nice addition to have in the Portfolio as an offset." Continuing, Mr. West informed, "We've got American Realty [Advisors] and that's the - Institutional Core hard asset, collect the rent product. And that declined very slightly." ~~ CITY OF WINTER SPRINGS, FLORIDA MINUTES P' BOARD OF TRUSTEES REGULAR MEETING -OCTOBER 28, 2008 PAGE 7 OF 16 Mr. West commented, "As far as the Galliard [Capital Management, Inc.] Portfolio goes, ~.~ we do need to know that they did have some Lehman Brothers [Inc.] exposure in the "~'~ Portfolio." Continuing the discussion on the Lehman Brothers [Inc.] Bond, Mr. West remarked, "Ends up having a negligible affect - on the Portfolio." Brief discussion. Mr. West noted, "And then the other exposure actually came from the Securities Lending portion northern Trust Custodian for this Fund and they were Securities Lending with Lehman Brothers [Inc.]." Discussion continued. Mr. West claimed, "We want to make sure the ratings are being maintained in the Portfolio and ninety-nine point five percent (99.5%) of the Portfolio as of today - remains Investment grade." Further discussion. Regarding Page 8 of 39 in the packet, Mr. West said, "From our perspective, we think it's critical, particularly during periods of direst to not be making any rash decisions. We have constructed an Investment Policy; we've got the policies and procedures in place to track our Managers. We are continuing to -more closely monitor and contact the Managers -we're meeting here with you on a -Quarterly basis tracking the Portfolio progress, the Manager level process. And it's -important that we maintain perspective as Fiduciaries of these Assets -that we stay invested in accordance with the Investment program that's been laid out." Discussion. Chairman Sardo asked, "Any other Money Managers on the radar for you that -maybe your looking at that -you do not have as much confidence in as you had before?" Mr. West replied, "No." Brief discussion. Regarding Voyageur [Asset Management, Inc.], Mr. West proclaimed, "We're comfortable with their strategy." Mr. West continued, "We're comfortable with their strategy and we think there's substantial upside for all the reasons Mike (Spencer) sited - I want to address them because I know we've -got performance issues. Our Policy requires that we raise the flag four (4) consecutive Quarters. Voyageur has not had four (4) consecutive Quarters." CITY OF WINTER SPRINGS, FLOR[DA ~ M[NUTES ~~,~~ BOARD OF TRUSTEES REGULAR MEETING -OCTOBER 28, 2008 ~ PAGE 8 OF I b Mr. West restated, "With the Galliard [Capital Management, Inc.] strategy, we're ~~ .. .i comfortable with the Galliard strategy. We recognize their under performance." '~ ~- Further discussion. ~- Mr. West continued, "The [Galliard Capital Management, Inc.] `TIPS' - no issue there, that's just being indexed. We're very comfortable with that." Regarding Lateef Investment Management, LP, Mr. West conveyed, "So, we're - comfortable with the Lateef [Investment Management, LP] strategy." Brief discussion. As to Voyageur Asset Management Inc., Mr. West asked, "Do we feel comfortable allocating additional Funds?" Tape 2/Side A Mr. West mentioned, "Yes - we are also comfortable - in rebalancing to the Policy as necessary, as cash flow -and balances move out of whack -that should be our - overriding, driving decision to stay on plan, stay on Policy as -it's been Approved. And within that International space, yes, absolutely, we would - be comfortable." Discussion. Continuing on the discussion of Voyageur Asset Management, Inc., Mr. West stated, "We are absolutely comfortable and we would -anticipate some very nice returns coming out of what they're doing." Mr. West insisted, "Yes, we're comfortable." Much discussion. Board Member Fair asked, "It would be an understatement to say that I am extremely uncomfortable with the Fees that the employees are paying. Twenty-five thousand, three hundred and four dollars ($25,304.00) for one (1) Quarter is a lot of money, especially in light of the Market. So, is there any way - do we have any leverage capabilities with these Managers to work to reduce the Fee structure a little bit here?" Discussion. Mr. West replied, "We'd be happy to -take the -Fee reduction request -it's been since October 1 S` [2007) since the Agreements were signed by the Managers. We'd be happy to revisit that on behalf of the Board." Further discussion. CITY OF WINTER SPRINGS, FLORIDA MINUTES F~'~'° BOARD OF TRUSTEES REGULAR MEETING -OCTOBER 28, 2008 PAGE 9 OF 16 Regarding asking Managers for a reduced Fee schedule, Mr. West mentioned, "We would be happy to -participate in a -joint request to each of the Managers." 1 With further comments on asking Managers for a reduced Fee schedule, Chairman Sardo '7 commented, "I do not have an issue with that. If there is an opportunity to reduce Fees, certainly we should take advantage of it." Brief discussion. "I WILL BE GLAD TO MAKE A MOTION THAT WE ASK THE BOGDAHN GROUP TO PUT IN A FEE REDUCTION REQUEST." MOTION BY BOARD MEMBER FAIR. MR. WEST ASKED, "IF WE COULD DO THAT IN CONJUNCTION WITH - KEVIN [SMITH], WITH THE CITY? THAT WOULD PROBABLY BE THE APPROPRIATE CHANNEL." SECONDED BY VICE CHAIRMAN BLAKE. DICUSSION. VOTE: BOARD MEMBER ROZELLE: AYE CHAIRMAN SARDO: AYE VICE CHAIRMAN BLAKE: AYE BOARD MEMBER FAIR: AYE BOARD MEMBER McLEOD: AYE MOTION CARRIED. Much discussion. REGULAR 602. General Services Department Discussion Of Recommendation From Bogdahn Consulting Regarding Snow Capital Management. Mr. West mentioned, "Our Investment Committee and accordingly, the Bogdahn Group has come to a -decision on Snow [Capital Management, LP]. We've been to the shop; we have been following them very closely. Obviously with this Board in particular, we've had discussions over the process and -product that's being delivered versus what was possibly discussed or expected and presented by Snow [Capital Management, LP]. In short, our recommendation is that the Board consider an alternative All-Cap Value Manager to Snow Capital [Management, LP]. CITY OF WINTER SPRINGS, FLORIDA MINUTES BOARD OF TRUSTEES REGULAR MEETING -OCTOBER 28, 2008 PAGE 10 OF 16 We've taken the position under very careful consideration, as always, recognizing though that this Market environment -has been very difficult for all Managers, all active management elements, but we have lost confidence in the strategy; this is a fundamental bottom up strategy. And what has concerned us is the reoccurrence of Investments in names that, for lack of a better term we'll call `Headline names' that ultimately, unfortunately, have had no chance of recovery because in many cases the companies have gone away. That's not consistent with the approach that we hired." Mr. West continued, "There's no change in the process that we can detect, but we're concerned that the process is no longer effective or has lost its effectiveness given the nature of what's transpired with some of the Investments." Discussion. Regarding the strategy of Snow Capital Management, LP, Mr. West remarked, "I think it's fair to say that they have been consistent in their strategy; there's not a deviation in the strategy." Further discussion. Continuing on the discussion of Snow Capital Management, LP, Mr. West commented, "What has been delivered is obviously quite different than from what was expected." Mr. West continued, "Our group has concerns and has lost confidence that the process is no longer effective." Discussion continued. Vice Chairman Blake asked, "Is it your recommendation that we move the money out immediately and park it some place during the RFP (Request for Proposal) process of seeking another Manager?" Mr. West replied, "Our recommendation in replacement is in the normal course of business, which I presume will involve some Special Meetings and this will not wait until the next Quarterly Meeting." Brief discussion. Mr. Smith said, "I would think that we could move forward with a RFP (Request for Proposal) type process that -Dave's (West) group did last time and bring the whole recommendation to the Commission at that time -the alternative would we would need to go back to the Commission and get Approval to fire Snow [Capital Management, LP], to go out to RFP (Request for Proposal) to hire a new Manager, come back to you; bring a recommendation back to them to replace that Manager." ~~~~ ~' it .-._ Much discussion. ~~~ C[TY OF WINTER SPRINGS, FLORIDA MINUTES °~"~, BOARD OF TRUSTEES REGULAR MEETING -OCTOBER 28, 2008 PAGE 11 OF I6 Vice Chairman Blake mentioned, "If they are continuing to operate in the manner in which Dave (West) has described, I do not - have a level of confidence to keep them 'e'=; engaged at this point in time." Mr. West suggested, "Alternatively, if -the window is going to be lengthy, perhaps an ETF (Exchange Traded Fund) placement, which could be executed by your Custodian, actually; as an alternative." Mayor Bush asked, "Why does not -your Committee tell us what you want to, we will call a Special Meeting and act on it? There is no reason to delay this." Mayor Bush continued, "You say what you -think should be done and then we can check it with Anthony (Garganese, City Attorney); we will take a Special Meeting." Further discussion. Regarding potentially putting the Funds into another investment vehicle, Mr. West suggested, "Some Index Fund surrogate for the Russell 3000® [Index] value to be the place marker -staying on Policy, staying invested. When we rebalance, the rebalancing would still take effect, but it's potentially going to the surrogate index rather than - an active Manager." Chairman Sardo asked, "And that would consistent with the Investment Policy going to the surrogate?" Mr. West replied, "Absolutely." Much discussion. Tape 2/Side B Discussion continued. Board Member Vernon Rozelle, Jr. asked, "As more of the Cities that you talk with and - others want to exit Snow [Capital Management, LP] -does that make it more difficult to exit Snow [Capital Management, LP] - in a clean way?" Board Member Rozelle continued to ask, "Is it better to take the position that - we should -recommend liquidating into something like your Russell 3000® [Index]?" Mr. West replied, "Yes, I don't think that that would have an impact." Mr. West continued, "In this case -Snow [Capital Management, LP] isn't going to affect the -Market Value of the companies from - small liquidations." Mr. Smith reiterated, "I think we have a few questions here. Number one (1) is, should we terminate Snow [Capital Management, LP] or not -and although it seems to be obvious that we seem to be headed that way, we'd obviously need a Board Motion and your decision on whether or not to terminate Snow [Capital Management, LP]. Your Advisor has recommended that you do so. Number two (2), if that is the -path you choose, what do we do with those Funds in the mean time? Do we leave them in Snow [Capital Management, LP] while we go through the process? Or do we park them somewhere?" CITY OF WINTER SPRINGS, FLORIDA MINUTES BOARD OF TRUSTEES REGULAR MEETING -OCTOBER 28, 2008 PAGE 12 OF 16 Discussion. Continuing, Mr. Smith remarked, "The third would be, if we, again, go forward with the termination of Snow [Capital Management, LP], whatever we do with the Funds, the third part would be to give Dave (West) permission to go forward with a RFP (Request for Proposal); to run that process. And if that is in the affirmative, I'll take all that, the Mayor's kindly offered to - schedule a Special Meeting; I'll take all of that to the Commission. Your recommendation presumably to terminate Snow [Capital Management, LP]; your recommendation of what to do with the Funds in the mean time; and your recommendation to go out to RFP (Request for Proposal) for a new Manager. And then schedule right now a Special Meeting, presuming that the Commission does agree with your recommendation. Schedule a Special Meeting whenever Dave (West) thinks the timeline would work out with the RFP (Request for Proposal) -and then interview those Managers. Then take that recommendation back to the Commission again, for final - Approval." Further discussion. "BASED ON RECOMMENDATION OF BOGDAHN [GROUP], I -WOULD MAKE THAT MOTION THAT WE MOVE TO TERMINATE SNOW [CAPITAL MANAGEMENT, LP] AND SEEK A -RFP (REQUEST FOR PROPOSAL) FOR AN ADDITIONAL INVESTMENT GROUP." MOTION BY BOARD MEMBER ROZELLE. SECONDED BY CHAIRMAN SARDO. DISCUSSION. BOARD MEMBER ROZELLE REITERATED, "THAT WE MOVE TO REPLACE SNOW [CAPITAL MANAGEMENT, LP] OR RECOMMEND TO THE COMMISSION THAT THEY CONSIDER APPROVING REPLACEMENT OF SNOW [CAPITAL MANAGEMENT, LP] WITH -ANEW ADVISORY INVESTMENT GROUP - TO BE OBTAINED BY RFP (REQUEST FOR PROPOSAL)." BOARD MEMBER McLEOD ASKED, "FROM A STANDPOINT THE INVESTMENTS SNOW [CAPITAL MANAGEMENT, LP] NOW HAS, DOES THAT BECOME A FIRE SALE, WHERE YOU -NOW SELL THAT BACK TO THE MARKET, OR - DOES SNOW [CAPITAL MANAGEMENT, LP] TRANSFER THAT BACK OVER TO THE NEW INVESTOR AND THEN THAT INVESTOR DECIDES HOW TO HANDLE IT?" ~a `- f- CHAIRMAN SARDO REPLIED, "THEY ARE GOING TO LOOK FOR A MANAGER THAT WILL TAKE THIS IN-KIND." BOARD MEMBER McLEOD REMARKED, "FINE." CITY OF WINTER SPRINGS, FLORIDA .S MINUTES BOARD OF TRUSTEES r~•..~,~, REGULAR MEETING -OCTOBER 28, 2008 M~°~' PAGE 13 OF 16 BOARD MEMBER FAIR STATED, "I AGREE WITH WHAT WE ARE TRYING ~,..,a TO DO HERE AND I -THINK WE CERTAINLY NEED TO TAKE OUR ~•~ FINANCIAL ADVISOR'S ADVICE ON TERMINATING SNOW [CAPITAL MANAGEMENT, LP]. HOWEVER, I DO NOT THINK THAT WHEN THEY CAME TO US WITH THAT RECOMMENDATION, THAT THEY HAVE GIVEN US FURTHER GUIDANCE THAT WE CAN REALLY ACT UPON APPROPRIATELY HERE. I THINK - WE ARE MISSING SOME PIECES OF THE PUZZLE HERE. AND I WOULD MUCH RATHER BOGDAHN [GROUP] - AS OUR FINANCIAL ADVISOR, I FEEL LIKE YOU HAVE GIVEN US ONE (1) DIRECTIVE AND YOU KNEW BEFORE YOU GAVE US THAT DIRECTIVE, THAT IT WOULD REQUIRE FURTHER STEPS, BUT YOU ARE NOT REALLY GIVING US A CLEAR DIRECTIVE HERE AS TO WHAT YOUR ADVICE IS -THERE IS OTHER COMPONENTS THAT HAVE TO FOLLOW THAT. AND SO I AM A LITTLE UNCOMFORTABLE WITH THIS MOTION, FOR THAT REASON." FURTHER DISCUSSION. BOARD MEMBER FAIR CONTINUED, "I FEEL LIKE THAT YOU ARE - GIVING US ADVICE BASED ON YOUR INVESTMENT POLICY COMMITTEE'S GUIDANCE. AND AS OUR FINANCIAL ADVISOR, YOU HAVE SAID TO US YOU FEEL THAT WE NEED TO TERMINATE SNOW [CAPITAL MANAGEMENT, LP]. SO, IF WE TERMINATE SNOW [CAPITAL MANAGEMENT, LP], WHAT IS YOUR ADVICE ON WHAT WE DO WITH THE MONEY IN BETWEEN -PUTTING OUT AN RFP (REQUEST FOR PROPOSAL) AND FINDING AN APPROPIATE ALTERNATIVE?" MR. WEST REPLIED, "PROCEDURALLY, OUR RECOMMENDATION WOULD BE TO LEAVE THE ASSETS AS THEY ARE INVESTED WITH SNOW [CAPITAL MANAGEMENT, LP], NUMBER ONE (1). WITH THE EXPECTATION, NUMBER TWO (2), THAT THEY WILL BE TRANSFERRED IN-KIND TO THE NEW MANAGER, WHO WILL ASSUME THE PORTFOLIO FROM SNOW [CAPITAL MANAGEMENT, LP]. AND AGAIN, WITH THE CAVEAT OR ASSUMPTION THAT WE WILL BE MOVING FORWARD ON THIS - WITHIN A REASONABLE TIMEFRAME, NUMBER ONE (1) -THAT'S THE ASSUMPTION. SO, WITHIN -THE REGULAR COURSE OF BUSINESS, WHICH ASSUMES SPECIAL MEETINGS, WHICH HAVE BEEN PROPOSED AND AGREED, WE RECOMMEND LEAVING THE ASSETS WITH SNOW [CAPITAL MANAGEMENT, LP] AND THEN NUMBER TWO (2), TRANSFERRING THE ASSETS IN-KIND TO WHOEVER THE REPLACEMENT MANAGER IS." CITY OF WINTER SPRINGS, FLORIDA - 1 MINUTES BOARD OF TRUSTEES REGULAR MEETING -OCTOBER 28, 2008 PAGE 14 OF 16 CHAIRMAN SARDO SAID, "SO, THE MOTION ON -THE TABLE IS TO TERMINATE THE RELATIONSHIP WITH SNOW [CAPITAL MANAGEMENT, e='-~ LP]." ~! f-- Vice Chairman Blake stated, "Point of Order -the Motion on the table has additional language than just that piece. " MR. SMITH SAID, "I HEARD THE MOTION, MR. CHAIRMAN -THAT WE RECOMMEND TERMINATION OF SNOW [CAPITAL MANAGEMENT, LP] AND MOVE FORWARD WITH AN RFP (REQUEST FOR PROPOSAL) TO FIND A -NEW MANAGER FOR THIS COMPONENT OF OUR -PORTFOLIO." VICE CHAIRMAN BLAKE SAID, "THAT IS CORRECT." MR. WEST SAID, "THE OFFICIAL TERMINATION OF THE AGREEMENT WOULD GO OUT ONCE THE NEW MANAGER'S AGREEMENT, I JUST WANT TO MAKE SURE WE'RE NOT CONFUSING TERMINATION AS - LETTER GOES OUT TOMORROW AND NOBODY IS MANAGING THE PORTFOLIO. AND SO, TERMINATION IS -WE'VE AGREED TO MOVE FORWARD WITH THE TERMINATION AND REPLACEMENT..." BOARD MEMBER FAIR SAID, "...IT IS REALLY UPON SELECTION, IS WHAT YOU ARE SAYING. UPON SELECTION OF ANOTHER MANAGER TO FIT THAT COMPONENT, A TERMINATION LETTER WILL THEN BE SENT BY BOGDAHN [GROUP] TO SNOW [CAPITAL MANAGEMENT, LP]." VICE CHAIRMAN BLAKE SAID, "RIGHT." "I WAS GOING TO MAKE A REPLACEMENT MOTION TO RECOMMEND TO THE CITY COMMISSION -THAT UPON THEIR ACTION TO SELECT OR THEIR DELEGATION TO US TO SELECT A REPLACEMENT MANAGER, THAT SNOW CAPITAL MANAGEMENT [LP] BE TERMINATED WITH INSTRUCTION TO THE EXTENT POSSIBLE TO TRANSFER ASSETS IN- KIND, TO THE NEWLY SELECTED MANAGER." MOTION BY VICE CHAIRMAN BLAKE. SECONDED BY BOARD MEMBER ROZELLE. DISCUSSION. VOTE: CHAIRMAN SARDO: AYE VICE CHAIRMAN BLAKE: AYE BOARD MEMBER FAIR: AYE BOARD MEMBER McLEOD: AYE BOARD MEMBER ROZELLE: AYE MOTION CARRIED. CITY OF W[NTER SPRINGS, FLORIDA MINUTES BOARD OF TRUSTEES REGULAR MEETING -OCTOBER 28, 2008 PAGE 15 OF 16 "SECOND MOTION WOULD BE TO REQUEST THAT THE CITY COMMISSION, EITHER ON THEIR ACTION OR THROUGH THEIR DELEGATION TO THE BOARD OF TRUSTEES, HAVE THE INVESTMENT MANAGER, BOGDAHN GROUP, GO BACK TO THE MARKETPLACE TO LOCATE AREPLACEMENT -ALL-CAP VALUE MANAGER FOR THE SNOW CAPITAL MANAGEMENT [LP] GROUP, WHICH WOULD BE TERMINATED UPON THEIR SELECTION." MOTION BY VICE CHAIRMAN BLAKE. SECONDED BY BOARD MEMBER FAIR. DISCUSSION. VOTE: VICE CHAIRMAN BLAKE: AYE BOARD MEMBER FAIR: AYE BOARD MEMBER McLEOD: AYE BOARD MEMBER ROZELLE: AYE CHAIRMAN SARDO: AYE MOTION CARRIED. Vice Chairman Blake remarked, "With concurrence of the Board of Trustees, and I know that the Mayor is here, if this message could be transmitted or -these recommendations could be transmitted to -the Commission as soon as possible. Time is of the essence in these matters." Mr. Smith replied, "Yes, Sir." Brief discussion. Mr. Smith suggested, "I was going to suggest, Mr. Chairman, that we'll move to take this information to the Commission, post haste. At the point in time, presuming that the Commission does Approve it, I'll contact Dave (West) and then -ask Danielle (Harker) if she'd be so kind to contact the Board Members to schedule a Special Meeting." Chairman Sardo commented, "That is fine." No objections were noted. Discussion. Chairman Sardo commented, "I would like to thank the Mayor for attending this Meeting." Mayor Bush remarked, "Tomorrow morning, I will ask the Clerk to contact the Commissioners to get a Meeting as soon as possible." Further discussion. Mr. West commented, "Just for clarification procedurally - we will be with -the RFP (Request for Proposal) responses with our own open universe search following our - quantitative look. We'll then be reporting to you -here's this level. Then we'll be reporting to you, here's the next level; here's how we went through that. So, at the end of the day, we'll be bringing to you a list of seven (7) or so Managers, from which we will have a vetting discussion and then we'll get down to three (3) finalists for interviews. ~_ ~_ ~--' .- CITY OF W[NTER SPRINGS, FLORIDA ~ MINUTES BOARD OF TRUSTEES REGULAR MEETING -OCTOBER 28, 2008 PAGE 16 OF 16 Again, assuming that we're going to follow the same procedure as last time; I just wanted ~°"~ to be clear on the procedure." Chairman Sardo said, "Yes, the same -format, if you can ~ as last time, also with the same -presentation -that you use the same -way you ~ delivered the information." Mr. West said, "Right, yes -understood." ~'-- Discussion. REGULAR 603. General Services Department Discussion Regarding RFP (Request For Proposal) For Replacement Of All Cap Value Manager. Chairman Sardo adjourned the Regular Meeting at 9:11 p.m. RESPECTFULL Y SUBMITTED: DANIELLE HARKER DEPUTY CITY CLERK NOTE: These Minutes were approved at the , 2009 Boazd of Trustees Regular Meeting.