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HomeMy WebLinkAbout2011 05 10 Consent 200 Requesting Approval of the Board Of Trustees Regular Meeting Minutes of February 8, 2011 CITY OF WINTER SPRINGS, FLORIDA MINUTES b BOARD OF TRUSTEES 7: REGULAR MEETING FEBRUARY 8, 2011 CALL TO ORDER The Regular Meeting of Tuesday, February 8, 2011, of the Board of Trustees was called to Order by Chairperson Maria Fair at 5:37 p.m. in the Commission Chambers of the Municipal Building (City Hall, 1126 East State Road 434, Winter Springs, Florida 32708). Roll Call: Chairperson Maria Fair, present Vice Chairman Ben McMahan, absent Board Member Vernon Rozelle, Jr., present Board Member Max Swaim, present Board Member Barbara Watkins, present A moment of silence was followed by the Pledge of Allegiance led by Chairperson Fair. Next, Chairperson Fair asked if there were any Agenda changes and there were none noted. INFORMATIONAL AGENDA INFORMATIONAL 100. Office Of The City Manager And Finance And Administrative Services Department Providing A Summary Of Pension - Related Expenditures For The First Quarter For Fiscal Year 2011. Mr. Shawn Boyle, Director, Finance and Administrative Services Department presented this Agenda Item and stated, "I have modified Item '100' slightly to help you — track over time, the changes in the expenditures of the Pension Plan. What I have is the fourth quarter of last year and the first quarter of this year. As you can see relatively, the fees are escalating; not a negative thing, actually quite positive because most of the fee structures are a function of the Asset base." CITY OF WINTER SPRINGS, FLORIDA MINUTES BOARD OF TRUSTEES REGULAR MEETING -- FEBRUARY 8, 2011 PAGE 2 OF 8 INFORMATIONAL 101. Finance And Administrative Services Department Providing A Summary Of The Pension Income Statements. Mr. Boyle introduced this Agenda Item and remarked, "This is more a balance sheet approach — and as you can see it pans out that from the fourth quarter to first quarter, the gross Asset base grew by eight point two percent (8.2 %). That is pretty robust growth and there was not anything extraordinary to point out from fourth quarter to first quarter." Mr. Boyle then stated, "We are just asking the Board to accept these Reports as presented." There were no objections voiced. Discussion ensued on invoices related to Gabriel Roeder Smith & Company. CONSENT AGENDA CONSENT 200. Office Of The City Clerk Requesting Approval Of The November 9, 2010 Board Of Trustees Regular Meeting Minutes. "I MAKE A MOTION TO APPROVE THE MINUTES" (NOVEMBER 9, 2010). MOTION BY BOARD MEMBER WATKINS. SECONDED BY BOARD MEMBER ROZELLE. DISCUSSION. VOTE: BOARD MEMBER ROZELLE: AYE BOARD MEMBER WATKINS: AYE BOARD MEMBER SWAIM: AYE CHAIRPERSON FAIR: AYE MOTION CARRIED. AWARDS AND PRESENTATIONS AWARDS AND PRESENTATIONS 300. Presentation By Lateef Investment Management Group. Ms. Jennifer L. Lavin, LIMA, Managing Director, Lateef Investment Management Group, 30 Drake Landing Road, Suite 100, Greenbrae, California: presented a document entitled, "City of Winter Springs Defined Benefit Plan Portfolio Review" and reviewed the Performance and Portfolio highlights. CITY OF WINTER SPRINGS, FLORIDA MINUTES BOARD OF TRUSTEES REGULAR MEETING - FEBRUARY 8, 2011 PAGE 3 OF 8 400. REPORTS No Reports were given. PUBLIC INPUT Mr. Corey Green, Seminole County Fire Department: as a Plan Participant, Mr. Green referred to a statement received from Gabriel Roeder Smith & Company related to the Employer Funding Level. With further discussion, Mr. Boyle spoke on investment returns. Tape 1 /Side B Chairperson Fair commented, "It was really a combination of a lot of variables that really created that Funding requirement." Mr. Boyle stated, "We are up - funding for the City since the [20'] 07 study, approximately a million dollars ($1,000.000.00) a year additional input into the Pension Plan." Mr. Marc Baumgart, Seminole County Fire Department: as a Plan Participant, Mr. Baumgart inquired about the percentage of the Funding Level. Next, Mr. Boyle then stated, "The Funding Level is running around sixty -four point four percent (64.4 %) and that is as of 2009. I anticipate that it will slightly improve with the 2010 Valuation which we should receive by the end of the month." PUBLIC HEARINGS AGENDA PUBLIC HEARINGS 500. Not Used. REGULAR AGENDA REGULAR 600. Finance And Administrative Services Department Requesting Approval For A Survivor Annuity Benefit Correction For Ms. Nellie P. Pilcher. Mr. Boyle reviewed the history on this Agenda Item to the Board Members in detail and stated, "Through the process of all these actuarial Valuations, we discovered an error." CITY OF WINTER SPRINGS, FLORIDA M INUTES BOARD OF TRUSTEES REGULAR MEETING - FEBRUARY 8, 2011 PAGE4OF8 Referring to the documents, Mr. Boyle commented, "I will email those to you so you can see exactly what we are talking about — because the documents were drafted Q inappropriately, we did not catch this until just recently." Chairperson Fair asked, "Did the Participants sign this document ?" Mr. Boyle replied, "Yes" and continued stating, "The Plan documents clearly state that if there is an error in the calculation, that the Board (of Trustees), the City, and the Pension Plan have the ability to go back and adjust it." Chairperson Fair asked, "Have we looked at other Participants ?" Mr. Boyle responded, "We have looked at all." Continuing, Mr. Boyle then stated, "So now — what Larry's (Wilson, Gabriel Roeder Smith & Company) firm does on an annual basis, is that he will review all Participants in the Plan." Referencing Ms. Pilcher, Mr. Boyle remarked, "Basically reducing her Pension payout by half and we have a fiduciary responsibility — we need to collect this and to retroactively go back and adjust it." Next, Chairperson Fair stated, "I have a real problem with that because it is a contract." Continuing, Chairperson Fair then stated, "I do not feel I could make any kind of reasonable or educated decision tonight based on not being able to visually — see the contract." Board Member Vernon Rozelle, Jr. stated, "I totally agree." Discussion. Chairperson Fair remarked, "I would like to know from the Attorney what our options are and I would like to know what all of the options are legally and what liability the City has in this regard." Mr. Boyle replied, "Very well. We can ask these questions." Next, Chairperson Fair commented, "I think it is too important of an issue that we should, if necessary, have a Special Meeting to resolve this matter." Mr. Boyle answered, "We are probably going to recommend a Special Meeting probably around the 22 of February (2011) dealing with the Pension and maybe some adjustments going forward." Chairperson Fair asked, "Could we use our City Attorney on certain things? I mean we are talking about potential liability." City Manager Kevin L. Smith stated, "I think that Anthony (Garganese) could probably handle this, but he would also defer this to Jim Linn (Esquire, Lewis Longman & Walker, P.A.) so, I think it is easy enough if it is okay with the Board just to have Mr. Linn (Esquire, Lewis Longman & Walker, P.A.) on a conference call and give you an opportunity to ask any questions that you see fit and have the documents you requested from Shawn (Boyle) in front of you for further clarification from Jim (Linn, Esquire, Lewis Longman & Walker, P.A.)." CITY OF WINTER SPRINGS, FLORIDA MINUTES BOARD OF TRUSTEES REGULAR MEETING - FEBRUARY 8, 2011 PAGE 5 OF 8 "0 Next, Chairperson Fair asked, "Any reason to have Anthony (Garganese) here as well ?" X7 Manager Smith replied, "I would advise that if Jim (Linn, Esquire, Lewis Longman & Q Walker, P.A.) is here that that should be sufficient, but I will pose that question to Anthony (Garganese) and give him the option, if that is okay with you." Chairperson Fair remarked, "Just to make sure we are covering all our bases." REGULAR 601. Finance And Administrative Services Department Discussion Of The Future Valuation Of The City Of Winter Springs Defined Benefit Plan. Manager Smith began the discussion of this Agenda Item and spoke of other government plans and the escalating costs and stated, "I think it is incumbent upon us to examine our Pension Plan regardless of what action we may or may not take. I think it is important to take a look at it and see where we are and where we may be going." Furthermore, Manager Smith spoke of variables that could reduce costs. Manager Smith stated, "Larry (Wilson, Gabriel Roeder Smith & Company) is our Actuary and is currently looking and undertaking that Study as we speak and that is what Shawn (Boyle) referred to when he spoke about a Special Meeting. Upon completion of that — in a very short time period, we would like to request to come back to this Board with Larry (Wilson, Gabriel Roeder Smith & Company) present to discuss various options for Plan costs or Plan reduction; pros and cons of each one and come to some type of decision for you all to recommend to the City Commission as to what we may or may not do with our Pension Plan moving forward." With further remarks, Manager Smith commented, "I believe that we are positioned now after Larry (Wilson, Gabriel Roeder Smith & Company) has completed and updated the Actuarial Studies and has caught us up to date — and undertaken Phase I and close to completing Phase II that we are right on schedule with getting this Board presented with those options for you all to digest — and create a recommendation that would go to the City Commission which I will present to them in — pre July 1, (2011) Workshop for Budget purposes which will put us right on line for implementation come October 1, (2011) if any changes or implementations are made." Discussion. Referring to the Study, Manager Smith stated, "Again, it is incumbent upon us to take a good look at it and do that in well thought out methodical process. That is what we are recommending to do." Chairperson Fair stated, "Everybody is on board with that — if you can just let us know a time. I am assuming at the end of the month" CITY OF WINTER SPRINGS, FLORIDA MINUTES BOARD OF TRUSTEES REGULAR MEETING - FEBRUARY 8, 2011 PAGE 6 OF 8 `CJ Furthermore, Manager Smith remarked, "We are certainly looking forward for Larry (Wilson, Gabriel Roeder Smith & Company) to completing the Study prior to that. Again, it would be a good opportunity to address the prior issue prior to March 1, (2011). So, that is the plan. If that changes, we will let you know. d I would ask that if the Board would be of the mindset to hear from Shawn (Boyle) to have some discussions on our Phase I Study that Larry (Wilson, Gabriel Roeder Smith & Company) has prepared just to give you a little bit of a taste of what we will be addressing in Phase II and set the groundwork for that." Mr. Boyle discussed the document entitled, "Gabriel Roeder Smith & Company Consultants & Actuaries, City of Winter Springs Defined Benefit Plan, Actuarial Study — Phase I ". Discussion ensued on benchmarking adjacent cities. Manager Smith stated, "It is not included in the current report, but we can have that information prior to our next Meeting." REGULAR 602. Finance And Administrative Services Department Presentation From Bogdahn Consulting, LLC Of The Investment Review Report For The Quarter Ending December 2010. Mr. Dave West, Bogdahn Consulting, LLC, 4901 Vineland Road, Suite 600, Orlando, Florida: referencing the real estate benchmark, Mr. West remarked, "We used the former benchmark in the Policy so that we could get this Report out to you." Mr. West continued his presentation and reviewed the document entitled, "Winter Springs General Employees General Plan and Trust — 4 Quarter 2010" with the Board of Trustees and then directed the Board's attention to page 3 of the Report referencing "Major Market Index Performance ". Tape 2 /Side A Next, Mr. West pointed out some highlighted interest on page 18 of the Report and discussed the "Financial Reconciliation Quarter to Date" and stated, "A very strong earnings quarter. Nice asset addition to the Plan." Continuing, Mr. West referred to the "Managers" on page 22 and reviewed the peer group rankings. Mr. West noted that on RBC Global (Voyageur Asset Management, Inc.) that the "Inception" number needs to be added. CITY OF WINTER SPRINGS, FLORIDA MINUTES BOARD OF TRUSTEES REGULAR MEETING - FEBRUARY 8, 2011 PAGE 7 OF 8 "C7 Referring to page 26 "Total Fund (Gross) ", Chairperson Fair commented to Mr. West, "You need to keep in mind that is gross. That is not net." Mr. West replied, "Right. That is a gross number." Chairperson Fair then said, "In the future reports, it would be helpful to see that net." Mr. West responded, "Let me see if we can do that. I will certainly bring that back." A handout entitled, "Winter Springs General Asset Allocation as of: 02/07/2011" was distributed to the Board Members and discussed. Discussion. A handout entitled, "City of Winter Springs General Employees' Pension Plan Investment Manager Evaluation Large Cap Growth" was distributed and discussed with the Board Members. Next, Mr. West pointed out that on page 2, the "Turnover Ratio" for Alger Capital Appreciation Composite should be thirty -five percent (35 %) and the Wells Capital Heritage All Cap Growth Fund is forty -five percent (45 %) turnover ratio. Mr. West commented, "It is a pretty impressive list of candidates and Wells (Cap) Heritage (All Cap Growth) is probably the truest `All Cap' of the strategies. They are going to hold, of this group, probably the largest number of stock positions." Referring to page 5, Chairperson Fair stated, "I think it would be interesting to have — each time we have a review to maybe use Wells (Cap), Winslow and Brown and kind of track and let's see how Lateef (Investment Management Group) compares to them and if they do not significantly improve and everyone else is improving, then maybe we have something to talk about." Discussion. Mr. West remarked, "We would be happy to do that. I would also note that with our Asset Value up, to the twenty three million dollar ($23,000,000.00) range with a very nice recovery and Asset Value, we are approaching that Asset threshold where I do not think it would be inappropriate to consider diversifying the domestic equity portfolio and bringing on an additional equity manager whether Lateef (Investment Management Group) is retained or not." Chairperson Fair commented, "Okay. And that would also explain your `Correlation (Matrix)' chart on page 13." Mr. West suggested, "We will add a page for Wells (Cap), Winslow and Brown and continue to track." Chairperson Fair added, "Brown is a good proxy in there to compare Lateef (Investment Management Group) too is what I was thinking." Mr. West replied, "Good point." CITY OF WINTER SPRINGS, FLORIDA M INUTES BOARD OF TRUSTEES REGULAR MEETING — FEBRUARY 8, 2011 PAGE 8 OF 8 ADJOURNMENT Chairperson Fair adjourned the Regular Meeting at 7:55 p.m. RESPECTFULLY SUBMITTED: JOAN L. BROWN DEPUTY CITY CLERK NOTE: These Minutes were approved at the , 2011 Board of Trustees Regular Meeting.