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HomeMy WebLinkAbout2012 05 08 Board of Trustees Regular Meeting Minutes CITY OF WINTER SPRINGS, FLORIDA MINUTES BOARD OF TRUSTEES REGULAR MEETING MAY 8, 2012 CALL TO ORDER The Regular Meeting of Tuesday, May 8, 2012, of the Board of Trustees was called to Order by Vice Chairperson Barbara Watkins at 5:35 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, absent Vice Chairperson Barbara Watkins, present Board Member Shelly Burlon, present Board Member Brian Fricke, absent Board Member Frank M. Mundo, present City Clerk Andrea Lorenzo-Luaces, present Assistant to the City Clerk Sean Beaudet, present A moment of silence was followed by the Pledge of Allegiance led by Vice Chairperson Watkins. Mr. Dave West, Senior Consultant, The Bogdahn Group, 4901 Vineland Road, Suite 600, Orlando, Florida: noted that related to Agenda Changes and specifically Regular Agenda Item "600", "I was not able to schedule Galliard (Capital Management, Inc.). They respectfully requested attendance at the next meeting that was agreeable to the Board." Next, Vice Chairperson Watkins inquired about Indexing, to which Mr. West remarked, "At the Board's direction, I had prepared a fairly involved discussion; kind of an interactive, education discussion piece on Indexing. And I'm prepared to discuss that tonight as previously agenda'd, but I am happy to take direction, deferral, or proceed however this Board, the current group in attendance would like to proceed. If you'd like to postpone it, no offense taken. I'm prepared. I'd be happy to do that at the next meeting when you have a full Board." Vice Chairperson Watkins said, "I would suggest that we postpone it until we get the other two (2) Board Members here since this is an important topic to discuss." Mr. West remarked, "That makes perfect sense to me—happy to defer." CITY OF WINTER SPRINGS,FLORIDA MINUTES BOARD OF TRUSTEES REGULAR MEETING-MAY 8,2012 PAGE 2 OF 7 PUBLIC INPUT No one spoke. INFORMATIONAL AGENDA INFORMATIONAL 100. Finance And Administrative Services Department Providing A Summary Of The Pension-Related Expenditures For The Second Quarter Of Fiscal Year 2011. Mr. Shawn Boyle, Director, Finance and Administrative Services Department presented this Agenda Item and supplied a summary to the Board Members with related information and stated, "I just wanted everybody to be comfortable with what the expenses in the Pension are, so we've included all the invoices for the second quarter and there're also available for any quarter that you want. If this is helpful to all of you, we'll continue to print it or if I could electronically send it to you somehow, that would probably be preferred from a cost standpoint." Continuing, Mr. Boyle added, "This is not necessarily intended to be an accurate, a forensic accounting of the expenses, more the less,just a disclosure of what we're paying through the Pension. So, the timing on the expenses may be off a little bit." Further, Mr. Boyle explained that the fees shown related to two (2) years of Actuarial Services which also "Included five (5) studies that we did,that eventually ended up in reducing the City's liability to the Pension Plan by almost thirty million dollars ($30,000,000.00). So it was an investment. There was an awful lot of work that went into that - what I also handed out that's reflected in these expenses is the `Actuarial Impact Statement', which is required by State Law. Anytime you make material changes to your Pension Plans, this is filed by our Actuary to the State and has been; and the State has accepted it." Continuing, Mr. Boyle added, "The work that you all did, in conjunction with the (City) Commission, resulted in a reduction of approximately almost seven hundred thousand dollars ($700,000.00)per year to the City. So, you relieved them of a liability." Mr. Boyle then said to the Board, "Our Actuary is asking if you guys want him to make an appearance to discuss any of this, the actual impact or anything that we've done, any interpretations of the Resolutions that we passed. He is certainly willing to come up." Vice Chairperson Watkins said, "I am sure at some point we will want to speak to him, but since we just got this, let us go over this and digest it." Discussion followed on the costs and individuals Pension statements that had just been sent out. CITY OF WINTER SPRINGS,FLORIDA MINUTES BOARD OF TRUSTEES REGULAR MEETING-MAY 8,2012 PAGE 3 OF 7 Board Member Shelley Burlon inquired about an Actuarial Evaluation for October 1, 2011. Mr. Boyle replied, "Yes, he's in the process of completing that. There's a couple pieces of information outstanding. What was critical was that we got the Impact Statement, because there is a time limit on that and we actually filed an extension and then we met the time limit. He'll have the evaluation, he said by the time we get the information to him, which will be sometime this week. He said he'd have it to us in about thirty(30) days. So, we'll definitely have by the next time we get together." Mr. Boyle further commented on the "The Annual Evaluation— State Law permits cities, counties that have in the State of Florida that have Defined Pension Plans, to create what they call, an Actuarial Evaluation every year. So every year, at the close of the Fiscal Year, your Actuary goes in and evaluates basically the status of the investments, and the promised benefits that we have and they do it on an individual basis. Then they project it forward, and—we use that to determine what the funding levels will be in the Pension." Continually, Mr. Boyle noted, "What's in our Contract is an Annual Review and I have the past ones if you guys are interested in looking at those. So, the Impact statements should really give you an indication of where we are, when the evaluation is done. I wouldn't expect it to deviate much at all actually, from what the Impact statements says. But, we'll have that at the very next Meeting." Board Member Frank Mundo asked, "Do we pay more because we are getting it every year as opposed to what we're required to do?" Mr. Boyle stated, "Kevin Smith (City Manager) has asked me to look into that and the answer is probably `A little bit', but if we did them every two (2) years or three (3) years instead of every year, it's just more catch up work for the Actuary. So, by doing them annually, there's probably a little bit more cost, but not a significant amount, because they still have to crunch the numbers." Mr. Boyle added, "But we are looking into that, absolutely." CONSENT AGENDA CONSENT 200. Office Of The City Clerk Requesting Approval Of The February 14, 2012 Board Of Trustees Regular Meeting Minutes. Regarding Approval of the Minutes, Vice Chairperson Watkins asked, "Do I have a Motion to Approve them?" "I WOULD LIKE TO MAKE THAT MOTION." MOTION BY BOARD MEMBER MUNDO. SECONDED BY BOARD MEMBER BURLON. DISCUSSION. CITY OF WINTER SPRINGS.FLORIDA MINUTES BOARD OF TRUSTEES REGULAR MEETING-MAY 8,2012 PAGE 4 OF 7 VOTE: VICE CHAIRPERSON WATKINS: AYE BOARD MEMBER BURLON: AYE BOARD MEMBER MUNDO: AYE MOTION CARRIED. AWARDS AND PRESENTATIONS AWARDS AND PRESENTATIONS 300. Not Used 400. REPORTS PUBLIC HEARINGS AGENDA PUBLIC HEARINGS 500. Not Used REGULAR AGENDA REGULAR 600. Finance And Administrative Services Department Galliard Capital Management, Inc. —Fixed Income Update. As noted at the beginning of the Meeting, this Agenda Item was not discussed. REGULAR 601. Finance And Administrative Services Department The Bogdahn Group Quarterly Investment Return Report. Mr. West presented this Agenda Item for discussion and began with a mention of European Union and United States monetary policies. In regards to domestic corporate earnings, Mr. West stated that "About sixty-seven percent (67%) or so of the companies reported earnings better than expectations." Discussion on different markets and financial benchmarks continued. CITY OF WINTER SPRINGS,FLORIDA MINUTES BOARD OF TRUSTEES REGULAR MEETING-MAY 8,2012 PAGE 5 OF 7 Mr. West explained, "We had to make a revision to the book that was previously sent out to you electronically, so the book I passed out tonight reflects the revision. The market value or unit value of the Intercontinental Real Estate Fund was adjusted. Fortunately it was adjusted upward, so we then had to go back in and do some recalculations in the Executive summary I put in front of the book, I captured all of those changes." Vice Chairperson Watkins commented, "We never received the electronic one. I know that is something that we would like to have in advance." Mr. West said, "We sent that weeks in advance." Board Member Mundo added, "We didn't get it and it is really helpful to have them for the meetings." Mr. Boyle answered by saying, "Let me go back and find out why." Discussion ensued on electronic distribution process, Florida's Sunshine Laws, and staffing. Mr. West added, "I'll just make sure that our distribution list is current and correct." Continuing with the discussion, Mr. West referenced page 18 and stated, "We opened up with a Market Value—January 1St - of twenty-three million seven hundred and forty-eight thousand one hundred and eighty-five dollars ($23,748,185.00). We had contributions for the period totaling five hundred twenty-two thousand two hundred and ninety dollars ($522,290.00); Distributions, which would be pensioner distributions, totaled four hundred and four thousand five hundred and forty dollars ($404,540.00); Investment Management Fees, that hit the custody statement during the period, forty-two thousand and fifty dollars ($42,050.00); other expenses - and I think we had the Actuarial Line Item Expenses included in this one — seventy-six thousand two [hundred] eighty-one [dollars] ($76,281.00). Your Investment Earnings is always broken down into Investment Income for the Quarter — that was one hundred and ten thousand six hundred and six dollars ($110,606.00) and the appreciation for the Quarter was two million two [hundred] twenty-seven [thousand] one [hundred] fifty [dollars] ($2,227,150.00). So, I take the snapshot on three/thirty-one (March 31, [2012]) and we closed the books with twenty-six million eighty-five thousand three hundred and sixty dollars ($26,085,360.00)." Related to page 19 of the Report, Mr. West referenced the fiscal year to date Revenue and noted, "Income generated by investments so far is two hundred and twenty-eight thousand eighty dollars ($228,080.00). The appreciation generated by investments is three million four [hundred] ninety-three [thousand] eight [hundred] fifty-two [dollars] ($3,493,852.00). So, just under four million dollars ($4,000,000.00) of additional contributions coming from investments for the Plan." Further comments. Next, Mr. West covered the "Total Fund (Net)" on Investment Fees on page 20 of the Report and stated that the return was nine point sixty-four percent (9.64%) and the Plan had earned a sixteen point forty-four percent (16.44%) for the actual earnings for the Quarter. Further, Mr. West spoke on comparison ratings to other similar plans. CITY OF WINTER SPRINGS,FLORIDA MINUTES BOARD OF TRUSTEES REGULAR MEETING-MAY 8,2012 PAGE 6 OF 7 Much discussion ensued between Mr. West and Board Member Mundo on the Templeton Index and how it was determined. Board Member Mundo asked Mr. West about using the particular Index and said, "It's not just your decision, but the Fund Company uses this benchmark to compare themselves with?" Mr. West replied, "I believe that to be correct. I would be happy to get confirmation on that, but I believe that is correct." Board Member Mundo then said, "Can I ask that you do that?" No objections were voiced, and Mr. West responded, "Absolutely". Mr. West next addressed the Intercontinental Fund by stating "Going back to a previous real estate discussion we had, the Intercontinental Fund is a very leveraged fund versus the American Realty, which has operating leverage of around seventeen percent (17%)." Further discussion. Board Member Burlon inquired if the Report provided during the meeting by Mr. West had the correction on the Intercontinental Fund. Mr. West replied, "Yes, the Report you have in front of you now is correct and reflects the modifications we had to make." Mr. West added, "We will mail that electronically so you have that for the Record." Next, rebalancing was addressed and Mr. West remarked, "No rebalancing recommendation at this time." Mr. West was then asked, "What triggers a rebalancing event?" Mr. West answered that "We are using the five percent (5%) rule for the Policy." Board Member Mundo followed by saying, "If Lateef (Asset Management Equity) went over thirty percent (30%) - he now is at twenty seven point eighteen percent (27.18%); if he went over thirty (30%) for example, that would trigger a rebalancing because he would have been more than five percent (5%) off of what he was supposed to have..." Mr. West replied, "...Yes. That's correct." REGULAR 602. Finance And Administrative Services Department Discussion On Preparing For The May 14th,2012 Board Of Trustees Presentation Before The Mayor And City Commission. Mr. Boyle began this Agenda Item for discussion by mentioning Florida's Sunshine Laws in regard to City Boards and Committees, and explained that Manager Smith had asked City Staff to simply remind the various Advisory Boards and Committees about the Sunshine Law. City Clerk Andrea Lorenzo-Luaces also mentioned the "Gavel to Gavel" rule. Discussion followed on the upcoming pending presentation to the City Commission, what Mr. Boyle and Chairperson Maria Fair spoke about previously regarding possible "talking points", and that any of the current Board of Trustees Members were more than welcome to participate in the upcoming discussion with the City Commission. CITY OF WINTER SPRINGS,FLORIDA MINUTES BOARD OF TRUSTEES REGULAR MEETING—MAY 8,2012 PAGE 7 OF 7 Tape 1/Side A Further comments ensued on addressing the City Commission, who should represent the Board of Trustees during their presentation, what should be said, various talking points, past efforts, and how to proceed. The funded ratio of the plan was referenced next, along with what previous Board of Trustees Members had contributed and changes made during the process, followed by additional planning on what and how to present to the City Commission. Continuing with whether Chairperson Fair could address the City Commission on behalf of the Board of Trustees, Mr. Boyle stated, "I will talk to her (Chairperson Fair)." Vice Chairperson Watkins offered, "I would be glad to help her". It was the sentiment of the Board that Chairperson Fair speak on behalf of the Board of Trustees when they meet soon with the City Commission. Regarding the aforementioned talking points, Mr. Boyle stated, "I will have them out to you all by tomorrow." The Board Members were then advised that they could respond back to Mr. Boyle with any comments any of them had. Members of the Board then commented on being able to refer to a "snapshot" or Executive Summary. With discussion, Mr. West mentioned, "Yes. We have available, what we call a `Flash Report'." Mr. West added, "It would look very similar to pages 20 and 21" (of the Bogdahn Group's "Investment Performance Review"). Discussion. PUBLIC INPUT Vice Chairperson Watkins opened Public Input. No one spoke. Vice Chairperson Watkins closed Public Input. ADJOURNMENT Vice Chairperson Watkins adjourned the Regular Meeting at 6:46 p.m. RESPECTFULLY SUBMITTED: ANDREA LORENZO-L DACES, MMC, CITY CLERK AND SEAS I EAUDET ASSISTANT TO THE CITY CLERK NOTE: These Minutes were Approved at the November 13,2012 Board of Trustees Regular Meeting.