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HomeMy WebLinkAbout2015 02 10 Consent 300 Unapproved Minutes from the May 13, 2014 Regular MeetingThe Regular Meeting of Tuesday, May 13, 2014 of the Board of Trustees was called to Order by Chairperson Barbara Watkins at 5:30 p.m. in the West Hall Conference Room of the Municipal Building (City Hall, 1126 East State Road 434, Winter Springs, Florida 32708). Roll Call: Chairperson Barbara Watkins, present Vice - Chairperson Frank Mundo, present Board Member Brian Fricke, present Assistant to the City Clerk Sean Beaudet, present A brief moment of silence was followed by the Pledge of Allegiance. AWARDS AND PRESENTATIONS AWARDS AND PRESENTATIONS 100. Not Used INFORMATIONAL AGENDA INFORMATIONAL, 200. Not Used PUBLIC INPUT Chairperson Watkins opened "Public Input ". No one addressed the Board of Trustees. Chairperson Watkins closed "Public Input". CITY OF WINTER SPRINGS, FLORIDA MINUTES BOARD OF TRUSTEES REGULAR MEETING - MAY 13, 2014 PAGE 2 OF 6 CONSENT AGENDA CONSENT I 300. Office Of The City Clerk Requesting The Board Of Trustees Review And Approve The Thursday, December 5, 2013 (Rescheduled From November 12, 2013) Board Of Trustees Regular Meeting Minutes. "I WOULD LIKE TO MAKE A MOTION TO ACCEPT THE MINUTES." MOTION BY CHAIRPERSON WATKINS. SECONDED BY BOARD MEMBER FRICKE. DISCUSSION. VOTE: VICE - CHAIRPERSON MUNDO: AYE BOARD MEMBER FRICKE: AYE CHAIRPERSON WATKINS: AYE MOTION CARRIED. CONSENT 301. Office Of The City Clerk Requesting The Board Of Trustees Review And Approve The Thursday, February 27, 2014 Board Of Trustees Special Meeting Minutes. "I MAKE A MOTION THAT WE APPROVE THE FEBRUARY 27TH MINUTES." MOTION BY VICE - CHAIRPERSON MUNDO. SECONDED BY CHAIRPERSON WATKINS. DISCUSSION. VOTE: BOARD MEMBER FRICKE: AYE CHAIRPERSON WATKINS: AYE VICE - CHAIRPERSON MUNDO: AYE MOTION CARRIED. 400. REPORTS No Reports were given. PUBLIC HEARINGS AGENDA PUBLIC HEARINGS 500. Not Used CITY OF WINTER SPRINGS, FLORIDA MINUTES BOARD OF TRUSTEES REGULAR MEETING -MAY 13, 2014 PAGE 3 OF 6 ❖ ❖ AGENDA NOTE: REGULAR ITEMS 11600" AND "601" WERE ADDRESSED SIMULTANEOUSLY. ❖❖ REGULAR AGENDA REGULAR 600. Finance And Administration Services Department Requesting The Board of Trustees Receive From The Bogdahn Group, An Interim Investing Of Surplus Funds, And To Enter Into Discussion. REGULAR 601. Finance And Administration Services Department Requesting The Board of Trustees Receive From The Bogdahn Group, The Year Endiniz ADril 2014- Investment Return Retort, And To Enter Into Discussion. Mr. Dave West, Senior Consultant, The Bogdahn Group, 4901 Vineland Road, Suite 600, Orlando, Florida: presented the Agenda Item and reviewed many of the returns in the Quarter Investment Return Report. Next, Mr. West addressed the rebalancing of funds, per the direction from the Board of Trustees at the last meeting, to policy targets from the Vanguard Total Stock Market Index into the Galliard Intermediate Bond Fund. Mr. West explained, "We had submitted the trade ticket to get that executed and it was a recommendation and the direction." Discussion followed on a Vote of the Board of Trustees Members that were in attendance at the February 27, 2014 Special Meeting and Mr. Shawn Boyle, Director, Finance and Administrative Services Department noted that based on the discussion and Vote at that time, that froze the transaction. Further, Mr. West remarked that on our "`Receipts and Disbursements' — that is why the cash is so out of wack. That is ten percent (10 %) of Plan assets now sitting in cash." With additional comments, Mr. West added that with the excess funds in cash, the Pension was not currently within the Policy targets and this needed to be addressed. Discussion. Vice - Chairperson Frank Mundo inquired about the status of the recently chosen Crescent Direct Lending. Mr. Boyle replied, "They sent us a very complicated contract, in our opinion, because it has off -shore accounts in the Caymans, etc. It's a very complicated contract from what we are used to seeing. So, I reached out to Dave (West) and he gave me some guidance. The application, which is forty -five (45) pages, is now complete. So, the City Manager has permission to sign it - the Commission has signed off on your recommendation to them for that Investment. CITY OF WINTER SPRINGS, FLORIDA MINUTES BOARD OF TRUSTEES REGULAR MEETING — MAY 13, 2014 PAGE 4 OF 6 The City Attorney has opined that in form, the contract is complete and looks fine. But, he also wants everyone to know that he is not a SEC (U.S. Securities and Exchange Commission) Attorney. He cannot opine to the content of it. I wanted to know what all of your opinions were. Some of you have this exact type of experience. We did the best we could, filling out the application based on what other cities have done that are similar to us. The question is, do we want to pause and put this to an SEC (U.S. Securities and Exchange Commission) Attorney or someone who's qualified to review this forty -five (45) page application." Discussion followed on a possible capital call up date for investment with Crescent Direct Lending; that other municipalities' Boards of Trustees are not an Advisory Board, but the ultimate Trustees of Pensions; that many municipalities already have a Pension Attorney on retainer; and that Pension Attorneys have different preferences and fees in reviewing investment contracts. Mr. Boyle inquired, "Do we slow it down? We have an Attorney, Jim Linn (Lewis, Longman & Walker, P.A.). Do we hand it to him for review? I don't know how long it takes for these guys to review this." Further comments. Mr. West added, "We have to submit this documentation before the end of the month or the approved investment is not going to happen." Mr. West added that it could be a couple of years before a similar investment option came open. Board Member Fricke noted that by having received an opinion from a Pension Attorney, the City is guaranteed some resolution should the contract and investment be unfavorable to the City. Mr. West asked if there was a procedure that addresses contract reviews; to which Mr. Boyle responded, "We have an operational procedure, but not a pension procedure per se." Vice - Chairperson Mundo added that this investment was in private equity and different than other investments within the Pension; and asked if the City needed to have a retainer for a Pension Attorney. Mr. Boyle noted he was not sure if it was required, as these investments were not utilized very often in the Pension. Tape 1 /Side B Mr. Boyle offered, "Let me find out what we can get done and how quickly we can get it done. You don't have to Vote on it. Let me see what I can currently do and we'll try to set something up longer term, in case these things come up again." CITY OF WINTER SPRINGS, FLORIDA - MINUTES BOARD OF TRUSTEES REGULAR MEETING — MAY 13, 2014 PAGE 5 OF 6 Next, discussion ensued on an interim investment option should the deal with Crescent Direct Lending not occur, or if the investment is approved and funds are awaiting the subsequent capital calls. Vice - Chairperson Mundo reminded everyone that he objected to placing the funds in Bonds, per his Vote at the last meeting. Board Member Fricke noted that he was not comfortable placing funds into equities on such a short term basis. Mr. West suggested, "Increasing our target allocation to the Templeton Global Bond Fund, which is a very short duration fund." Vice - Chairperson Mundo responded, "I think that whatever we decide, since it is a short term decision — shouldn't have a capital risk component." Discussion. Board Member Fricke inquired, "If we stay in cash, are we violating Investment Policy ?" Mr. West replied, "I think if the Pension Auditors — if we took a snapshot, and we had a ten percent (10 %) position is cash, then the Pension Auditors are going to raise the flag on that one." Board Member Fricke then asked, "If it was part of the Policy, then the Pension Auditors would be okay with that ?" Mr. West said, "Yes. If it is written in the Policy, no problem. However, we do not have a `Cash Allocation' written in the Policy." Further remarks followed. As a solution, Mr. Boyle offered, "I could buy short term Treasuries. There is no interest rate risk ", to which Vice - Chairperson Mundo asked Mr. West if this could be done. Mr. West replied, "We would have to direct a Manager or do our due diligence and bring in some short term investments options." Mr. Boyle clarified, "So, the Pension cannot go out and buy U.S. Treasuries directly? We can't go buy some bonds that have short term maturities ?" Mr. West said, "The City wouldn't be authorized to transact on behalf of the Pension. We obviously are only advisory." Board Member Fricke added, "How do we fix that? Is that a mechanism that can be put in place, words on paper that would allow the City to go and buy Treasuries ?" In response, Mr. West said, "I wouldn't recommend that. We want well established money managers doing the transactions." Much discussion ensued on possibly changing the Investment Policy language to allow 10% cash allocation in anticipation of capital calls from certain investments. Summing up the discussion, Mr. West said, "I think we have two (2) options we can do here. If we want to go before City Council again with another Investment Policy Amendment, within the current Investment Policy we just amended, we are absolutely operating within the confines of that Investment Policy by reviewing another Fixed Income Investment option and diversifying away additional funds into that. The second option is, if we want to have cash management language for transitional cash and define what that is, absolutely. We can amend the document to that affect. I think we are completely operating within the current Policy as it was just revised and approved." Further discussion. Tape 2 /Side A CTTY OF WINTER SPRINGS, FLORIDA MINUTES BOARD OF TRUSTEES REGULAR MEETING —MAY 13, 2014 PAGE 6 OF 6 Concluding, Mr. Boyle said, "I think the direction of the Board is that I'll seek legal opinion and if Dave (West) and I think it can be completed before the capital call, that's the direction you guys want to go. If it can't, then we're going to stop and come back to a regular meeting in terms of what we are going to do with these funds." Mr. West reiterated the recommendation. No objections were noted. CONSENUS OF THE BOARD OF TRUSTEES TO ACCEPT STAFF'S RECOMMENDATION. Mr. West also stated, "Then maybe an advisory board direction on the cash. Because we need the Minutes to reflect that the cash balance was addressed. Given that the amount of the capital call is not known, and rebalancing has resulted in a significant cash balance; the board has directed the Investment Consultant to bring Alternative Fixed Income investment options to the next meeting." Vice - Chairperson Mundo requested, "I would like the word `short-term' to appear in there. Mr. West agreed and said, "I would rather you put it in there." No objections were noted. CONSENUS OF THE BOARD OF TRUSTEES TO ACCEPT THE FIDUCIARY'S RECOMMENDATION. PUBLIC INPUT Chairperson Watkins opened "Public Input ". No one spoke. Chairperson Watkins closed "Public Input ". WI0I11901105 101 al Chairperson Watkins adjourned the Regular Meeting at 7:06 p.m. RESPECTFULLY SUBMITTED: SEAN BEAUDET ASSISTANT TO THE CITY CLERK NOTE: These Minutes were Approved at the , 2015 Board of Trustees Regular Meeting.