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HomeMy WebLinkAboutDocumentation_Regular_Tab 7-B_4/9/1998 4 V •F Tf. VILLAGE OF TEQUESTA Post Office Box 3273 • 357 Tequesta Drive '`�,� 1"'�o Tequesta, Florida 33469-0273 • (561) 575-6200 so Fax: (561) 575-6203 h CO. TEQUESTA EMPLOYEES' PENSION TRUST FUND BOARD OF TRUSTEES MEETING DECEMBER 15, 1997 I. CALL TO ORDER AND ROLL CALL • The Tequesta Employees' Pension Trust Fund Board of Trustees held a regularly scheduled meeting at the Village Hall, 357 Tequesta Drive, Tequesta, Florida, on Monday, December. 15, 1997 . The meeting was called to order at 9 :06 A.M. by Secretary Thomas G. Bradford, ' who conducted the meeting in the absence of Chairman Ron T. Mackail. A roll call was taken by Betty Laur, the Recording Secretary. Boardmembers in attendance at the meeting were: James B. Trube, William Sharpless, Carl C. Hansen, Allan Oslund, and. Thomas G. Bradford. Also in attendance were Finance Director Bill Kascavelis and Staff Accountant Jennifer West. Chairman Ron -. T. Mackail and Boardmember Shawn Thurmond were absent from • the meeting. II. 'APPROVAL OF AGENDA Boardmember Hansen made a motion to approve the agenda as submitted. Boardmember Oslund seconded the motion. The vote on. the motion was: • . Thomas Bradford - for Carl Hansen - for Allan Oslund - for William Sharpless - for James Trube • - for • Recycled Paper 4. BOARD OF TRUSTEES TEQUESTA EMPLOYEES' PENSION TRUST FUND MEETING MINUTES December 15, 1997 PAGE 2 The motion was therefore passed and adopted and the Agenda was approved as submitted. III. APPROVAL OF MINUTES A) Tequesta Employees' Pension Trust Fund Board of Trustees meeting minutes for September 22, 1997 Boardmember Sharpless made a motion to approve the agenda as submitted. Boardmember }Jansen seconded the motion. The vote on the motion was: Thomas Bradford - for Carl Hansen - for Allan Oslund - for William Sharpless - for James Trube - for The motion was therefore passed and adopted and the minutes were approved as submitted. IV. STANDING REPORTS A) Approval of New Applicants for Participation in Plan (September - November 1997) : 1) Michele Hirsch, General 2) Christine Rimatello, General 3) Michelle Falasz, General 4) Paul Magnano, Fire Rescue Boardmember Hansen made a motion to approve the new applicants for participation in the Pension Plan as submitted. Boardmember True seconded the motion. The vote on the motion was: BOARD OF TRUSTEES TEQUESTA EMPLOYEES' PENSION TRUST FUND MEETING MINUTES December 15, 1997 PAGE 3 Thomas Bradford - for Carl Hansen - for Allan Oslund - for William Sharpless - for James Trube - for The motion was therefore passed and adopted. B) Approval of Beneficiary Changes (September - November 1997) 1) Shawn Thurman Boardmember Oslund made a motion to approve the requested beneficiary change as submitted. Boardmember Hansen seconded the motion. The vote on the motion was: Thomas Bradford - for Carl Hansen - for Allan Oslund - for William Sharpless - for James Trube - for The motion was therefore passed and adopted. C) Request for Withdrawal of Contributions (employees terminating employment with Village (September - November, 1997) 1) None Boardmember Bradford made a motion to approve the new applicants, the beneficiary changes, and withdrawal of funds. Boardmember Trube seconded the motion. The vote on the motion was: BOARD OF TRUSTEES TEQUESTA EMPLOYEES' PENSION TRUST FUND MEETING MINUTES December 15, 1997 PAGE 4 Thomas Bradford - for Carl Hansen - for Allan Oslund - for William Sharpless - for James Trube - for The motion was therefore passed and adopted. V. FINANCIAL REPORTS (Bill Kascavelis, Finance Director) A. Report of Employee/Employer Contributions and Reconciliation to Custodial Broker Statements (September - November, 1997) 1) Florida Municipal Pension Trust Account Statement 9/30/97 Finance Director Bill Kascavelis reported on the Florida Municipal Pension Trust Account Statement as of 9/30/97, and explained that estimated fees for administrative services as of that date were $1, 200 and that he had been assured by Joyce Case that this estimate would not go any higher. In response to an explanation requested by Boardmember Trube regarding $3,491. 81 shown as a transfer on the full year statement for the Fire Department, Mt . Kascavelis clarified that this would be explained at the next meeting. It was verified that the employer contribution was 14. 73% which did not include the 1.5% from the State of Florida. 2) Prudential Securities, Inc., Account Statements 10/31/97 and 11/30/97 Mr. Kascavelis and Ms. West reviewed the account statements from the broker, Prudential Securities, Inc. BOARD OF TRUSTEES TEQUESTA EMPLOYEES' PENSION TRUST FUND MEETING MINUTES December 15, 1997 PAGE 5 Since reconciliation of the statements had not yet been accomplished, it was decided to withhold approval of statements from Florida Municipal Pension Trust and Prudential Securities, Inc. , until the next meeting. Boardmember Sharpless made a motion to approve the $1,200 service fee to Florida Municipal Pension Trust. Boardmember Oslund seconded the motion. The vote on the motion was: Thomas Bradford - for Carl Hansen - for Allan Oslund - for William Sharpless - for James Trube - for The motion was therefore passed and adopted. B. Loomis, Sayles & Company, L.P. , Investment Manager's Financial Statements (10/31/97 & 11/30/97, Peter V. Van Bueren, V.P. & Senior Partner) 1) Review and Discussion: Mr. Van Bueren reviewed the October 31, 1997 investment appraisal and the November 30, 1997 financial statement from Loomis, Sayles & Company, L. P. Mr. Van Bueren explained that normally his company would review quarterly information of equities characteristics and fixed income, and answer any questions. However, information for one quarter was not. yet available. Mr. Van Bueren commented that the agreement between Loomis, Sayles & Company had been signed October 8, 1997, and the monies transferred to the broker' s account shortly thereafter. Funds had been invested according to verbal instructions and basically according to the F\ Lr BOARD OF TRUSTEES TEQUESTA EMPLOYEES' PENSION TRUST FUND MEETING MINUTES December 15, 1997 PAGE 6 way they had been invested with the Florida Municipal League, 50% equities and 50% fixed income, since no written investment guideline had yet been established. Year to date investments were approximately 30% cash, 43% in common stocks, and 27% in fixed income securities. A major drop in the stock market had occurred shortly after Loomis, Sayles & Company had assumed management of the portfolio; however, the market had come back resulting in an improvement in fixed income. Strategy was to slowly invest in more fixed income and to have the account more fully invested by the end of the year. Mr. Van Bueren recommended that the Board authorize signing a form to allow Prudential to purchase securities outside the broker, which would be an advantage to the Village by allowing purchase of securities from different brokers or dealers to obtain the best deal. Mr. Van Bueren explained that because the investments of the Village were long term, that they could take advantage of opportunities as prices came down. Mr. Van Bueren explained that in future meetings he would give more detailed reports which would show performance, and that cash was high presently, but would be lower when the portfolio was fully invested. Boardmember Sharpless pointed out that cash was really cash equivalents. C. Discussion of Operating Procedures, Financial Reporting, Investment Policy and Scheduling of Meetings. 1) Operating Procedures Finance Director Kascavelis reported that he would be working with Steve Palmquist on financial statements for the three separate funds and the annual report. During normal day-to-day operations when an employee left the Village the contributions f BOARD OF TRUSTEES TEQUESTA EMPLOYEES' PENSION TRUST FUND MEETING MINUTES December 15, 1997 PAGE 7 would either be returned to the individual or placed into a similar account at his new place of employment. Mr. Kascavelis requested that the Board consider authorizing the Secretary of the Board to sign the withdrawal request required to be approved prior to the expenditure being made. Mr. Kenny of Prudential Securities would wire transfer funds to the Village who would then cut the check. Payment was required to be made within 60 days. At the end of the year these transactions would be reported on 1099R forms. Disbursements would be reported at the next quarterly meeting. During discussion, Boardmember Trube questioned whether withdrawals would include contributions and vested amounts or only contributions. Mr. Kascavelis explained that only contributions would be returned. Boardmember Oslund recalled that this had been discussed previously and a decision made. Mr. Kascavelis explained that he just wanted to review the matter again because funds were due in 60 days and the Board only met every 90 days. Boardmember Oslund questioned whether there was a safeguard to prevent a check being cut for the wrong amount of dollars prior to the Board meeting and approving the withdrawal, to which Mr. Kascavelis responded that staff would verify the total contributions from date of hire for that employee using annual reports and year-to-date figures and that data would be provided to Secretary Bradford to assure him that he would be approving the appropriate amount of money. Mr. Bradford commented that he was comfortable with the procedure. Mr. Kascavelis explained that the second operating procedure to be approved was that he would notify Mr. Kenney at Prudential Securities of the withdrawal authorization who would wire funds to BOARD OF TRUSTEES TEQUESTA EMPLOYEES' PENSION TRUST FUND MEETING MINUTES December 15, 1997 PAGE 8 the Village so that the Village could cut the check, and the Village would issue a 1099R at the , end of the year. Boardmember Hansen made a motion to approve the two operating procedures discussed by the Board. Boardmember Sharpless seconded the motion. The vote on the motion was: Thomas Bradford for Carl Hansen - for Allan Oslund - for William Sharpless - for James Trube - for The motion was therefore passed and adopted. 2) Financial Reporting Mr. Kascavelis reported that in the future a financial report would be presented similar to that which had been provided by the Florida Municipal Pension Trust, and he would work with the actuary on setting up a quarterly report for each meeting. 3) Investment Policy Mr. Kascavelis reported that at the present time there was a 50* cap in investment into equities, and that Mr. Palmquist had drafted an investment policy and had indicated that an ordinance could be established to increase the mix if desired; however, any change in the plan would also require approval from the two employee bargaining units. Secretary Bradford commented that when the Police Department had opted out of the Florida Retirement System that State Statutes had required the Police Plan to be equal to terms and conditions for t BOARD OF TRUSTEES TEQUESTA EMPLOYEES' PENSION TRUST FUND MEETING MINUTES December 15, 1997 PAGE 9 Chapter 185 of the Florida Statutes, which had specific limitations on the amounts in equities, foreign stocks, etc. Mr. Kascavelis reported that Mr. Palmquist had advised local ordinance could override the State Statute requirement limiting equities to 50%. Mr. Van Bueren reported that the Florida Municipal League had used a 50% equities level, and questioned whether that level could be maintained or if it must revert back, to 30%. After discussion, Mr. Van Bueren requested that Village Attorney Randolph check on the requirement. Mr. Sharpless suggested that the Village Council authorize 60%/40% as a target. Secretary Bradford summarized that the first step should be to obtain a legal opinion from the Village Attorney regarding what flexibility was available, then the Board should make a recommendation to the Village Council, after which he would negotiate the new mix with the employee bargaining groups. Boardmember Oslund stated that the General Employees were subject to the bargaining units which was one reason they wanted out as soon as possible. Mr. Oslund suggested that the Board make a recommendation pending Village Council agreement which would save one quarter of waiting. Secretary Bradford stated that the Board did not have to wait to meet quarterly, but that was only a minimum. After a suggestion had been made that a motion be made to change the mix pending the Village Attorney' s opinion, Mr. Van Bueren advised that this was only one item, that it was not pressing, and that there would be a lot of other criteria to be considered for investing. Mr. Van Bueren advised that it was more important that an investment guideline of objectives desired for the fund be approved, and that the ordinance should be changed once for everything. Mr. Van Bueren BOARD OF TRUSTEES TEQUESTA EMPLOYEES' PENSION TRUST FUND MEETING MINUTES December 15, 1997 PAGE 10 advised that Loomis Sayles and Company would not impose additional fees when changes were made, however, there might be legal fees. Mr. Van Bueren requested that his company be given time to analyze the investment policy, and get it to a point satisfactory to both his company and the Village, which he indicated could be accomplished within another three months. Mr. Sharpless commented that the Village Attorney' s opinion was needed first, and that Loomis Sayles and Company should make recommendations. - Boardmember Sharpless requested comments from Loomis Sayles and Company as soon as they were ready so that the Boardmembers could review them. Mr. Van Bueren reported they. were 3/4 . finished. Mr. Sharpless suggested a meeting in a month to review the comments with the Village Attorney. Other Boardmembers agreed that a workshop meeting would be helpful. Secretary Bradford requested that Mr. Kascavelis coordinate with Attorney Randolph to set up a workshop meeting as soon as possible. 4) Scheduling of Meetings Finance Director Kascavelis reviewed the timing of receipt of monthly reports from Loomis Sayles and Company, and suggested that a standing meeting be scheduled for Wednesday of the fourth week of the month following the end of the quarter. This would make the next quarterly meeting on the fourth Wednesday in, January, 1998. Secretary Bradford advised that the Community Appearance Board met on Wednesdays; therefore, Mr. Kascavelis would need to reserve the room so that Community Appearance Board could not meet on that day. Boardmember Sharpless made a motion to set the quarterly meeting of the Board of Trustees for the BOARD OF TRUSTEES TEQUESTA EMPLOYEES' PENSION TRUST FUND MEETING MINUTES December 15, 1997 PAGE 11 fourth Wednesday of the month following the close of each quarter at 9 A.M. Boardmember Hansen seconded the motion. The vote on the motion was: Thomas Bradford . - for Carl Hansen - for Allan Oslund - for William Sharpless - for James Trube - for The motion was therefore passed and adopted. VI. Agreements to be Reviewed and Approved Mr. Kascavelis reported that Village Attorney Randolph had reviewed the agreement and suggested that items VI A and B be approved conditioned to his final review, and had reported that item C was fine. A) Command Account Agreement, Prudential Securities, Inc. Mr. Kenney of Prudential Securities discussed the importance of the command account agreement which among other things would provide $100 million in insurance on the account and a daily sweep of accounts. Boardmember Hansen made a motion to approve the Command Account Agreement with Prudential Securities, Inc. , and to authorize the Chairman of the Board of Trustees to sign the same, subject to Village Attorney Randdlph's final approval. Boardmember Trube seconded the motion. The vote on the motion was: j Thomas Bradford - for Carl Hansen - for Allan Oslund - for William Sharpless - for James Trube - for BOARD OF TRUSTEES TEQUESTA EMPLOYEES' PENSION TRUST FUND MEETING MINUTES December 15, 1997 PAGE 12 The motion was therefore passed and adopted. B. Prime Broker Account Agreement, Prudential Securities, Inc. Mr. Kenney explained that this agreement would allow Prudential Securities to make purchases from other brokers or dealers in order to obtain the best price for the Village, would reduce paperwork and costs, and that there were no fees. Statements would include costs, gains, losses, pie charts of how assets were divided, and cost vs. current price. Boardmember Oslund made a motion to approve the Prime Broker Services Agreement with Prudential Securities, Inc. , and to authorize the Chairman 'of the Board of Trustees to execute the same upon the final approval of the agreement by the Village Attorney. Boardmember Hansen seconded the motion. The vote on the motion was: Thomas Bradford - for Carl Hansen - for Allan Oslund - for William Sharpless - for James Trube - for The motion was therefore passed and adopted. C. Actuarial Services Agreement, Gabriel, Roeder, Smith & Company, Consultants and Actuaries Mr. Kascavelis reported that this agreement was in accordance with Board approval some time ago and had been approved by the Village Attorney. Mr. Sharpless questioned how the fee quotation compared to the fee of Florida Municipal League. Mr. Kascavelis explained that the Florida Municipal League wanted $4500 for an annual audit and a comparative analysis of having Gabriel, `t BOARD OF TRUSTEES TEQUESTA EMPLOYEES' PENSION TRUST FUND MEETING MINUTES December 15, 1997 PAGE 13 Roeder, Smith & Cofnpany provide an audit every two years it was cheaper than the League. Mr. Sharpless indicated that the agreement called for an annual evaluation and a $6300 annual fee. During discussion, other Boardmembers recalled the fee quoted had been smaller. Mr. Kascavelis advised that Mr. Palmquist had been paid nothing to date and that he would check on item three and report at the January meeting. VII. POLICE OFFICERS REPRESENTATION ON BOARD OF TRUSTEES A) Memorandum to Secretary of Board of Trustees Secretary Bradford reported that the decision had been made by the Police Department to continue to allow Mr. Trube to represent them on the Board of Trustees. VIII. ANY OTHER MATTERS Mr. Van Bueren requested discussion by the Board regarding correspondence from their firm in addition to statements, such as lists of transactions, supporting background data for companies just purchased, authority to sign proxies on behalf of the Board and how Loomis Sayles and Company had voted; and whether the information was desired monthly or quarterly. Boardmember Hansen requested that prior to each meeting the Board be provided performance statements including what Loomis Sayles and Company wanted to happen, and transactions that had taken place during the past three months, so that the Boardmembers could review the information before the meeting. Boardmember Sharpless inquired about a newsletter, which Mr. Van Bueren indicated could be provided quarterly, along with a list of transactions. During discussion on proxies, Mr. Van Bueren indicated that Loomis Sayles and Company had arranged to have proxy statements sent to them so that they could evaluate each vote on behalf of the Village and could BOARD OF TRUSTEES TEQUESTA EMPLOYEES' PENSION TRUST FUND MEETING MINUTES December 15, 1997 PAGE 14 furnish a report on the voting. Mr. Van Bueren explained that the voting was based on research by their analysts. Mr. Sharpless indicated he would be interested in information regarding companies purchased and a monthly statement. Mr. Van Bueren indicated that monthly and quarterly statements could be provided with commentary, and the quarterly mailing would include information in regard to performance of the account. Mr. Van Bueren explained that the number of shares or the number of bonds on a particular date and the dollar value at that point was indicated on the reports as purchase cost. Secretary Bradford commented that from time to time Mr. Kascavelis as Administrator would receive documents which needed to be executed, and in his opinion the Board should authorize each transaction rather than authorizing a blanket approval. Discussion ensued. Boardmember Sharpless agreed that routine matters should be authorized but other things should come before the Board. Mr. Kascavelis expressed his opinion that contracts should be approved by the Board, and that a special meeting could be called before regular Board meeting to approve a contract if any questions arose. Operating procedure at time of hire was to have a Boardmember sign subject to Board approval at the next meeting. Mr. Sharpless inquired why the Board had to approve new participants, to which Mr. Kascavelis responded the Board could question if an applicant met the minimum physical requirements for the position. After discussion, Mr. Kascavelis indicated he would add the information regarding physicals to the application. IX. ADJOURNMENT Boardmember Sharpless moved that the meeting be adjourned. Boardmember Hansen seconded the motion. The vote on the motion was: BOARD OF TRUSTEES TEQUESTA EMPLOYEES' PENSION TRUST FUND MEETING MINUTES December 15, 1997 PAGE 15 Ron T. Mackail - for Allan Oslund - for Tom Bradford - for James Trube - for The motion was therefore passed and adopted and the meeting was adjourned at 10:43 A.M. Respectfully submitted, 44-59- 4L4.;2) Betty Laur Recording Secretary ATTEST: Joann Manganiello Village Clerk DATE APPROVED: