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HomeMy WebLinkAboutDocumentation_Pension Public Safety_Tab 01_05/03/2010 DRAFT TEQUESTA PUBLIC SAFETY OFFICERS' PENSION TRUST FUND REGULAR QUARTERLY MEETING MINUTES February 1.2010 I. Call To Order and Roll Call A regular quarterly meeting of the Tequesta Public Safety Officers' Pension Trust Fund Board of Trustees was held at the Tequesta Village Hall, 345 Tequesta Drive, Tequesta, Florida, on February 1, 2010. The meeting was called to order at 8:02 a.m. A roll call was taken by Recording Secretary Betty Laur. In attendance at the meeting were: Chair Ed Sabin, Secretary Frank D'Ambra, Board Member Ray Giblin, Board Member David Cooper, and Board Member Robert Young. Also in attendance were Attorney Bonni Jensen, Pension Coordinator Lori McWilliams who arrived at 8:14 a.m., Senior Accountant Monica Rahim, Recording Secretary Betty Laur, Tony Brown of Rockwood Capital Advisors, Dan Johnson and Tyler Grumbles with Bogdahn Consulting, LLC., and Steve Palmquist of Gabriel Roeder Smith and Company. Finance Director JoAnn Forsythe attended on behalf of management. II. Swearing In of Member Ed Sabin Chair Ed Sabin announced this item would be delayed until Pension Coordinator McWilliams had arrived. III. Approval of Agenda MOTION: Board Member Cooper made a motion to approve the amended agenda dated January 29, 2010 with "Secretary David Cooper" changed to "Secretary Frank D'Ambra" and "Board Member Frank D'Ambra" changed to "Board Member David Cooper". Board Member Young seconded the motion, which carried by unanimous 5-0 vote. IV. Approval of Minutes 1. Tequesta Public Safety Officers' Pension Trust Fund Board of Trustees Quarterly Meeting Minutes -November 2, 2009 AND Tequesta Public Safety Officers' Pension Trust Fund Board of Trustees Workshop Meeting Minutes -January 22, 2010 Regular Quarterly Meeting Minutes Board of Trustees of Public Safety Officers' Pension Trust Fund February 1, 2010 2 MOTION: Board Member Young made a motion to accept the minutes of November 2, 2009 and January 22, 2010 as submitted. Secretary D'Ambra seconded the motion, which carried by unanimous 5-0 vote. V. PRESENTATIONS 2. Presentation by Investment Manager Tony Brown, Rockwood Capital Advisors, provided handouts and addressed questions raised by the board at their November quarterly meeting and the January workshop meeting. The question as to Rockwood's style and the manner in which they managed assets was addressed. Mr. Brown advised the style was known as relative price cycle, a combination of quantitative analysis and fundamental analysis-about 80% of it was quantitative (using technology to go through their screening process), and 20% at the end of that process where they looked at each input in the quantitative process. Mr. Brown explained there were two primary drivers in the market-investor psychology and the fundamentals of the company. In using relative price cycle, focus was primarily on movement of the price. In order for a security to become a part of their universe it must have seven years of price history. Going back to 1972 their research had proven over and over that a security had an 18 to 24-month cycle, up, down, sideways and back through the cycle. Their research had determined there were five positive phases. Initially when they ran their process they were looking for securities which had started an upward trend, and securities which had reached their peak. This was not an anticipatory process, but was a confirmation process. They waited until a security showed it was clearly on an upward trend before they would consider purchasing it. This process allowed them to recognize mistakes early and get those securities out of the portfolio, watch securities to see if those began to reverse themselves, and see when a security began to move positively up-these were labeled "A" and were candidates for inclusion in the portfolio. The first week of each month they immediately sold any "D" rated securities-those had typically underperformed the market by 4.2%. Mr. Brown clarified in response to questions from Chair Sabin that a security purchased as an "A" and sold as a "D" would have a 1 return. Mr. Brown confirmed all their portfolios used the same process except 20-25 which had restrictions from investment policies or State or municipal statutes. Mr. Brown explained their company had an investment portion and a research portion, and several huge multinational corporations, including Bank of New York and Bank of America, purchased their research. Each month they provided Regular Quarterly Meeting Minutes . t Board of Trustees of Public Safety Officers' Pension Trust Fund February 1, 2010 3 Rockwood with securities to run through their process for them-as they ran these securities through their process they included them in their universe so that they became possible candidates for their clients' portfolios as well. Mr. Brown explained that by selling off the "D" securities at the beginning of each month they minimized the impact of the down side and over time, over they last two decades they had underperformed only three times. They ended up with a 40-stock portfolio, new accounts were purchased at 2-1/2%and were fully invested at all times. Secretary D'Ambra questioned if 2-1/2% was normal weighting, what was the range on weighting for on the portfolio. Mr. Rockwood gave an example of a stock purchased at 2-1/2% which went to 5%; they cut it back to 2-1/2%, it went back to 5%, they cut it to 2-1/2% again, and then sold it as a "D". This occurred over a 36-month period. Mr. Brown explained that when purchasing a security the sector also needed to show an upward trend. Secretary D'Ambra asked how they would perform if the market stayed where it was for the next year and making money depended on picking specific stocks. Mr. Brown responded it normally took them 3-6 months to change from one theme to another, and looking back in the past one could see how they had performed well in down markets, but this time had been completely different and it had taken them longer to change themes, and they now believed the market would move forward. Secretary D'Ambra expressed concern that the expiration of tax cuts would take purchasing power out of the private sector, causing the market to be flat for the next year. Mr. Brown commented they looked at their process every day for opportunities to take advantage of, and there would continue to be pullbacks for a period of time but companies had reduced costs dramatically so they were not going to get caught in a similar situation, and they now saw a positive scenario playing out. If that did not happen, they would go with that using their process. Secretary D'Ambra felt in addition to numbers, to choose superior stocks, the managers of companies and suppliers should be contacted. Mr. Brown stated they did not do that because there was a huge amount of distrust as to whether they would be hearing the truth, and their process had told them in the past when something was wrong. Their process included growth and value, so they were not tied to one style and they moved between them. Even in down periods, "D" stocks were sold each month and replaced. Mr. Brown reviewed the rest of his handout items, and stressed they were looking at performing long-term rather than just quarter to quarter. Chair Sabin asked that the long-term information be updated to show only the period they had been managing the Village of Tequesta. The final handout was the Global Investment Performance Standards put out by AMIR (The Association for Investment Management and Research) which provided certification for investment managers, which they used for calculations. Mr. Brown reported Rockwood had just received a very good audit from the SEC, with the biggest thing they found being an ADD form incorrectly filled out. Regular Quarterly Meeting Minutes Board of Trustees of Public Safety Officers' Pension Trust Fund February 1, 2010 4 Secretary D'Ambra had asked for a calendar year chart in addition to the fiscal year chart, which would require some programming changes. Secretary D'Ambra asked if the composite numbers would be identical or different from just Tequesta's numbers. Mr. Brown responded differences in his numbers and Bogdahn's numbers generally would be from a cash flow perspective, but it should not be a big difference. Chair Sabin clarified the type of difference being discussed was less than '/2 of 1 %. In response to a question from the audience, Mr. Brown advised the total portfolio was up approximately $106,000 for the year. The next question was if the Village gave his company $300,000 what would happen, to which Mr. Brown responded it would immediately go into the Village's account and begin making money in a short-term vehicle. Mr. Johnson of Bogdahn indicated for that amount a plan would be discussed and it would be invested within 30 days. Mr. Brown confirmed Secretary D'Ambra's comment that using Rockwood's process, the Board should expect the portfolio performance to be that in an upward market it might under perform a bit but in a down market it should out perform. In an upward market they captured about 70%; in a down market about 20%. Mr. Brown reviewed his quarterly report booklet, which showed 4th quarter total fund return of 3.2%. Secretary D'Ambra suggested converting gains to cash to prevent losses over the next year. Mr. Brown advised they must follow the investment guidelines and their style was to remain fully invested unless directed by the Board to hold more cash. Discussion ensued. Secretary D'Ambra expressed his concern that based on answers to previous questions he would have expected higher returns for the quarter. Mr. Brown responded financials accounted for the lower returns. Secretary D'Ambra requested sold stocks show the price acquired and price sold. Mr. Brown reviewed bond performance and called for questions from the Board. Secretary D'Ambra noted if interest rates went up ARM rates would increase at maturities over the next couple of years; Mr. Brown indicated they were aware that both residential and large commercial real estate loans would need to be refinanced and were watching that closely. Chair Sabin advised the Board had held a special meeting and had discussed the rate of return, and asked for Mr. Brown's input. Mr. Brown recommended lowering the assumed rate of return. Chair Sabin reported that pending Village Council approval the international portion of the portfolio would be increased from 10% to 25% and asked if the portfolio had suffered from the 10% limitation. Mr. Brown responded it had not been a problem. Chair Sabin commented the Regular Quarterly Meeting Minutes Board of Trustees of Public Safety Officers' Pension Trust Fund February 1, 2010 5 investment guidelines required 40% in fixed income-Mr. Brown advised it had been 36.7% at the end of December, 2009. TIPS were discussed-Mr. Brown advised they had experience with TIPS and could purchase them, but they were not in the benchmark. Attorney Jensen noted there was one scrutinized company in the portfolio; Mr. Brown indicated it would be removed. Mr. Brown left at this point in the meeting at 9:45 a.m. 3. Presentation by Monitor Dan Johnson, Bogdahn Consulting, LLC, introduced Tyler Grumbles from their office, and advised there was no cost if the Board wished his firm to attend a workshop meeting at any time. Mr. Johnson distributed a final report for the quarter ending December 31, 2009, and provided an overview. Mr. Johnson discussed the assumed rate of return and indicated although he would be more comfortable with a lower rate than 8%, if it were kept at 8% the Village could still contribute more without being told they had to contribute more. Secretary D'Ambra pointed out the 8% return in the actuarial report was net return; therefore, he felt it would be prudent to lower it to possibly 7-1/2%. Mr. Johnson responded the manager could be terminated to save investment management fees, put the money in an index fund, and get 9.6%, but the hope was that the investment manager had been paid to outperform that index by a margin above their fee. Steve Palmquist made the point that looking just at the expected return was not appropriate when considering the rate of return, but you must also look at the probability of beating the return over an extended period of time, and this fund's net over an extended period of time was well below 50%. The annual rate of return was net of investment expenses (custodian, investment manager, and consultant); other plan expenses were added into the normal cost of the plan each year paid by the Village. Discussion ensued regarding risk/return. Mr. Johnson explained that Mr. Palmquist's job was to make sure the fund had a very prudent actuarial valuation, and agreed that lowering the assumption from 8% to 7.75% or 7.5% made it more realistic to achieve, and there were many ways to look at what the assumption should be. The Board was asked to remember that this rate was a budgetary tool. Mr. Johnson announced Inflation data had been included in the quarterly report, and reviewed the information. The portfolio was reported to be in line with the 60/40 target index and the stocks, bonds, and cash asset classes. There had been $156,000 return on investment-3.09%. Over the past 3 years Rockwood had done well, but over just the past year they had not done so well. This fund had lacked a dedicated component to international, which had helped many other funds. Back in May, the State of Florida had allowed Public Safety funds to increase international investments from 10% to 25%. Mr. Johnson clarified the total portfolio compared the Tequesta Public Regular Quarterly Meeting Minutes Board of Trustees of Public Safety Officers' Pension Trust Fund February 1, 2010 6 Safety Officers against other similar plans of similar moderate risk tolerance; other plans did have an international component, an asset class that had outperformed in 2009, so one reason the total portfolio was in the 94th percentile was this fund did not have that, and if there had been dedicated international equity it could have helped the total portfolio return. Rockwood had been in the 74th percentile for the quarter comparing their stock portfolio to other stock managers, and were 7% behind the benchmark S&P 500 index. Mr. Johnson commented the investment manager needed to exceed the benchmark, essentially they had been paid to be 7% behind for the one-year period. Mr. Johnson advised he would discuss the rationality that drove their poor performance. Secretary D'Ambra expressed concern regarding poor numbers in the past, and commented since the Board now understood their process and what the expectations were, it came down to how well they were executing it. Mr. Johnson concluded the quarterly report, noting Rockwood had overweighted financials and had picked poor stocks in health care. Mr. Johnson distributed the attribution report, and commented on Rockwood's process of waiting for a theme to emerge and be shown as a leader, then move the stocks with positive momentum. A contrarian would have done the opposite, buying stocks that had been beaten up. Over the one-year period those sold off the most bounced back the most, but that was not Rockwood's procedure. Over three years earnings had been -5.22% against the index at -5.6%, and since May 1, 2005 when they began working with this portfolio, 1.7%, index 1.33%. The fixed income portion of the portfolio had done okay and over the one year period had beat the benchmark 5.91 %. Mr. Johnson did not recommend selling bonds to hold cash, because if bond values dropped they still paid the original amount of interest. Secretary D'Ambra suggested holding cash for one year, and possibly earning only 1 %-1-1 /2%, then reinvesting to avoid capital losses. Finance Director Forsythe indicated she was looking to Bogdahn to let the Board know how Rockwood was doing. Mr. Johnson advised it would be putting a lot of responsibility on the board to make a decision such as to sell bonds in order to hold cash in hopes there would be inflation. Secretary D'Ambra felt there was greater risk in not acting and wanted to look at the risk of acting versus not acting. Discussion ensued. Mr. Johnson recommended letting the investment manager make the investment decisions. Attorney Jensen advised the board had hired the investment manager to make those kinds of decisions and if the Board had questions about Rockwood's ability to make decisions going forward, they needed to ask Mr. Johnson to give them other choices for fixed income. Board Member Cooper asked where Rockwood was right now, using a grade of A through F. Mr. Johnson responded on bonds B-, on stocks C-. Board Member Cooper commented over and over they were being told underperformance, and he did not understand the C-. Board Member Young commented he was not seeing significant gains against the index, but losses Regular Quarterly Meeting Minutes Board of Trustees of Public Safety Officers' Pension Trust Fund February 1, 2010 7 against the index were significant. Mr. Johnson discussed data over athree- yeartime frame, explaining how Rockwood could be okay but be graded a C-. Chair Sabin clarified with Mr. Johnson that if there were a dedicated 25% international component, there would be a dedicated international investment manager to handle that. Chair Sabin inquired as to the status of the amendment to be presented to the Village Council and was told if it were approved by Council on first and second readings it would be effective on March 11. Chair Sabin asked if Mr. Johnson had recommendations for dedicated international investment managers to give the Board today. Mr. Johnson advised they were waiting on the ordinance to be passed so that the investment policy could be changed and then they could move forward. Not having an international component did not excuse Rockwood's poor stock and bond performance, and the Board could use Vanguard 500 index fund for free. Mr. Johnson talked about adding more risk to the portfolio and pointed out Rockwood's investments were less risky; however, performance had been poor. Board Member Cooper indicated he was not comfortable with them. Mr. Johnson distributed a 3-page handout review of Rockwood. Bogdahn's research team had reinerated that Rockwood had a thematic opportunistic strategy and ran numbers that confirmed they were really buying on the uptrend and not buying stocks on the downtrend. The market had not been in their favor because they did not buy companies that were sold off the most. Their research department was still comfortable with this strategy for portfolios that could deal with the risk that there might be periods when the market favored more contrarian investors rather than thematic investors, and over longer periods of time they would do better. Bogdahn's research department recommended pairing the thematic strategy with an index fund or other active manager to remove some of the risk. The research team's recommendation was to take 25%-50% of the portfolio and placing it in Vanguard 500 index fund to reduce costs and bring the tracking area closer to the target index. Secretary D'Ambra expressed his concern with staying with a strategy that would trade sideways and not make money and possibly the Board should look at other investment alternatives. Chair Sabin commented by the next meeting there might be a new investment policy that would allow a 25% international component. Mr. Johnson advised he wanted the Board to make a decision they felt Rockwood would do better based on Mr. Brown's information, or if a change was needed. If they underperformed next quarter that would be four quarters of under performance. Chair Sabin asked how to address the international- should they get an investment manager who also dealt in international. Mr. Johnson recommended if the portfolio had a dedicated international component that there be a dedicated international manager. Regular Quarterly Meeting Minutes Board of Trustees of Public Safety Officers' Pension Trust Fund February 1, 2010 8 Mr. Johnson advised the investment policy statement could not be adopted until the Village had approved the pending ordinance. The investment policy was being changed from 60% to the S&P 500 and 40% to Barclays Intermediate Government Credit to 50% domestic equity, 10% international equity, and 40% government credit and TIPS could be a part of the portfolio as well as part of the target index if added. Since 10% of the portfolio was only approximately $500,000, the most effective way of investing that would be with mutual funds, and a handout described options and historical comparisons for that type of investment. Mr. Johnson recommended if the ordinance were adopted that 10% of the portfolio be placed with a dedicated international manager. This would be a good way to add risk to the current portfolio without an additional bill to pay because the cost was imbedded in the mutual fund. He described how active management would be able to choose the most advantageous international investments. Secretary D'Ambra expressed his opinion that the Board should notify Rockwood they were on probation. Mr. Johnson advised that meant to be careful because they might get a termination notice any day, and the quick solution could be to place the funds into the Vanguard 500 mutual fund, which would not cost much. Attorney Jensen advised that formal probation was not necessary for termination. Mr. Johnson advised Rockwood was on his watch list and had been on his personal radar for awhile. Board Member Cooper asked why that had not been communicated to the Board. Mr. Johnson responded their performance had been discussed at length at the last meeting. Board Member Young asked what probation would mean since they would not be changing their strategy, to which Mr. Johnson responded it meant the Board had a lot of concerns and might need to evaluate other options. Secretary D'Ambra commented probation would mean termination was probably likely, and he was not so concerned with their strategy as the execution of their strategy, and talked about placing them on probation and taking some time to review other options. Board Member Cooper commented he could tell Mr. Johnson was not happy to bring this bad news, but felt it should have been brought up long ago, and although it had been discussed previously he had not gotten the feeling that he was getting today. Chair Sabin suggested probation to formalize the feelings of the Board, possibly characterizing what that meant, put words into action by diversifying and leaving the manager in place by utilizing a mutual fund or some other means, or initiate the process through Bogdahn to review proposals from other investment managers. Board Member Giblin favored placing them on probation. Mr. Johnson advised he could bring alternatives to the next meeting and present the different management style-growth, value, etc. Chair Sabin recalled when he had joined the Board there had been a growth manager who did well for several years, but the market had changed so that growth had not been the right strategy in the market at that time, and Rockwood had come in with their strategy which allows them to invest more freely as the market demands. He wanted the Board Regular Quarterly Meeting Minutes .Board of Trustees of Public Safety Officers' Pension Trust Fund February 1, 2010 9 to be aware of that history if they decided to look at other investment managers and know that some were more limited than what they had had. They would want more open selection with the next investment manager, if that route were chosen. Board Member Cooper asked when enough was enough, and suggested placing them on probation now and have Mr. Johnson make a presentation at the May meeting of investment companies comparing their performances to Rockwood. Secretary D'Ambra preferred not to wait until May, but to have a special meeting before then, so the Board would be prepared to act in May. MOTION: Secretary D'Ambra made a motion to place Rockwood Capital Advisors on formal notice they were on probation and instruct Bogdahn Consulting to proceed to look at other investment alternatives and other investment managers, and have amid-quarterly meeting to review those recommendations. Board Member Giblin seconded the motion, which passed by unanimous 5-O vote. Mr. Johnson asked the Board to submit any items they would like him to cover at the next meeting. Mr. Johnson passed out handouts and reviewed the impact of adjustable rate mortgages to the economy in 2010 and 2011 and adjustable rate mortgage resets and recasts, and also an overview of TIPS. Chair Sabin requested that Pension Coordinator McWilliams schedule a meeting after second reading of the ordinance so that in addition to investment management options, alternatives could be discussed in regard to the new investment policy statement. Board Member Cooper asked that Mr. Johnson's presentation include the costs to current clients of each management company presented for plans of similar size to this one. Mr. Grumbles left at this point in the meeting at 11:50 a.m. 4. Presentation of Public Safety Actuarial Valuation Report of 10/1 /09 Steve Palmquist of Gabriel Roeder Smith and Company, noted the Board had already reviewed the 10/1/09 report at a previous meeting. Mr. Palmquist provided information on smoothing which was used to reduce fluctuations in the cost of the plan, and clarified the new funding method would allow gains and losses to be paid off over a fixed 20-year period. Secretary D'Ambra noted there was a minimum amount of contribution, but more could be put in, and asked if the Board wanted to consider lowering the assumed contribution rate from 8% to 7-1/2%. Chair Sabin asked if that could be estimated without going through an Regular Quarterly Meeting Minutes Board of Trustees of Public Safety Officers' Pension Trust Fund February 1, 2010 10 evaluation so that the Board could recommend to the Village that they increase the contribution by a specific amount now since the Board would likely want to lower the rate to 7-1/2% in two years. Mr. Palmquist advised figure would be $80,000 to $90,000. MOTION: Secretary D'Ambra made a motion to make a recommendation to the Village Council to lower the investment return assumption rate to 7-1/2% and recommend the corresponding increase in the contribution rate of 4%. Attorney Jensen clarified the assumption was not actually being changed at this point, the Board wished to notify the Village they were looking to do that for the next valuation, but they wanted Mr. Palmquist to provide them with some calculations so that the Village could be aware of the potential impact on the contribution, and a recommendation that they increase their contribution. Secretary D'Ambra agreed that was the motion. Board Member Young seconded the motion, which carried by unanimous 5-0 vote. It was further clarified that this motion would be a minimum recommendation that the Village consider putting in an additional $80,000 - $90,000 which would be the equivalent of lowering the assumed rate from 8% to 7-1/2%. VI. UNFINISHED BUSINESS 5. Discussion of TIPS -Discussion of updates Chair Sabin announced that this item had been previously covered. 6. Status on amendments to pension plan Attorney Bonni Jensen reported first reading was anticipated for this month and second reading in March on the amendments in the pension plan, and asked for direction as to whether to attend the meeting. Vice Mayor Paterno, who was present in the audience, recommended the Village Manager make that decision. 7. Update regarding IRS Determination Letter Attorney Bonni Jensen reported there were no updates since the special meeting. VII. STANDING REPORTS (INFORMATION ITEMS) Regular Quarterly Meeting Minutes Board of Trustees of Public Safety Officers' Pension Trust Fund February 1, 2010 11 8. New applicants for participation in Pension Plan None 9. Request for withdrawal of contributions (employees terminating employment with Village of Tequesta) -Ratification of withdrawals made since the last meeting on 2 signature basis: None 10. Terminated Employees who have not taken their contributions None 11. Revenue and Expenditure Report There were no questions from the Board regarding the informational items. VIII. PAYMENTS TO BE RATIFIED (PAYMENTS MADE SINCE LAST MEETING) 12. Business Services Connection, Inc. Office Work for weeks ended 10/16/09 through 01/01/10 $ 1,605.60 Hanson, Perry 8~ Jensen, P.A. Services through 11/15/09 2,770.05 Business Services Connection, Inc. Preparation of 11/2109 quarterly meeting minutes 356.80 FPPTA 2010 Dues 600.00 IX. PAYMENTS TO BE REVIEWED AND APPROVED 13. Perry & Jensen, LLC. Services through 12/15/09 269.25 Bogdahn Consulting, LLC Fee for Quarter ending 9/30/09 3,750.00 Regular Quarterly Meeting Minutes • • Board of Trustees of Public Safety Officers' Pension Trust Fund February 1, 2010 12 Rockwood Capital Advisors, LLC Fee for Quarter ending 9/30/09 6,425.22 Gabriel Roeder Smith and Company Actuarial Services thru 11/20/09 7,433.00 Business Services Connection, Inc. Prepare Minutes of Workshop Meeting - 01/22/10 231.92 MOTION: Secretary D'Ambra made a motion to approve the ratified payments and payments for payment as presented. Board Member Giblin seconded the motion, which carried by unanimous 5-0 vote. X. BUDGET REPORT 14. Quarterly Budget Report Expenditures There were no questions from the Board; therefore, the quarterly budget report expenditures were received and filed. XI. NEW BUSINESS 15. Review of Sunshine Law Attorney Bonni Jensen reviewed the sunshine law as it affected the Board of trustees, covering open meetings law, public records law, and financial disclosure. Some highlights of the presentation were a-mail communication was public record, and the first report was covered but responses would need to go through administrative personnel. Meetings must be open to the public except for shade meetings, where attorney-client discussion for strategy or settlement for pending litigation could be discussed. The Board could always email Attorney Jensen, Village staff members and consultants, but not each other. Meeting notices must allow time for those who wished to attend to do so. For special meetings at least 24-hour notice was required. Inspections, meetings at restaurants, facilities that discriminated or restricted access, and out-of-town meetings were discussed. Meetings could be conduced by electronic media, but a quorum must be physically present. Three votes were required of this Board in order to pass a motion. In-depth coverage of the ethics law was included, and fiduciary standards were also explained. 16. IRS Mileage Rate Regular Quarterly Meeting Minutes • •Board of Trustees of Public Safety Officers' Pension Trust Fund February 1, 2010 13 Attorney Bonni Jensen advised the IRS mileage rate was now 50¢ and the supporting material was self explanatory. 17. Discussion of 3~d Party Administrator Pension Coordinator McWilliams explained the Village Manager had given the Village Clerk's office additional duties and had asked Pension Coordinator McWilliams to speak to each of the pension boards about a third party administrator. The time had come where there were going to be some retirees in both plans and some DROP participants. There was a need for an expert in that field, and being Pension Coordinator did not make her an expert, and now might be the time to consider that. Attorney Jensen indicated she thought Pension Coordinator McWilliams was just bringing this up at this point to see if the Board was interested in moving in that direction, and advised there were a few businesses who provided third party administrative services in the State of Florida. There were also some individual people who provided services, but she did not know the extent to which there would be people who were interested in expanding the business they had. Attorney Jansen advised she worked with two companies and several of the funds had individual people who worked for them. She commented this fund was probably not big enough at this point to look for somebody to work with them individually; this fund would not have enough business. Secretary D'Ambra commented the key would be identifying firms that might consider it, their strengths, resources, and experience, and other clients they were working for. Board Member Young asked what process would be used. Attorney Jensen responded it could be advertised in a local publication, in a national publication, and she would send it to those she knew who provided those services here in Florida. Pension Coordinator Lori McWilliams asked if the Board was interested in moving forward with a third party administrator and taking steps to find out the costs associated to do an RFP process. Board Member Cooper requested more information be provided and that this be tabled to the next meeting. Chair Sabin asked that Pension Coordinator McWilliams come back to the meeting with more information-responsibilities and duties, scope of work, and a couple of different individuals and businesses and who they worked with and their costs, as well as other information. Consensus was that with that general outline they would have material for discussion. Pension Coordinator McWilliams commented this had obviously been added onto the agenda at the last minute since the Village Manager had just discussed it with heron Friday. XII. ANY OTHER MATTERS Regular Quarterly Meeting Minutes .Board of Trustees of Public Safety Officers' Pension Trust Fund February 1, 2010 14 Secretary D'Ambra advised he was running for a seat on the Village Council and if elected he would like to continue on the pension board with the Village Council's approval. He considered the role of pension board member and the role of council member as two very distinct functions, but would only pursue holding both offices if the members of this Board felt comfortable with his ability to function independently in both roles and do his best on both. Chair Sabin commented that years ago a member of the Council had been on the Board and it had seemed to work well. Board Member Cooper brought up that there had been a proposal before Council to add approximately $300,000 to the pension fund and expressed concern that if a member of Council were also on the pension Board, that could be perceived as a conflict. Secretary D'Ambra commented he thought he could separate the two functions but looked to the trustees for their input. Board Member Giblin expressed concern that as a Council member he would be looking out for budgetary concerns and as a trustee was supposed to look out for the plan people, and he saw that as a conflict. Attorney Jensen noted this position would be appointed by the Village Council. At this point in the meeting item II. Swearing In of Member Ed Sabin, took place, with Pension Coordinator McWilliams swearing in Ed Sabin. Secretary D'Ambra distributed handouts, which he indicated would be appropriate for the special meeting. XIII. COMMUNICATIONS FROM CITIZENS There was no communication from citizens. XIV. ADJOURNMENT There being no further business, the meeting was adjourned at 12:44 p.m. Respectfully submitted, Betty Laur Recording Secretary