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HomeMy WebLinkAboutDocumentation_Regular_Tab 06C_06/10/2004 C TEQUESTA GENERAL EMPLOYEES' PENSION TRUST FUND BOARD OF TRUSTEES MEETING FEBRUARY 19, 2004 I. CALL TO ORDER AND ROLL CALL The Tequesta General Employees' Pension Trust Fund Board of Trustees held a meeting at the Tequesta Recreation Center, 399 Seabrook Road, Tequesta, Florida, on February 19, 2404. The meeting was called to order at 1:00 p.m.. A roll call was taken by Betty Laur, Recording Secretary. Boardmembers in attendance at the meeting were: Chair Jeff Newell, Vice Chair Carl Hansen, Boardmember Thomas Paterno, and Boardmember Greg Corbitt. Also in attendance were staff inember Dan Gallagher and Assistant Village � Manager Robert Garlo. II. APPROVAL OF AGENDA MOTION: Vice Chair Hansen made a motion to approve the agenda as submitted. Boardmember Corbitt seconded the motion, which carried by unanimous 4-0 vote. III. ACCEPT A NEW EMPLOYEE REPRESENTATIVE AND VOTE ON A FIFTH MEMBER OF THE BOARD Boardmember Corbitt, who held the position as fifth member of the board appointed by the other four members, formally resigned from the Board. MOTION Boardmember Paterno made a motion to accept the resignation from Greg Corbitt to resign the position of Sth member of the Board. Vice Chair Hansen seconded the motion, which carried by unanimous vote. Chair Newell called for a motion to appoint Greg Corbitt as employee representative, having been unanimously elected by the members of the General Employees' Pension Fund. MOTION . �_�r BOARD OF TRUSTEES TEQUESTA GENERAL EMPLOYEES' PENSION TRUST FUND MEET�IVG MINUTES February 19, 2004 PAGE 2 --------------------------------------------------------------------------------- Vice Chair Hansen made a motion to appoint Greg Corbitt as an Employee representative to the General Employees' Pension Trust Board of Trustees. Boardmember Paterno seconded the motion, which carried by unanimous vote. MOTION Vice Chair Hansen made a motion to appoint Robert Garlo as the fifth member of the General Employees' Pension Trust Board of Trustees. Boardmember Paterno seconded the motion, which carried by unanimous vote. Vice Chair Hansen expressed appreciation to Mr. Garlo for serving on this Board and welcomed him on behalf of the Board. IV. DETERMINATION OF WHICH MEMBER TO SEND TO SEMINAR Boardmember Paterno asked if more than one member could attend at the same time. Boardmember Garlo suggested it would be more cost effective to send two members. Boardmember Paterno stated he was in favor of sending all three members who had not attended because it would allow them to do a better job and would only benefit the Board, and the cost was little compared to what could be lost by not educating the members and making poor decision. MOTION Boardmember Paterno made a motion to approve sending Boardmembers Garlo, Hansen, and Corbitt to the next trustee school available either through the Police association or Florida Pension Public Trustee Association. Vice Chair Hansen respectfully declined, indicating he had attended several conferences as a Village Council Member and felt the younger members should attend. Vice Chair Hansen stated he appreciated the confidence of the Board in him, since to attend did cost money. Mr. Garlo commented that the Public Safety seminar coming up in March in Tallahassee was less expensive, and that was the one he would like to attend. Mr. Gallagher commented the next FPPTA conference would be in June. Mr. Paterno commented there was a conference in Naples before that but he did not know if there would be a trustee school offered then. Mr. Corbitt indicated it would be more convenient for him to attend during the summer. Motion failed for lack of a second. Consensus was to authorize Mr. Garlo to attend the March seminar in Tallahassee, and to authorize Mr. Corbitt to attend in March if possible. MOTION Boardmember Paterno made a motion to authorize Mr. Garlo to attend the BOARD OF TRUSTEES TEQUESTA GENERAL EMPLOYEES' PENSION TRUST FUND MEETING MINUTES February 19, 2004 PAGE 3 --------------------------------------------------------------------------------- conference March 22/23, 2004 in Tallahassee, and to authorize Mr. Corbitt to also attend on those dates if he can work out his schedule or if not this will be brought up at a later date. Vice Chair Hansen seconded the motion, which carried by unanimous 5-0 vote. Mr. Gallagher advised that he had the seminar dates for FPPTA for the whole year. Boardmember Paterno advised that the schedule could be obtained on the internet at fppta.org. V. CONSIDERATION OF ATTENDING JOINT MEETING WITH PUBLIC SAFETY OFFICERS PENSION BOARD ON TUESDAY, MARCH 2, 2004 AT 10:00 A.M. TO ESTABLISH A SHORT LIST OF MONITORING COMPANIES RESPONDING TO RFP Vice Chair Hansen confirmed with Chair Newell that at the March 2, 2004 a short list of monitoring firms would be established and a firm would not be selected that day. It was also confirmed that the purpose of the meeting would be to establish the short list and there would only be a couple of other items on the agenda but nothing that would take any time. Vice Chair Hansen asked if the monitoring company who was selected would send a report of their findings or report at a meeting and tell the Board if Northstar was doing a proper job. Mr. Gallagher responded the monitor would provide a report as to the competency and activities of Northstar, and at that point the Board could determine if they wanted to stay with Northstar. The monitor would also provide a list from which the Board could choose if they wanted to pick a new investment manager. The monitoring firm would charge by the hour or a flat fee, and by piggybacking with Public Safety it would be cheaper for this fund. Mr. Gallagher commented three firms had responded to the RFP—Merrill Lynch, Burgess Chambers, and GRS who currently provided actuarial services to this fund. Boardmember Garlo commented the Public Safety Board was required by law to have monitoring and asked if it was voluntary for this board to do so. Mr. Gallagher responded the plan required monitoring every quarter. The legal requirement for Public Safety was once every three years but their plan also called for quarterly monitoring. Boardmember Paterno questioned whether GRS would have a conflict of interest since they also did the actuarial studies, to which Mr. Gallagher responded they had stated they would not have a conflict of interest—they had different people performing the separate services. BOARD OF TRUSTEES TEQUESTA GENERAL EMI'LOYEES' PENSION TRUST FUND MEETING MINUTES February 19, 2004 PAGE 4 --------------------------------------------------------------------------------- MOTION Vice Chair Hansen made a motion to approve attending a joint meeting on March 2, 2004 at 10:00 a.m. with the Public Safety Officers' Pension Board for the purpose of establishing a short list of monitoring companies who had responded to the RFP. Boardmember Corbitt seconded the motion, which carried by unanimous 5-0 vote. VI. ANY OTHER MATTERS Chair Newell welcomed Boardmember Garlo to the board. It was confirmed in response to a question from Vice Chair Hansen that Northstar, formerly Loomis and Sayles, had been the investment manager since inception of the pension fund. Mr. Garlo announced that Recording Secretary Betty Laur was going to be handling the meeting agendas as well as the minutes and would also bullet what had transpired at each meeting in a systematic list of what needed to get done, to avoid what had happened at the last meeting insofar as items not done timely.. She would also be the liaison between the Board and the Finance Department to see that things got done on time and provide an organized approach. Mr. Newell reported he had asked his brother who was in the investment business to look at Northstar's performance, and he had indicated they were very conservative and from a performance point of view below average. Chair Newell commented that was why he felt the Board should look at that, and if Northstar was found really to be perfortning below average some changes needed to be made. Chair Newell reported he had been on this Board two years and he was not very happy with the returns. It was pointed out by Boardmember Paterno that Northstar had just started handling investments for this fund 2-1/2 months ago, and could not be penalized for the last two years. Chair Newell agreed, but commented he wanted to make sure the Board was getting the best that was available, and the only way to know that was to have a monitor for the investments. Mr. Gallagher reported when he had told Mr. West of Burgess Chambers that Northstar was doing the investments, Mr. West had immediately responded that Northstar was very conservative. Chair Newell commented the Board must decide if a very conservative approach was best for this fund, and indicated he was suspicious the returns were below average and needed to be better. Boardmember Paterno agreed, but commented it was better than before, and that this fund should probably be in small caps, large caps, and diversify the stock almost like a Merrill Lynch that would let the fund put money in different funds; however, that might not be possible without going with the Public Safety Officers' BOARD OF TRUSTEES TEQUESTA GENERAL EMI'LOYEES' PENSION TRUST FUND MEETING MINUTES February 19, 2004 PAGE 5 --------------------------------------------------------------------------------- fund since this fund was so small. Mr. Gallagher read excerpts regaxding small value funds from an internet article on Morning Star which had returned 42% in last year's rally and overall gained 15% a year since 1995, Mr. Gallagher agreed there was a need to invest in a better mix of small, medium, and large cap companies. Boardmember Paterno advised if money was spread over different sectors the risk would reduce with higher return, and diversification needed to be done to have lower risk with highest potential return, and smooth out the valleys and peaks. Chair Newell commented that the goal was to find a balance as things rose and fell. Mr. Gallagher commented that Peter Van Beuren had advised that Northstar's philosophy was large caps and a very conservative approach, and indicated if you wanted to change that philosophy, Northstar was not the right company. Vice Chair Hansen asked if the first monitoring report would address whether the investments had been too conservative. Mr. Gallagher responded that it would and would also give a list of names of other companies if the Board wanted to change. Vice Chair Hansen noted the Board should wait to make a decision after the first monitoring report was received. Mr. Gallagher advised that the Public Safety Officers' Board had made that same decision. Boardmember Paterno suggested having more than one investment manager, with Northstar managing large caps, and having one manager for bonds, one for value, one for growth and possibly a foreign manager Chair Newell commented that seemed to be a successful way of doing it. Boardmember Paterno commented on the possibility of diversifying the 60% in stocks into four equal quarters, and pick the area for each upon advice from the monitor. Chair Newell commented this would be the first monitoring since inception. Mr. Paterno commented although not required by law for this board, without a monitoring service this Board might not be living up to their fiduciary responsibility, and it was written into the plan that there should be a monitor. Chair Newell commented he was pleased with the direction taken by the Board, and they were performing their fiduciary responsibility well. Boardmember Paterno inquired when re-doing the actuarial study would be brought up. Mr. Gallagher commented he had called Mr. Palmquist to get cost to update the actuarial study and statements to each employee regarding their contributions into the plan and their benefits. Mr. Gallagher indicated he would hopefully have the cost figures by the next meeting. Mr. Paterno commented the Village needed to put in their contribution to make up the shortfall, since not much money was made last year. Mr. Gallagher noted there should be some type of report on an annual basis to see what the liability of the Village would be in order to fund the pension plan if it required funding. Boardmember Paterno expressed his opinion the Village would be better off funding it on a yearly basis instead of putting it off. Mr. Gallagher commented if it was done every two years, it was five months into the next year before the actuarial report was received and that made it a good 2-1/2 years before the figures were known which he did not believe was appropriate. BOARD OF TRUSTEES TEQUESTA GENERAL EMPLOYEES' PENSION TRUST FUND MEETING MINUTES February 19, 2004 PAGE 6 -------------------------------------------------------------------------------- VII. COMMUNICATIONS FROM CITIZENS There were no comments from citizens. VIII. ADJOURNMENT There being no further business, upon motion by Boardmember Corbitt, seconded by Boardmember Paterno, and unanimously carried, the meeting was adjourned. Respectfully submitted, Betty Laur Recording Secretary Date Approved