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HomeMy WebLinkAboutDocumentation_Regular_Tab 06E_06/10/2004 ` /� � JOINT MEETING OF TEQUESTA GENERAL EMPLOYEES PENSION TRUST FUND AND TEQUESTA PUBLIC SAFETY OFFICERS PENSION TRUST FUND BOARDS OF TRUSTEES MARCH 2, 2004 I. CALL TO ORDER AND ROLL CALL The Teyuesta General Employees' Pension Trust Fund Board of Trustees and the Tequesta Public Safety Officers' Pension Trust Fund Board of Trustees held a joint meeting at the Emergency Operations Center of the Public Safety Facility on March 2, 2004. The meeting was called to order at 10:01 a.m. A roll call was taken by Roberta Russo, Acting Recording Secretary. Boardmembers in attendance at the meeting were: Public Safety Officers' Board--Chair James Weinand, Secretary Peter Lucia, Boardmember Ed Sabin, and Vice Chair Geraldine Genco who arrived at 10:10 a.m.; General Employees' Board--Chair Jeff Newell, Vice Chair Carl Hansen, Boardmember Thomas Paterno, and Boardmember Greg Corbitt who arrived at 10:06 a.m.. Boardmember Robert Garlo was absent from fhe meeting. Also in attendance were staff memhers Dan Gallagher and Terri Katz, and Attorney Bonni Jensen. II. APPROVAL OF AGENDA MOTION: Chair Jeff Neweil made a motion to approve the agenda revised to close the joint portion of the meeting after item IV regarding the monitoring service so that the members of the General Employees' Pension Board could leave if they desired, since the remaining portion of the agenda was oniy items to be considered by the Public Safety O.fficers' Board. Vice Chair Hansen seconded the motion, which carried by unanimous vote. III. APPROVAL OF MINUTES BOARD OF TRUSTEES TEQUESTA GENERAL EMI'LOYEES' PENSION TRUST FUND MEETING MINUTES March 2, 2004 PAGE 2 --------------------------------------------------------------------------------- MOTION: Boardmember Sabin made a motion to approve the minutes of the February 10, 2004 meeting of the Public SaFety Officers' Pension Board as submitted. Boardmember Lucia seconded the motion, which carried by unanimous vote. IV. UNFINISHED BUSINESS Discussion and short listing of companies who responded to the RFP for monitoring services Chair Newell asked for an explanation of soft dollars and hard dollars. Attorney Jensen responded that hard dollars were payments in cash; soft dollars were use of appropriate services, and Smith Barney was the only bidder who offered appropriate services. Therefore, if Smith Barney was chosen they could be chosen also as the broker for securities transactions and they would offset for costs for their services, and if $22,500 worth of trades were made through them then their monitoring services would be free. That meant they would either charge $15,000 in hard fees or if $22,500 were made in soft dollars that would totally offset the fee. It could also be a combination by using soft dollars to reduce the hard costs. Discussion ensued. Attorney Jensen advised that the pension funds were required by Florida Statute to have at least a tri-annual monitoring report card on the investment manager. Attorney Jensen also advised that it would be financially advantageous for both boards to choose the same monitor. Mr. Gallagher noted that with only $375,000 in the General Fund, most of the firms who had responded to the RFP were more than willing to curtail charging a fee to that fund. Bogdan was willing to reduce their fee to $2,000 for the first year for the smaller plan, assuming both boards met on the same day. Attorney Jensen explained the process to be followed in choosing a monitoring firm, discussed the information provided by each firm who had made a proposal, and stated the requirements that the chosen firm must follow. Attorney Jensen provided a spreadsheet of monitor response comparison for the four firms who had responded: Bogdan Consulting, LLC, Burgess Chambers & Associates, Inc., GRS Asset Consulting Group, and Smith Barney. The information provided for each company included location, generat description of business, personnel, other clients, universe for evaluation, fiduciary, understanding of work to be performed, relationship to Northstar, litigation, report, and fees. Attorney Jensen reviewed the spreadsheet information for each firm. BOARD OF TRUSTEES TEQUESTA GENERAL EMPLOYEES' PENSION TRUST FUND MEETING MINUTES March 2, 2004 PAGE 3 --------------------------------------------------------------------------------- Vice Chair Hansen asked if two firms were going to be picked today for further evaluation or if only one was to be picked. Chair Newell suggested individual votes for each company and if the vote was against, that company would be dropped. Chair Weinand recommended a short list of two firms. Discussion ensued. Vice Chair Genco discussed fees being provided in soft dollar, to which Attorney Jensen responded that Bogdan Consulting , Burgess Chambers and GRS Asset Consulting would not accept a soft dollar payment but would go through a directed brokerage and those dollars could be used against their fees. It was explained that soft dollars were based on commissions (the transaction cost for executing a trade). A transaction fee of $50, for example, did not include soft dollars. Soft dollars would be rebated to their customer when the brokerage firm traded securities that were in their own inventory. Vice Chair Genco explained that she had been involved with litigation against Smith Barney for the last two years and they had major client issues; therefore, it was her personal opinion that they should not be chosen. During further discussion of soft dollars, Vice Chair Genco reported that Northstar did have the benefit of soft dollars through Prudential and they had been able to obtain a very good transaction fee. Boardmember Lucia pointed out that Smith Barney had submitted two proposals—one for monitoring and one for investment services, which would possibly be a conflict of interest because the monitor was supposed to be reporting on the investment manager. Chair Weinand agreed the two should be completely independent, and expressed concern that GRS was alreading doing actuarial services. Discussion ensued. Vice Chair Genco and Chair Weinand expressed the opinion that the actuarial report was hard to read, but that was a separate issue. Chair Newell indicated he would not want the same firm doing monitoring and actuarial services. Consensus was to eliminate both Smith Barney and GRS Asset Consulting Group. A copy of the Bogdan Consulting proposal was provided to Vice Chair Genco. Vice Chair Hansen indicated he would like Burgess Chambers & Associates to remain under consideration. Mr. Paterno expressed some concern that one of the Bogdan Consultin� representatives did not have the amount of experience that Burgess Chamb�rs had. Mr: Corbitt commented Burgess Chambers' fees seemed to include more services than offered by Bodgan. Chair Newell commented that during the presentations, he would ask how fees would be charged since the General Employees' fund was so much smaller. During discussion, it was pointed out the fees should be based on the assets. Chair Weinand asked if the monitor had to attend quarterly meetings. Attorney Jensen BOARD OF TRUSTEES TEQUESTA GENERAL EMPLOYEES' PENSION TRUST FUND MEETING MINUTES March 2, 2004 � PAGE 4 --------------------------------------------------------------------------------- indicated that was the proposal. Chair Weinand expressed his opinion that was overkill and it could be done annually or semiannually. Vice Chair Genco agreed. Mr. Paterno expressed his opinion that each board should choose separately what managers they wanted to use, and asked what would happen if after the presentations each board chose a different firm as monitor. Attorney Jensen explained that item was negotiable with both of these firms, and that it was hard to get a manager who would take a fund as small as the General Employees. Vice Chair Genco noted that right now the General Employees fund was able to get a higher level of investment management services by riding on the coat tails of the Public Safety Fund, and General could never afford an investment manager like Northstar on their own. Attorney Jensen explained that one of the things the monitor was asked was to consider the changing needs of the General Fund in regard to their investment manager as they grew. Attorney Jensen clarified that legally the investment manager did not have to be the same firm for both funds. Mr. Paterno indicated he did not want the General fund to just go along with Public Safety because they had more money, with General possibly not living up to their own fiduciary duty. Attorney Jensen indicated she believed either of the monitoring firms would work with the General Fund, and that would be a good question to ask. Mr. Paterno commented both boards might end up picking the same firm. Another questions that might be asked were what was considered other research,and to request Burgess Chambers provide a complete list of clients with phone numbers. Mr. Gallagher was requested to check five randomly selected clients with under $10 million in assets. Consensus was to have a joint meeting for the presentations, with each board voting independently on their selection. MOTION Chair Newell made a motion for the General Employees' Pension Fund to have Bogdan and Burgess Chambers come to make presentations to the board. Boardmember Paterno seconded the motion, which carried by unanimous 5-0 vote. MOTION Boardmember Sabin made a motion for the Public Safety Officers' Pension Fund to have Bogdan and Burgess Chambers come to make presentations to the board. Vice Chair Genco seconded the motion, which carried by unanimous 4-0 vote. Chair Newell announced that he had previously requested the joint portion of the meeting be adjourned to allow the General Employees' Board to leave and that the meeting be I 3 t' BOARD OF TRUSTEES TEQUESTA GENERAL EMPLOYEES' PENSION TRUST FUND MEETING MINUTES March 2, 2004 PAGE 5 --------------------------------------------------------------------------------- reconvened for Public Safety Officers' Board. Discussion ensued regarding the date of the joint meeting to hear the presentations. Vice Chair Genco requested that everyone be contacted by e-mail with the date. The joint meeting was adjourned at 11:00 a.m. The Public Safety Officers' Pension Trust Fund Board of Trustees reconvened at 11:06 a.m. with the following Boardmembers present: Chair 3ames Weinand, Vice Chair Geraldine Genco, Boardmember Edward Sabin, and Secretary Peter Lucia. Also in attendance were Attorney Bonni Jensen and staff inembers Dan Gallagher and Terri Katz. V. PAYMENTS TO BE REVIEWED AND APPROVED MOTION Vice Chair Genco made a motion to approve payment of $203.72 to Business Services Connection for attendance at the board meeting held on February 10, 2004 and preparation of minutes. Boardmember Sabin seconded the motion, which carried by unanimous 4-0 vote. VI. CONSIDERATION OF SENDING A MEMBER OF THE BOARD TO CONFERENCE Chair Weinand advised that the Board had discussed sending a member to the conference in Tallahassee but no vote had been taken. MOTION Boardmember Sabin made a motion to send a member of the Board to the conference in Tallahassee. Vice Chair Genco seconded the motion, which carried by unanimous 4-0 vote. VII. ANY OTHER MATTERS Vice Chair Genco inquired when the policy for expenses would be considered. Chair Weinand advised that would be considered at the next quarterly meeting. Vice Chair BOARD OF TRUSTEES TEQUESTA GENERAL EMPL�YEES' PENSION TRUST FUND MEETING MINUTES March 2, 2004 PAGE 6 --------------------------------------------------------------------------------- Genco was against substitution allowing someone to stay with their family and still get a per diem amount for their expenses. Attorney Jensen explained that the policy had been taken from state and federal laws, and was reimbursement for expenses or one could choose in lieu of that to have a per diem amount which would include lodging, food, and miscellaneous expenses. Discussion ensued regarding IRS guidelines, a$50 per diem, and the proposed increase to $30 a day for meals. Consensus was to use the IRS reimbursement of 37 cents per mile for mileage reimbursement. Mr. Lucia was advised to follow the draft policy when he turned in his expenses, and that when passed, the policy would be retroactive. Consensus was to go with $30 a day for meals rather than a$50 per diem which would include lodging. VIII. COMMUNICATIONS FROM CITIZENS There were no communications from citizens. IX ADJOURNMENT Boardmember Sabin made a motion to adjourn, seconded by Vice Chair Genco, and unanimously approved. Therefore, the meeting was adjourned at 11:16 a.m. Respectfully submitted, u-�.,(,'�';c, -. ==�1.�-� �:� ��� � � Betty Laur Recording Secretary Date Approved