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HomeMy WebLinkAboutDocumentation_Regular_Tab 06A_08/12/1999 F t v� G , ' � � VILLAGE OF TEQUESTA `'� Post Office Box 3273 • 250 Tequesta Drive • Suite 300 � �� Q � Tequesta, Florida 33469-0273 • (561) 575-6200 3 0 � Fax: (5G1) 575-G203 � y � y Co TEQUESTA EMPLOYEES' PENSION TRUST FUND BOARD OF TRUSTEES MEETING APRIL 28, 1999 i. CALL TO ORDSR 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 Wednesday, April 28, 1999. The meeting was called to order at 9:00 A.M. by Chairman Ron T. Mackail. A roll call was taken by Betty Laur, the Recording Secretary. Boardmembers in attendance at the meeting were: Alex Nathanson sitting in. for Peter Allen, William Sharple�s, Chairman Ron T. Mackail; Car�. C. Hansen, Secret�ry 'Tom Bradford, and Boardm��nber Shawn Miller, who arrived at 9:03 a.m.. Also in attendance were Attorney John McCracken sitting in for Village Attorney John C. Randolph, Finance Director Connie Holloman, and Loomis, Sa�rles & Company representative Peter V. Van Beuren. II. APPROV,AL OF AGENDA Attorney McCracken requested addition of discussion of xouse Bill 261 which had been adopted by the Florida legislature and approved by Governor Bush. Boardmember Haasen made a motioa to approve the agenda as ameaded. Baardaiember Sharpless secoaded the motioa. The vote oa the motion was: Roa T. Mackail - for Thomas Bradford - for BOARD OF TRIISTBSS TEQIIESTA 13n�LOYSLS' P�+]'SION TRIIST FUND b�BTING MINUTBS Jaauary 27, 1999 PAGL 2 Alex Nathaason - for Carl C. Haasea - for �illiam Sharpless - for The motioa was therefore passed aad adopted and the Agenda was approved as amended. III. APPROVAL OF MINU'PES A) Tequesta �loyees' Peasioa Trust Fund Baard of Trustees meetiag miautes for January 27, 1999 Boardmember Hansen made a motion to approve the minutes as submitted. Boardmember Sharpless seconded the motion. The vote on the motion was: Roa T. 2�ackaf 1 - for ' Thomas Bradford - for Alex Nathaasoa - for Carl C. 8ansea - for �Pillfam Sharpless - for The motion was therefore passed and adopted and the minutes were approved as submitted. IV. STANDING RSPORTS A) Approval of New Applicaats for Participation fa Plan tJanuary 1999-April 1999)s 1) Neil DiRico, 2/17/99 2) Cynthia Sementelli, 2/22/99 3) Rocco Napoli, 3/31/99 4) Mark Spurgeon, 3/31/99 5) Mark Fives, 4/13/99 BDARD OF TRIISTg$S TEQIIESTA E6�LOYELS' PLNSION TRIIST FUND �$TING MINQTLS Jaauary 27, 1999 PAGL 3 Boardmember Shawn Miller arrived at this point in the meeting at 9:03 a.m. Boardmeanber Bradford made a motioa to approve the new applicauts for participatioa ia the pensioa plaa. Boardmember Sharpless secoaded the motioa. The vote oa the motioa wa�: Roa T. Mackail - for Thomas Bradford - for � Alex Nathaason - €or Carl C. 8ansen - for Shawa Mf.iler - for �Pilliam Sharpless - for The motioa was therefore passed and adopted. 8) Approval of Beaeficiary Chaages (,January 1999 - April 1999) 1) None (No motion necessary} C) Request for �ithdrawal of Coatributioas (employees tarminating employmeat with village (Jaauary 1999 - April� 1999} Name Term. Date Payout Amount Cheryl DiBlasio 1/15/99 $1,406.16 Tracey Friscia iZ/15/98 880.17 Paul Magnano 2/4/99 2,042.50 Robert Smith 2/26/99 8,550.91 Craig Speigelhalter 1/14/99 3,168.11 Boardmember Bradford made a mo�ioa to approve the request for withdrawal of coatributioas for those employees listed Jaauary 1999 through April 1999. Soardmember 8aasea secoaded the motioa. The vote oa the moti,on was: Roa T. �Sackail - for BOARD OF TRIISTSSS TSQUESTA ��LOYLES' PENSION TRIIST FIIND �ETING MIND'P8S April 28, 1999 PAGL 4 Thomas Bradford - for Alex Nathaasoa - far Carl C. 8ansea - for Shawn Miller - for �illiam Sharpless - for The motion was therefore passed and adopted. V. FINANCIAL RBPORTS A) Loomis, Sayles & Company, L.P., Iavestmeat Maaager�a Fiaancial Statement for Quarter Sadiag March 31, 1999 (Peter V. Vaa Beuren, V.P. & Sr. Partxtier) 1) &eview aad Discussioa: Mr. Van Beu.ren presented an Investment Review booklet for the Village of Tequesta Employees' Pension Trust - Fund for the period en�.ing March 31, 1999. Mr. Van Beuren reviewed the report booklet beginning with Section Two, and explained that the mix of investments was shown at 40� for fixed income and 60� tor equities, as voted on by the Board at the last meeting. Mr. Van Beuren explained that 10$ of the 60$ in equities could be placed into foreign securities if so desired b� the money manager. Mr. van Beuren explained there had been a slight upward trend as indicated by the market indices on the following page, and that a more major change had developed in the Dow Jones index, which was comprised of more cyclical companies. Mr. van Beuren explained that the S&P index was moving up at a more gradual pace; that grices were coming down and yields were going up somewhat on 5-year notes and 30-year bonds. Mr. Van Beuren commented that the environment remainecl favorable for investing in financial assets. Fixed incame performance had been neutral during the BOARD OF TRIISTg$S TSQUSSTA �LOYLES' PENSION TRIIST FUND �LTING MINUTLS April 28, 1999 FAGS 5 first quarter. Mr. Van Beuren reported that the total portfolio for the quarter had under performed; however, since inception the overall portfolio exceeded the benchmarks by a wide margin. Mr. Van Beuren explained that the compositian of the portfolio as of 3/31/99 had been 56.6� in ec�u.ities with the balance in �ixed and cash equivalents. Diversification had been accomplished by over weighting consumer, commercial and technical inve�tments and under weighting business and financial areas, utilities, transportation, energy, and basic materials companies. In the fixed income area, maturities had been extended in the hope of capturing incremental performance. Mr. Van Beuren reported that investments had under performed during this past quarter; however, the quality had been maintained per the portfolio guidelines. Approximately $13,000 had gone out in March and $8,809 had been'added during March, as participants moved in and out of the plan. Mr. van Beuren referred to Section 4 in the report, and commented that the economic picture for the first quarter of 1999 remained the same as in January, i999, with interest rate structure neutral, inflation subdued, and very strong earnings reported. Health care areas had performed well, and the picture remained good for the near future. The GDP was favorable for 1999, and the CPI did not ].00k like it would affect financial assets. Mr. Van Beuren explained that his company had been investing in a way to capture stronger areas of the economy by under weighting or over weightin,g certain economic sectors. Mr. Van Beuren referred to Section 5 of the report, and explained that Rite Aid stock had been sold at a loss. An article in the Wall S�reet Journal had BOARD OF TRIISTg$S TBQIIESTA ��LOYELS' PENSION TRIIST FUND �ISETING MINUTBS April 28, 1999 PAGT 6 reported conflicts of interest between the owners; however, Loomis Sayles had not sold at that point because that should not have affected earnings. Subsequently, lower earnings were reported due to expenses relative to opening and �Iosing stores and too much inventory in closing stores, which should have been better controlled by the company. The stock price dropped, aMd Loomis Sayles sold at a loss. Lucent Technologies had also been sold, due to concern that recent earnings reports showed gain� from investments rather than operations, and that stock was sold at a gain. Boardmember Hansen questioned whether Mr. Van Beuren considered the number of investments in the portfolio to be the right amount for a portfolio of this size. Mr. van Beuren responded that more names would be added as the portfolio amount grew, and that an increase from the present $600,000 + to $2 million - would only add 3-4 r�ore names. Chair Mackail questioned how a situation such as had happened with the Rite Aid stock was monitored by Loamis Sayles. Mr. Van Beuren responded that it had turned out to be bad to hold the stock after the articl.e in the Wall Street Journal; however, there had been no way to know that at the time because it had not been expected that wouZd trigger lower earnings. In response to a question from Boardmembe� Sharpless, Mr. van Beuren explained that increasing volatility was developing in �ome internet stocks; with some earning good incomes and others not earning anything at all. Investments were only considered in those internet companies where price earnings ratio could be correlated to growth ratio. Mr. Van Beuren commented that some of these companies might not be showing earnings because hardware and software purchases were being deferred because of the Y2K problem. Mr. Van Beuren explained that Loomis Sayles BOARD OF TRIISTg$S TLQUESTA �bIl�LOYLLS' PENSION TRIIST FUND �STING MINUTgS April 28, 1999 PAGL 7 looked at historical and future earnings growth and stocks not showing earnings were in.appropriate for investment for a pension fund, although individuals might like to try such an investment. Boardmember Hansea made a motioa to approve the report by Pet�r Vaa Beurea for the geriod eadiag March 31, 1999. Boardmember Sharpless secoaded the motioa. The vote oa the motioa was: xoa T. Mackail - for Thomas Bradford - for Alex Nathaasoa - for Carl C. Haasen - for Shawa Miller - for �illiam Shar�less - for The motiaa was therefore passed aad adopted. B) Prudeatial Securities, Iac., Custodial Broker, Accouat Statements tJaauary - March, 1999) soardmember sradford made a motioa to approve the Prudeatial Securities, =ac., accouat statemeats for the period endfag March 31, 1999. Boardmember 8ansea seconded the motion. The vote on the motioa was: Raa T. Mackail - for Thomas Bradford - for Alex Nathaasoa - for Carl C. Hansea - for Shawn Miller - for William Sharpless - for The motion was therefore passed and adopted. BOARD OF TRIISTg$S TEQUESTA �LOYLSS' PENSION TRIIST FIIND �$TING MINUTSS April 28, 1999 PAGE 8 VI. PAYl�NTS TO B� RBVI�D AND APPROVED A) 10/20/98 Gabriel, Roeder, Smith & Co. -$525 (Monthly Retainer - October) 12/4/98 Gabriel, Roeder, Smith & Co. -$525 (MOnthly Retainer - November) 1/14/99 Gabriel., Roeder, Smith & Co. -$525 (MOnthly Retainer - January) 2/18{99 Gabriel, Roeder, Smith & Co. -$525 (Monthly Retainer - February) 3/10/99 Gabriel, Roeder, Smith & Co. -$525 (Monthly Retainer - March) 2j17/99 Jones, Foster, Johnston & Stubbs -$335 fLegaZ Services) 3/9/99 Jones, Foster, Johnston & Stubbs -$160 (Legal Services} 2/25/99 Loomis Sayles & Co. - $2,523.95 (Management Services) Boardmember Haasen made a�tion to approve the paymeats as showa on the ageada. Boardmember Bradford seconded the motioa. The vote an the motioa was: Roa T. �a,ckail - for Thomas Bradford - for Alex Nathaason - for Carl C. $aasea - for Shawa �iller - for �illiam Sharpless - for The motion was therefore passed and adopted. v== ANY OTHSR �SATTSRS Attorney McCracken explained that House Bill 261 had been passed by the Florida legislature and vetoed by Governor Chiles, and that Jeb Bush had promised during his campaign BOARD 4F TRIISTS$S TLQIIESTA ��LOYEES' P�TSION TRUST FUND D�ETING MINUTTS April 28, 1999 PAGS 9 that he would not veto it if passed again after his election. Subsequently, the legislature had passed the bi1Z a second time and Go�rernor Bush had signed it into law. Attorney McCracken explained that because of the volume of material contained in the statute, he had not yet been able to review it sufficiently to advise the Village regarding how it would affect the pension. fund. Attorney McCraclten read aloud a portion of the statute which he described as being the most controversial sectian affecting municipalities, and explained that the intent of the statute was to establish minimum standards for premium tax funds from insurance for police and fire fighters. This statute would modify the former Chapter 1?5 for fire fighters and Chapter 185 for police officers to be appZicable to any pension fund using these funds. Attorney McCracken advised that his lara firm would be working on this matter for the next several months, but it was his belief that sometime during the summer the Village woulcl need to hold an election of the fire fighters and police officers so that they could determine whether they wanted a separate board from the present board or two separate boards from the present board. Attorn,ey McCracken explained. that it was possible �he �Tillage could end up with two or three pension boards, and the other boards would have authority similar to the present board. Chair Mackail commented the cost would be quite expensive in proportion to th.e funds collected. Attorney McCracken commented that he believed there was an option for a rnunicipality to ogt out of the ta�ing pravisions and if they did so the new boards would not go inta effect. Attorney McCracken explained that the tax was now 1.6� on homeowner and fire policies imposed on residents of the community who had those types of policies, and that a portion of that money came back to the Village. Attorney McCracken. commented that the village Council might want to look at whether it was a benefit to tax the residents. Attorney McCracken explained that police and fire unions had been pressing for this legislation for some time. In response to Boardmember Hansen�s question of whether there BOARD OF TRIISTEBS T}3QIIESTA ��LOY}3ES' P}3NSIOPT TRUST FUND �LTING MINUTLS Apri1 28, 1999 PAGS 14 were any pros to this statute, Attorney McCracken commented that the fire fighters and police officers would have more control over their own funds. Attorney McCracken advised that literature was expected on this issue from Florida League of Cities, the Attorney General�s office, and the unions, which he would review and repart back to the village. VIII. ADJOURI�NT Boardmember Bradford a motioa to adjonra the meetiag. Boardmember Hanse�a secoaded the motioa. The vote on the motioa was: Roa T. Mackail - for Thomas Bradford - for Alex Nathaasoa - fvr Carl C. 8aasea - for Sha�vn Mi.11er - for william Sharpless - for The motioa was therefore passed aad adopted, aad the meeting was ad�ouraed at 9:43 A.M. Respectfully submitted, ��� � Bett� Laur Recording Secretarg BOARD OF TRIIST$$S TEQQESTA ��LOYLLS' PBNSTON TRUST FUND �ETING MINOT]3S April 28, 1999 PAGS 11 ATTEST: Joann Manganiello Village Clerk DATF APPROVED: