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HomeMy WebLinkAboutDocumentation_Regular_Tab 07D_05/13/1999 i 1' • J � I ' VILLAGE OF TEQUESTA U . � Post Oflice Box 3273 • 250 Tequesta Drive • Suite 300 9 �"� Tequesta, Florida 33469-0273 • (561) 575-6200 s � t Fa�c: (561) 575-6203 V 0 TEQUESTA EMPLOYEES' PENSION TRUST FUND BOARD QF TRUSTEES MEETING JANUARY 27, 1999 I. CALL TO ORDLR AND ROLL CALL The Teques�a gnployees' Pension Trust Fund Board of Trustees held a regularly scheduied meeting at the Village Hall, 357 Tequesta Drive, Tequesta, Florida, an Wednesday, January 27, 1999. The meeting was. called to order at 9:00 A.M. by Chairman Rori T. Mackail. A roll call was taken by Betty Laur, the Recording Secretary. Boardmembers in attendance at the meeting were: i�Tilliam Sharpless, Chairman Ron T. Mackail, Carl C. Hansen, and Secretary Tom Bradford. Also in attendance were Attorney John MeCracken sitting in for Village Attorney John C. Randfllph, Finance Direc�or Connie Holloman, and Loomis, Sayles & Company representative Peter V. Van Beuren. Boardmembers Cheryl De�lasio and Shawn Miller were absent from the meeting. Peter Alien, who had been on an emergency call, arrived at 10:05 A.M. II. APPROfTAL OF AG]3NUA Boaxdmember Bradford made a�tioa to approve the ageada as submitted. Boardmember Saasen. seconded the motion. The vote oa the motfaa aras: Roa T. Mackail - for Thomas Bradford - for Carl C. Haasea - for �Pilltam Sharpless - for � . 80ARD OF TRIISTELS TS�t'3�STA ��LOYELS' P�iSION TRUST FtJND MEI3TING MINOTES Jaauary 27, 1999 PAGS 2 The matioa was therefore passed aad adopted aad the Agenda was approved as svbmitted. III. APPBOVAL OF MINO'r8S A) Tequesta Smgloyees• Pensioa Trust Fuad Board of Trustees meetiag minutes for October 28, 1998, 1998 Boardmember Bradford made a motion to approve the minutes as submitted. Boardmember Hansen seconded the motion. The vote on the motian was: iton T. Mackail - for Thomoas 8radford - for Carl C. Sansea - for �Pilliam Sharpless - for The motion was therefore passed and adopted and the minutes were approved as submitted. IV. STANDING RSPORTS A) Approval of New AppZicants for Particfgatioa ia Plaa (Octobe� 1998-Jaauary 1999): 1} Noel Hamzik, 11/9/98 2) Kara Irwin, 11/3A/98 3) James Peters, 12/22/98 ` 4} Ricki Nix, I/3i99 5) Andrew Terwilliger, ijii/99 B) Approval of Beaeficiary Changes (Ootober 1998 - Jaauary 1999) 1) None � r BOARD OF TRIISTBLS TSQIIBSTA �LOY88S' P�iSION TRQST FUND MRSTING MINOTES Jaauary 26, 1999 PAGg 3 Boardmeaiber Bradford made a motfon to approve the aew applicaats for partfcipatioa fa the peasion plan. Soardmember Sharpless 8econded the motion. The vote oa the matior,�, was: Roa T. Mackail - for Thomas Bradford - for Carl C. Saaaea - for �illiam Sharpless - for The motfoa was therefore passed aaad adopted. C) Request for �ithdraaial af Contrfbutioas tea�ployees termfaatiag employmeat arith viilage (October 1998 - January 1999) Name Term. Date Payout Amount Shawn Thurman 11/1/98 $6 Boardmember Sansea made a motioa to agprove the request for �ithdrawal of cflatribntions for those empZoyees listed October 1998 through Jaauary 1999. Boardmember Sharplesg secoaded the motion. The vote oa the motion was: Roa T. b�ackail - for � Thamas Ssadford - for Carl C. 8aasea - for �illiam Sharpless - for The motioa was therefore passed aad adopted. V . FINANCIAL RI�PORTS A) LoomiB, Sayles � C0004pauy, L. P. ,=avestment �aaager� s Financfai 3tatemeat for Quarter Faadiag December 31, 1998 tPeter V. Van Beurea, V.P. & Sr. Partner) r BQARD OF TRIISTL$S T]3QIISSTA Bb+�LOYSSS' PEI+TSION TRIIST FUND b�ETING M�NOTLS Jaauary 26, 1999 PAG$ 4 1) Revievr and Discussioa: Mr. Van Beuren presented an Investment Review booklet for the Village of Tequesta Employees� Pension Trust Fund for the period ending December 31, 1998. Mr. Van Beuren reviewed the report booklet beginning with Section Two, and explained that the mix was still at 50�r for fixed income and 50� for equities. Mr. van Beuren explained that during 1998 interest rates had trended downward which facilitated higher stock market valuations. Total returns year to year on both stock and bond indexes had been quite positive. ` The results for the year had been quite favorable for the pension trust plan both for equities and fixed income securities. Mr. van Beuren explained these were unusual returns. Mr. van Beuren explained that his firm was trying to stay as close to the 50�/50� allocation as possible, ar�.d were right on the mark at the end of the year. If cash came in at the end of the evaluation period that percentage could be slightly off. Securities which had substantially higher growth characteristics �han the S&P 500 were selected with a price earnings multiple higher than that of the S&P 500. Mr. Van Beuren explained that the price earnings multiple wpuld probably drop during 1999. The authority for changing the allocation mix was discussed. Mr. Van Bueren explained that he believed a change was now in progress. Mr. Van Beuren commented that one way to add value to the portfolio was to overweight or underweight certain sectors of the econamy, trying to avoid underperforming areas. Selecting longer maturities was also a strategy, staying within the A - AAA rated securities. Mr. van Beuren explained that his firm was now Iimited to buying in sizes of $25,Ofl0 because of the size of the pension fund, and there would be more opportunities when the fund grew to where $1 million sizes could be purchased. Mr. r BOARD OF TRUST]3L3 TLQUESTA 81��LOYI�SS' PRNSIOW TRIIST FDND b�BTING MTNDTES Jaauary 26, 1999 PAGL 5 Van Beuren announced the fund had now crossed the $1 million level., and that the total fund as of 12/31/98 was $1,094,325. Mr. Van Beuren anticipated that in 1999 and 200Q, retirement accounts would be controlled more by individuals. zmportant thing� happening throughout the world would guide Loomis Sayles & Company; for example, governments that had previously ignored these matters were now providing liquidity to make their currencies stable and thence their financial markets. Mr. Van Beuren explained that there was a cooperati:ve movement to help countrie� get over their major financial problems. Brazil, South America, and the �ar East and were being helped by the International Monetary gund. Mr. Van Beuren commented that the world had chan�ed with the development of high technoiogy and computers and - companies were more ef€icient. The United States was a leader in this field. Mr. Va�n Beuren predicted ifl+ years of terrific growth around the world, and that corrections and pullbacks would recover. Mr. Van Beuren predicted continued slower growth with inflation curtailed, downward interest rates, and softened earnings. The challenge would be to €ind companies with above average growth rates ir� comparison to their values �n.d to target those early. Mr, Van Beuren stated the current market was very momentum driven, meaning that when buyers of common s�ocks were interested in a security they would generalZy accumulate shares for some �ime, after which they would leave it and go to something else, and a distribution process would begin. The energy se�tor was not predicted to be high during 1999. Boardmember Hansen questioned why more was not invested in Intel, which was doing very well. Mr. van Beuren responded that diversi�y was very important in a smaller portfolio to minimize risk, , BOARD OF TRII3T88S TBQi�'SSTA �SPLOYB$S• PENSION TRIIST FOI�D �ETING MINUTgS Jaauary 26, 1999 PAGS 6 and that sizes would grow as the portfolio grew. Mr. Van Beuren explained that approximately 25 separate companies were the right number for diversification for a$1 million account, and expl.ained that their firm managed a hypothetical 35-company portfolio as a model, which was up 55� during 1998. Mr. van Beuren commented that if the allocation mix was changed to 60� they might add to the list of companies, and that Microsoft might be added at some point. Mr. Van. Beuren reviewed purchases and sales made during the past quarter, and mentioned that corporate biographies were also included in the report. IMS Health was described by Mr. Van Beuren. Foreign investments were discussed and the ability to invest in multinational companies. Baardmember Bradford reported that� the Village Council 1�ad approved an Ordinance December 14, 1998 on second and final �eading so that the Board now had the option to invest in securities up to 60�, and to purchase foreign securities up to 10� of the fund assets. Boardmember Bradford made a motioa to approve the report by Peter vaa Beurea for the perfod eading December 31, 1998. Boardmember 8aasea seconded the matfoa. The vote on the motioa �asa Roa T. D�a,ckail - for Thamas Bxadford - for Carl C. 8aasea - for �illiam Sharpless - €or The motion was therefore passed and adopted. S) Pzudeatial Securitiea, =ac., Custodial Broker, Account Statemeats �October - December, 1998) Boardmember Sradford made a mottoa to approve the Prudeatial Seourities, 2ac,, aacouat atat+ements for the w 84ARD OF TRUST88S TEQUESTA ��LOYSLS' PENSION TRIIST F[JND I�ETING MINUTSS Jaauary 26, 1999 PAGS 8 Vi2. Ordiaaace No. 538 1°im,ending Peasioa Fuad Iavestment Optioas Boardmember Bradford reported that the�Board had recommended to the Village Council con�ideration of an amendment to the Plan to allow the option to invest in foreign securities up to the maximum aliowed by law, and to invest in securities up to 60�. The Village Council had approved the request, and the Board now had the authority to make investments in securities not to exceed 60�, which included foreign securities of up to 10�. Mr. Van Beuren clarified that the 10�r was a total fund percentage allocation; and stated as an example that on a$1 million account $600,000 would be permitted in equities. Attorney McCracken explained that in that example, the 10� could be foreign equities and bonds. Mr. Van Beuren commented that his company would prabably not go up to the 10�k maximum inunediately, but this would allow investment in foreign based companies such as Royal Dutch Petroleum, Tyco International, etc. • Chairman Mackail made a motion to grant Loomis , SaleB � Comapanlr authority to alloar iavestmeat of 60� ia seourities, I.O� af which could be ia foreiga-based securitiea that are traded in the form of ADRs aa a aational exchange, �ithia the statutory limitations. Boardmember Haas�a. secoaded the motioa. The vote on the motioa was: Ror� T. Mackall - far Thomas 8radford - for Cari C. 8aasen - for �vfiliam Sharpless - for Tb�,e mottoa was therefore passed aad adopted. V�II. CONSIDSRATION OF SSL]3GTION OF INDBPENDEN'P LSGAL COIINSLL - �villfam M. Sharpless, Esquire Boardmember Sharpless explained that he had great respect for the law firm of Jones, Foster, Johnston & Stubbs and BOARD OF TRIISTgSS TSQIIESTA BL�LOYSBS' P�2TSION TRIIST FQND �BTING MINUTSS Jaauary 26, 19�9 PAGg 9 that this was no reflection on their services; however, because of possible conflict of interest it was recommended at the training classes that all Boards of Trustees have their own independent attorneys. Boardmember Sharpless commented that he had spoken to members of other Boards who also reco�nended ind.ependent counsel. Boardmember Sharpless reported he had spoken about this matter to members of this Board after the last meeting, arld had been asked to speak to some other attorneys. Boardmember Peter Al1en joined the meeting at 10:05 a.m. Boardmember Sharpless reported he had spoken with Peter `Tan Beuren, who had consulted other members of Loomis Sayles & Cornpany, who had reconmiended attorney Lee Danar and Attiorney Steven Sipen. Steve Palmquist had recommended 1�ttorneg Bonnie Jensen. Attorney Sipen's fees were $200 per hour plus travel expenses from Miami Beach; Attorney Daner�s fees were $160 per hour plus travel expenses from Sarasota, and since their firm represented Palm Beach Gardens that traval � expenses could be shared; and Attorney Jensen's fee was $i45 per hour with no travel expenses since she was located in West Palm Beach. Boardmernber xansen questioned the possible • conflict of interest on the part of Jones, Foster, �ohnson & Stubbs. Boardmember Sharpless explained that alI members of the Board should only be concerned with one thing--the welfare of the participants in all three plans--and not the cost to the village. Since the firm of Jones, Foster, Johnson & 3tubbs represented the Viilage in many other matters, they might have concerns regarding the cost. Chairman MackaiZ asked Attorney McCracken tnrhether he believed there was a conflict of interest. Attorney McCracken responded that his firm had handled the Town of Palm Beach and their pension fund for more than twenty years and had Y�ad no conflict to their knowledge. Attorney McCracken explained that there were frequently conflicts between unions and municipalities, but no conflict had been presented to them, and commented that many seminars were BOARD OF TRIISTB�S T$QUBSTA �LOYEBS' P�TSION TRIIST FUND �ETING MINUTLS Jaauary 26, 1999 PAaL 10 sponsored by unions who recommended independent counsel. Chairman Mackail expressed his opinion that this Soard's interest had always been in the pension fund and that the fund. h�d__grown_ successfull� _usina_. the__Jones_ _Foster firm____ Chairmafl Mackail did not recom�nend making a change because he did not believe the cost was prohibitive. Boardmember Hansen and Boardmember Allen expressed a desire to table this item until the next meeting to allow time to study the matter. Secretary Bradford reported that at a meeting of the employees the previous week they had heard a presentation from a firm regarding defined benefit versus defined contribution plan�. Secretary Bradford stated he believed there was a real pos�ibility that the emplayees might abolish the current plan in favor of a defined contribution plan, and therefore believed this was not the time to make a change. Boardmemb�r Sharpless stated that in light of this infarmation from Secretary Bradford, he agreed the Board should not pursue this matter further, and he believed that if �on�s Foster Jahnston & Stubbs represented both the Town of Palm Beach and the�.r pension fund with no conflicts for twenty years, that nothing further should be done at this time. IX. ADJOIIRZ�i�]'P 8oardmemb�r Hansea a motion to adfoura the meeting. Boardmember Sharpless gecoaded the motion. The vote on the motion aras: Roa T. Mackail - for ThomaB Bradford - for Peter Al1en. - for Carl C. Sausen - for �illiam Sharpless - for The motioa was therefore passed aad adopted, and the meetiag was adjourned at 10:22 A.M. � , �QARD OF TRUST$S3 TBA.LT�STA E�PLOYISSS' PENSION TRIIST FUND b�STINC� MINIITI3S Jaauarsr 2 5. 199 9 PAGE 11 Respectfully submitted � ��'�=� � Betty Laur Recording Secretary ATTPST: Joann Manganiello Village Clerk DAT$ APPROVED: