Loading...
HomeMy WebLinkAboutDocumentation_Special Meeting_Tab 05_12/08/2005•, TEQUESTA GENERAL EMPLOYEES' PENSION TRUST FUND REGULAR QUARTERLY BOARD OF TRUSTEES MEETING AUGUST 15, 2005 I. CALL TO ORDER AND ROLL CALL The Tequesta General Employees' Pension Trust Fund Board of Trustees held a regular quarterly meeting in the Emergency Operations Center (EOC) of the Tequesta Public Safety Facility, 357 Tequesta Drive, Tequesta, Florida, on August 15, 2005. The meeting was called to order at 8:04 a.m. A roll call was taken by Betty Laur, Recording Secretary. Board members in attendance at the meeting were: Chair Jeff Newell, Secretary Tom Paterno, Boardmember Carl Hansen and Boardmember Bob Garlo. Also in attendance were Attorney Bonni Jensen, Pension Coordinator Gwen Carlisle, and Accounting Manager Patrice Maqueda. Board member Anne Koch was absent from the meeting. Finance Director JoAnn Forsythe, arrived at 8:09 a.m.. Monitoring Consultant Joe Bogdahn arrived at 8:16 a.m. II. APPROVAL OF AGENDA MOTION: Boardmember Hansen made a motion to approve the agenda with addition under Any Other Matters of possibly changing the meeting date of the November meeting to accommodate the Rockwood representative, as requested by Pension Coordinator Carlisle. Board member Garlo seconded the motion, which carried by unanimous 4-0 vote. III. APPROVAL OF MINUTES MOTION: Boardmember Garlo made a motion to approve the minutes of the July 7, 2005 special meeting as submitted. Boardmember Hansen seconded the motion, which • carried by unanimous 4-0 vote. BOARD OF TRUSTEES • ~ TEQUESTA GENERAL EMPLOYEES' PENSION TRUST FUND REGULAR QUARTERLY MEETING MINUTES AUGUST 15, 2005 PAGE 2 IV. DISCUSSION OF RE-APPOINTMENT OF RESIDENT CARL HANSEN AND VILLAGE COUNCIL REPRESENTATIVE AND RESIDENT TOM PATERNO AS MEMBERS OF THE BOARD Finance Director Forsythe arrived at this point in the meeting at 8:09 A.M. Board member Hansen stated he would give up his seat if there was someone who wanted to serve. Board member Paterno clarified that the Board could not re-appoint these members since that must be done by the Village Council. Attorney Jensen advised that those board members served at the pleasure of the Village, and that was in this board's administrative rules as well. During discussion, Board member Hansen stated he enjoyed being on the board and would continue, but there might be younger people better qualified, and in that case he would say goodbye. Board member Paterno advised that there were three applicants for the Public Safety Board who were not chosen by that Board, and those residents would be qualified for this Board also. It would be a matter of • asking them if they were interested in this Board. Pension Coordinator Carlisle announced the appointments for positions would be on the Village Council's September agenda, and a list of the volunteers would be presented. Board member Paterno commented they should be contacted ahead of time and if Mr. Hansen did not want to continue it might be worked out that one of the applicants could serve. Chair Newell asked if this board should even discuss this. Attorney Jensen responded the board could certainly express concerns of Mr. Hansen regarding if someone else was interested in serving. Pension Coordinator Carlisle asked if Mr. Hansen wanted his name to be included on the list of volunteers. Mr. Hansen responded, yes, and stated that he was not resigning. It was verified that the other volunteers were all residents of the Village and not employees. When asked if he was interested in serving for another two years, Board member Paterno advised he was like Carl Hansen and he might be replaced. He hoped that today the Board's little problem could be finalized, and if so, that would make it easy for him because he did not like to leave with the problem unresolved. V. DISCUSSION OF RE-APPOINTMENT OF JEFF NEWELL AS EMPLOYEE REPRESENTATIVE TO THE BOARD • Chair Newell commented he had been on this board for four years and had no problem BOARD OF TRUSTEES • TEQUESTA GENERAL EMPLOYEES' PENSION TRUST FUND REGULAR QUARTERLY MEETING MINUTES AUGUST i5, 2005 PAGE 3 with continuing and to put his name on the list, but he also had no problem stepping aside if there was new blood. Attorney Jensen advised that would require an election. Pension Coordinator Carlisle commented the employee position was the hardest to fill and staff had just tried to get an employee for the position just filled by Anne Koch, and no none was interested, so, this might be the same case. VI. PRESENTATIONS a) Quarterly Investment Manager's Report -Andrew Holtgrieve of Rockwood Capital Mr. Holtgrieve was not present. Board member Paterno requested this item be tabled for now. b) Monitor's Quarterly Report -Joe Bogdahn A phone call had been received indicating that Mr. Bogdahn would arrive within 15 minutes; therefore consensus was to skip ahead in the agenda to Item VII -Consent Agenda. VII. CONSENT AGENDA MOTION: Board member Paterno made a motion to approve the Consent Agenda. Board member Hansen seconded the motion, which carried by unanimous 4-0 vote. Therefore, the following items were approved on the Consent Agenda: a) Payments to be reviewed and approved: (1) Business Services Connection, Inc. - Minutes of 5/10/OS - $165.20 Minutes of 5/17/05 - 47.20 Minutes of 7/7/05 - 306.80 (2) Hanson, Perry & Jensen PA $959.35 • (3) A. G. Edwards Trust Co. FAB - $106.33 BOARD OF TRUSTEES • TEQUESTA GENERAL EMPLOYEES' PENSION TRUST FUND REGULAR QUARTERLY MEETING MINUTES AUGUST i5, 2005 PAGE 4 (4) Gabriel, Roeder, Smith & Company $860.00 (5) Bogdahn Consulting LLC - $500.00 b) Approval of new applicants for participation in Pension Plan: Jacqueline Weinand Date of Hire 6/13/05 -Dispatcher Victoria Rolen Date of Hire 6/28/05 -Fire Dept Administrative Asst. Emily Gervais Date of Hire: 7/18/05 -Accounts Payable c) Approval of withdrawal of contributions (employees terminating employment with Village of Tequesta) (1) Matthew Anderson -date of separation 7/8/05 -Total $775.00 ($620.00 payout + $155.00 taxes) (2) Sandra Durbin -date of separation 6/30/05 -Rollover - $9,116.31 (3) Connie Martin -date of separation 7/11/05 -Total $1,149.37 ($919.50 payout + $229.87 taxes) IX. FINANCIAL REPORTS a) Account Statements -Rockwood Capital Advisors/ Wachovia Securities/A. G. Edwards Trust Pension Coordinator Gwen Carlisle reported the statements were in the packets and asked if there were any questions. Ms. Carlisle noted there was still money in Wachovia. During ensuing discussion, it was clarified there was a balance of $3.11 left in Wachovia, which was interest that had been posted, and Ms. Carlisle commented staff would like to transfer that balance. Mr. Bogdahn arrived at this point in the meeting at approximately 8:15 A.M.. Board member Hansen indicated it seemed contributions by the employees and the Village totaled approximately $125,000 a year. Finance Director Forsythe commented that could change based on the actuarial report which stated the amount that was needed in contributions to fully fund the pension trust. Ms. • Forsythe commented there had not been an actuarial report for two or three years, BOARD OF TRUSTEES • `( TEQUESTA GENERAL EMPLOYEES' PENSION TRUST FUND REGULAR QUARTERLY MEETING MINUTES AUGUST 15, 2005 PAGE 5 so that might need to be considered. The actuarial requirement translated into a percentage of overall payroll. The employee contribution was always constant at 5% but the Village's contribution changed depending on what the actuary determined was needed to fully fund the pension trust. Attorney Jensen advised the last actuarial report was in October 2003, which determined the contributions for fiscal years ending September 30, 2004 and September 30, 2005. Ms. Forsythe reported the Village's contribution was currently about 7.8%. Boazd member Hansen stated he was looking for the amount of the fund to grow faster when the contributions were that much. Ms. Forsythe commented that was a good point, since there was a difference whether the investments were causing the fund to grow or if growth was due simply to contributions. Mr. Bogdahn stated page two of his report addressed that. MOTION: Board member Paterno made a motion to close the Wachovia account. Board member Hansen seconded the motion, which carried by unanimous 4- 0vote. b) Proposed Budget for 2006 -General Employees Pension Trust Fund Chair Newell commented this was the first time he had seen a budget since he had been on the board. Finance Director Forsythe explained that the Public Safety Officers' pension board had requested this budget. Ms. Carlisle commented it had been easy enough to prepaze the same budget for the General Employees' pension at the same time, and this was presented for information purposes. The Public Safety Board had reviewed each line item so they could prepaze for next yeaz. Chair Newell asked if the board could track their costs through this budget. Finance Director Forsythe responded that the numbers were generated by the accounting softwaze; they could provide a revenue and expense report at any time. The worksheet was set up so the board could see where they were year-to-date this year and go back and look at the prior year if they wanted to set up a budget. Ms. Carlisle pointed out this was actual through July, not September, and this was the cost to administer the pension board. This was based on last year's invoices and what was projected for next year; $24,460 had been spent so far this year. Finance Director Forsythe commented the Public Safety Board had been interested in seeing the legal and consulting costs, which had increased, and new accounts had been set up to track these costs. It was confirmed this budget was presented as an • FYI for this board. Pension Coordinator Carlisle commented if the board wanted ' BOARD OF TRUSTEES • TEQUESTA GENERAL EMPLOYEES' PENSION TRUST FUND REGULAR QUARTERLY MEETING MINUTES ' AUGUST 15, 2005 PAGE 6 to send two people to school instead of one, that figure might be raised to $1,000 next year. Chair Newell commented these boards were not held to a budget, but authorized their own expenses; however, this could be used just to tell the board what they were spending. Board member Garlo asked how insurance premiums were broken out between the two boards, to which the response was a percentage of assets. Attorney Jensen commented Mr. Gallagher had been able to get a quote last year for both boards. Board member Garlo commented he had the premium numbers from last year. Secretary Paterno commented it was not a bad idea to know what you were going to spend, so that it was not a surprise. Board member Paterno commented the board needed to consider legal, investment advisor, custodial agreement, insurance, seminars, and actuary. It would be an option to set figures and if spending went over that, Finance could let the board know. Finance Director Forsythe advised if the board did that then a revenue and expenditure report could be provided to the board. Board member Garlo suggested that report be provided at each quarterly meeting. Secretary Paterno commented numbers were needed for Bogdahn & Associates, the custodian, and an actuary, and new accounts created to track them. Seminar training might be increased. Secretary Paterno expressed his opinion that every year at least two people should attend the seminars. Chair Newell commented he was all for tracking expenses with this type of report. MOTION: Secretary Paterno made a motion that Finance Director Forsythe set up those expenses and work this into a budget and that the board vote on it at the next meeting. Board member Hansen seconded the motion, which carried by unanimous 4-0 vote. Consensus of the board was to back up to Agenda Item VI (b). VI. PRESENTATIONS b) Monitor's Quarterly Report -Joe Bogdahn Chair Newell asked if the amount in the fund was the result of contributions or investments. Mr. Bogdahn referred to page 2 of his report, the account reconciliation. The reconciliation showed that since inception, as of October 31, 2000, the assets had been $109,000; net contributions added had been $404,000; • investment gain for that time added had been $56,000; for a new value as of June BOARD OF TRUSTEES • \ TEQUESTA GENERAL EMPLOYEES' PENSION TRUST FUND REGULAR QUARTERLY MEETING MINUTES AUGUST i5, 2005 PAGE ~ 30, 2005 of $569,000. For the most recent quarter, investment gain had been $15,000 or 2.71 % return; the indexes had earned 1.66%, so this fund had beat the indexes by a little over 1 % after fees. Mr. Bogdahn explained this was a time weighted return so it was not calculated by using beginning and ending values to get the return, it was actually based on investment gain or losses on the monies that were there at the time, so if a big contribution came in there would be investment earnings on that contribution, but the contribution itself would not be used to adjust the return. For the past one year, the fund had been up 8.24%, and the benchmark was 5.74%, so the fund had beat the indexes by 2.5%. So far this year the fund had beat the indexes by almost 2%. Mr. Bogdahn reported the actuary assumed earnings would be 8%, and three-quarters through the year we earned 7.96% after fees. Discussion ensued regarding when the fund had actually been transferred from Northstar; Mr. Bogdahn confirmed that of the three-quarter number, one quarter of that had been Northstar. The fund was almost at the 8% expected by the actuary. 2.71 % for the quarter in the calendar year return was in the 5~' percentile of peers, so the fund did as well or better than 95% of the other funds with the same asset allocation. On the bond side, Mr. Bogdahn noted the number was just Rockwood, and return for the quarter was 3.44%; and predicted the bond market would begin acting more rationally as interest rates rose. Rockwood's positioning in the bond market was with the intent of preservation of capital. Mr. Bogdahn answered questions regarding the fiscal year and calendar year return figures. Mr. Bogdahn referred to page 20 of his report and explained the standard deviation and beta figures, which were measurements of risk. The standard deviation-- the amount of risk taken relative to the overall market showed this fund took 25% more volatility than the benchmark indexes for the particular period shown-which was primarily due to Northstar having all their eggs in one growth basket, and that percentage would consistently begin dropping because of the now diversified portfolio. The beta figure would also start to fall. Mr. Bogdahn noted Rockwood really did a nice job, but the custody problem was frustrating. The board's second choice, Dana, had had very strong performance for this period of time also, but if the board went back to them the fund would be a little bit hampered by costs, because it was an individually managed portfolio. Board member Hansen questioned how often the investment allocation was changed and if it should be changed, suggesting that he would go with 70/30. Secretary Paterno agreed; however, stated that the custody issue must be resolved and that would dictate some of this. Mr. Bogdahn explained that the present 60/40 allocation equities to bonds still provided the bestrisk/reward. • Mr. Bogdahn indicated he believed the fund would be right at the 8% required by the actuary this year; however, as the memo from him and Mike Welker stated, BOARD OF TRUSTEES • TEQUESTA GENERAL EMPLOYEES' PENSION TRUST FUND REGULAR QUARTERLY MEETING MINUTES AUGUST i5, 2005 PAGE 8 their concern was on the bond side since they expected the 10-year bond average of 7.7% to drop over the next 10-year period to possibly 5%. Because of the size of the portfolio there was not much opportunity for bond diversification to try to hedge that, other than to stay in high quality bonds to try to avoid any blow-ups that might happen, which was how Rockwood was structured for this. On the equity side, the Rockwood program of being opportunistic should do better on the upside, and the goal would be to preserve capital on the downside. In response to Chair Newell's question of whether the board was held to the 60/40 allocation, Attorney Jensen advised that could be changed by asking for a change in the ordinance. It was pointed out that if Rockwood did not sell any stocks the allocation could become 70%, but when they sold, the numbers had to be re-adjusted. Boazd member Hansen asked if the board could change the allocation to 50/50, which Mr. Bogdahn indicated could be done since it could always be less restrictive than the ordinance, but not more. Secretary Paterno commented out this could be discussed in the future, but now the board had a more urgent problem. VII. UNFINISHED BUSINESS a) Overview/history of transferring investments from Wachovia to A. G. Edwards Trust/Rockwood Capital and status of custodian Finance Director Joann Forsythe referred to her memo in the packet, which she commented gave an overview of where the board was with the custodian. Chair Newell expressed concern that contributions were in anon-interest bearing fund. Ms. Forsythe responded that Pension Coordinator Carlisle and she had discussed this with Tamela Martin and asked how to get the money into another account, and she had explained that the contributions did not come to them, they came to another arm of A. G. Edwards which put it into an account. Ms. Forsythe stated she had said she hoped that was aninterest-bearing account, to which Ms. Martin had responded, it was not. All the bi-weekly city and employee contributions were placed in the account and at the end of the month Rockwood came in and swept the account and make investments with the money, so the money was in that account for sometimes a month or longer. Chair Newell asked if that was normal, to which Mr. Bogdahn responded it was not, and when the fund was originally set up to be the sweep account, it was to have been interest bearing, and • that needed to be rectified; however, he was hoping to have the money sent straight to the custodian's account, in which case that would no longer be an issue. BOARD OF TRUSTEES •' TEQUESTA GENERAL EMPLOYEES' PENSION TRUST FUND REGULAR QUARTERLY MEETING MINUTES AUGUST i5, 2005 PAGE 9 Attorney Jensen advised the A. G. Edwards statement indicated there was a money market account. Discussion ensued. Ms. Maqueda indicated the money could sit as long as six weeks in the non-interest bearing account. Secretary Paterno commented this might not be a problem because when he had attended the Public Safety Officers' pension board meeting to hear the actuary, he had asked a question of Mike Welker, Mr. Bogdahn's partner, and Mr. Welker had expressed a different opinion from Mr. Bogdahn. He had stated the custodial account should be in the Village's name and that Rockwood could change the makeup. Mr. Bogdahn responded he had been referring to payments made by Salem Trust, which absolutely should be in the Village's name. Secretary Paterno commented Mr. Welker had been referring to the custodial account and had said he would look into this. Secretary Paterno expressed his opinion that the board might have to change to a different investment manager, although he did not want to change. Secretary Paterno noted that Salem would not be the custodian because they did not hold the assets, and by law the fund must have a custodian, so a decision had to be made. Ms. Forsythe commented Mr. Bogdahn had said there were certified public audits at the end of every month verifying the valuation, so she had written for an attestation letter, but never received it. The Finance Department had discovered a loss, which Rockwood had not acknowledged, and she was concerned that Rockwood did not do their job very well, and A. G. Edwards was saying the money went to a different arm-that seemed very loose for a pension fund. Mr. Bogdahn commented Rockwood did a great job of investing, but he agreed they were not custodians and the commingled fund had not been set up well. Mr. Bogdahn commented if the attorney was not comfortable with the custodial situation, then the board needed to change custodians. Board member Garlo commented he understood Rockwood satisfied all legal requirements. Attorney Jensen advised the money was being held at a qualified public depository but there was no relationship with a custodian. During ensuing discussion, Ms. Forsythe commented that A. G. Edwards could set up a custodial account but would have to post manually. Secretary Paterno asked if other small funds Attorney Jensen worked with were in commingled funds. Attorney Jensen advised this was an unusual situation, which she had never before experienced, but she had worked with funds that had had a relationship with an investment manager who had the assets custodied at another entity, so the relationship was between the two entities. In that case, in the • investment manager's contract, there was a provision that said the investment manager shall provide the custody services. They would provide it through their BOARD OF TRUSTEES •~ TEQUESTA GENERAL EMPLOYEES' PENSION TRUST FUND REGULAR QUARTERLY MEETING MINUTES AUGUST 15, 2005 PAGE io sub-agreement with the custodian and the fund would get a copy of the agreement. Ms. Forsythe stated she thought you had to have an independent custodian-in the scenario described by Attorney Jensen that was asking the person that was investing to tell you that you still had your money, when it actually could be gone. Attorney Jensen stated she understood those concerns, and in this situation the board could either have Rockwood with the relationship through A. G. Edwards and understand that there is a difficulty in the statements, which seemed unacceptable to the board. A. G. Edwards would be the qualifying trust company. Attorney Jensen commented the board had never been comfortable. Ms. Forsythe stated she had no confidence in the statements. Attorney Jensen advised this was a legal relationship and was accepted practice in Florida, but she did not think it fit with this board because it had been uncomfortable, and asked if the board wanted to change to another investment manager. Chair Newell questioned Mr. Bogdahn, asking what kind of nightmare it would be to go with Dana as investment manager. Mr. Bogdahn `s response was that any losses or gains incurred during a change to another manager would depend on the market. Chair Newell asked if there was a comfort level with Dana and whoever they would use as custodian. Mr. Bogdahn responded Ms. Forsythe would have to be comfortable with that, and Dana would use Salem Trust as custodian. Ms. Forsythe asked if that would be a commingled fund and was told it would not be commingled. Ms. Forsythe commented that Attorney Jensen saying the fund could be in a commingled fund took care of one of her concerns, but she was still concerned with sloppy statements and mistakes made by Rockwood. Ms. Forsythe stated she would not have a problem with a commingled fund if the account statements could be relied on. Mr. Bogdahn indicated Rockwood did a good job of investing. Board member Garlo commented that he agreed the fund was compliant with the State statutes and he thought the commingled fund returns were good, and asked if Rockwood could abscond with the money without the board's knowledge. Ms. Forsythe responded the custodian verified that what the manager was saying was real. Secretary Paterno commented Rockwood did not do a good job setting this up and it had been a constant problem. Board member Garlo asked, what was the monitor's responsibility. Mr. Bogdahn explained they had been going through the same things as Ms. Forsythe in regard to trying to reconcile statements. • Secretary Paterno asked what the board wanted to do-jump ship or stay with the. ship and let this go. Mr. Bogdahn expressed his opinion that signing a contract BOARD OF TRUSTEES • TEQUESTA GENERAL EMPLOYEES' PENSION TRUST FUND REGULAR QUARTERLY MEETING MINUTES AUGUST 15, 2005 PAGE ii with A. G. Edwards would not fix the problem with reconciling statements. Chair Newell commented he was not comfortable going with Dana but he was only one member, but the accounting had to be right and at the same time the fund needed to grow. Chair Newell asked if Rockwood had any suggestions. Mr. Bogdahn reported Rockwood was spending a lot of time trying to figure this out. Chair Newell asked Mr. Bogdahn for the worst case scenario if this board decided today to pull out and go with Dana. Mr. Bogdahn responded there would be a couple of days of market risk and the fund could benefit or lose, but in the big scheme of things there would be no difference in the plan. Chair Newell commented he did not think Rockwood was doing any harm, and this was an accounting issue. Secretary Paterno asked for any legal insight from the attorney. Attorney Jensen advised she had tried to get information from A. G. Edwards and Rockwood, and this was an issue with which the board had been uncomfortable. Board member Hansen commented he would look to Ms. Forsythe for advice. Ms. Forsythe responded the statements indicated the fund was showing a loss from December of $2,000 that Rockwood was not reporting, and everything in Mr. Bogdahn's report was based on what Rockwood was reporting. Secretary Paterno commented that Attorney Jensen had an interesting idea-to get an insurance policy that would cover loss of the funds. Discussion ensued regarding the mistakes, and efforts by Ms. Maqueda to resolve them. Ms. Maqueda reported an unearned loss of $2,381.63. Ms. Bogdahn advised he would give that information to Donna in his office, who also reconciled these statements. Ms. Forsythe commented the statements could not be relied on. MOTION: Secretary Paterno made a motion to sell the assets, go with Dana and be done with it, although he liked Rockwood, but under the circumstances he believed a change was needed;the board could not have meetings every 2-3 weeks; Dana would be a little more conservative and the fund would not make as much money, but no one could question that the board did not have an understanding of the subject and they had a duty to be more conservative, and if the Finance Department had a problem, it would always be a problem. Board member Hansen stated he was hearing only negatives about Rockwood and asked Chair Newell's position. Chair Newell commented the negative part was the accounting. Board member Garlo asked if there was some variable so that the return was really not negative. Mr. Bogdahn • advised he would go through the reconciliation with Donna in his office and outline it. Mr. Bogdahn pulled up on his computer the numbers for Venice • BOARD OF TRUSTEES TEQUESTA GENERAL EMPLOYEES' PENSION TRUST FUND REGULAR QUARTERLY MEETING MINUTES AUGUST 15, 2005 PAGE 12 Firefighters' individually managed plan with Rockwood, and reported their returns were right in line with Tequesta's. Secretary Paterno expressed his opinion the numbers were right overall, but until Rockwood sorted out their problems with accounting, the numbers could not be verified; so the fund would make less money and at some future point might change the investment advisor, and that was all that could be done. Chair Newell stated the motion was still on the floor, but suggested giving Rockwood until the next meeting. Ms. Carlisle reported she had spoken with Mr. Holtgrieve and told him the board was at a point to make a decision and she would like him to be here, and he had said he would be here in November. Secretary Paterno commented if Rockwood would set up a little trust company that would fix the problem. Mr. Bogdahn noted their statements needed more detail. Chair Newell stated there was a motion on the floor to withdraw the funds from Rockwood and to move the funds to Dana Investments. Board member Hansen asked, why Dana? Secretary Paterno reported there had been other presenters, but Dana had been the next best option, and it had been a split vote. Board member Hansen seconded the motion. Board member Garlo called for discussion and asked if the problem the employees had was that it was a commingled fund. Pension Coordinator Carlisle responded she did not think it was because the fund was commingled-her sense was that the employees felt the board was not thinking of the employees-and if the board kept postponing this, the situation kept getting bigger, and the employees wanted to be comfortable with what they had-- whichwas why the underlying current was FRS. Secretary Paterno expressed his opinion the employees wanted FRS because it was portable and did not care that the city would have to pay 18%. Ms. Carlisle disagreed, stating that she did not believe that was true. Chair Newell commented FRS was a separate issue, and called for a vote on the motion to terminate the relationship with Rockwood and retain Dana for investment manager. Motion carried 3-1 with Chair Newell opposed. MOTION: Board member Hansen made a motion to retain Salem Trust as custodian at a $1,500 inclusive fee. Secretary Paterno seconded the motion, which carried by unanimous 4-0 vote. • Attorney Jensen announced that she would not terminate Rockwood until there was a signed contract with Dana. BOARD OF TRUSTEES • TEQUESTA GENERAL EMPLOYEES' PENSION TRUST FUND REGULAR QUARTERLY MEETING MINUTES AUGUST 15, 2005 PAGE 13 --------------------------------------------------------------------------------- b) Custody Agreement from A. G. Edwards Trust -Attorney Bonni Jensen This agenda item was no longer necessary since the board had voted to retain Salem Trust as custodian. Attorney Jensen next presented New Business item (c), since she needed to leave to attend another meeting. X. NEW BUSINESS c) Update of Administrative Rules Attorney Jensen acknowledged there was a problem with the table of contents. Chair Newell commented that one person could not do the duties of the secretary. Attorney Jensen explained that the last item was that those items would be delegated. Chair Newell indicated he was comfortable with that so long as the board understood. Attorney Jensen advised this was not law-it was board policy, and the board could change it as they wished. Pension Coordinator Carlisle commented the secretary did not do a lot of those duties. Secretary Paterno commented there should be a line added that those duties would be delegated to the Pension Coordinator, and that could be done in the minutes rather , than in the administrative rules. Consensus of the board was to state it in the minutes and not in the administrative rules. Attorney Jensen stated that A and B would not be delegated; but C through G would be the responsibility of the Pension Coordinator. Ms. Carlisle stated she could not maintain the financial records. It was clarified that she would be sure the financial records were done but could not do them herself. MOTION: Secretary Paterno made a motion to accept the administrative rules. Board member Garlo seconded the motion, which carried by unanimous 4-0 vote. The board next considered item VII (c): VII. UNFINISHED BUSINESS • c) Status Report on opening checking account at Independent Community BOARD OF TRUSTEES • TEQUESTA GENERAL EMPLOYEES' PENSION TRUST FUND REGULAR QUARTERLY MEETING MINUTES AUGUST i5, 2005 PAGE 14 Bank (Board approved May 17, 2005) Ms. Maqueda requested direction on how to make disbursements for the approved bills. Ms. Forsythe advised there was presently no vehicle for payments. Secretary Paterno commented the board would have to direct the manager to sell enough assets to pay the bills at the end of the month, and Rockwood should be given this direction in the next ten days. Mr. Bogdahn commented if Salem went ahead and opened an account for the Village, contributions could be sent there to pay bills instead of sending them to Rockwood, and Salem could pay the bills. Secretary Paterno commented the board had already approved opening a checking account, and it could be done with contributions this month. Discussion ensued regarding the amount needed to cover the approved bills. Recording Secretary Laur advised there was an outstanding $4,000 bill to Gabriel, Roeder & Smith. It was clarified that the board had approved it, but there had not been means to pay it, and this was brought up to be sure that now there would be sufficient funds to • cover this amount as well as the other approved bills. It was determined that by using the $6,000 in A. G. Edwards there would be enough money to pay everything. MOTION: Secretary Paterno made a motion that the next employee contribution be put into a checking account at Independent Community Bank to pay bills. Board member Hansen seconded the motion, which carried by unanimous 4-0 vote. The board next considered New Business Item (d): NEW BUSINESS (d) Fiduciary Monitoring of Pension Consultants and Consultant Questionnaire Attorney Jensen advised the SEC and Department of Labor had recently come out with a list of questions that should be asked of the board's monitor, and recommended the list of questions be forwarded to Mr. Bogdahn to be answered and then put it on the agenda to have a discussion. MOTION: • Secretary Paterno made a motion to hand Mr. Bogdahn the questions to fill out and bring to the next meeting. Board member Garlo seconded the motion, BOARD OF TRUSTEES • TEQUESTA GENERAL EMPLOYEES' PENSION TRUST FUND REGULAR QUARTERLY MEETING MINUTES AUGUST i5, 2005 PAGE ~5 which carried by unanimous 4-0 vote. Mr. Bogdahn announced his company's website where the board could get additional information and provided Pension Coordinator Carlisle with an article to distribute as part of the next packet. Mr. Bogdahn noted that Geraldine Genco might want the information. Mr. Bogdahn indicated he would send it bye-mail so that Ms. Carlisle could distribute it. X. NEW BUSINESS a) Discussion of Frequency of Actuarial Reporting Attorney Jensen reported the board was currently under atwo-year provision, and in her notes she had that Mr. Gallagher was going to do an RFP for an actuary and she did not know if the board was still interested in that. Every two years met the requirement, which was actually every three years. The last actuarial was done through 9/30/2005 so the next regularly scheduled actuarial evaluation would be as of 9/30/2005. Attorney Jensen suggested having Mr. Palmquist prepare the numbers in advance; in other words, he would project the rates for the next year because his report would not be done until April or May of 2006. It would have to be done this year because there was no actuarial projection for 2006. The last report covered 2004 and 2005. The requirement was for every three years, but was superseded by an IRS requirement of every two years. Attorney Jensen advised to get into a cycle of having the report done for the following fiscal year rather than the current year that was already half finished, which allowed municipalities to budget properly. Mr. Garlo clarified that would mean to do the report for 2005 and 2006 and project the numbers for the 2007-2008 year. Ms. Forsythe indicated she would call Mr. Palmquist. The cost of the actuarial report was discussed and determined to be the $4,000 discussed previously. Attorney Jensen advised she had a drafted RFP and would send it with a list. Consensus of the board was to have Attorney Jensen distribute the RFP. b) Renewal of Fiduciary Liability Insurance Pension Coordinator Gwen Carlisle reported everyone had a copy of the form filled out by Mr. Gallagher, and there had been one change made by the Public • Safety Board-the asset value on page 2 of 3-their recommendation was to change the asset value from $2,000,000 to $2,400,000 for the Public Safety •! BOARD OF TRUSTEES TEQUESTA GENERAL EMPLOYEES' PENSION TRUST FUND REGULAR QUARTERLY MEETING MINUTES AUGUST i5, 2005 PAGE i6 Officers Pension Trust Fund. That board had questioned going from $2,000,000 in coverage to $600,000 and wanted Mr. Gallagher to see if coverage were reduced to $600,000 if that would cause a reduction in the premium. Their motion had been they would drop the coverage to $600,000 if the premium would be reduced by 50%. Mr. Bogdahn commented he had seen insurance companies come back and say $1,000,000 was minimum coverage. Board member Garlo commented this would be cutting $1.4 million for $2,000. Ms. Carlisle commented she did not know where the board was on this-that had been the Public Safety Board motion. This board was looking at it because their monies were included and she had wanted this board to know they might see a decrease. Attorney Jensen advised $1,000,000 in coverage was normal. Secretary Paterno commented if coverage were decreased to $600,000 they would still pay the million dollar rate. Ms. Carlisle advised the .Public Safety Board wanted Mr. Gallagher to see what the premium would be at current coverage and what it would be cut in half. Attorney Jensen advised that the boards might want to ask the municipality what they recommended for coverage, because. the fund could buy insurance to cover the board members, but ultimately they were indemnified by the municipality. Ms. Carlisle commented if the board recommended going to the Village Council, that was fine. Ms. Carlisle explained that the numbers could be changed-Mr. Gallagher had been waiting to hear from the two boards, and this proposal needed to be in by September 1St. He had the date of August 11 on it so that he would have time to prepare after hearing from the boards and meet the September 1St deadline, but if it was going to Village Council it could not meet the September 1St deadline. Mr. Bogdahn suggested changing the $5,000 deductible might have a bigger impact on reducing the premium. Secretary Paterno recommended that Mr. Gallagher check into not lowering the amount of insurance and changing the deductible. Board member Hansen asked if the board had the option to work with changing the deductible-Secretary Paterno responded he had never seen anything in writing limiting that. Finance Director Forsythe commented this was the insurance that if anyone brought a lawsuit against any board member it would pay attorney's fees. It was confirmed this would make the fund whole, and Secretary Paterno stated that otherwise the Village would make it whole. Secretary Paterno commented if coverage was lowered to $600,000, he would no longer be on the board, because he would not put his own personal assets on the line. Board member Garlo commented the boards had to agree. Mr. Bogdahn • responded they could get their own insurance. Ms. Carlisle commented that was BOARD OF TRUSTEES • TEQUESTA GENERAL EMPLOYEES' PENSION TRUST FUND REGULAR QUARTERLY MEETING MINUTES AUGUST i5, 2005 PAGE 1~ another option Mr. Gallagher had stated-that they could break it out for a cost. Secretary Paterno commented he was not willing to take money out of his personal assets, and this board's portion plus what it would be by the end of the year-probably $700,000-was what the coverage needed to be. Mr. Garlo asked if the board would then look to save on the deductible, to which the response from other members was yes. Attorney Jensen left the meeting at this point, at 10:06 a.m. e) Consideration of sending a member of the board to FPPTA Trustees School October 2-5, 2005 in St. Augustine Board member Garlo expressed a desire to attend the conference, since he had been unable to attend a year ago. MOTION: Secretary Paterno made a motion to send Board member Garlo to the FPPTA Trustees School October 2-5 in St. Augustine and if he could not go to send Anne Koch, if the Village Manager would allow them to go. Board member Hansen seconded the motion, which carried by unanimous 4-0 vote. XI. ANY OTHER MATTERS a) Information Items: 1) Fiduciary information and SEC report on same (no action required) 2) Memo from Joe Bogdahn & Mike Welker re: additional diversification The information items had been previously discussed. 3) Discussion of changing the meeting date Ms. Carlisle noted this was now a moot point since the Rockwood representative would not need to attend the meeting. • Board member Garlo asked how the renewal appointments to the board would be handled. BOARD OF TRUSTEES • TEQUESTA GENERAL EMPLOYEES' PENSION TRUST FUND REGULAR QUARTERLY MEETING MINUTES AUGUST 15, 2005 PAGE 18 Pension Coordinator Carlisle indicated she would handle that. Finance Director Forsythe requested the meeting time be changed to 8:30 a.m. instead of 8:00 a.m. MOTION: Board member Hansen made a motion to change the meeting time to 8:30 a.m. Secretary Paterno seconded the motion, which carried by unanimous 4-0 vote. XI. COMMUNICATIONS FROM CITIZENS There were no comments from the public. XII. ADJOURNMENT Board member Garlo made. a motion to adjourn, seconded by Secretary Paterno, and unanimously approved. Therefore, the meeting was adjourned at 10:18 a.m. Respectfully submitted, ~< ~ ~~ Betty Laur Recording Secretary •