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BO~DAHN
GrROUP
simplifying your investment and fiduciary decisions
MEMORANDUM
TO: Board of Trustees, Tequesta Pension Plans
FROM: Joe Bogdahn /Dave West
RE: Proposed Fee Increase
DATE: July, 2008
Bogdahn Consulting was formed with the mission of providing the highest level of
institutional investment consulting at a very competitive fee. As we have grown in
number of clients, we have done our best to prudently build a firm that is ready to meet
the challenges associated with today's market, and think we are on the right track.
Today we are a better, stronger and more experienced firm than we were when initially
engaged by your Board. The Florida municipal pension marketplace has changed
dramatically over the years. True independence is now recognized as the prudent
approach, and we are pleased to have been at the forefront of this movement.
Our primary difficulty lies in balancing the necessity to generate the revenues necessary
to support an A+ team with the desire to provide cost-effective service to plans like
yours that have served as the foundation of our firm. In addition to our outstanding
operations team, our credentials include seven CFA Charterholders, two CIMA's, two
CPA's and an attorney. We have expanded our analytical workbench to include the
industry's top holdings-based attribution software, asset/l.iability modeling software
with links to the top actuarial firm's programs, and are improving our quarterly reports
through our conversion to the RogersCasey/Paris system.
Current market pricing for investment consulting services are considerably higher than
they were several years ago. Driven by sharp increases in the cost of providing our
services -from 50% fuel increases to fiduciary liability insurance that is fully TEN
T'Il12ES where it was, we have had take a hard look at the fees we are charging. Our
current base quote is $25,000 per year for Florida municipal funds, and we are still often
on the lower end of the competitive scale! As a firm, we have always done our best to
run an efficient shop to keep our expenses low. We continue to work hard to hold down
our costs through efficient travel, productivity gains through automation and good old-
fashioned hard work. However, for us to remain competitive in this business and to
continue to provide responsive service, we must make adjustments.
In recognition of and appreciation for the long relationship we have enjoyed with your
Board, our proposed fee is $15,000 (PSO) and $10,500 (General) per year, inclusive of
all of our services. As we have is the past, we will guarantee these fees for three years.
340 West Central Avenue • Suite 300 • Winter Haven, Florida 33880
Telephone (863)293-8289 • Facsimile (863) 292-8717
INVESTMENT MONITOR AGREEMENT
THIS AGREEMENT is entered into this i r - day of 2004,
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by and between the BOARD OF TRUSTEES OF THE VILLAGE OF TEQUESTA
GENERAL EMPLOYEES' PENSION FUND, hereinafter referred to as the'?rustees,"and
BOGDAHN CONSULTING, LLC, hereinafter referred to as the "Consultant."
WITNESSETH
WHEREAS, the VILLAGE OF TEQUESTA GENERAL EMPLOYEES' PENSION
FUND, hereinafter referred to as the "Fund," has been established for the purpose of
providing retirement and related benefits to eligible participants and beneficiaries and
defraying reasonable expenses of administering the Fund; and
WHEREAS, the Consultant represents that it is skilled in the area of investment
performance, and the Consultant represents that it is free and independent of the influence
of an Investment Mana
Y gers to the Fund; and
WHEREAS, the Trustees desire that the Consultant serve as an independent
consultant with respect to assisting the Trustees in monitoring the investment performance
of certain of the assets of the Fund, and the Consultant is willing to so serve.
NOW, THEREFORE, in consideration of the mutual agreements herein contained,
it is covenanted and agreed as follows:
1. Appointment of Consultant. The Trustees appoint the Consultant as an
independent consultant with respect to assisting the Trustees in monitoring the investment
performance of those Fund assets being managed as equity or fixed income investments
and for which the Trustees pay a fee for investment.
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2. Duties of the Consultant. Services under this Agreement shall include, but
are not limited to, the following:
2.1 Assist the Trustees in determining and outlining specific investment
objectives and help draft and execute a Statement of Investment Policy to be adhered to
by the Investment Manager(s).
2.2 Assist the Trustees in evaluating the investment performance of the
Investment Manager(s) of the Plan.
2.3 Assist the Trustees in determining the desirability of continuing orterminating
the employment of the Investment Manager(s). If necessary, and only at the direction of
the Trustees, the Consultant will conduct an Investment Manager Search;
2.4 The Consultant shall provide in report form on a quarterly basis, the annual
rates of return for the total Pension Fund, as well as equity and fixed income portions of
the Pension Fund, calculated according to the American Banking Institute method. The
Consultant shall also provide an annual database ranking for the above returns, and
comparisons to appropriate indices. This information shall be provided for each
Investment Manager. All rates of return shall be reported both as a gross rate of returns
and a rate that is net of fees.
2.5 The Consultant shall make an oral presentation of the above report at a time
and place designated by the Trustees on a quarterly basis.
2.6 The Consultant shall assist the Trustees in monitoring compliance by the
Investment Managers with the investment objectives and guidelines set forth in the
Trustees' Statement of Investment Policy and Guidelines and the Village of Tequesta
General Employees' Pension Plan.
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2.7 Assist the Trustees in determining asset allocation;
2.$ Other special projects requested by the Board.
3. Qualifications. The Consultant certifies that it is professionally qualified as
an independent consultant to evaluate the performance of professional money/investment
managers, and that it has at least five (5}years of experience as an investment Consultant
in the public sector. Furthermore, Consultant is an investment advisor registered with the
Securities and Exchange Commission under the Investment Advisors Act of 1940.
4. Independent Status. The Consultant certifies that it is not associated in any
manner with the present Investment Manager(s) of the Fund. Further, the Consultant
certifies that it shall not be associated in any manner with any future Investment
Manager(s) of Fund assets for whose performance the Consultant is engaged to evaluate.
5. Fees and Costs.
5.1 For service rendered under this Agreement, the Trustees shall pay the
Monitor an annual cash fee as set forth in Exhibit A attached hereto which is payable
quarterly in arrears upon delivery of the quarterly report.
5.2 No other fees or costs shall be payable without the express written consent
of the Trustees.
5.3 This fee will be guaranteed for a period of three years from the date of the
agreement above.
5.4 It is the responsibility of the individual investment manager(s) to achieve best
price and best execution in their securities transactions in accordance with the agreements
between those managers and the Fund,
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6. Record Retention. The Consultant shall maintain all records held by it
pertaining to the Fund fior six years from the date of origination of such records.
7. Confidential Information. The Consultant shall maintain and protect in
strictest confidence any and all data, information, and documents of and concerning the
finances, business and affairs of the Fund which Consultant acquires in its performance
of this Agreement. The Consultant agrees that none of the aforesaid data, information or
documents, and none of the reports and analyses prepared by the Consultant as provided
in Paragraph 3 hereof, or otherwise, shall be disclosed to anyone except the Consultant's
subcontractors, the Trustees, the investment manager, the administrative manager,
consultant, actuary or legal counsel to the Trustees, except as otherwise agreed to in
writing or as required by law.
8. Fiduciary Relationshio: Consultant will provide the services contacted for in
• order to assist the Trustees in making prudent investment judgments. In pertorming
services hereunder, Consultant shall act solely in the best interest of the Fund and shall
have a reasonable basis for any information provided. However, final decision making
authority and responsibility resides with the trustees. The Consultant acknowledges that
it is a fiduciary of the Plan within the meaning of the Employee Retirement income Security
Act of 1974 ("FRIBA") and Florida Statute §112.656.
9. Assignabili~r. This Agreement shall not be assigned without the priorwritten
consent of the Trustees.
10. Entire Agreement. This Agreement constitutes the entire agreement between
the parties hereto.
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11. Modification. This Agreement may be modified or revised only by written
amendment signed by the Trustees, and incorporated as written amendments to this
Agreement.
12. Prior Amendments. This Agreement supersedes all prior agreements with
the Consultant, oral or written.
13. Applicable Law and Venue. Insofar as they do not conflict with any
applicable federal law, the laws of the State of Florida shall govern this Agreement. Any
dispute involving the enforcement or interpretation of this Agreement shall have venue in
Palm Beach County, Florida.
14. Termination. This Agreement may be terminated with thirty days notice by
either party hereto upon mailing of written notice, by certified mail, to the other party at the
addresses given below:
Fund: Tequesta General Employees' Pension Fund
Go Daniel J. Gallagher, Pension Administrator
Village of Tequesta
250 Tequesta Drive, Suite 300
Tequesta, FL 33469-0273
Consultant: Joe Bogdahn
Bogdahn Consulting, LLC
62 Fourth Street Southwest
Winter Haven, FL 33880
Copy: Bonni S. Jensen, Fund Legal Counsel
Hanson, Perry & Jensen, P.A.
400 Executive Center Drive, Suite 207
West Palm Beach, FL 33401-2922
15. Trustees' Responsibilities. The Trustees represent that custodial account
statements, asset valuations, and other information relating to the Fund as may be
requested by Consultant is accurate and complete in all material respects. Consultant
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1012.0071
shall not be required to verify the accuracy of such information and Consultant shall be
entitled to rely on such information.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
by their respective authorized representatives on the dates indicated below.
BOARD OF TRUSTEES OF THE BOGDAHN CONSULTING, LLC
VILLAGE OF TEQUESTA GENERAL
ENjP YE ' PENSIOf~f FUND:
By:. C. By; ~
ewell, Chairman Joe Bo dahn, Principa
Date: ~ J I 1 ~ '1 Date: ~ ~ a
~~ 4~.
Witnes as to Mo itor:
Secretary
Date: ~ ~ ~ ~ ~ ~
Witness as to Board of Trustees:
Y~u~- `
BSJ/ka
May 10, 2004
H:1Tequesta GE 10121VendorslMonitorWGMT.wpd
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EXHIBIT A
Fees and Costs
Evaluation of Manager Performance:
In consideration for providing Investment Monitor/Consultant services to both the
Tequesta General Employees Pension Fund and the Tequesta Public Safety officers'
Pension Fund, the Consultant's fee for the first three years is as follows:
Year 1: No Charge
Year 2: $2,000.00
Year 3: Regular Fee Schedule
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Regular Annual Fee (Based on Assets):
Less than $750,000
$750,000 to $1,500,000
$9,500,000 to $2,500,000
$2,500,000 +
Set up fee
Additional Investment Manager Evaluations
$2,500
Additional Fees:
Additional Meeting Attendance
$300 per meeting {waived for the first year)
Manager Search
$3,500 per search
$3,000
$4,500
$6, 000
$$,ooo
$350 per year of data
Fee is guaranteed for three years.
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