Loading...
HomeMy WebLinkAboutMinutes_Pension Public Safety_02/18/2005~~ TEQUESTA PUBLIC SAFETY OFFICERS' PENSION TRUST FUND QUARTERLY BOARD OF TRUSTEES MEETING FEBRUARY 18, 2005 I. CALL TO ORDER AND ROLL CALL The Tequesta Public Safety Officers Pension Trust Fund Board of Trustees held a regular meeting at the Emergency Operations Center (EOC) of the Public Safety Facility, 357 Tequesta Drive, Tequesta, Florida, on February 18, 2005. The meeting was called to order at 8.10 a.m. A roll call was taken by Gwen Carlisle, Village Clerk and Pension Board Coordinator. Boardmembers in attendance at the meeting were: Chair James Weinand, Vice Chair Geraldine Genco, and Secretary Peter B. Lucia. Also in attendance were Attorney Bonni Jensen, Monitoring Consultant Joe Bogdahn, Investment Manager Peter Van Beuren, and Finance Department staff members Director JoAnn Forsythe and Patrice Maqueda. Boardmember Edward Sabin and Board member Joe Petrick were • absent. II. APPROVAL OF AGENDA Chair Weinand requested addition of item VIII (e) - an invoice from Gabriel Roeder Smith; and addition under IX (a) of Boardmember Sabin's term that was expiring. Ms. Carlisle reported the Village Council had approved a resolution for a new contribution percentage by the Village, and the revised agenda had been done to remove Brittany Bouse as a new participant in item VI (a) because she was in the General Employees Pension Plan. Ms. Carlisle reported that early in the summer, Janet Lampier had been approved for withdrawal of her pension contributions; however, she was in the General Employees plan, so the General Employees plan would repay this fund. Vice Chair Genco requested addition under Any Other Matters of draft certification of trustees and excerpts from State Statutes 175 and 185. Vice Chair Genco noted there was a contract for Attorney Jensen and for the investment manager. Vice Chair Genco announced that Dan Gallagher was no longer involved in the pension board and financial matters should go to the Finance Department. MOTION: • Vice Chair Genco made a motion to approve the agenda as amended with the BOARD OF TRUSTEES • TEQUESTA PUBLIC SAFETY OFFICERS' PENSION TRUST FUND MEETING MINUTES February 18, 2005 PAGE 2 additions stated above. Secretary Lucia seconded the motion, which carried by unanimous 3-0 vote. III. APPROVAL OF MINUTES MOTION: Vice Chair Genco made a motion to approve the minutes of the November 9, 2004 meeting as submitted. Boardmember Lucia seconded the motion, which carried by unanimous 3-0 vote. MOTION: Vice Chair Genco made a motion to approve the minutes of the January 12, 2005 meeting as submitted. Boardmember Lucia seconded the motion, which carried by unanimous 3-0 vote. IV. PRESENTATIONS • A. NORTHSTAR CAPITAL MANAGEMENT -INVESTMENT MANAGER'S REPORT AS OF DECEMBER 31, 2004 Peter Van Beuren reported there were no violations of the investment policy. Mr. Van Beuren expressed concern that Value Line investment criteria was being used and recommended relying on the consultant to provide due diligence. Trusting those the board hired would provide more safety and consistency of earnings and growth. Vice Chair Genco asked Mr. Bogdahn to send the members of the board the investment guidelines as now proposed. Mr. Bogdahn indicated he would submit the guidelines in writing to be on the next meeting's agenda, and noted that Florida Statutes used to require Value Line. Mr. Van Beuren reviewed the quarterly report and reported the fund did very well last year. Northstar had achieved their mandate and goals and had made up for poor performance during 2003. The years 2000 through 2003 had been a bad time for the stock market. Mr. Van Beuren reported the fund had achieved their actuarial goal of 8%, and he was sorry the board was considering someone else to manage the fund. Mr. Van Beuren noted that problems of elections, Iraq elections, and gas prices had been overcome, and jobs were increasing with unemployment low. The Federal Reserve was doing a good job. The problem was the market hadn't received the message, and January was a difficult month even in large cap funds. February had been a little better. Mr. Van Beuren was optimistic regarding the coming year, anticipating that Northstar's style would do well in this type economy. • BOARD OF TRUSTEES • TEQUESTA PUBLIC SAFETY OFFICERS PENSION TRUST FUND MEETING MINUTES February ~8, 2005 PAGE 3 Attorney Jensen advised the investment manager's report should reflect proxies were voted during the quarter and to make sure that was provided in the back of the book. B. PRESENTATION BY JOE BOGDAHN Mr. Bogdahn reviewed the fund during the first quarter of the year, which showed an investment gain of $151,000. The fund had out-performed the indexes by 3.28%. The first quarter showed a 6.19% return after fees, and the goal was 8% on an actuarial basis. The size of the portfolio had been a drawback on the fixed income side because of the current economic picture. Mr. Bogdahn indicated in that situation the best scenario was to be more conservative, which was what had taken place. Performance of equities was reviewed. The quarter showed strong returns. Up and down capture percentages were given for the past seven years. The total fund showed significantly less violitility since inception than the benchmark indexes. Risk measures of beta, traynor and sharp ratios were reviewed. Chair Weinand asked Mr. Van Beuren if his company's management philosophy had changed in the last couple of years, since the amount of returns had gone up. Mr. Van Beuren explained that in going back seven years that included the 2-3 years where the stock market had been down as well as good years, and it smoothed out returns, while just going back 3-4 years the returns were not so good because those were mostly bad years for growth funds in the market. Vice Chair Genco explained further that Northstar's conservative philosophy had not done as well in volatile times but looking at that management style since inception it had paid off, and one had to decide on a management style that gave consistent returns or one that gave higher returns with more risk. Vice Chair Genco noted that the returns were actually higher than figured by Mr. Bogdahn because he had used 8% as the actuarial goal, but it had actually been 6% until recently. Mr. Bogdahn explained that growth and value swapped leadership roles over time and having only growth stocks in the portfolio meant less returns when value stocks were up. Mr. Bogdahn showed and explained different types of graphs to measure returns. Vice Chair Genco requested the subject of 5-year smoothing be placed on the next agenda. Chair Weinand responded that direction had been given to the actuary to use 5-year smoothing, and the next actuarial report would be in October. Vice Chair Genco indicated then that agenda item should wait until the actuarial report BOARD OF TRUSTEES • TEQUESTA PUBLIC SAFETY OFFICERS PENSION TRUST FUND MEETING MINUTES February ~8, 2005 PAGE 4 was received. Vice Chair Genco asked about the information ratio, which Mr. Bogdahn explained was the alpha divided by the traynor. Mr. Bogdahn's report was received and filed. Mr. Van Beuren expressed appreciation for the relationship Northstar had had with the fund and asked that the board consider them again if they wanted a large cap growth manager. Vice Chair Genco indicated she was very pleased with Northstar's performance, but now there was more pressure on the fund to produce higher yields, since there was an 8% rate of return and fees and expenses had increased, and unfortunately that meant taking more risk. The board members expressed thanks to Mr. Van Beuren for a good job. c) Presentation of Additional Money Manager Choice Boardmember Lucia commented he would like clarification of the legalities of being a member of the board and making a presentation, and just wanted to have an open conversation. Boardmember Lucia noted the board had been going through this process for a long time, looking to reduce risk, to diversify, and to have a different type of approach. Boardmember Lucia explained that he did have access to different programs and had not brought it up in the past because things were going pretty smoothly until at the last meeting, it was decided to go with a single manager which he felt would not provide diversification-it would provide the same swings that Mr. Van Beuren's management had achieved from year to year to year. Mr. Lucia recommended a multiple manager level on an institutional basis with Nationwide, and due diligence provided by Wilshire, a very large firm which provided due diligence on managers. A 4-level plan with Nationwide could be provided with Wilshire doing due diligence on all the money managers in the program. The board's goal was to protect the plan assets as seamlessly as possible, and it seemed to him there were too many variables, and he wanted to show the board what was available in a seamless plan, which they could use for comparison purposes or however they wanted. The 4-level plan would help manage the fiduciary responsibility of the board. Vice Chair Genco indicated it was her understanding that a board member could not make a presentation like this. If the board had requested a presentation, Mr. • Lucia should not be the person making the presentation. Boardmember Lucia BOARD OF TRUSTEES TEQUESTA PUBLIC SAFETY OFFICERS PENSION TRUST FUND • MEETING MINUTES February ~8, 2005 PAGE 5 asked if he should resign from the board. Mr. Bogdahn indicated he had asked up front if there was anyone else they wanted to include in the process. Mr. Lucia indicated he had thought Mr. Bogdahn as an independent could not make this presentation, but it was clarified that would have been the proper procedure. Mr. Lucia commented at that point he had not felt it was necessary to present this type of program; but at the last meeting, between the A.G. Edwards piece and the commingled funds it had seemed a lot more complicated and he had felt it was now necessary. He wanted to bring that all up before the presentation to get direction from the board, and if he had to resign or sign a conflict of interest form he would do so. Vice Chair Genco stated for the record the board would not be voting on anything and if after hearing the presentation if the board felt there was anything they felt they might want to have Mr. Bogdahn bring forward, they could ask him to do so. Chair Weinand asked Attorney Jensen if the RFP process could be re-opened. Attorney Jensen advised that a standard RFP had not been done- Mr. Bogdahn had recommended the managers to bring in--so essentially the RFP had been from a single source. Vice Chair Genco commented the RFP had been for a monitor and after being selected, Mr. Bogdahn had used his own RFP • criteria to select the investment advisors who met the board's criteria. The board was relying on the monitor to do a lot. Mr. Lucia could have asked Nationwide to be included when Mr. Bogdahn asked if there was anyone else the board wanted him to consider, and he could have resigned from the board if the board leaned toward his company, which would have been the cleanest way to do this. Vice Chair Genco advised now there was a gentleman waiting outside, so the board would just listen to what he had to say and the board would not take a vote, but at the next meeting if the Chair and Vice Chair Genco thought this was something they wanted to put on the agenda again they would do so. Boardmember Lucia commented he had wanted to open a conversation prior to this whole situation on an informal basis. Vice Chair Genco commented he was handling it well, that the board would take any handouts and distribute them to the other members who were not present, and hear the presentation. Boardmember Lucia introduced Rick Simon with Nationwide/Provident. Mr. Simon advised Nationwide was an affiliate of the Nationwide Insurance company. Boardmember Lucia explained that they had amulti-manager strategy, which provided diversity and was very flexible as far as investment policy, and to get into an institutional level like this usually required a fund to be well into the millions. Mr. Bogdahn commented there were three different sample portfolios shown in the handout. Mr. Simon explained those were only for illustrative • purposes-that the product was customized for each client, based on their policy BOARD OF TRUSTEES • TEQUESTA PUBLIC SAFETY OFFICERS PENSION TRUST FUND MEETING MINUTES February 18, 2005 PAGE 6 statement, risk/reward, tolerance for risk, etc. Mr. Simon explained they were a part of Nationwide Insurance Company, having been acquired by Nationwide Insurance about three years ago. Formerly they were a firm in Philadelphia called Provident Mutual. Their Star program had been operating for about 12 years, primarily in the northeast, and they had worked with approximately 200 municipalities in Pennsylvania with plans similar to Tequesta's pension plan. The Star program encompassed a series of separate accounts called the All Pro Funds, similar to mutual funds, but with a couple of major advantage-they were cheaper to operate and managers within the funds could be changed when necessary without proxy votes. The All Pro Funds provided an opportunity to take advantage of different investment styles-not to be locked in to small cap, large cap, or growth, etc.--and the opportunity to be exposed to institutional investment managers who normally would require anywhere from $5 to $20 million. What Nationwide had done was pooled their clients' accounts into these separate accounts, hired sub-advisors for various style-specific separate accounts, and used them in asset allocation programs. How assets were balanced was the primary • determinant of how the portfolio would do-one study showed it contributed 90% to the return. Wilshire did the manager searches, due diligence, and manager negotiations. Nationwide felt Wilshire was the best investment consultant for the major pension market. Wilshire's database, to which Nationwide had access, tracked about a thousand investment firms and five thousand investment products, so there was a pretty extensive list of investment managers that Nationwide could go to. Wilshire was riding herd on a trillion and a half dollars worth of assets, so Nationwide was always getting the lowest price possible because of their buying power, which was a significant advantage. Nationwide would support the trustees in their fiduciary obligations and responsibilities by supporting them in their investment policy statement, customize their asset allocation program to fit the investment policy and the tolerance for risk and their goals and objectives for the plan. One of the big things in maintaining a disciplined approach to investing was in re-balancing the fund on a quarterly basis, which meant bringing the portfolio back to the original percentages, which provided a much higher degree of expectation that the fund would reach its stated goal. Assets were diversified to the nth degree, not only by style but by manager and then by the actual securities that made up the different portfolios. Wilshire had the ability to look into the portfolios on a daily basis to assure that the managers were buying the proper style and maintaining their stated discipline. Mr. Simon advised that their firm would cut the checks for retirement or other benefits and take care of the tax reporting as part of their service. There were two dedicated websites, which made it very easy • for staff and the actuary to monitor the plan and view detailed financial BOARD OF TRUSTEES • TEQUESTA PUBLIC SAFETY OFFICERS PENSION TRUST FUND MEETING MINUTES February ~8, 2005 PAGE ~ transactions. Everything was online and was updated daily. There was a lot of periodic reporting and review Mr. Simon described the Star process-major criteria Wilshire used in hiring and firing investment managers, the people, resources, the process, and the philosophy. Asset allocation modeling was done using Wilshire proprietary software. The most efficient portfolio was created to reach a given return target. Wilshire published an asset allocation report each year, which was a forecast for the next ten years. Mr. Simon reviewed the report, and answered questions. Vice Chair Genco commented she felt it was important to know that this plan would provide all the benefits of insurance and that Wilshire was assisting, selecting managers and rebalancing-doing basically what Mr. Bogdahn along with Rockwood and Contravisory were doing--plus administration for the pension plan by cutting checks. Online information was reviewed. During ensuing discussion, Mr. Simon clarified this was a defined benefit. Vice Chair Genco noted Mr. Simon would have to come back if the board decided they wanted his services, • since there was not a quorum present today to vote on his presentation. Mr. Simon reviewed a sample portfolio as provided in his handout. Mr. Simon advised fees would be based on the asset allocation and showed fees for each of the sample portfolios. There would be no additional fees for administrative duties such as writing checks. Vice Chair Genco advised the Finance Director would look at Mr. Simon's report, and the Finance Director and Chair would decide whether this would be put on the agenda for the next meeting, and she recommended that if they decided to put it on the next agenda that Joe Bogdahn do an evaluation for the next meeting also. Mr. Bogdahn asked for additional information in order to do an apples-to-apples comparison. Ms. Forsythe summarized her understanding that Nationwide was an independent contractor -they had money managers managing their specific type of portfolios, and because of their size they had many managers, which Mr. Simon verified. Wilshire was their contracted consultant to sit on top of the money managers. Ms. Forsythe asked the check procedure, to which Mr. Simon responded they would type the checks and send for signatures, and eventually it would be done through the website. Vice Chair Genco advised the board accepted this and would leave it up to Ms. Forsythe and Chair Weinand to review, and thanked Mr. Simon for his time. BOARD OF TRUSTEES • TEQUESTA PUBLIC SAFETY OFFICERS PENSION TRUST FUND MEETING MINUTES February 18, 2005 PAGE 8 V. UNFINISHED BUSINESS a) Presentation of Investment Manager Contract for Consideration of Signature Vice Chair Genco asked where this contract came from. Attorney Jensen advised she had drafted the contract and it was presented at the January meeting. Vice Chair Genco advised she had gone through the minutes from the past year and did not find where the board had asked Attorney Jensen to prepare the contract. She had expected Mr. Bogdahn, Rockwood, and Contravisory to present their contracts and if the board was uncomfortable with that they would then ask Attorney Jensen to change the contract. Vice Chair Genco stated because there was a cost involved, the board needed to authorize Attorney Jensen to do the work before she did it. Attorney Jensen apologized but stated it was her understanding she was authorized to do the work; that she had presented the contract at the January 12 meeting and the board had directed her to make a change. Vice Chair • Genco stated the board did not direct her to make a change, they directed her to ld accept the contracts and review them, and she expected Attorney Jensen wou let the board know if they needed to have changes. Chair Weinand commented at the last meeting Vice Chair Genco had not been present, and there had been another contract that was proposed that was complicated, and Attorney Jensen had put it all together for the commingled fund. Vice Chair Genco commented if the board wanted the commingled fund that was another issue; and this was not meant as a criticism but as a budgetary issue, that expense should be authorized. Vice Chair Genco commented she thought that was something Chair Weinand wanted to address as far as coming up with a budget and a policy of how to deal with issues like this. Chair Weinand commented the board had taken action to hire Rockwood and had asked Attorney Jensen to engage in that, which was where the contract came from. Vice Chair Genco responded she had specifically asked for Rockwood's contract 2-3 times and it wasn't until last week she finally got a copy. She stated she wanted to see what they offered before the board had an attorney amend their contract. She would rather work with the template they provided and then have the attorney revise or amend it, but it was up to the board to make that decision. Vice Chair Genco asked Mr. Bogdahn the cost now on an annual percentage basis, which she felt was probably about 3-1/2%. Mr. Bogdahn advised with custody, investment, and his fee it was just under 1% of assets. Vice Chair Genco commented there were approximately $3,600 in legal fees. Chair Weinand commented he was not criticizing Bonni, but she got calls from . everybody and she was doing the work. Chair Weinand stated that in reality, the BOARD OF TRUSTEES TEQUESTA PUBLIC SAFETY OFFICERS PENSION TRUST FUND MEETING MINUTES February ~8, 2005 PAGE 9 board needed to make a policy because there really was not an administrator and Bonni was doing a lot of the administration that had formerly been done by someone else. Attorney Jensen reported Mr. Gallagher had asked her to handle the situation where Alex Nathanson, who left the Village in 2001 and had left his money in the fund, had written a letter to the fund indicating he was entitled to the new vesting. Attorney Jensen advised that an employee was entitled to the vesting the way it was when they left unless it was made retroactive or specifically included people through a group, in other words, if the board added a cost of living adjustment and were including all who were retired now. Chair Weinand stated the Village Council would make that decision. Attorney Jensen advised the plan was amended to have six year vesting in December of 2003 and that was not retroactive and did not include people who were out of the fund. Vice Chair Genco asked that Attorney Jensen forward a copy of her response to Mr. Nathanson to Ms. Carlisle so that she could forward it to all members of the board and the Finance Director. Mr. Bogdahn recommended there be a specific contact . person from the board to the attorney. Vice Chair Genco stated an individual's perception might be totally different than that of the board, so it was important to have gatekeepers. Chair Weinand recommended funneling everything through Ms. Carlisle. Finance Director Forsythe commented the board needed to agree as a board to authorize the attorney to perform work. Vice Chair Genco commented if it was a little item that was one thing, or a simple question, and she trusted Ms. Forsythe or Chair Weinand to do that, but there was going to be an expenditure of say, more than $250, maybe the board had to decide not to direct anybody to do anything without the board's authorization. Ms. Forsythe commented in this case she would probably call Attorney Jensen and say do we have to do that, and if she said no, then put together a letter, but she would have felt uncomfortable authorizing the work without the board's approval. Chair Genco stated she thought that was enough on that subject. Chair Weinand stated let's get back to where we were-to the item regarding presentation of investment manager contract for consideration of signatures, and if the board was not comfortable to table it to the next meeting. Vice Chair Genco commented she had a question about problems the General Employees' board had with Rockwood. Mr. Bogdahn reported their issues were with the commingled fund. Vice Chair Genco indicated it was Rockwood's lack of response to questions. Mr. Bogdahn advised one contact was home sick with the flu and the • other was on vacation, so there was a day's delay, and those two had been the best BOARD OF TRUSTEES TEQUESTA PUBLIC SAFETY OFFICERS PENSION TRUST FUND • MEETING MINUTES February 18, 2005 PAGE 10 persons to provide the information needed. Andy Holtgrieve was the primary contact and he could be contacted by calling their office or on his cell phone. MOTION: Vice Chair Genco made a motion to table to decide whether to enter into agreement with Rockwood to the next meeting, and the assets would stay at Northstar, and this would be on the agenda for the next meeting which was scheduled for the second Tuesday in May. Vice Chair Genco requested a meeting in March, indicating it was not fair to anyone to wait because the board was not following their plan. Chair Weinand expressed concern it was too long to wait to approve Attorney Jensen to do work when the meetings were quarterly, and the board needed to come up with a policy to authorize up to a certain dollar amount or bring it back to the board. Monday, March 14 at 8 a.m. was agreed upon for the next meeting, with a backup date of Friday, March 11 if needed. Boardmember Lucia seconded the motion, which carried by unanimous 3-0 vote. • b) Presentation of Options for Custodial Agreements Mr. Bogdahn advised quotes had been received from Bank of New York, Salem Trust and Am South Bank. Salem Trust was the least expensive, with a minimum fee of $3,000 annually. Bank of New York was $2,000 and $22 per transaction and Am South charged 10 basis points plus $1500 per ticket charge. Mr. Bogdahn gave the history of A. G. Edwards being chosen and explained that A. G. Edwards would not be involved in Salem Trust. There was no relationship between the custody and investment manager; however, Mr. Bogdahn recommended moving from Wachovia to have a different custodian because Wachovia charged $55 per ticket. Discussion ensued. Mr. Bogdahn commented Salem Trust charged 4 basis points and $10 per ticket up to 200 transactions, so this fund would be just under the minimum of $3,000; and Salem Trust would do checks to pay bills or the Village could do the checks. MOTION: Vice Chair Genco made a motion that the board get a contract from Salem Trust for their standard custodian package and have that submitted to the board for approval and authorization. At the next meeting the board would have the contract to review. Chair Weinand asked if the motion was for Attorney Jensen to review that contract. Vice Chair Genco responded at the • next meeting the board would look at the contract provided by Salem Trust BOARD OF TRUSTEES TEQUESTA PUBLIC SAFETY OFFICERS PENSION TRUST FUND • MEETING MINUTES February i8, 2005 PAGE 1~ and if they wanted something changed then would ask her to do it, and at the following meeting would authorize the actual execution and transfer of assets, so it was still two steps away from transferring the assets. Boardmember Lucia seconded the motion, which carried by unanimous 3-0 vote. c) Discussion and Consideration of Bill Paying Procedure if Custodian chosen does not provide Check Writing Services. Pension Board Coordinator Carlisle advised there was no backup for this item-it was placed on the agenda in case the custodian chosen did not provide checking account services. Vice Chair Genco commented the Finance Department would set up a procedure with Salem Trust through a letter of authorization. Mr. Bogdahn advised that Salem Trust representatives would come sit with the Finance Department. Chair Weinand advised no action was necessary at this time. • d) Report of Firefighters Vote for Increased Funding for Extra Benefits Chair Weinand reported all the scenarios laid out by Mr. Palmquist had been presented to the firefighters and they had voted unanimously to increase their personal contributions to 6.1% instead of 5%, to include extra benefits, which was Mr. Palmquist's option 6, which included changing the plan multiplier to 3% for years 16 through 21 and changing the multiplier for 25 years and over to 3%, and increasing the supplemental health insurance subsidy. Copies of all the ballots were included in the packets. They were going to use the supplemental monies now in reserve but would fall short, so were contributing another 1.1 % out of their paychecks. The Village contribution rate did not change. Chair Weinand reported the police contribution rate did not change-it was sti115%. Vice Chair Genco asked if there would be a point where the police department was benefiting from or being discriminated against because the firefighters were doing these additional benefits Chair Weinand advised they would get the benefit, too. Vice Chair Genco commented because the police and fire funds were commingled, State regulations required that one group could not receive a benefit that the other did not and it had to be equal. Chair Weinand reported the last time this went to the Village Council they had been adamant about keeping the benefits the same for fire and police. The contribution rates could be different as long as benefits were the same. Vice Chair Genco commented that was because State funds were • accepted. Mr. Bogdahn commented at some time down the road probably the BOARD OF TRUSTEES TEQUESTA PUBLIC SAFETY OFFICERS PENSION TRUST FUND • MEETING MINUTES February ~8, 2005 PAGE 12 police would ask to separate the fund. Finance Director Forsythe commented that was being tracked. Chair Weinand commented there were enough state funds for the police so that their contribution did not have to change, but there were not enough state funds for the firefighters so their contribution rate had to be increased to provide the benefits. Vice Chair Genco commented that this would be an actuarial impact issue in the future and it might legally affect state funds. Chair Weinand advised firefighters could not use police funds and police could not use firefighters funds-they had to stay separate for extra benefits. Vice Chair Genco commented one group might have to contribute more or less for the same benefit and if something happened at the State one class could be at a disadvantage, and as the assets got larger the board might want to think about separating the funds-probably in two to three years. Ms. Forsythe reported there were actually two sets ofbooks-actually two plans, which was why astand-alone audit had not been required. They were presented to the State separated. Vice Chair Genco asked if any changes were needed to the plan document for these changes. Attorney Jensen advised the plan document would have to be amended • to incorporate the changes and be presented to the Village Council and to Steve Palmquist for his actuarial cost statement. Chair Weinand advised that Mr. Palmquist had already done the work but just had to put it into the proper form. MOTION: Vice Chair Genco made a motion to have Steve Palmquist provide a copy of the report which was authorized at the November meeting and for which an invoice in the amount of $2,935.00 had been received, and that Attorney Jensen make the changes to the plan documents, including boilerplate language she would provide to Attorney Jensen so that there could be an authorization resolution that could be presented to other entities whenever there was a contract as to who had signing authority and what that authority was. It was confirmed by Attorney Jensen that Mr. Palmquist would had already done the work, and there were several changes and he would put into the proper report format only those changes that applied to this. Boardmember Lucia expressed concern there would be additional charges; Chair Weinand commented he did not believe the extra charges would be extensive. Boardmember Lucia seconded the motion. Chair Weinand stated he would call Mr. Palmquist to get the cost for the accrual cost impact statement. Chair Weinand summarized that the motion was to authorize Attorney Jensen to amend the plan document, to include trustee certifications, and for Mr. Palmquist to do an impact statement so that this • could be moved forward to the Village Council. Motion carried by BOARD OF TRUSTEES TEQUESTA PUBLIC SAFETY OFFICERS PENSION TRUST FUND • MEETING MINUTES February i8, 2005 PAGE 13 unanimous 3-0 vote. e) Discussion of budget for 2005 Chair Weinand commented he and Finance Director Forsythe had discussed this and she had indicated it would not be hard to put together. Chair Weinand asked that Director Forsythe present this item at the March meeting just basically income and expenses. VI. STANDING REPORTS a) Approval of new applicants for participation in Pension Plan- None. b) Approval of Beneficiary Changes -None c) Request for withdrawal of contributions - MOTION: Motion was made by Boardmember Lucia, seconded by Vice Chair Genco and carried by unanimous 3-0 vote to approve the following requests for withdrawal of funds: Roberto B. Madera -firefighter. Date of Termination 8/16/02 Rollover - $2,587.55; and Gregory Meehan -police officer. Date of Termination 1/23/05 Payout $3,005.67; withheld for taxes $751.42, total $3,757.09. d) Ratification of withdrawals made since last meeting MOTION: Motion was made by Boardmember Lucia, seconded by Vice Chair Genco and carried by unanimous 3-0 vote to approve the reimbursement paid to Boardmember Joe Petrick for Trustee School Expenses in the amount of $631.45. VII. FINANCIAL REPORTS a) Statement of Accounts (October-December 2004) • BOARD OF TRUSTEES TEQUESTA PUBLIC SAFETY OFFICERS PENSION TRUST FUND • MEETING MINUTES February ~8, 2005 PAGE i4 MOTION: Vice Chair Genco made a motion to accept the statements. Boardmember Lucia questioned as far as the trading done at Wachovia, Mr. Van Beuren was to provide the commission runs, and none had been provided, and asked who was being copied on confirmation of trades. Vice Chair Genco responded that the Pension Administrator would continue to reconcile the statements and most transactions were done by block trade and that was charged at 1- 1/2%, and there was an agreement on price per share with Prudential which was the financial institution that was now Wachovia. Mr. Bogdahn indicated he would provide a purchase and sell report for the next meeting. Boardmember Lucia seconded the motion which carried by unanimous 3-0 vote. b) Schedule of Activities for Quarter ended December 2004 Pension Board Coordinator Gwen Carlisle reported that the schedule of activities was just handed out today provided by the Finance Department. MOTION: Vice Chair Genco made a motion to accept the Schedule of Activities for the quarter ended December 31, 2004. Boardmember Lucia seconded. The motion carried by unanimous 3-0 vote. VIII. PAYMENTS TO BE REVIEWED AND APPROVED MOTION: Vice Chair Genco made a motion to approve the following payments: Business Services Connection -11/9/04 meeting and minutes $330.40; Business Services Connection - 1/12/05 meeting and minutes $159.30; Hanson, Perry & Jensen, P.A. - $2,002.15; Bogdahn Consulting, LLC - $2,000.00; Northstar Capital Management, Inc. -Services 10/1/04 to 12/31/04 $4,861.00 and Services 1/1/OS to 3/31/05 $5,382.00; Gabriel, Roeder, Smith $2,935.00. Board member Lucia seconded the motion, which carried by unanimous 3-0 vote. • BOARD OF TRUSTEES TEQUESTA PUBLIC SAFETY OFFICERS PENSION TRUST FUND • MEETING MINUTES February ~8, 2005 PAGE 15 IX. ANY OTHER MATTERS a) Reappointment of 5th Member of Board of Trustees Vice Chair Genco commented she was in favor of reappointing Mr. Sabin. Ms. Carlisle advised reappointments might be taken to the Village Council in April since they were trying for a light agenda in March. Vice Chair Genco suggested the board make reappointments to coincide with when the Village Council made reappointments. Chair Weinand commented Mr. Sabin had expressed interest in serving on the board for another two-year term. MOTION: Vice Chair Genco made a motion to approve appointment of Edward Sabin as 5th member of the board for another two-year term. Board member Lucia seconded the motion, which carried by unanimous 3-0 vote. • b) Resolution 31-04/05 was presented for the record. c) Draft Certification for Trustees Vice Chair Genco commented this had already been covered, but referred to a sample resolution, and stated that it also should be done for the General Employees Board. Vice Chair Genco stated this certification resolution would be adopted at the next meeting, and she believed the plan required two signatures, so basically there would be no transfer or disbursal of funds without two signatures. d) 175/185 Statutes Vice Chair Genco provided a handout for information, stating the plan only needed a monitor to evaluate assets every third year, and an actuarial report every third year. Mr. Bogdahn advised the State statutes still said every three years, but the Federal statute had been changed to every two years. Vice Chair Genco commented the state took precedence. Mr. Bogdahn commented he was just reporting what he had heard, and the board should check with their auditors for proper information. Chair Weinand commented the board was on a two-year cycle and he did not feel comfortable going to three years. Vice Chair Genco cautioned to be aware that a full report was required every three years, and she had only brought this up if the board wanted to think about other ways of containing costs. Chair Weinand advised this • had been brought up before, and during the RFP process for a monitor it had been a BOARD OF TRUSTEES TEQUESTA PUBLIC SAFETY OFFICERS PENSION TRUST FUND • MEETING MINUTES February ~8, 2005 PAGE 16 question. Chair Weinand recalled that Mr. Bogdahn had indicated it was easier and cheaper for him to do it every year rather than waiting and having to go back and reconstruct the information. Mr. Bogdahn commented also regarding the actuarial side, if something happened that changed or affected the plan, most boards would have it done more frequently; a lot could happen in three years and the board might not have the information they needed if they waited three years for a report. For example, the Village might have to do a 3-year catch-up on contributions or if five new police officers and ten new firefighters were hired the board would want an actuarial evaluation to avoid sticker shock by the time another evaluation was done. On the monitoring side, something that had happened to a number of funds was that in 1999 they needed to do an evaluation and they had value-oriented portfolios which had significantly under-performed in 1997, 98, and 99. So they hired growth managers based on the recommendation of their consultants based on their history. They went out of the frying pan into the fire because growth did well for only one more quarter and they captured none of the upside and all of the downside for the next three years. If they had had the proper information along the way they could have changed direction. Mr. Bogdahn indicated he was not saying the board should • not have a monitoring report every three years; however, of the 97 firms he represented, they all did it on an ongoing basis. Vice Chair Genco commented she agreed and she had just taken time to read the statute thoroughly for the first time so had presented it for information purposes. Vice Chair Genco indicated she thought board members should be given copies of the statutes when they were appointed. Chair Weinand agreed. Mr. Bogdahn advised that F.S. 112.661 required all the trustees to have continuing information and the Department of Retirement was hosting a conference March 23, 24, and 25 in Tallahassee. The first day was new trustee orientation and then another day and half of discussion, which might be interesting to members of the board or members of the Finance Department. In October this conference was usually in Tampa or Orlando, but never farther south. The FPTTA conference was going to be in Boca Raton in the summer, but they also had two trustee schools, which were much better for education purposes. Finance Director Forsythe described the finance schools and reported both she and Ms. Maqueda were required to take 80 hours every two years. F. S. 112 dealt with public officers and governed the public sector. Board member Lucia indicated he would like to attend the Tallahassee conference in March. Discussion ensued. MOTION: Vice Chair Genco made a motion to approve sending Board member Peter Lucia to the conference in Tallahassee in March. Board member Lucia • seconded the motion, which carried by unanimous 3-0 vote. BOARD OF TRUSTEES TEQUESTA PUBLIC SAFETY OFFICERS PENSION TRUST FUND • MEETING MINUTES February ~8, 2005 PAGE ~~ e) Attorney's Contract Vice Chair Genco stated this was just FYI and went back to some of the other issues that had been discussed. Chair Weinand commented he would attempt as much as possible as Chair to coordinate with Attorney Jensen's office. Vice Chair Genco commented the attorney's contract allowed the board to ask her to do pretty much everything, but just because it allowed her to do everything did not mean the board was not supposed to be directing her. X. COMMUNICATIONS FROM CITIZENS There were no communications from citizens. XI. ADJOURNMENT Upon motion by Vice Chair Genco, seconded by Boardmember Lucia, and unanimously • carried, the meeting was adjourned at 11:20 a.m. Respectfully submitted, Betty Laur Recording Secretary •