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DRAFT
Sebastian Police Pension Board Minutes: June 12, 2012, 10:00 a.m.
TYPE OF MEETING: Regularly Scheduled
Sebastian City Council Chambers
ATTENDEES: Board Members:
Greg Witt, Chairperson
Harry Tanner
Steve Marcinik
Robert Zomok, Secretary
EXCUSED: Debra Krueger
CONSULTANTS:
Peter Goodridge, Wells Fargo Advisor
Grant McMurry, ICC Capital Mgmt. (Portfolio Manager) - Absent
Lee Dehner, Attorney
SUBJECT
CALL TO ORDER
10:15 a.m. There being a quorum present, Greg Witt, called the meeting
to order.
SUBJECT
APPROVAL OF MINUTES
The minutes for the regular meeting on March 20, 2012 and the minutes
for the special meeting on April 17, 2012 were reviewed and approved.
SUBJECT
OLD BUSINESS
None for this meeting.
NEW BUSINESS
SUBJECT
DRAFT 2 ° 06/12/2012
WELLS FARGO CONTRACT UPDATE
The Board has received six (6) responses to the RFP to provide
investment consultant services. The "Board will hold a Special Meeting
on August 17, 2012 at 10:00 AM in City. Council Chambers to determine
the three (3) firms who will be asked to make a presentation to the
Board. The presentations will take place at the Regular Meeting on
September 18, 2012.
SUBJECT
WELLS FARGO ADVISORS REPORT
The Board asked Peter Goodridge to discuss the reasons for the
differences between the performance of our fund and others within the
State. Peter explained the need to select comparable plans for
comparison. For example, the Florida Retirement System (FRS) invests
in private equity, real estate, and international stocks. Our fund is too
small to fully utilize those avenues of investment. In addition, the FRS
can negotiate a more favorable fee structure due to the size of the fund.
Our Fund had a total market value of $8,561, 803 as of the end of the
first quarter, 2012. The Fund had an investment return of 6.45% in the
first quarter ending 03/31/2012. The Fund was allocated 51% in stocks,
42% in bonds, and 7% in cash equivalents. The Fund has a net average
annual time weighted return of 2.02% over the last five years. The FRS
Pension Plan returned 2.93% during the same time period. The
Hollywood Police Officers Pension Fund had a gross return of 4.3%
while the City of Orlando Police Officers Pension Fund had a net return
of 2.1%.
We now have four (4) bonds in the portfolio that currently do not meet
the requirements of the Statement of Investment Policy adopted March
159 2011. The Board determined the need for a rationale and a plan for
dealing with these downgraded bonds. The Statement does say that
"fixed income securities that are downgraded below the minimum
rating by both entities shall be sold at the earliest beneficial
opportunity."
At our last Regular Meeting, the ICC Management representative
agreed to review the status of the, then, three (3) downgraded bonds and
prepare a report for the Board. Since they were unable to attend this
DRAFT 3 06/12/2012
(June 12, 2012) meeting, the Board agreed to have Bob Zomok contact
Grant McMurry and request a statement showing the rationale for
retaining the bonds up to this point in time and detailing his plans for
action on these downgraded bonds.
SUBJECT
PORTFOLIO MANAGERS INVESTMENT REVIEW REPORT
Report on Sale of Downgraded Bonds - (see above)
SUBJECT
ATTORNEY MATTERS
Attorney Dehner reported on the following:
No "unfriendly" pension legislation is currently being acted upon at the
State level. The focus, at the state level, is on the Florida Retirement
System due to the major impact it has on the State budget.
HB 401 was passed protecting confidential (private) information about
police officers. If a records request concerning a police officer is
received, information delineated in BB401 is to be redacted from an
response.
HB 629 Pension Beneficiary Designation - prior to this piece of
legislation, if a police officer became divorced and had not processed a
change of beneficiary, the ex- spouse would receive the officers pension
benefit if the officer died. Under this legislation, the ex- spouse
designation is voided. Lee anticipates a major challenge based on the
legislation being determined unconstitutional due to "impairment of
contract rights."
Lee also reminded all Board member to file their financial disclosure
forms with the Supervisor of elections prior to July 1, 2012 and to
ensure to form is completed accurately.
SUBJECT
ACTION ITEMS
ITEM RESPONSIBLE PERSON
DRAFT 4 06/12/2012
Email to Grant McMurry Bob Zomok
SUBJECT
ADJOURNMENT
Next Special meeting is August 17,2012, at 10:00 a.m.
in the City Council Chambers.
Next Regular meeting is September 18, 2012, at 10:00 AM in the City
Council Chambers.
Having no further business for discussion, Chairman Greg Witt asked
for a motion to adjourn the meeting. Bob Zomok made the motion and
Harry Tanner seconded. Motion passed and the meeting was adjourned
at 11:20 AM.
Respectfully submitted,
Bob Zomok
Secretary
Sebastian Police Pension Board