Loading...
HomeMy WebLinkAbout05-10-2006 Minutes Minutes of the Regular Meeting of the CITY OF OCOEE GENERAL EMPLOYEES PENSION BOARD Held on May 10, 2006 At 150 N. Lakeshore Drive Ocoee, FL 34761 AGENDA ITEM I. CALL TO ORDER— Chairman Swickerath A. Chairman Mary Anne Swickerath called the meeting to order at 10:10 a.m. in the Commission Chambers in City Hall. She called on Secretary Jean Grafton to call the roll. Present were Trustees Mary Anne Swickerath, Russ Wagner, Terry Reed and Jean Grafton and it was declared that a quorum was present. Absent was Trustee Tom Hendrix. Also present were H. Lee Denner, Attorney; Jim Carnicella, Human Resources Director/Plan Administrator; Mike Sebesta, Money Manager, Trusco Capital Management; Larry Cole, Monitor, Merrill Lynch; and Dianne Garcia, Relationship Manager, SunTrust. B. Approval of Minutes from Regular Session dated February 8, 2006, Approval of Minutes from Workshop Session dated March 22, 2006, and Approval of Minutes from Joint Meeting of Police & Fire dated March 6, 2006 Chairman Swickerath called for review of the Minutes as stated. There being no additions or corrections, it was, on motion made by Trustee Reed, seconded by Trustee Wagner, unanimously RESOLVED that the Minutes of the Regular Session of the Board of Trustees of the General Employees' Pension Board of February 8, 2006, the Minutes of the Workshop Session of the Board of Trustees of the General Employees' Pension Board of March 22, 2006, and the Joint Meeting of the Board of Trustees of the General Employees' Pension Board and of the Board of Trustees of the Police Officers'/Firefighters' Pension Board of March 6, 2006, be and they are hereby approved. AGENDA ITEM II. NEW BUSINESS A. Money Manager's Report—Michael Sebesta, Managing Director, Trusco Capital Mr. Sebesta went over documents (in the Trusco blue book— investment review for the quarter) that were handed out to the Board. He reported that the fund had a very good quarter for the second quarter of the fiscal year. He stated that there were many positives in the Equity side but negative on the Fixed Income Bond side due to inflationary pressures as the Fed has increased the interest rate. Trustee Wagner asked about our intent to re-allocate assets or did we just decide to leave allocations alone and just move the Large Cap to Mutual Fund. Larry Cole said he would address that issue. Mr. Sebesta continued going over the blue book and discussed the General Employees Pension Board Quarterly Meeting,May 10,2006 Page 2 of 4 economy slowing and said that the Fed may not continue to raise interest rates but the Bond Fund will probably lag for a while longer. B. Investment Consultant Report—Larry Cole,Merrill Lynch Mr. Cole went over the investment consultant reports (green book for 3-31-06) that were handed out to the Board and advised that the fund started well and is near $13,000,000 now and that asset allocation become more the responsibility of the investment counselor. He recommended the Board allow Merrill Lynch to become more responsible to determine the asset allocation, identifying the different targets like Small Cap, Equity, International and that Trusco would be held responsible and would be measured against specific indexes and the Board would do the re- balancing of the asset allocations. He referred to the fact that the allocation for International is now up to 15% and we are only invested about 8% in Internationals. Mr. Cole said he has drafted individual assignments. Trustee Grafton asked Attorney Denner if the Trustees should be more involved in asset allocation. Attorney Dehner said no, that we must rely on Consultants. Trustee Wagner asked why have we not moved to 15% in Internationals. Mike Sebesta said he was waiting for direction since the Board moved the Large Cap away from Trusco. Larry Cole stated that Trusco did not move to 10% International when they could have. Attorney Dehner affirmed that it would be Merrill Lynch recommending re-balancing and the Board would just follow the recommendations or they could just leave Trusco with the responsibility of moving assets from one fund to another (i.e.: from International to Small Cap to Mid Cap, or when to move up and down into the Bond Fund). Trustee Wagner pointed to page 2 of the asset allocation pie chart and questioned why there is not more exposure in Small Cap, International, or Mid Cap. Trustee Wagner also questioned Trusco's decisions vs. their performance and he wonders why when considering Merrill Lynch's recommendations. Mike Sebesta said with reviewing their performance over the past 5 years it is not bad vs.just looking at the last 3 years. Trustee Wagner again said he is confused as to why Trusco did not allocate the assets differently. Mr. Sebesta said the biggest negative was the Large Cap Fund and yes, they did well in other assets but if the Large Cap had done well then they would be ok but they just had too much allocated to the Large Cap, which "by the way" unfortunately did not do well. Mr. Cole asked Mike Sebesta if he wants it to stay the way it is or separate individual assignments. Mr. Sebesta stated that he would like to keep it the way it is as that seems more efficient, otherwise we need to provide Trusco with a letter of direction. Trustee Swickerath stated that review in the workshop was the Board was going to wait to see what happens in the future before making any big changes. Trustee Wagner said the Board was talking about changes in Investment Counselor (Merrill Lynch). Trustee Wagner also said we are talking now about how Trusco has reacted to market changes and how slow Trusco moves to allocate funds. Trustee Wagner asked is there a "middle of the road" way to meet what Larry Cole recommended and allowing Trusco to maintain their autonomy. Mr. Cole countered with creating specific indexes like Russell 5000, Russell 2000 or 2500, etc. Trusco would then be measured in the future to those indexes. Mr. Cole stated he is not criticizing Trusco and Mr. Sebesta for not hitting the home run but over the long haul they have not done well. Mr. Carnicella recommended the Board consider Mr. Cole's "middle of the road" recommendation. Trustee Grafton asked if Trusco would report on Fund without 25% Large Cap and Mr. Cole would report on the Mutual Fund. Mr. Cole stated it could be done and done without confusion. Trustee Grafton and Mr. Cole discussed what Trusco would be responsible for and how our reports would come to the Board. Mr. Cole reviewed Trusco's history and stated Trusco Growth had trouble keeping up with peers in the Growth Groups. Trustee Wagner asked about "marching orders" and Mr. Cole stated he would get it to General Employees Pension Board Quarterly Meeting,May 10,2006 Page 3 of 4 Mr. Carnicella and have it approved. Trustee Wagner asked when this would happen and said that the Board does not want to wait three months. Chairman Swickerath said the Board needed to consider the asset reassignment and new bench marks and have it as an agenda item for next meeting. Mr. Cole reviewed page 4. Trustee Wagner asked about Fixed Income and again Trusco was in the bottom 2% compared with what other managers have done. Mr. Cole said Trusco should have done better but he was not as concerned now and referred to the Bond Fund. Mr. Cole reviewed the Handout of Market Analysis and said it shows those who went with large companies and more established companies, but they have not earned well. Attorney Dehner asked about the SEC inquiry and Mr. Cole said Merrill Lynch has heard nothing although it has been going on for several years now and that no news is good news. Attorney Denner stated that he wants a fiduciary letter from New Jersey and ten questions trustees should ask of Investment Consultants and asked for some communication before next meeting. C. Actuary Report —Ward Foster, Foster& Foster Trustee Grafton stated Brad Heinrich, Foster& Foster, had called and apologized for not having the Evaluation Report done. AGENDA ITEM III. OLD BUSINESS A. American Funds Application American Funds application was finally done on April 28, 2006, transferring $3,403,228.75 from Trusco to American Funds Group. AGENDA ITEM IV. OTHER BUSINESS A. Payment of Invoices Trustee/Secretary Grafton shared the Plan Administrator Report listing bills and other charges and fees for the last two quarters. On motion made by Trustee Wagner, seconded by Trustee Reed, unanimously RESOLVED that the bills and other charges and fees be and are hereby approved as presented for payment. B. Reports and Correspondence—Jean Grafton, Trustee/Secretary Trustee Grafton placed her report in the record of the forty-three (43) former employees who have not had their contributions returned to them. Trustee Grafton stated that she has asked the IRS to try and find the remaining twenty-one (21) former employees. Trustee Grafton brought up a communication from Riverside Capital requesting an opportunity to assist exiting employees with their investments. Attorney Denner said we should not be getting in the business of giving financial advice to our employees and the Board agreed. General Employees Pension Board Quarterly Meeting,May 10,2006 Page 4 of 4 C. Set Dates for Next Year's Meetings L Attorney Dehner suggested his office provide the dates for next year's meetings for the Board according to past schedules. Mr. Carnicella suggested that it be ready for the next meeting and Attorney Dehner said that he may be able to have it for the next meeting but would have it for sure by the November meeting. Attorney Denner said he would take care of it. AGENDA ITEM V. ATTORNEY COMMENTS—H. Lee Dehner, Esq. Attorney Dehner brought up the 3%multiplier ordinance and stated that he will work on it with the Plan Administrator, Jim Carnicella. Attorney Dehner reminded the Trustees that they must fill out a Financial Disclosure and submit it before July 1st. AGENDA ITEM VI. PLAN ADMNISTRATOR COMMENTS—Jim Carnicella Jim Carnicella spoke briefly about Daniel Dingman, who is an employee who should have been in the Police Officers' & Firefighters' Pension Plan rather than the General Employees' Pension Plan. Attorney Dehner asked Mr. Carnicella for documents, including the labor agreement,job description and PERC certification. Jim Carnicella also spoke about the liability insurance issue, which the Board paid for in the past and seems to be the same as the City's general liability coverage. AGENDA ITEM VII. COMMENTS FROM TRUSTEES In order for the secretary to make reservations for the FPPTA Conference the Trustees were polled with Trustee Reed stating yes, Chairman Swickerath - no, Trustee Grafton — yes, Trustee Wagner—no, Trustee Hendrix—yes. AGENDA ITEM VIII. SET AGENDA FOR NEXT MEETING Not addressed. AGENDA ITEM IX. ADJOURN There being no other business, the meeting was adjourned at 12:10 p.m. Respectfully submitted by App v by: sA Debbie Bertling HR Analyst '` ` 12“”E LL 6/4 QAJ M. 1/(C E — eicha�2