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Home My WebLink About05-10-2000 Minutes THE CITY OF OCOEE GENERAL EMPLOYEES' RETIREMENT BOARD MEETING- May 10, 2000 The General Employees Pension Board was called to order by Chairman Dabbs at 10:10 AM on May 10, 2000. Present were the Chairman, Trustees Carter, Cornell, and Ison. Trustee Oliver was absent. A quorum was present. APPROVAL OF MINUTES The minutes of the February 9th meeting of the General Employees Pension Board (GEPF) were read and approved as amended. Upon motion by Trustee Ison and seconded by Trustee Cornell. NEW BUSINESS EDUCATIONAL EFFORT IN DROP PLAN Under new business, the Board and Attorney Dehner dialogued with the many employees present regarding an appropriate educational effort to insure the DROP plan is understood by the employees. A copy of the ordinance adopting the DROP is to be distributed to each Director's office for perusal by interested employees. Attorney Dehner gave a synopsis of the DROP which will be reproduced and sent to each Director for sharing with interested employees. A copy of the application form and other pertinent paperwork will also be provided to the Directors for sharing. RECORD RETENTION The problem with not having an appropriate and safe repository for GEPF records was discussed. Each Trustee was asked to assist Trustee Cornell in purging records as per conditions of state and city record retention procedures. Discussion of possible storage options such as Orlando record storage companies, purchase of fire proof file cabinets or air conditioned mini storage areas ensued. Trustee Ison volunteered to get bids from at least three (3) record storage companies and bring the information to the August 9th meeting. Trustee Cornell opined that once the records are purged, the remaining records could probably be stored in a four drawer file cabinet. Record storage became an issue because the City doesn't have space, and because the GEPF is a separate entity from the City, it is appropriate for the GEPF board to plan for appropriate and safe record storage. EMPLOYEE REQUEST FOR POSTING OF MINUTES/INSURANCE BENEFITS At the Employee Committee meeting held on April 19, 2000, the Chairman of the GEPF was invited to attend. The Chairman attended that meeting and heard employee concerns regarding GEPF minutes not being readily available to employees, a request for an insurance supplement, and fund enhancements such as COLAs, "30 and out," etc. The Chairman promised copies of minutes stamped "Draft, Not Board Approved" would be provided to the general employees directors. He also gave an explanation of the Board and the Chairman's efforts to secure qualified secretarial support at Board meetings. The consensus of the Employee Committee members was that the Board should zealously continue hiring efforts and that $12.50 per hour was a fair compensation rate. General Employees' Retirement Trust Fund May 10, 2000 CONFERENCES (JUNE) The Chairman also brought up the GEPF Board's blanket policy to cover costs of members' attending FPPTA conferences and seminars which enhance the members' effectiveness as Trustees. Trustees Carter and Cornell have conflicts and don't plan to attend the upcoming FPPTA event in Naples, June 23-28`h. Trustee Ison plans to attend but will make his own hotel reservations. Chairman Dabbs also plans to attend the conference. The Board then heard detailed explanations of S.T.I.'s assessment of the Nation's economic climate, its investment policies and strategies, and the impact upon the GEPF's performance. Essentially, the overall economic climate, including Fed rate increases, and the S.T.I. policies regarding Technology investments contributed to the poor performance rating when measured against other fund managers. (The Fed again raised the rate 50 basis points on May 16th). Since each Trustee got copies of the S.T.I. and Merrill Lynch handouts, these minutes will reflect only the main points of the money manager and the performance monitor. S.T.I. reported a 5.67% gain the 1st six (6) months of our fiscal year with a 60-40 market split on our investments. The areas of investment on the equity side were: 25% large cap growth; 20% large cap value; 3% international; 12% small cap. The remaining 40% was in bonds. Virtually little or no gain was experienced in every area but small and medium cap growth, which was up 21.5% the most recent quarter. Bond rates are now higher on short term than long term (the inverted curve). REPORTS Mr. Nash (S.T.I.) reported on changes in investment policy in which the equity investment was split into two funds: a growth and income fund (with no previously required divided requirement - which opens this fund to technology stocks); and a growth and equity (value fund). This gives a good balance between growth and value and opens up technology investment. The international investment dollars were also split as follows: 50% in current value funds plus 50% in an equity index fund. This action permits movement of investment dollars based on what's hot. The discussion led to a statement by Attorney Dehner that it is time to review the Board's Investment Policy which governs how the money manager invests the GEPF portfolio. Trustee Ison questioned the efficiency of the 60-40 split and observed that municipal bonds are available around 8% and that corporate bonds were also a possibility. Mr. Nash stated as long as the subject bonds were rated "A" or better, etc., the fund could invest in such instruments. Trustee Ison noted that the GEPF had good five (5) year results, 14.68%. More recent performance figures are not so impressive. Mr. Craig Hamilton, Merrill Lynch, confirmed the lower percentile rating of S.T.I. funds and commended the investment manager for the changes in investment strategy noted above. Mr. Hamilton observed that the international fund was not working and that S.T.I. had not met the 2 General Employees' Retirement Trust Fund May 10, 2000 50% of cost requirement for equity investment. He observed the current percentage is only 38%. He expressed concern about the low (64th percentile)ranking among investment funds and asked to present some suggestions regarding asset allocation at the Board's August 9th meeting. The performance monitor also noted that S.T.I. was ok measured against the policy checklist,but had failed to meet targeted growth numbers in the past year or two. The most recent twelve months have caused the five year growth rate to fall; i.e., last 12 months growth was around 5.8% (below target) and the year-to-date in 2000 rate was around 5.7%. He cautioned against municipal bond investment. His "grade" for the investment manager was a "D;" however, taking out the last 12 month performance and the "grade"became a"C." OTHER BUSINESS SECRETARIAL APPOINTMENT, CLARIFICATION INCLUDING TRANSCRIPTION OF MEETING MINUTES The Chairman reported on his exhaustive efforts to find a person with transcription abilities. Westside Tech personnel are now assisting in this search. L PAYMENT OF BILLS A summary of payment vouchers were as follows: 1) Christiansen&Dehner, P.A. 4) Merrill Lynch, 2) S.T.I. 5) Cooksey &Associates (Liability Ins.) 3) Brenda King for secretarial services There was general consensus to ratify the bills to SunTrust for payment. CORRESPONDENCE Letters from Foster&Foster, and Merrill Lynch were part of the packet. ATTORNEY COMMENTS/SET AGENDA FOR NEXT MEETING/ADJOURN The meeting concluded by hearing an explanation by the attorney regarding new IRS regulations concerning lump sum distributions from the fund and the setting of agenda items for the August 9th meeting. Respectfully submitted, / / / / LESTER DABBS, J r . Acting Secretary L 3