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HomeMy WebLinkAbout03-06-2006 Minutes Draft Subject to Approval THE CITY OF OCOEE POLICE OFFICERS’/FIREFIGHTERS’ PENSION BOARD THE CITY OF OCOEE GENERAL PENSION AND BOARD SPECIAL JOINT MEETING – March 6, 2006 Chairman Wilson and Administrator Carnicella called the special joint meeting of the City of Ocoee Police Officers’/Firefighters’ Pension Board and the City of Ocoee General Pension Board to order at 8:18 a.m. in the Commission Chambers of City Hall. The roll was called and a quorum declared present. PRESENT: Chairman Wilson, Member Gledich, Member Coschignano, General Board Administrator Carnicella, Terry Reed, Thomas Hendrix, Russ Wagner, Jean Grafton, Attorney Dehner, Performance Monitor Cole and Recording Secretary Conkling. ABSENT: Secretary Strickland, Member Strosnider, Mary Anne Swickerath, Actuary Foster, Money Manager Sebesta and Administrative Officer Garcia. REVIEW OF MONEY MANAGER ALTERNATIVES Chairman Wilson advises this meeting is called to discuss Trusco’s performance with large cap growth product. Performance Monitor Cole distributes Investment Manager/Fund Information and states there is a long relationship with Trusco, but the people handling your money are not the same people. Their performance has not been great, especially over the last three to four quarters in the large Performance Monitor Cole cap growth product. discusses changes in Trusco over the last three to four yearsin personnel and management styles. He compares the growth and value market, as well as performance issues relating to management turnover. Performance Monitor Cole advises the plans have grown, giving more options and better alternatives. Merrill Lynch sees Trusco in several other places where they have relationships. They are looking for a CIO. Recommends opting for another alternative, staying focused on international and core growth. Member Gledich questions whether our portfolio is in a place to have multi-managers, and how the Board decides how much money to pull out and give to another manager? Performance Monitor Cole states even though there has been one Money Manager, there are still multi-managers under that umbrella. The Board gives Trusco guidelines and they make asset allocations within those guidelines. Merrill Lynch will start with the actuarial assumption rate and use asset allocation models to get there in the safest and smoothest way. You as a board are responsible, but we are here for guidance. Performance Monitor Cole advises they have done a Mutual Fund Search, starting with best management teams. He explains the better management teams have minimum amounts before Page 1 of 4 Draft Subject to Approval Performance Monitor they will speak to you, but we can access them through mutual funds. Cole refers to handout discussing the different firms and their rankings, and states the firm he’s recommending is American Fund Group based on their strong growth fund management. He discusses the different classes of shares, the cost of those shares and expense ratios. Administrator Carnicella questions how we would get a report on the growth portfolio, and whether Trusco will continue asset allocation on the value side? Performance Monitor Cole states the Board would no longer have a portfolio manager come to quarterly meetings, with the exception of an occasional sales-oriented person. Merrill Lynch will report to you every quarter on the growth product, while Trusco will still come out and report on 75% of assets. Their assignment will change slightly with an addendum to policies or new benchmarks. They just won’t have the large cap growth fund. Russ Wagner asks what the expenses are to take out 25%? Performance Monitor Cole states it will only be sell fees. Trusco is already obligated to act under best execution. The only cost you’d have is on the sell side, nothing on the buy side. Member Coschignano questions whether the expense ratio will go up once we take 25% away from Trusco, or will the expense stay the same because we’re over the threshold? Performance Monitor Cole advises the Boards have $30 million combined, and taking out $7.5 million combined, will bring it down to $23 million with Trusco. This will give us 45 basis points with Trusco and 40 basis points at American Fund Group. Member GledichRuss Wagner states she is leaning toward the R5 Share. asks who would Performance Monitor Cole make the investment? states it would be set up initially through Jim Carnicella in the General Plan. Each quarter we would look at the total pie and make re- balancing decisions with the Board. Trusco will wire the money to American Fund Group under your direction. He also advises R5 forms require signature guaranty. Performance Monitor Cole advises the options are to stay with Trusco or go with American Fund Group. Member GledichMember Coschignano , seconded by , moves for the City of Ocoee Police Officers’/Firefighters Pension Board to move the large cap growth funds to American Fund Group, R5 Share. Motion carried 3-0. Performance Monitor Cole stated he will have paperwork to the Board by the end of March. Jean Grafton states she would like to hear recommendation from General Plan Administrator. Administrator Carnicella advises he will be more involved with Larry in quarterly decisions Administrator regarding growth and value piece of large cap. Due to Trusco’s history, Carnicella recommends going forward with this for now and continue monitoring 75% with Page 2 of 4 Draft Subject to Approval Trusco. If Trusco’s trend continues with value side of large cap, then look for an active manager. Performance Monitor Cole asks if the term “active manager” means a separate portfolio and Administrator Carnicella states this is an actively managed product. acknowledges it does mean a separate portfolio, but his recommendation is to consider this for now and eventually separately manage. Attorney DehnerPerformance Monitor Cole states is recommending not sticking with Trusco for growth fund of 25%. Russ Wagner asks from a fiduciary standpoint, how will Trusco allocate the money left? Will Performance Monitor Cole we need to give further instruction on how to invest? advises the policy won’t change. He will prepare a policy Addendum with new benchmarks for Trusco prior to the next meeting. He will also draft a sample letter to Trusco advising they are no longer responsible for large cap growth assets, with wire instructions to American Group Fund. We can have the account set up by the end of the quarter, March 31, 2006. Terry ReedJean Grafton agrees with the Police Officers’/Firefighters Pension Board. , Thomas Hendrix seconded by moves to transfer 25% of the General Pension Board’s growth fund to American Fund Group, R5 Share. Motion carried 4-0. Discussion is held regarding the presentation being easy to understand, and based on the facts presented, the risk would be staying with Trusco. Merrill Lynch’s goal is to get the best performance. Administrator CarnicellaPerformance Monitor Cole defers to the Boards or on whether the Attorney Dehner plan should be audited. advises there is not a right or wrong answer. Some Performance funds consider City audit sufficient; larger funds employ an independent auditor. Monitor Cole states Merrill Lynch checks to see if your plans are in compliance every quarter, which is different from an independent auditor who would track cash flow and re-balance every quarter. Merrill Lynch is review. Russ Wagner asks if we know of any problems, because the City does a complete audit and we Attorney Dehner can get the report. An independent audit could be expensive. advises an Terry Reed independent audit would run $5,000-$8,000. does not think that is necessary. Administrator Carnicella advises he will recommend the City make their audit available by end of March. Attorney Dehner brings up one item of business regarding Englehart disability application is st pending and expires May 1. He would recommend extending the time frame. Member CoschignanoMember Gledich seconded by , moves to extend the time frame for the disability application. Motion carried 3-0. Page 3 of 4 Draft Subject to Approval Chairman Wilson advises the next Board Meeting will be his last meeting. Someone is to be appointed at the next Commission Meeting, likely Charlie Brown. There will also be an election of a new Police Officer position before the next meeting. SET NEXT MEETING Chairman Wilson sets the next regular Police Officers’/Firefighters Board Meeting for Wednesday, May 10, 2006at 1:00 p.m. , in the Commission Chambers Conference Room at Wednesday, May 1, 2006, at 10:00 a.m. Ocoee City Hall. General Board meeting set for in the Commission Chambers. ADJOURNMENT Russ Wagner adjourns the General Board meeting at 9:43 a.m. Member Gledich questions when the next Commission meeting will be held, and if Mr. Brown Chairman Wilson knows he is up for appointment? advises the next Commission meeting is thst March 7, and if it’s not on the Agenda, it will be on March 21. We’ll also need to post for an election in April. Member Gledich Attorney Dehner expresses concern about not meeting a quorum. advises the rule states two unexcused absences, but the rule cannot override statute of a two year term. The Chairman Wilson’s election in April for the police side to take place, and we’ll count the Member Coschignano ballots at the next meeting. notes Commission will appoint someone to Member Strosnider, replace who has resigned. Member Gledich asks if there is anything that can be done to expedite the disability situation? Attorney Dehner advises everything must go through the office procedure of obtaining medical records, independent medical exam, etc. Discussion is held regarding criteria for participation in Police Officer/Firefighter Pension Plan. Need documentation of certification and job description before entrance into this plan. Attorney Dehner updates the Board on State monies from Windermere. Have had several contacts, and is working with City Manager on it. We cannot force Windermere to pass an Member Gledich ordinance. states we’ve discussed this several times as a Board and it seems to be taking too long. If there is money available to us, it needs to get in the pension plan. Member GledichMember Coschignano. Motion to adjourn is made by , seconded by Motion carried 3-0. Meeting adjourned at 10:05 a.m. Respectfully submitted, ______________________________________ Darlene Conkling, Recording Secretary Page 4 of 4