06-16-2003AGENDA
PENSION
TRUSTEES
AGENDA
Board of Trustees of the Employees' Pension Fund
June 16, 2003 - 9:00 A.M.
1 - Call to Order
2 - Approval of Minutes: 05/12/03
3 - Request for acceptance into membership: Deborah Lemon, Jeffery Schmitt, Joseph
Miller, Kimberly Miller, John Sever, Christoph auf dem Kampe, Kari Connor, Felicia
Leonard, Floyd Thurman, Ronald Gideon, Christopher Jenkins, Michael Reynolds,
Clifford Fisher, Mark R. Coffin, Lisa Hobin, Dimitrlos Tsoustas, Robert Fegley, Zane
Morris, Sharon McAuley, Eddie Marry, and Michael Olsa
4 - Regular Pension(s) to be granted: Charles A. Howard and John M. Hodgden
5 - Pension(s) to be vested: Elizabeth L. Garrett
6 - Authorize staff to conduct a search for a firm to provide performance measurement
and other related services for the Pension Plan,
7 - Authorize staff to negotiate a contract with the firm of Charles D Hyman & Company
for investment consulting services.
8 - Ratify and confirm the termination of EPW Investment Manager and the transfer of
the assets under their management to Northern Trust's Lehman Aggregate Bond
Fund.
9 - Other Business
10- Adjourn
Meeting Date:
r- 16-03
Approved by Trustees:
CITY OF CLEARWATER
EMPLOYEES' PENSION PLAN/
PENSION ADVISORY COMMITTEE
TO:
FROM:
SUBJECT:
DATE:
Pension Trustees
Pension Advisory Committee
Recommendation for Acceptance into Pension Plan
May 8, 2003
As Trustees of the City of Clearwater Employees' Pension Fund, you are hereby notified that the
employee(s) listed below have been duly examined by a local physician and each has been designated as a
"first class risk". The employment of these individuals brings the number of FTE's as of this date to
1752.36 of 1844.9 budgeted positions (including the City Commission).
These employees are eligible for pension membership as noted in the Pension Eligibility Date column
below, and it is the recommendation of the Pension Advisory Committee that they be accepted into
membership.
Pension Elig.
Name, Job. Class. & Dept./Div. Hjre Gate Date
Deborah Lemon, Recreation Leader/Parks & Recreation 4/15/02 3/22/03
Jeffery Schmitt, Solid Waste Worker/Solid Waste 3/24/03 3/24/03
Joseph Miller, Custodial Worker/Parks & Recreation 3/24/03 3/24/03
Kimberly Miller, Neighborhood Services Coordinator/Development Sor. 3/29/03 3/29/03
John Sever, Field Service Representative/Customer Service 417103 417/03
Christoph auf dem Kampe, Utilities Chemist/Public Utilities 4/7/03 4/7/03
Kari Connor, Accounting Clerk/Gas 417103 417103
Felicia Leonard, Pedestrian-Bicycle Coordinator/Parks & Recreation 4/7/03 417/03
Floyd Thurman, Mechanic II/Solid Wate/General Services 5/19/00 3/25/03
Ronald Gideon, Risk Management Specialist/Finance 3/24/03 3/24/03
Christopher Jenkins, Recreation Leader/Parks & Recreation 3/24/03 3/24/03
Michael Reynolds, Senior Planner/Planning 3/24/03 3/24/03
Clifford Fisher, Police Recruit/Police 3/24/03 3/24/03
Mark R. Coffin, Custodial Worker/Parks & Recreation 4/8/02 417/03 "
Lisa Hobin, Senior Payroll Technician/Finance 4/21/03 4/21/03
Dimitrios Tsoustas, Solid Waste Worker/General Services/Solid Waste 4/21/03 4/21/03
Robert Fegley, Custodial Worker/Parks & Recreation 4/21/03 4/21/03
Zane Morris, Recreation Programmer/Parks & Recreation 4/21/03 4/21/03
Sharon McAuley, Police Information Technician/Police 4/7/03 4/7/03
Eddie Marry, Solid Waste Worker/General Services/Solid Waste 4/21/03 4/21/03
Michael Olsa, WWTP Operator Trainee/Public Utilities 4/21/03 4/21/03
• originally hired in 2000; resigned and withdrew pension contributions; rescinded resignation on 3/25/03
•• originally hired as part-time; transferred to full-time and pension eligible as of 4/7/03
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SUBJECT/RECOMMENDATION:
Trustees of the
Employees' Pension Plan
Agenda Cover
Memorandum
Final Agenda Item #
Meeting Date: 6/16/03
Charles A. Howard, Police Department, and John M. Hodgden, Solid Waste Department, be
granted regular pensions under Section(s) 2.393 and 2.397 of the Employees' Pension Plan as
approved by the Pension Advisory Committee.
? and that the appropriate officials be authorized to execute same.
SUMMARY:
Charles A. Howard, Police Officer, Police Department, was employed by the City on August 18,
1982, and his pension service credit is effective on September 12, 1992. His pension will be effective
May 1, 2003.
Based on on average salary of approximately $52,031 per year over the past five years, the formula
for computing regular pensions, and Mr. Howard's selection of the 100% Joint & Survivor Annuity, this
pension will approximate $13,298 annually.
John M. Hodgden, Solid Waste Equipment Operator, Solid Waste Department, was employed by the
City on February 16, 1981, and his pension service credit Is effective on June 6, 1983. His pension will
be effective July 1, 2003.
Based on an average salary of approximately $38,114 per year over the past five years, the formula
for computing regular pensions, and Mr. Hodgden's selection of the Joint & Survivor Annuity, this
pension will approximate $20,962 annually.
These pensions were approved by the Pension Advisory Committee on May 8, 2003. Section 2.393
provides for early retirement eligibility when a participant has reached age 60)and completed ten
years of credited service in a type of employment described as "hazardous duty" and further
specifically defines service as a Police Officer as meeting the hazardous duty criteria. Section 2.393
also provides for normal retirement eligibility when a participant has reached age 55 and
completed twenty years of credited service, has completed thirty years of credited service, or has
reached age 65 and completed ten years of credited service, Mr. Howard qualifies under the
hazardous duty criteria. Mr, Hodgden qualifies under the age 55 and 20 years of service criteria.
Reviewed by: Originating Dept: Coats
Legal NA Info Tech NA Debbie Ford/Human - Total
Resources
Budget NA Public NA User Dept. Funding Source:
Works
Purchasing NA DCM/ copto Current Fiscal Year
Improvement
ACM
Risk Mgmt NA Other NA Attachments operotnq
Other
Appropriation Code:
Submitted by: O None
CI Man r
Printed on racvclad moor Rev.
2/98
..C_-
Trustees of the
Final Agenda Item #
9?w,;rE ?•?° Employees' Pension Plan 6/16/03
Agenda Cover Meeting Date:
Memorandum
SUBJECT/RECOMMENDATION:
Elizabeth L. Garrett, Police Department, be allowed to vest her pension under Section(s) 2.397 and
2.398 of the Employees' Pension Plan as approved by the Pension Advisory Committee.
? and that the appropriate officials be authorized to execute some.
SUMMARY:
Elizabeth L. Garrett, Police Information Technician I, Police Department, was employed by the City on
January 5, 1987. Ms. Garrett terminated from City employment on April 25, 2003.
The Employees' Pension Plan provides that should an employee cease to be an employee of the City
of Clearwater after completing ten or more years of creditable service (pension participation), then
such employee shall acquire a vested interest in the retirement benefits. Vested pension payments
commence on the first of the month following the month in which the employee normally would
have been eligible for retirement.
Section 2.393 (p) provides for normal retirement eligibility when a participant has completed twenty
years of credited service in a type of employment described as "hazardous duty" and further
specifically defines service as a Police Officer as meeting the hazardous duty criteria. Section 2.393
also (p) provides for normal retirement eligibility when a participant has reached age 55 and
completed twenty years of credited service, has completed 30 years of credited service, or has
reached age 65 and completed ten years of credited service. Ms Garrett would have completed
twenty years of service and reached age 55 on January 5, 2007. Her pension will be effective
February 1, 2007. This pension was approved by the Pension Advisory Committee on May 8, 2003.
Reviewed by: Originating Dept: Costs
Legal NA Info Tech NA Debbie Ford/Human Total
Resources
Budget NA Public NA User Dept. Funding Source:
Works
Purchasing NA DCM/ copriot Current Fiscal Year
Improvement
ACM
Risk Mgmt NA Other NA Attachments Operating
O'ner
Appropriation Code:
Submitted by: p None
CI Mana er
Printed on recycled paper Rev.
2/98
?ySEf11M? l't
p9?•IrEt????
Employee's Pension Plan
Trustee's
Agenda Cover Memorandum
Work Session Item #: 6?2 .
Final Agenda Item #
Meeting Date: (0-1(o-():3
SUBJECT/RECOMMENDATION:
Authorize staff to conduct a search for a firm to provide performance measurement and other related
services for the Pension Plan
O and that the appropriate officials be authorized to execute same.
SUMMARY:
• The Pension Plan has been using the services of Callan Associates to measure the Plan's
performance since 1987.
• The services of a performance consultant include the following:
• Provide a quarterly report of the plans investment performance.
• Monitor our money managers and notify us of any changes.
• Conduct new manager searches.
• Provide education opportunities.
• Conduct custodian searches.
• Monitor asset allocation and make recommendations on changes.
• Monitor the investment industry and keep us updated on new developments and trends
through special reports.
• Provide special reports such as manager style drift.
• The Pension Investment Committee is recommending that a search for a performance measurement
firm be undertaken at this time.
• Attached is the proposed RFP.
Reviewed by: Originating Dept: Costs
Legal N/A Into Srvc N/A S. Moskun Finance Total N/A
Budget N/A Public Works N/A User Dept. Funding Source:
Purchasing N/A DCM/ACM N/A Finance Current FY N/A CI
Risk Mgrnt N/A Other N/A Attachments OP
Ordinance Other
Submitted by:
City Manager ? None Appropriation Code:
(1)
CITY OF CLEAR WATER
Pension Investment Measurement and Consulting Services
REQUEST FOR PROPOSAL (RFP) PROCEDURES
1. Sealed RFPs•
Responses to this request for proposals (please submit eleven (11) copies) should be
submitted in a sealed envelope, clearly identified as "Proposal for Pension Investment
Measurement and Consulting Services," and mailed to:
George McKibben
Purchasing Manager
City of Clearwater
PO Box 4748
Clearwater, Florida 33758-4748
Or delivered to:
George McKibben
Purchasing Manager
3r`t Floor
100 South Myrtle Avenue
Clearwater, Florida 33756-5520
The RFP's are due no later than 4:OOPM, August 1, 2003. Any RFP's received after that
date and time will not be opened. The RFP's will be opened at that time in Room 342.
2. RFP Response Forms:
Each item/question must be answered separately and specifically. Please reference the
question number or restate the question in your response. Supporting material may be
provided. The City reserves the right to reject any or all RFPs, or to informally negotiate
certain points of the final contract with a qualified proposer.
3. Questions and Additional Information:
Requests for clarification or additional information should be submitted in writing to:
Mail: George McKibben
Purchasing Manager
P.O. Box 4748
Clearwater, Florida 33758-4748
FAX: (727) 562-4635
Email gmckibbe®clearwater-fl.com
Responses will be in writing and copied to all proposers as addenda to this RFP.
4. RFP Schedule:
July 1, 2003 Distribution of Request for Proposals.
August 1, 2003 All sealed RFPs must be in the hands of the City's Purchasing
Manager by 4:00 p.m.
August 14, 2003 Pension Investment Committee makes recommendation
September 2, 2003 Recommendation for award to PAC.
September 15, 2003 Trustee's make award
5. Selection Criteria:
The following criteria will be used to evaluate RFP responses and to make a
recommendation for award to the City Commission:
• 0- 50 points- Organization Background
0 - 50 points- Professional Staff
• 0 - 50 points- Research and Education
• 0 - 50 points - Investment Analysis Process
• 0 - 40 points- Investment Manager Search/Due Diligence Process
0 0 - 60 points - Monitoring Managers
• 0 - 20 points - Additional Issues
• 0 - 80 points- Fees and fee structure
e 0 - 200 points - Quarterly report
Total possible score of 600 points.
2
6. Right To Protest:
Any actual or perspective proposer who is aggrieved in connection with the solicitation or
award of a contract may seek resolution of his/her complaints by contacting the
Purchasing Manager.
7. Openness of Procurement Process:
Written competitive proposals, other submissions, correspondence, and all records made
thereof, as well as negotiations conducted pursuant to this RFP, shall be handled in
compliance with Chapters 119 and 286 Florida Statutes. The City gives no assurance as
to the confidentiality of any portion of any proposal once submitted.
8. No Collusion:
By offering a submission to the RFP, the proposer certifies the proposer has not divulged
to, discussed or compared his/her competitive proposal with other proposers and has not
colluded with any other proposers or parties to this competitive proposal whatsoever.
9. Informality Waiver/Resection of Bids:
The City reserves the right to reject any or all responses and to waive any irregularity,
variance or informality whether technical or substantial in nature, in keeping with the best
interests of the City.
10. RFP Expenses Statement:
All vendor costs associated with this RFP will be the responsibility of the vendor.
11. No Correction:
Once a competitive proposal is submitted, the City shall not accept any request by the
proposer to correct errors or omissions in any calculation or competitive price submitted.
3
SCOPE OF PENSION INVESTMENT MEASUREMENT AND
CONSULTING SERVICES
The Citv of Clearwater is currently looking for a financial institution to provide the following
Pension Investment Measurement and Consulting Services.
All proposes are required to answer the following questions:
A. uestions
1. ORGANIZATION BACKGROUND
1. Year organization was founded. How many years has your organization been providing
pension consulting services to governments?
2. Location(s) of headquarters and branch offices.
3. Describe the ownership structure of your organization.
4. Within the past three years, have there been any significant developments in your
organization (changes in ownership, personnel reorganization, etc.)? If so, please
describe.
5. Do you anticipate any near-term changes in your organization's basic ownership structure
or any other significant changes in your organization? If so, please explain.
6. Are you a registered investment adviser with the SEC under the Investment Advisers Act
of 1940? If not, what is your fiduciary classification?
7. What percentage of revenues are results of consulting services? What other services or
products are offered? Does your firm or an affiliate manage money for clients?
8. Is your firm or its parent or affiliate a broker/dealer? Does your firm trade for client
accounts through this broker/dealer? Does your firm accept soft-dollars as a method of
payment for services provided?
9. Explain your firm's goals and desires for expansion, particularly how such goals may
pertain to accepting new client business and the quality of service to all clients.
10. If your current client base is heavily weighted to any particular type of investor, identify
this type and explain your reasoning for such emphasis.
11. Provide four client references. Include: name, phone, asset values, and years the client
has retained the firm, and product or service the client uses. Include at least three
government clients. We may contact any of these clients as references. If the firm
requires advance notice of our intention to make inquiries, please indicate.
4
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12. How many clients gained/terminated in the last three years? Please provide reasons for
tile termination(s).
13. Describe the full range of services you provide to clients in a full-service consulting
relationship.
14. Has your organization or any officer or principal been involved in anv business litigation
or other legal proceedings relating to your consulting activities'? If so, provide a brief*
explanation and indicate the current status.
15. Explain in detail any potential for conflict of interest, which would be created by this
assignment.
16. Are there any circumstances under which you receive fees from investment managers'? If
yes, please describe.
17. Do you have a code of ethics'? Please describe.
II. PROFESSIONAL STAFF
18. Provide the names of all consulting professionals, including researchers, and systems
support personnel. Include their length of experience in financial consulting/advising
services. Identify all principals of the firm. Include: name, title, years with firm and
years consulting experience.
19. Please indicate the turnover of professional staff (senior management and hey
professionals) over the past three years. (If none, please indicate).
20. Give a brief description of your firm's compensation arrangements for professional staff,
including any incentive bonuses and how and for what are they awarded.
21. Provide an organizational chart showing functions, positions, and titles of all personnel
involved in financial consulting services.
IILRESEARCH AND EDUCATION
22. Provide general description of your research. (If no separate department exists, describe
how this function is performed.) Include a list of research available to clients.
23. How does your firm integrate internal and external research?
24. Outline your process for monitoring and reporting on market trends.
25. Do you have an educational program for your clients? Please describe.
IV. INVESTMENT ANALYSIS PROCI?SS
26. Outline your process for developing an investment policy statement. Include a sample
document.
27. Outline your process for maintaining and providing a continuous review of your client's
investment policy, investment strategy and portfolio mix.
28. Outline your process for analyzing a client's investment portfolio structure. Describe your
process for recommending modifications to the portfolio structure i?S warranted by
changes in the marketplace. Include a sample structure report.
29. Fully detail your asset allocation/liability process. Include a discussion of how you
develop capital markets projections. Include a sample report.
V. INVESTMENT MANAGER SEARCH/DUE DILIGENCE PROCESS
30. Detail your manager search process.
31. Does the firm maintain a universe of investment managers? How many managers are
contained in the universe?
32. Briefly discuss your views on performance-based fees, asset-based fees, flat fee with
performance bonus, or other structures you recommend.
VI. MONITORING MANAGERS
33. Detail your performance measurement service including the incorporation of illiquid
assets such as real estate and venture capital. Include a sample report.
34. Describe your return methodology.
35. Describe your interface with your clients' custodians.
36. Describe what benchmarks are maintained. How are benchmarks chosen for fund
comparison?
37. Describe your manager database
38. Describe how the firm gathers, verifies, and analyzes the data collected on managers.
39. Describe manager peer group analysis. Describe the screening variables and capabilities
of the peer group database.
40. Do you have a way to compare our plan to similar plan sponsors? Is this universe of plan
sponsors comprised of only your clients or does it include outside plan sponsors? Please
describe.
41. Describe the capability of providing custom client reports. Are reports available
electronically?
42. Describe your experience and capabilities in analyzing and monitoring international
managers, including currency effects and the use of hedging.
43. Describe the firm's criteria for placing a manager on probation and/or terminating a
manager.
VII. ADDITIONAL ISSUES
44. Please discuss any additional issues not covered in this RPP or questionnaire, which will
illustrate the capabilities and uniqueness of your firm.
45. How do you conlnlunicate with your clients'? How do you notify your clients of changes
in your firm? Changes at a manager'? Changes in the investment environment'?
B. Meetines
The selected firm will attend the following meetings:
• Quarterly Pension Investment Committee meetings.
• Other meetings with the Pension Investment Committee on an add needed basis i.e.
¦ Manager problems
¦ Manager searches
• Trustees and the Pension Advisory Committee on an add needed basis i.e. annual
performance update
C. Ouarterly Reports
Enclose an example of your quarterly report. At a minimum the quarterly report will
have the following:
• Active management market overview
• Plan's asset allocation (cost and market) and over all performance (vs. peers
and custom benchmark)
• Domestic equity performance (both overall and by manager)
• International equity performance (both overall and by manager)
• Domestic fixed-income performance (both overall and by manager)
The performance review will include:
• Return analysis, performance vs. benchmarks and peer groups
• Portfolio characteristics
• Sectors weights
7
D. Fees:
The proposer will quote a flat monthly/quarterly fee that includes the following:
• Attendance at all meetings
• Quarterly performance report
• Special reports on an as needed basis i.e. money manager style drift
Provide a fee schedule for your firm's other services that we might utilize.
8
Employee's Pension Plan
Trustee's
Agenda Cover Memorandum
Worksession Item #:
Final Agenda Item #
Meeting Date:
SUBJECT/RECOMMENDATION:
Authorize staff to negotiate a contract with the firm of Charles D. Hyman & Company for investment
consulting services
0 and that the appropriate officials be authorized to execute same.
SUMMARY:
• John Willoughby has been providing consulting services (i.e. strategic and tactical asset mix,
diversification guidance, economic and market analysis) to the Pension Plan through the firm of EPW
Investment Management. Since the recent buyout of EPW, Mr. Willoughby has moved to the firm of
Charles D. Hyman & Company.
• Currently the Pension Plan is involved in searches for two fixed income managers and a small
capitalization value manager. A RFP for a performance measurement consultant is being issued
shortly. Given these changes it would not be feasible to conduct an additional search for a consultant
at this time.
• Staff is requesting approval to negotiate a contract with Charles D. Hyman & Company for Mr.
Willoughby's services.
Reviewed by: Originating Dept: Costs
Legal WA Info Srvc N/A Finance SMoskun Total 0
Budget N/A Public Works N/A User Dept. Funding Source:
Purchasing . N/A DCM/ACM Finance Current FY 0 Cl
Risk Mgmt WA Other Attachments OP
Other 0
Submitted by:
City Manager None Appropriation Code
Printed on recvcled naner riev
2/98
Employee's Pension Plan Worksession item
Trustee's
9??1?,t pE?°! Agenda Cover Men10I-AndLIIII Finaf Agenda Item #
Meeting Date:
SUBJECT/RECOMMENDATION:
Ratify and confirm the termination of EPW Investment Manager and the transfer of the assets under
their management to Northern Trust's Lehman Aggregate Bond Fund.
?x and that the appropriate officials be authorized to execute same.
SUMMARY:
On May 28th staff received notice that the money management firm of EPW Investment Manager was
involved in a buyout. In addition, staff was notified that the firm is changing its focus away from money
management and that key individuals were leaving the firm. John Willoughby, the plans consultant was
one of those individuals. A separate agenda item will deal with his services to the plan.
• On May28th staff froze the assets under EPW's management and made arrangements for the assets
to be transferred to a Lehman Brothers Index Fund (aka Lehman Aggregate Bond Fund) at Northern
Trust, the plan's custodian. On May 28th EPW had $65.8 million under their control.
• A fixed income manager search is already under way. A short list of managers has been developed by
Callan. The Pension Investment Committee is meeting this month to reduce the short list to about four
managers and to schedule presentations. The committee will be looking for two fixed income
managers instead of one.
Reviewed by: Originating Dept: Costs
Legal N/A Info Srvc N/A Finance ?rn? SMoskun Total 0
Budget N/A Public Works N/A User Dept. Funding Source:
Purchasing N/A DCWACM Finance Current FY 0 CI
Risk Mgmt N/A Other Attachments OP
Other 0
Submitted by:
City Manager None Appropriation Code