09-15-2003AGENDA
PENSION
TRUSTEES
AGENDA
Board of Trustees of the Employees' Pension Fund
September 15, 2003 - 9:00 A.M.
1 - Call to Order
2 - Approval of Minutes: 08/18/03
3 - Approve the recommended administrative expenditures for fiscal year 2003-04
totaling $151,250 for the City of Clearwater Employees' Pension Plan.
4 - Approve the contract with the firm of Charles D. Hyman & Company for consulting
services with an annual cost of $15,000.
5 - Other Business
6 - Adjourn
S`? r Worksession Item #:
Employees' Pension Trustee 3
0
Agenda Cover Memorandum Final Agenda Item #
Meeting Date: 9-15-03
SUBJECT/RECOMMENDATION:
Approve the recommended administrative expenditures for fiscal year 2003-04 totaling $151,250 for
the City of Clearwater Employees' Pension Plan,
and that the appropriate officials be authorized to execute same.
SUMMARY:
• The Employees' Pension plan does not have a legal requirement to have a budget. The Trustees must
approve all expenditures. The following are routine expenditures that staff is requesting approval for the
sake of efficiency.
• These expenditures involve routine and small dollar amounts.
• Medical Bills is the medical services that the Pension Advisory Committee authorizes.
• Travel is for two trips. The first is for attendance for two people at a training seminar and a due diligence
visit. Second is for training for two people with our new custodian, Northern Trust.
• Printing and Binding is for the statutorily required annual information distribution to the members of the
pension plan.
• Training is for mandatory training required by state statute.
• Money Manager, Safekeeping Service, and Pension Administrator fees are all set by contracts approved
by the trustees and are not included in this administrative budget.
• Reimbursement to the General Fund and Self Insurance fund is for the cost of oversight of the plan and is
recognized as revenue to the General Fund and Self Insurance Fund.
Medical Bills $6,000 Physicals $35,000
Travel Expenses $4,500 Training $ 2,500
Printing $750 Misc. $500
Reimbursement to General Fund $79,000
Reimbursement to the Self Insurance Fund $23,000
Reviewed by: Originating Dept:
Legal . N/A Info Srvc N/A Finance
S. Moskun
Budget N/A Public Works N/A User Dept.
Purch N/A DCM/ACM Finance
Risk Mgmt N/A Other Attachments
Submitted by:
City Manager ? 0 None
PrfnfM nn rnrvrIM manor
Funding Source:
CIP
OP
Other Pension
ation Code: 646-07410-5xxx00.585-
0-
Costs
Total S151,250
Current so
FY
2/98
o
Employee's Pension Plan
Trustee's
Agenda Cover Memorandum
Worksession Item #:
Final Agenda Item # 1+
Meeting Date: - 115 _ p 3
SUBJECT/RECOMMENDATION:
Approve the contract with the firm of Charles D. Hyman & Company for consulting services with an
annual cost of $15,000
O and that the appropriate officials be authorized to execute same.
SUMMARY:
• As directed by trustees at the June 16, 2003 Trustees meeting, staff has negotiated a contract with
Charles D. Hyman and Company for pension plan-consulting services.
• The contract provides for pension plan consulting services (i.e. strategic and tactical asset mix,
diversification guidance, economic and market analysis) to the Pension Plan at an annual cost of
$15,000, paid quarterly.
• A copy of the contract is available for review in the Official Records and Legislative Services
Department.
Reviewed by: Originating (Dept: Costs
Legal WA Info Srvc WA Finance. SMoskun Total 15,000
Budget N/A Public Works User Dept.
Funding Source:
Purchasing N/A DCM/ACM Finance Current FY 0 CI
Risk Mgmt WA Other Attachments OP
Other X
Submitted by: P 91 646-07410.530100-585
City Manager None Appropriation Code
Printed nn recwded naner Rev.
2/98
??C0-y\1 I
INVESTMENT ADVISORY AGREEMENT
This Investment Agreement is entered into between THE TRUSTEES OF THE CITY
OF CLEARWATER EMPLOYEES' PENSION FUND (hereafter "the Trustees" or "Pension
Fund") and CHARLES D. HYMAN & COMPANY (hereafter "Hyman" or "Advisor") whose
address is 4300 Marsh Landing Boulevard, Suite 201, Jacksonville Beach, FL 32250. This
Investment Advisory Agreement is effective as of the day of ,
2003.
In consideration of the mutual covenants and benefits to be provided by each party
to the other, as set forth herein, the Trustees and Hyman agree as follows:
Services to be provided.
During the term of this Agreement, Hyman shall serve in the capacity of investment
advisor to the Trustees and, in that capacity, shall advise the Trustees on equity
matters and fixed income matters relating to the General Employees Pension Fund.
The duties of Hyman shall include. but are not necessarily limited to, the following:
a. Attend all regular meetings of the Finance Committee of the Trustees (the
Committee) as requested by the Chairman of the Committee.
b. Attend and participate in other staff meetings or work sessions of the
Trustees relating to pension investment matters as requested by the
Chairman.
C. Provide advice and counsel to staff and Committee relating to all investment
matters pertinent to the investment policies, strategies and operations of the
Pension Fund. This advice and counsel shall be supported by writings,
research and other pertinent material gathered from internal and external
(nationally recognized research firms) sources. Such matters shall include
but are not necessarily limited to, the following:
1. Strategic and tactical asset mix (diversification among permissible
classes of assets).
2. Diversification among investment advisor styles and types.
3. Economic and market analysis.
4. Assisting the Committee in evaluating investment managers,
performance consultants, and other consultants, and systems, which
may be required, and effecting changes in same when required.
Page 1 of 5
Given the current size of the pension portfolio, the addition of one or
more investment managers may be considered during the term of this
Agreement, in which event a period of intensive review and
consultation would be required.
2. Fees.
Charles D. Hyman & Company shall provide its services under the Agreement for
an annual fee of $15,000.00, inclusive of all professional fees and costs. The fee
shall be billed quarterly in equal installments of $3,750.00 per quarter.
3. Term.
This Agreement shall continue until terminated by either party as provided below.
4. Termination.
This agreement may be terminated by the Trustees at any time upon giving written
notice of the termination to Charles D. Hyman, at the address stated above. This
agreement may be terminated by Charles D. Hyman by giving ten (10) days written
notice to Trustees at the address listed above. This Agreement shall automatically
terminate in the event Charles D. Hyman's registration as an investment advisor
under the Investment Advisors Act of 1940 ("the "Advisors Act") is suspended or
revoked, said termination to be effective with the date of such suspension or
revocation.
5. Representative.
The Finance Director for the City of Clearwater, who is designated by ordinance as
the Finance Director for the Trustees, shall serve as the representative of the
Trustees in dealings with Charles D. Hyman & Company.
6. Investment Advisor Representations.
a. The Advisor certifies that it is professionally qualified as an independent
consultant/advisor to evaluate the performance of professional money
managers investing the assets of the Pension Fund.
Page 2 of 5
b. The Advisor represents that it is an investment advisor registered with the
Securities and Exchange Commission under the Investment Advisors Act of
1940.
C. The Advisor recognizes that the Pension Fund is not governed by ERISA.
In all of its relations with the Pension Fund, the Advisor will utilize the skill,
care, prudence and diligence which a prudent person acting in a like capacity
and familiar with such matters would use in the conduct of an activity of a like
character and purpose. The Advisor recognizes that its primary obligation
under this Agreement is to the Trustees and members of the Pension Fund,
and that it will place the interest of the Trustees and the members above all
others and will not enter into any agreement or take any action contrary to
that obligation. The Advisor will be governed in all of its activities by Chapter
112, Part VII, Florida Statutes, including, but not limited to, the standards
applicable to providers of services to retirement plans in Section 112.656,
Florida Statutes. While no guarantee of investment results is made, the
Advisor shall make the Fund whole for any loss occasioned by its negligence
or breach of the agreement; provided, that in any case where any part of an
investment loss is occasioned by, or is alleged to be occasioned by, a breach
of duty of any nature by an investment manager or other advisor, the
Trustees will not make any claim or take any action in any court against
Advisor without also making a claim against the investment manager or other
advisor in that same court, unless the Trustees are limited by contract or law
from making a claim against such investment manager or other advisor in
such court. Advisor shall also be responsible for reasonably monitoring
compliance by managers with the investment policy statement on a quarterly
basis and shall report to the Fund any violations of the investment policy or
lack of due diligence by the managers revealed by Advisor's monitoring
activities. However, Advisor is not responsible for buy, sell or hold decisions
of the investment managers and shall have no duty to affirmatively inquire
into the adequacy of investment advisor's due diligence or prudence in
making its buy, sell or hold decisions, such duty belonging solely to the
investment managers. The Trustees acknowledge that Advisor's expertise
is in reviewing and commenting on the investment results achieved by
investment managers and not in rendering legal advice. Advisor shall utilize
its expertise in making its recommendations to the Trustees, but shall have
no authority or duty to direct, hire or fire investment managers. Advisor shall
not be liable for good faith reliance on any written or oral representation of
the investment managers in making its reports and recommendations to the
Trustees. Advisor does not waive any rights it may have for indemnity or
contribution from investment managers in the event of any claim against, or
liability of, Advisor. The Trustees will not release, or attempt to release, any
investment manager or mutual fund from any claim or liability arising from
investment activities subject to monitoring by Advisor without also releasing
Advisor, and a release of an investment manager from liability arising from
Page 3 of 5
losses attributable to investment decisions of the manager shall constitute
by that fact alone a release of Advisor.
d. The Advisor agrees to disclose, in writing, to the Trustees, within seven
business days if the Advisor becomes the subject of an investigation by the
Securities and Exchange Commission for alleged breach of federal securities
laws; an investigation by the U. S. Department of Justice for allegations
relating to violation of federal securities laws or related allegations of fraud;
or if the Advisor is named as the defendant in any civil action alleging fraud,
negligence or breach of fiduciary responsibility in connection with its
consulting duties.
e. The Advisor and its employees will not render any legal, accounting or
actuarial advice, and will not prepare any legal, accounting or actuarial
documents. The Advisor encourages the Trustees to obtain such services
from competent professionals.
f. The Advisor will treat confidentially, by not disclosing to unaffiliated persons,
information furnished by the Trustees to the Advisor hereunder without the
Trustees' consent except: (1) incident to a subcontract or service contract
entered into by the Advisor to assist in performing services hereunder, (ii) in
connection with an audit or regulatory examination, or (iii) as may otherwise
be legally required.
g. The Advisor agrees that with respect to the performance of its duties
hereunder, Advisor is a "fiduciary" to the Trustees and the Pension Fund as
that term is defined in ERISA.
7. Dispute Resolution; Controlling Law: Venue.
This Agreement shall be governed by the laws of the State of Florida. Venue for
resolution of any dispute under the terms of this Agreement shall be in Pinellas
County, Florida. In the event of any legal action arising out of the enforcement or
interpretation of this Agreement, the prevailing party shall be entitled to recover its
costs and attorneys' fees.
Page 4 of 5
IN WITNESS WHEREOF, the parties hereto have set their hands and official seals
on the date written below.
THE TRUSTEES OF THE CITY OF CLEARWATER
EMPLOYEES' PENSION FUND
Approve,d to foy4n and content:
CITY OF CLEARWATER EMPLOYEES'
PENSION FUND
By:
Brian J. Aungst, Chairperson
Attest:
, Cynthia E. Goudeua, City Clerk
By:
11 r. WV111vuy11uy
resident
Page 5 of 5
By: Charles D. Hyman Co.
Its general partner