08/20/1982
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POLICE
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SUPPLEMENTARY
PENSIONI!
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Minutes'
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. CLEARWATER POLICE SUPPI.EMENTARY PENSION FUND
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AGENDA
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MEETING'TO BE HELD AUGUST 20, 1982 AT 10:00 A.M.
IN THE POLICE CONFERENCE ROOM, 644 PIERCE STREET,
CLEARWATER, FLORIDA.
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1. ,Approval of Minutes of meeting held
'June 4, 1982.
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2. certificate of Deposit Maturing -.
R'epo,rt by Sgt. Ray Kaminskas.
3. Ratification of Certificate of Deposit
Transactions - Report by Sgt. Ray Kaminskas.
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,4. Investrn~nts - Report by Chief Klein
regarding memorandum received from
Jeffrey, Butler, ,Assistant Manager for
Finance.
5. Approval of Expenditure to Purchase
Deferred ,Annuity for Detective Charles
Butler, Retired. .
" ' 6. Semi-Annual Payment to Betty Ward, in
the amount of $500.00 for secretarial
and bookkeeping services.
7. Approval of Invoice from Provident Life
and Accident Insurance Company for annual
premium for all participating members, in
, amount of $134,240.41.
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"SID 'KLEIN, Secret~ry
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CLEARWATER POLICE SUPPLEMENTARY PENSION FUND - MINUTES OF MEETING
HELD AUGUST 20, 1982
~ A meeting of the Board of Trustees was held on August 20, 1982, in
the Police Confer.ence Room, Police Department, 644 Pierce Street,
Clearwater, Florida.
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The following Trustees were present:
Mayor Charles F. LeCher, Chairman
Police Chief sid Klein, Secretary
Sgt. 'Ray Kaminskas
Officer William Sedrick
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Donald Hibbard, Trustee, was absent.
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Also present was Cindy Hicks, secretary, Police Chief Klein's
office. Richard Griesinger, Assistant City Attorney, was absent.
Chairman LeCher called the meeting to order at 10:15 A.M. The first
item on the agenda was the approval of the minutes of the meeting
held June 4, 1982., Chief Klein made a motion that the minutes be
approved. Motion seconded by Officer Sedrick. Motion carried
unanimously.
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Item #2 on the agenda concerned the certificate of deposit at the
Bank of Clearwater maturing. Sgt. Kaminskas reported that it would
be necessary to reduce the amount of the certificate from $50,000.00
to $40iOOO.00 due to upcoming expenses (which are e~plained under
Items #5, #6 and #7). Sgt. ,Kaminskas made a motion that the Board
approve the reduction of this certificate. Motion was seconded by
Mayor LeCher. Motion carried unanimously.
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Item #3 on the agenda was the ratification of certificate of deposit
transactions made by Betty Ward. Sgt. Kaminskas reported the following
transactions:
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DATE TRANSACTION BANK INTEREST
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6/10/82 Purchased $100,000 CD Exchange Bank 12.367%
6/10/82 Purchased $ 70,000 CD Southeast Bank 12.367%
6/11/82 Renewed $ 20,000 CD Franklin Federal 12.367%
6/14/82 Purchased $100,000 CD Florida Federal 12.367%
6/22/82 Renewed $ 80,000 CD Fortune Federal 13.281%
6/22/82 Renewed $ 70,000 CD Clwr. Beach Bank 13.281%
6/23/82 Renewed $ 70,000 CD Atlantic Bank 13.281%
7/08/82 Reduced $ 80,000 CD Franklin Federal 13.232%
to $ 20,000 CD
7/08/82 Withdrew $ 60,000 CD First Federal of Largo
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Chairman LeCher asked what is done with the interest earned on the
certificates (whether it is left on deposit with the bank w~ere the
certificate is purchased). Sgt. Kaminskas explained that due ,to the
Federal insurance requirements (nothing over $100,000. in anyone
account is insured) the money is deposited in a separate savings
account for 'the Supplementary Pension Fund. Motion to ratify the
transactions was made by Sgt. Kaminskas. Motion seconded by Chief
Klein. Motion carried unanimously.
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SUPPLEMENTARY PENSION FUND
MINUTES OF MEETING HELD AUGUST 20, 1982
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~ Item #4 on the agenda concerned a memorandum from Jeffrey Butler,
Assistant City Manager for Finance, on the advisability of investing
in "Ginnie Mae" bonds (each Trustee was given a copy of the
memorandum). Chief Klein stated that the memowas'a reply based
on the Board's inquiry regarding "Ginnie Mae" accounts at the last
meeting. Chief Klein pointed out that Mr. Butler listed several
items under #1 on his memo that should be studied before making a
decision on whether to make this type investment. He also stated
that the present. manner of .investing in money market certificates
of deposit has ~ stability that would not be present with a "Ginnie
Mae" type investment. Chief Klein said that with a IIGinnie Mae"
investment we would also have to pay a commission cost which would
cut into the interest earned, whereas under the present system the
only expense is for bookkeeping.
Sgt. Kaminskas noted that with the present system, there is no
fluctuating rate of interest to worry about and also, if it was
agreed to change to the "Ginnie Mae" investment, a great deal of
additional bookkeeping would be involved.
riffice~ Sedrick suggested that if the Board wished to pursu~ a
"Ginnie Mae" type of plan, it would be a good idea to request that
other investment companies present proposals to the Board.
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Chief Klein stated that the' "Ginnie Mae" type investment also
presented a certain amount of risk that we don't presently have.
Chief Klein then made a motion that the investments continue to be
handled in the present manner (money market certificate of deposit).
Motion seconded by Sgt. Kaminskas. Motion carried unanimously.
(Correspondence concerning Item #4 is to be attached to and made a
part of these minutes.)
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Item is concerned approval of the expenditure of $5,696.86 for the
purchase of a Deferred Annuity for Detective Charles Butler, Retired.
Chief Klein reported that the cost for this annuity would be
$13,380.86, and the cash surrender value which we will receive on
his present policies is $7,684.00. Sgt. Kaminskas made a motion
that the expenditure of $5,696.86 be approved. Motion seconded by
Officer Sedrick. Motion carried unanimously.
Item #6 on the agenda concerned the semi-annual payment to Betty Ward
in the amount of $500.00 for secretarial and bookkeeping services.
Officer Sedrick made a motion that the payment, of $500.00 be approved.
Motion seconded by Sgt. Kaminskas. Motion carried unanimously.
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Item #7 on the agenda concerned the approval of the invoice from
Provident Life and Acpident Insurance Company for annual premiums
for all participating members in the amount of $134,240.41. Sergeant
Kaminskas made a motion that payment be approved. Motion seconded
by Chief Klein. Motion carried unanimously.
There being no further business, the meeting was adjourned at 10:30 A.M.
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Rej:/iZ sUbmit ted,
SID KIoiEIN
'Chief of Police
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CITY OF CLEARWATER
Interdepartment'~orrespondence Sheet
TO:
Jeffrey Butler, Assistant City Manager for Finance
Sid Klein, Chief of Police ~(
FROM:
COPIES: File
SUBJECT: Investments (Clearwater Police Supplementary Pension Fund)
DATE:
June 4, 1982
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From time to time the Board of Trustees have been approached relative
to the cash assets of this Fund, and have allowed some of these firms
to make presentations to the Board. The most recent request has come
from David panossian, retired Captain of this Department. He is now '
employed with Dean Witter Reynolds and has sent the Board ,a letter,
copy of which I have attached. '
At our Board of Trustees meeting this morning, the Mayor (who is
Chairman of our Board) recommended that we contact, you in an effort
to determine. whether .the "Ginnie Mae II ,bonds \'o'ould be considered a
prudent investment for the, Board t? make at some future time.
Going into a little background, the Police Supplementary Pension Fund
was established in 195Q. At one time Jack Martens, then-President
of City National Bank, was a member of the Board of Trustees and as
such assisted the Board in investments, such as 'Ilreasury Bonds. In
1962 the Treasury Bonds were sold and ~he monies invested in Savings
and Loan Associations. The funds are now all invested in money rnarket
certificates of deposit. The Fund has grown from $45,171.25 in 1959
(that being the amount turned over to Police Supplementary Pension by
the city of Clearwater, representing monies which had been held in
escrow and had accumulafed ~nder the provisions of Florida St~tute 185),
to $1,173,257.00 as shown in our 1981 annual report.
Your expertise in this matter would be appreciated.
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TO:
Sid Klein, Chiaf of Police )t\L
C 1 T Y 0 F C LEA R W A'T E R
Interdepartment Correspondence Sheet
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FROM:'
COPIES:
'SUBJECT:
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Jeffrey E. Butler, Asst. City Menager for Finance~l.~
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QATE:
Response'to Your Memo of 6/04/82
Investments for Police Supplementary Pension Fund
July 2, 1982
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You asked my opinion as to whether HGinnie Mae" bonds would be a prudent investment
for the Police Supplemental Pension Fund. I have discussed this with John Willoughby~
,Group'Vice President - Investments at Exchange Bank, who acts as investment consultant
.for the Employees' Pension Plan.
IiL general, selection of investments for a pension plan portfolio should be related to
the benefit and funding requirements of each individual plan. Thus, investments
appropriate for one plan may not be appropriate for another. Without knowing the.
objectives for the non-life insurance investments of the fund it is not possible to
express an opinion about "Ginnie Hae" bonds for your purposes.
Apart from questions relating to whether this type investment is appropriate for the
objectives of your plan, I can relay certain information received from John Willoughby.
",'~ While the credit is based on the federal government (thus, there is minimal risk of
!',~) default), the market risk (Le., 10s5 of liquidation value because of increases in the
level interest rates) can be significant. Further, Ginnie Mae bonds payout on a
monthly basis which creates a certain amount of additional 'administrative work in
accounting for the receipt of principal on a monthly basis, and in attending to the
reinvestment of this income. In conclusion, I would counsel the Trustees to go
through the following steps prior to making an investment in Ginnie Mae bonds:
1. Determine the investment objectives for the plan assets, considering:
a. the need for cash for benefit payments, expenses, or refunds;
b. the impact on funding, or benefits, if any, of a temporary decline in
the market value of investments;
c. the relative importance of - liquidity
- current income
~ long-term appreciation
- achieving some target rate of return
(for example, in comparison to inflation
or in comparison to the assumed actuarial
rate of return)
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2. Determine whether the non-life insurance investments should have certain
'characteristics to compliment the existing commitment to life insurance.
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Continued
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'Sid'Klein, Chief of Police,
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CITY OF,cLEARWATER
Interdepartment Correspon~ence, Sheet
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JeffreyE. Butler, Asst., City Manager' for Finance
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,COPIES:
, SUBJECT:
DATE:
Response to Your Memo of 6/04/82
Investments for Police Supplementary Pension Fund
July 2, 1982
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3. After having established investment objectives in'
with 'existing investments, compare the advantages
alternative investments from the 'following points
, a. ' credit,
.,' , b,.,' 'yield
c" liquidity
"do' 'market risk.
..', e.' 'reinvestment risk
f.administrative convenience
general, and;; in cotnbination
and, disadvantages of
of' view: '
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