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07/13/1998 (2) ;"..;,:' '\' ',' ,...' ',; "'::"::,"" ">:::':;", , " I~~ .,. , , I . . . I " : \ . ' ~ , ' /.' , ' .. ' ,J '.~ . \' , , " .: :~ ~:: ~ . "" " . (, ::T:~' . ,.' ", <Date " . 1 j " , , . I '. ., ., .,': ',' ~;: u c , ~:J . '", < ',' , ' ", 'I ;' . <I ..0,' " .,. . 1'! . I" , " , " " ~ { . I ' ," '. I, I ' fc t " " , , " c~ j: , L .: 't ',OfI!f .,.. . ..."., ~. ~. .. ~ 0; .. '^:' \ . <-, . . ,. 0, . . . , ,. . ~ I { ~ .' c " .,' " ' . . ~ + ~ .., . '.',. , , It:\;;::,:: ','; '-', !J~.. ' :::;-> . ~' ACTION AGENDA Board of Trustees of the Employees' Pension, Fund July 13, 1998 1. Call to order 1. 1 :17 p.m. 2. Approval of Minutes: 6/15/98 2. Approved as submitted. 3. Request for acceptance into membership: 3. Approved. :/ " a) Lynn Jason b) William R. Karner c) Gary Spence 'd} Matthew Burmood ,e} Sean McKay f) Tammy Resser g) Tamara Yacso, 4. , Regular Pension to be 'granted: James Davis \, 4. Approved. ::':.~ 5. Pensions to be Vested: Timothy Treble Anita Daniels 5. Approved. 6. Terminate contract with Alliance Capital Management LP as a core fixed income manager '6. Approved. 7. , Approve contract with Sirach Capital Advisors, Inc. as a core fixed income manager; provide for smooth transition tor the addition , through opening of safekeeping account at SunTrust 7.' Approved. 8. Other Business: 8. None. 9. Adjournment: , I 9. 1 :21 p.m. , I f I j I I ,:) , . ;. ;0 , .,.\ " I " I /. . . " ,~ 'TRUSTEES OF THE EMPLOVEES' PENSION FUND MEETING CITY OF CLEARWATER July 13, 1998 Present: , Ed Hooper J. B. Johnson Robert Clark Karen Seel Michael J. Roberto Pamela K. Akin Cynthia E. Goudeau Vice-ChairlTrustee Trustee Trustee Trustee City Manager City Attorney City Clerk Absent: Rita Garvey Chair The Chair called the meeting to order at 1: 1 7 p.m. at City Hall. To provide continuity for research, items are in agenda order although not necessarily discussed in that order. ITEM #2 M Aporoval of Minutes . Trustee Clark moved to approve the minutes of the June 15, 1998, meeting, as recorded and submitted in written summation by the City Clerk to each Trustee. The motion was duly seconded and carried unanimously. ITEM #3 - Reauest for Acceptance into Membershic: , The City Manager presented the recommendation of the Pension Advisory Committee to approve membership for the employee(s) listed below: a) Lynn Jason b) William R. Karner c) Gary Spence d) Matthew Burmood e) Sean McKay f) Tammy Resser g) Tamara Yacso Trustee Seel moved to accept the recommendation of the Pension Advisory Committee. The motion was dUly seconded and uarried unanimously. ITEM #4 - Reauest for Pension: The City Manager presented the recommendation of the Pension Advisory Committee that James Davis be granted a regular pension under Section(s) 2.393 and 2.397 of the Employees' Pension Plan. '~ mpf0798 1 07/13/98 i , l \ I I I I ; I ~ James Davis was employed on February 21, 1972, and his pension service credit is effective August 21, 1972. His pension will be effective on February 1, 1999. Based on an average salary of approximately $44,464 over the past five years, the formula for computing regular pensions, and Mr. Davis' selection of the 100% Joint & Survivor Annuity, this pension will approximate $31,B35 annually. Mr. Davis' pension was approved by the PAC on June 11, 199B. Section 2.393 (p) provides for normal retirement eligibility when a participant has reached age 55 and completed twenty years of credited service or has completed thirty years of credited service regardless of age. Mr. Davis qualifies under the age 55 and twenty years of service criteria. Trustee Johnson moved to accept the recommendation of the Pension Advisory Committee. The motion was duly seconded and carried unanimously. ITEM #5 - Request to Vest Pension: The City Manager presented the recommendation of the Pension Advisory Committee that Timothy Treble and Anita Daniels be allowed to vest their pension under 8ection(s) 2.397 and 2.398 of the Employees' Pension Plan. ('~~ )~;' Timothy Treble was employed on January 17, 1987, and his pension service credit is effective on that date. His pension will be effective on February 1, 2007. Anita Daniels was employed on September 9, 1985, and her pension service credit is effective on July 21, 1986. Her pension will be effective on November 1, 2008. The Employees' Pension Plan provides that should an employee cease to be an employee of the City of Clearwater after completing 10 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. Mr. Treble would have completed 20 years in a hazardous duty position on January 17, 2007. Ms. Daniels would have completed at least 20 years of service and reac'hed age 55 on October 19, 2008. These requests to vest pensions were approved by the PAC on March 12, 1998. Trustee Clark moved to accept the recommendation of the Pension Advisory Committee. The motion was dUly seconded and carried unanimously. ITEM #6 . Terminate contract with Alliance Capital Management lP as a core fixed income manager For the five year period ending March 31st, Alliance has performed at the 91st percentile. Last year it was decided to monitor their performance one more year and if it ,..) mpf0798 2 07/13/98 ~ i j J ". ~ did not improve they should be replaced. Their performance continues to be below expectations. Both of the plan's financial advisors and the Pension Investment Committee recommend termination of the contract with Alliance Capital Management LP. The contract with Alliance requires giving ten days written notice of termination. Staff will coordinate this termination with the addition of a replacement money manager recommended in a separate item. (See Item #7) It was questioned why we waited five years. Steve Moskun, Cash and Investments Manager, replied this was to allow Alliance to go through one business cycle, which is usually five years. Trustee Johnson moved to terminate the contract with Alliance Capital Management lP as a core f;xedincome manager. The motion was duly,seconded and carried unanimously. ITEM #7 - Aporove contract with Sirach Capital Advisors, Inc. as a core fixed income manager, provide for smooth transition tor the addition through opening of safekeeping account at SunTrust 8,', ,~ "j",\ Last year a search for a core fixed income manager resulted in contracting with ARM Capital Advisors, Inc. Sirach Management, Inc. was almost equal in ranking to ARM. The City would now like to hire Sirach to replace Alliance Capital Management LP who is not meeting performance expectations. Representatives from the Pension Investment Committee visited Sirach's office earlier this year and were favorably impressed with their abilities and resources. For the last five and ten years in aggregate, Sirach has ranked in the 5th and 7th percentile of all fixed income core managers respectively. Sirach has been managing tax~exempt funds as a team, without any change in their philosophy or process since the inception of this product in 1978. Sirach manages $2.6 billion in tax-exempt funds. Sirach's management fee is as tallows: .30% on the first $25 million, .25% on the next $25 million, and .20% on the balance. The fees are lower than the average fees of other fixed income managers. This fee is also the lowest Sirach charges. Given their past superior performance, staff is very comfortable with these fees. , Staff recommends funding for Sirach's portfolio be $47 from Alliance Capital Management LP. The balance of Alliance's portfolio of $11 million will go to ARM. This will give each of the fixed income managers (ARM, Sirach, and Eickhoff, Pieper & Willoughby) approximately $47 million to manage. Staff will open a safekeeping account at Sun Trust and facilitate the transfer. --.J mpf0798 3 07/13/98 , i , ~ . , .. " I .. \' 0, ' ~. . ~;~;~+:;:":~:L;': I <: .".'":- .~ .:. .r~I.>:.(' '. 'j;. :'. ' ~; ~ "~ , . .... Trustee Clark moved to approve a contract with Slrach Capital Advisors, Inc. as a core fixed income manager and to provide for the smooth transition of the addition 'through the opening of a safekeeping account at SunTrust. The motion was duly seconded and carried unanimously. , In response to a question, Steve Moskun reported the plan had a 29.54% return during the last year. This Is in the top 35th percentile for the year and over alf the plan is ' in the top 13th percentile. ITEM #8,- Other Business - None. ITEM #9 - Adiournment: , The meeting adjourned at 1 :21 p.m. ' A~EST:~Z' )i..Oo~ ':' " ' " City Clerk ,\ i I I I I [, I I I I I I I I I " ~".' . , ',' , , .~ mpf0798 4,' 07/13/98 , , ~ii.~*~~!'i;;;:c:i:;i<:>!:{'i;:J;;';"~:, ""'>,; ,~,:, ;: :'",: '\'," .:", "" ",: ',:,:', ,i',:)'" ':',' , ;,:, '! , 'I. ' ::i.;~ ;..:::, " :!' : :;' :, ':. ;:J:~.""':,!:> ,,":,:"