11/13/2003 (2)
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PAC
. Pen'sion Advisory Committe.e .
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PENSION ADVISORY COMMllTEE MEETING
CITY OF CLEARWATER
November 13, 2003
Present:
Whitney Gray
'John Schmalzbauer
Tom Jensen
Hoyt P. Hamilton
Frank Hibbard
Cha ir/Commissioner
Committee Member
Committee Member
Committee Member/Commissioner
Committee Member/Commissioner
Absent: .
John Lee
Nathan Hightower
Vice-Chair
Committee Member
Also Present: Joe Roseto
Stuart Kaufman
Patricia O. Sullivan
Human Resources Director
Pension Advisory Committee Attorney
Board Reporter
The Chair called the meeting to order at 9:00 a.m. at City Hall.
To provide continuity for research, items are In agenda order although l10t
necessarily discussed in that order.
2 - Approval of Minutes
. Member Hibbard moved to approve the minutes of the regular meeting of October 9,
2003, as recorded and submitted in written summation to each board member. The motion
was duly seconded and carried unanimously.
3 - Emplovees to be Heard - None.
4 - Action Items
a) Review and Action on Employee Requests for Years of Service Pension
1. James W. Thomas - Police Department.
2. Gordon W. Yaudes - Fire Department
Member Hamilton moved to approve a Years of Service Pension for James W. Thomas
and Gordon W. Yaudes. The motion was duly seconded and carried unanimously.
b) Approval of New Hires as Plan Members:
As of October 30,.2003, the City had 1766.3 FTEs out of 1844.9, budgeted. positions.
Pe nsion Advisory 2003-11-13
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Member Jensen moved to accept the following employees into membership in the
Pension Plan:
Michael Franco, Solid Waste Equip Oper.
Kyle Kilian, Accountant
Vincent Jones, Solid Waste Worker
James Weinreich, Field Service Rep
Demetrius Brown, Solid Waste Worker
Nicole Anderson, Police Recruit
Gary Martinez, Police Cadet
Mitch Arnold, Parks Svc Technician.J
Amanda Seibel, Recreation Programmer
Chris Hicks, Parks Service Technician I
Kerri Leeman, Rec. Program Support Tech
Jeff Mahar. Parks Service Technician I
Timothy Smith, Pool Guard
5 - PendinQ/New Business
Date of Pension
Emplovment Elig. Date
Solid Waste
Parks & Recreation
Solid Waste
Customer Service
Solid Waste
Police Department
Police Department
Parks & Recreation
Parks & Recreation
Parks & Recreation
Parks & Recreation
Parks & Recreation
Parks & Recreation
1 0/06/03
10/06/03
10/06/03
10/08/03
10/06/03
05/19/03
05/19/03
09/22/03
1 0/20/03
10/20/03
10/20/03
10/20/03
10/12/03
a) Marcus Lane - Set Hearing Date for Job-connected Disability Application
10/06/03
1 0/06/03
10/06/03
10/08/03
10/06/03
05/19/03
05/19/03
09/22/03
10/20/03
10/20/03
1 0/20/03
10/20/03
10/12/03
Consensus was to schedule the hearing for Marcus Lane's job-connected disability
application on December 11, 2003. .
Pension Advisory Committee Attorney Stuart Kaufman said it was acceptable to him for
Mr. Lane's medical provider, therapist Lisa Averoff, to have forwarded her notes to Dr. Kaplan,
who performed Mr. Lane's IME (Independent Medical Examination) and.summarized the notes.
The entire package of information related .to this case has been forwarded to PAC (Pension
Advisory Committee) members.
As Mr. Lane is in a no pay status, it was requested that this hearing be scheduled prior
to December 11, 2003, if possible.
b) Discuss Policies and Procedures
It was recommended this item be continued as two committee members are absent.
Member Schmalzbauer moved to table Item 5b. The motion was duly seconded and
carried unanimously.
Human Resources Director Joe Roseto said tomorrow staff will distribute to committee
members a revised loose leaf binder of Committee policies and procedures.
'c) Hire Fixed Income Manager
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Cash & Investments Manager Steve Moskun invited Committee members to attend the
10:00 a.m. Pension Investment meeting, where discussions with Putnam are scheduled.
A Pension Investment training session has been scheduled for December 16, 2003, in
Room 130 of the Municipal Services Building from 1 :00 to 5:00 p.m. The Plan's Pension
Attorney and program investment consultants will ,participate.
Mr. Moskun reviewed the request. The Pension Trustees previously authorized Callan
Associates to conduct a search for a fixed income manager. The following is a list of fixed
income managers that Callan recommended to the Investment Committee: 1) Dodge & Cox
(D&C); 2) Western Asset Management Co. (WAMCO); 3) Pacific Investment Management Co.
(PIMCO); 4) Baird Advisors; 5) Banc One Investment Advisors; 6} Black Rock; 7) Barrow,
Handley, Mewhinney &'Strauss, Inc.; 8) Deutsche Asset Management; 9) Evergreen
Investments; 10) Hartford Investment Management Co.; 11) Richmand Capital Management;
12) Weiss, Peck & Greer; and 13) Wells Capital Management
After reviewing the information provided on these managers. the Investment Committee
ranked the managers and conducted interviews with the top three firms listed above. Based
upon the interviews, Dodge & Cox and Western Asset Management were ranked as the top two
firms. Representatives from the Investment Committee visited the top two managers. Dodge &
Cox is a bit more conservative in their investment style and the committee felt that Dodge &
Cox fits better into our goals and objectives. The Investment Committee recommends that the
Trustees hire Dodge & Cox. The Investment Committee recommends that Dodge & Cox be
funded at $75 million with the funds coming from the Northern Trust Lehman Index Fund, where
funds were placed after the termination of EPW and Sirach.
Dodge & Cox charges a money management fee based upon the amount invested and
will result in the fee of .25 of 1 % for $75 million. Additional amounts above the $75 million will
be charged at .15 of 10/0, up to a total $135 million. We estimate the fees to be approximately
$200,000 annually and will vary based upon the market value of the funds managed. This fee
is consistent with industry norms. Klausner and Kaufman, the Plan's Attorneys. have reviewed
the contract. .
Mr. Moskun said Dodge & Cox has an excellent reputation. It was stated the firm
cannot provide this level of service for a lower fee. .
Member Schmalzbauer moved to approve the contract with Dodge & Cox as fixed
income managers for the Employee's Pension Plan and authorize the appropriate officials to
execute same. The motion was duly seconded and carried unanimously.
d) Elizabeth Alvarez Appeal
Mr. Kaufman reported Elizabeth Alvarez has filed a petition for writ of certiorari.
appealing the PAC's decision to deny her request for a job-connected disability pension. He
said PAC comments are not evidentiary material and snippets of PAC member comments cited
in the petition do not reflect entire remarks. He will reference the meeting transcript when filing
a response and requesting oral arguments. He said case law research supports the City's
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position. Based on Florida Statute,' he also will file a motion for reimbursement by the plaintiff
of City attorney fees. The hearing date will be determined by the court's docket. As they occur,
Mr. Kaufman will forward case updates to Mr. Roseto for distribution to PAC members. Mr.
Kaufman anticipated the case will be upheld on appeal.
6 - Director's Reports
Mr. Roseto reported the yearly membership fee for FPPTA (Florida Public Pension
Trustees Association) is $400.
Consensus was for staff to provide additional information regarding FPPT A and to
schedule a vote on the issue for December 11.2003.
7 - Committee Members to be Heard
Member Schmalzbauer expressed sorrow at the passing of Sergeant Joseph Rinaldi
and requested that staff streamline their efforts to award his pension benefit to his family.
Member Jensen. said it has been several years since the last actuarial review of the
Pension Plan and stated the disparity in benefits between single and married Pension Plan
members continues. even though the last actuarial review had indiCated equalizing this disparity
would not harm the Plan. He suggested this issue be explored. Mr. Roseto agreed a new
actuary report is needed. All changes to the Pension Plan must be discussed with the labor
organizations before going to referendum for citizen approval. He said these discussions are
planned after labor negotiations are resolved. Mr. Kaufman said he will review related issues in' .
the next month or so. It was noted there is insufficient time to add, Pension questions to the
March 2004 referendum and preparation should begin now for their inclusion in the following
election. . . .
8 - Adiournment
The meeting adjourned at 9:26 a.m.
Bo
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Pension. Advisory
Attest: .
Pension Advisory 2003-11-13
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