12/12/2006
PENSION TRUSTEES AGENDA
Location: Council Chambers - City Hall
Date: 12/12/2006- 1 :30 PM
1. Call to Order
2. Approval of Minutes
2.1 Approve the minutes of the November 14, 2006 Pension Trnstees Meeting as submitted in written
summation by the City Clerk.
~ Attachments
3. Pension Trustee Items
3.1 Accept the employees listed below into membership in the City of Clearwater's Employees' Pension Plan.
~ Attachments
3.2 Richard Novo-Mesky, Engineering Department, and Ross H. Smith, Jr., Police 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.
@ Attachments
3.3 Authorize staff to conduct a large cap value manager search and approve hiring Dahab Associates at a
cost of $15,000 to assist with the search.
@ Attachments
3.4 Approve the termination of Putnam as an international equity manager and ratify and confirm the transfer
of assets to Northern Trnst for the management of the assets in a passive index fund.
I@l Attachments
4. Other Business
5. Adjourn
Meeting Date: 12/12/2006
Pension Trustees Agenda
Council Chambers - City Hall
SUBJECT / RECOMMENDATION:
Approve the minutes of the November 14,2006 Pension Trustees Meeting as submitted in written summation by the City Clerk.
SUMMARY:
Review Approval: 1) Clerk
TRUSTEES OF THE EMPLOYEES' PENSION FUND MEETING MINUTES
CITY OF CLEARWATER
November 14, 2006
unapproved
Present:
Frank Hibbard
Carlen Petersen
Hoyt Hamilton
William C. Jonson
John Doran
Chair
Trustee
Trustee
Trustee
Trustee
Also Present:
William B. Horne, II
Garry Brumback
Pamela K. Akin
Cynthia E. Goudeau
Rosemarie Call
City
Assistant
City
City Clerk
The Chair called the meeting to order at 1 :38 p.m.atCity Hall.
To provide continuity for research, items are in agenda order
necessarily discussed in that order.
2. Approval of Minutes:
2.1 Approve the minutes of the October 16. 2006 Pension Trustees Meetina as submitted in
written summation bv the City Clerk.
Trustee Petersen movedtoapprove the minutesoHhe October 16, 2006, meeting, as
recorded and submitted in writteosummation by the CityClerktoeachTrustee. The motion
was duly seconded and carried unanimously.
3. Pension Trustee Items
3.1 Accept the emplovees listed below into membership in the City of Clearwater's Emplovees'
Pension Plan.
Pension Elig. Name, Job. Class, & Dept.IDiv.Hire Date Date
Elizabeth Daly, PI Specialist/Fire 9/5/06 9/5/06
Lavale Smith, SWWorker/Solid Waste 8/7/06 8/7/06
Ronnie Melton, Pier 60 Supr/Mar & Av. 7/17/067/17/06
Charles Brown, Pks Ser Techl/P&R 7/24/06 7/24/06
Justyna Buszewski, PlannerJ/Planning 8/21/06 8/21/06
Veteran Nix, SW Worker/Solid Waste 8/29/06 9/18/06 *
Andrew Biscardi, GasTechnician I/Gas 9/5/06 9/5/06
AlcidesRamos, SWWorker/Solid Waste 9/18/06 9/18/06
MichaeFStephenson,SW Wkr/Solid Waste 9/18/06 9/18/06
CharlesFloyd,GasTechnician I/Gas 9/18/06 9/18/06
Benton Rothermel, Survey Asst I/Eng. 9/18/069/18/06
Dustin Cox, Pks Ser Tech I/P&R 9/18/06 9/18/06
Amanda Barnhart, Util. Chem./Pub Util. 9/18/06 9/18/06
Philip McGrath, Survey Asst I/Eng. 9/18/069/18/06
Pension Trustees 2006-11-14
1
* originally employed as temporary; changed to full-time and pension eligible as of
9/18/06.
Trustee Doran moved to accept the listed employees into membership in the City of
Clearwater's Employees' Pension Plan. The motion was duly seconded and carried
unanimously.
3.2 Marcia Charlton. Marine & Aviation Department John A. Johnson. PublicUtiHties
Department and Peter C. Werbstein. Public Utilities Department be arantedreaularpensions
under Section(s) 2.393 and 2.397 of the Emplovees' PensionPlanas approved bvthePension
Advisorv Committee.
Marcia Charlton, Administrative Analyst, Marine & Aviation Department, was employed
by the City on October 3, 1983, and her pension service credit is effective on that date. Her
pension will be effective October 1, 2006. Based on an average salary ofapproximately
$43,072 per year over the past five years, the formula for computing regularpensions, and Ms.
Charlton's selection of the Joint & Survivor Annuity, thispensionwill approximate $27,230
annually.
John A. Johnson, Wastewater TreatmenfPlant Operator A, Public Utilities Department,
was employed by the City on January 20, 1986, and his pension service credit is effective on
that date. His pension will be effective January 1,2006. Based on an average salary of
approximately $47,095 per year over thepastfiveyears, theformula fOfcomputing regular
pensions, and Mr. Johnson's selectionofthe 100% Joint&Survivor Annuity, this pension will
approximate $26,616 annually.
Peter C. Werbstein, PubHcUtilities Specialist, Public Utilities Department, was employed
by the City on September 14, 1981,and his pension servicecreditiseffective on that date. His
pension willbeeffective October 1,2006. Based on an average salary of approximately
$47,755peryearoverthepast five years,the formula for computing regular pensions, and Mr.
Werbstein's selection of the Joint & SurvivorAnnuity, this pension will approximate $32,886
annually.
These pensions were approved by the PensIon Advisory Committee on October 12,
2006. Section 2.393 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. Ms. Charlton, Mr.
Johnson, and Mr. Werbstein qualify under the age 55 and twenty years of service criteria.
Trustee Hamilton movedtogrant Marcia Charlton, Marine & Aviation Department; John
A. Johnson, Public Utilities Department; and Peter C. Werbstein, Public Utilities Department
regular pensions>under Section{s) 2.393 and 2.397 of the Employees' Pension Plan as
approved bythePensionAdvisory Committee. The motion was duly seconded and carried
unanimously.
3.3 Hollv L. Mav. Librarv Department. and Elizabeth L. Garrett. Police Department. be allowed
to vest their pensions under Section(s) 2.397 and 2.398 of the Emplovees' Pension Plan as
approved bv the Pension Advisorv Committee.
Pension Trustees 2006-11-14
2
Holly L. May, Librarian II, Library Department, was employed by the City on January 19,
1981, and began participating in the Pension Plan on that date. Ms. May terminated from City
employment on September 29, 2006.
Elizabeth L. Garrett, Police Information Technician I, Police Departrnent, was employed
by the City on January 27,1988, and began participating in the Pension Planonthatdate. Ms.
Garrett terminated from City employment on October 27, 2006.
The Employees' Pension Plan provides that should an employee cease to be an
employee of the City of Clearwater after completing ten or moreyearsofcreditable service
(pension participation), such employee shall acquire a vested interestinlhe retirement benefits.
Vested pension payments commence on the first of the month followingthe month in whichthe
employee normally would have been eligible for retirement. Section2.393(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. May would have completed at least 30 years of serviceonJanuary 19,2011. Her
pension will be effective February 1, 2011. Ms. Garrett would have completed at least20years
of service and reached age 55 on January 27,2008. Her pensionwilFbeeffective February 1,
2008. These pensions were approved by the PAC on October 12, 2006.
Trustee Jonson moved to alloWHolly L. May, LibraryDepartment,andElizabeth L.
Garrett, Police Department, to vesttheirpensions underSedion(s) 2.3.9Tand 2.398 of the
Employees' Pension Plan as approved by the Pension Advisory Committee. The motion was
duly seconded and carried unanimously.
4.
Simmonsreported that Pension Plan money manager Putnam's
and the firm is for sale. Staff has moved plan investments
present actionto terminate the contract.
has
firm and in
Adjourn:
The meeting adjourned p.m.
Chair
Employee's Pension Plan Trustees
City Clerk
Pension Trustees 2006-11-14
3
Meeting Date: 12/12/2006
Pension Trustees Agenda
Council Chambers - City Hall
SUBJECT / RECOMMENDATION:
Accept the employees listed below into membership in the City of Clearwater's Employees' Pension Plan.
SUMMARY:
Pension Elig. Name, Job. Class, & Dept./Div. Hire Date Date Meghan Holder, Recreation Programmer/P&R 10/2/06 10/2/06 Matthew
Parker, Pol. Com. Oper. Tr./Police 10116/06 10116/06 Rita Izaguirre, Pol. Com. Oper. Tr./Police 10116/06 10/16/06 Michael R. Brown,
FirefigtherIFire 10116/06 10116/06 Alain Cauper, Fire MedicIFire 10116/06 10116/06 Jesse Cross, Fire Medic/Fire 10116/06 10116/06
Michael Garrity, Fire MedicIFire 10116/06 10116/06 Jerome McIntee, Fire MedicIFire 10116/06 10116/06 Jerome Mourelatos, Fire
MedicIFire 10116/06 10116/06 Josiah Wolfe, Fire MedicIFire 10116/06 10116/06 Douglas Wood, Fire Medic/Fire 10116/06 10116/06 Brenda
Curry, Custodial Worker/Solid Waste 5115/06 9118/06* Valerie Smutko, Solid Waste Wkr./Solid Waste 6116/03 10/2/06** Jennifer
Obermaier, Librarian III/Library 10116/06 10116/06 Charmatee Rodrigues, Util. Chemist/Pub. Util. 10116/06 10116/06 Myra Mingo,
Recreation Leader/P&R 8119/0610116/06 *** * originally hired a part-time 5115/06; transferred to full-time and pension eligible as of
9118/06 ** originally hired as temporary 6116/03; promoted and pension eligible as of 10/2/06 *** originally hired as part-time on 8119/06;
transferred to full-time and pension eligible as of 10116/06
Review Approval: 1) Clerk
Meeting Date: 12/12/2006
Pension Trustees Agenda
Council Chambers - City Hall
SUBJECT / RECOMMENDATION:
Richard Novo-Mesky, Engineering Department, and Ross H. Smith, Jr., Police 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.
SUMMARY:
Richard Novo-Mesky, Design & Mapping Technician, Engineering Department, was employed by the City on October 24, 1972, and his
pension service credit is effective on that date. His pension will be effective November 1, 2006. Based on an average salary of
approximately $47,943 per year over the past five years, the formula for computing regular pensions, and Mr. Novo-Mesky's selection of
the Joint & Survivor Annuity, this pension will approximate $44,852 annually. Ross H. Smith, Jr., Police Officer, Police Department, was
employed by the City on August 15, 1988, and his pension service credit is effective on that date. His pension will be effective January 1,
2007. Based on an average salary of approximately $66,199 per year over the past five years, the formula for computing regular pensions,
and Mr. Smith's selection of the 100% Joint & Survivor Annuity, this pension will approximate $31,318 annually. These pensions were
approved by the Pension Advisory Committee on November 9,2006. Section 2.393 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. Section 2.393 also provides for normal retirement eligibility when a participant has
completed twenty years of credited service or has reached age 55 and completed ten years of credited service in a type of employment
described as "hazardous duty" and further defines service as a Police Officer as meeting the hazardous duty criteria. Mr. Novo-Mesky
qualifies under the age 55 and twenty years of service and the 30 years of service criteria. Mr. Smith qualifies under the hazardous duty
criteria.
Review Approval: 1) Clerk
Meeting Date: 12/12/2006
Pension Trustees Agenda
Council Chambers - City Hall
SUBJECT / RECOMMENDATION:
Authorize staff to conduct a large cap value manager search and approve hiring Dahab Associates at a cost of $15,000 to assist with the
search.
SUMMARY:
For the last five years the pension plan's large cap value manager has performed below the median of the large cap value style peer group
with a ranking of the 73rd percentile for the last 5 years. Their annual rankings during that time period (2002 - 2006 YTD) have been 52nd,
83rd, 57th, 59th, and 58th, respectively. This performance is not meeting our expectations and staff and the plan's consultants feel that the
manager should be replaced. Formal approval to terminate the existing manager will be obtained concurrently with the approval to hire the
new manager. Staff has recently concluded both a mid cap value manager and a small cap growth manager search. Dahab Associates has
been assisting staff with one of those searches. Staff was extremely satisfied with the performance of Dahab and would like to use them for
this large cap value manager search as well. Dahab has agreed to hold its current price of $15,000. Dahab was hired through a RFQ process
and their price was extremely competitive compared to other respondents. The price is significantly under Dahab' s price for new clients. The
contract previously approved by the Trustees with Dahab is attached.
Type:
Current Year Budget?:
Operating Expenditure
None
Budget Adjustment:
No
Budget Adjustment Comments:
Current Year Cost:
Not to Exceed:
For Fiscal Year:
$15,000
Annual Operating Cost:
Total Cost:
$15,000
10/1/06 to 9/30/07
Appropration Code
0646-07410- 5 301 00-585 -000-
0000
Amount
$15,000
Appropriation Comment
Review Approval: 1) Office of Management and Budget 2) Legal 3) Clerk 4) City Manager 5) Clerk 6) City Manager 7) Clerk
"t ... ~-
AGREEMENT FOR INVESTMENT EVALUATION CONSULTANT SERVICES
dlL ~
THIS AGREEMENT made and entered into this~ay of ~ ,2006, by
and between the CITY OF CLEARWATER GENERAL EMPLOYEES' PENSION FUND(hereinafter
referred to as "the Fund" or "Pension Fund") and DAHAB ASSOCIATES, INC., a corporation-for-
profit (hereinafter referred to as "Consultant").
WIT N E SSE T H:
WHEREAS, the Fund is desirous of hiring the Consultant for the purpose of providing
certain investment evaluation services to the Board (particularly, an investment manager search);
WHEREAS, Consultant is desirous of providing those services for the Fund; and
NOW, THEREFORE, in consideration of the promises and mutual covenants contained in
this Agreement, the parties agree as follows:
1. The Consultant shall perform an investment manager search for the City of
Clearwater General Employees' Pension Fund.
2.
"'Fl.u CUII~ultdllt "I'dll dl:so pel r,:M'I, a,lY utI'ul c.oll~l:lltiR~ 8I!!I"/i~~i, &Ii rE:'a'iO(;1~hIV
k?
!'l~rooel uIJUl1 by d ,E Con€:bllt~f1t, '''~i=I~II&r Lc d;, eeted iF.UN1 iti..O I'r th~ P'IRS.
3. Information needed to conduct the search will be provided to Consultant. Consultant
will rely on those records as the official records of the Pension Fund. Should additional information
be needed by the Consultant, the Fund shall execute such releases as are necessary to secure
such information. The Consultant is entitled to reasonably rely on information provided by the
Fund, its agents or investment advisors and the Consultant will, to the best of its ability, notify the
Fund of any material discrepancy that it may find between the official records and the reports and
records of the investment advisors.
1
4. The Fund shall pay the Consultant in accordance with Schedule A, attached to this
Agreement. The fee shall be paid in one lump sum upon delivery of the completed study.
5. The Consultant certifies that it is professionally qualified as an independent
consultant to perform this manager search and to evaluate the performance of professional money
managers that may be selected to invest the assets of the Pension Fund.
6. 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.
7. The parties further agree:
a. 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.
b. The Fund represents that a person authorized to transact business for the
Pension Fund has determined that the services hereunder, to the extent that
they are paid for by the Pension Fund, inure solely to the benefit of the
Pension Fund and that, under the governing instruments of the Pension
Fund and/or the Board, and the laws to which the Board and/or the Pension
Fund is subject, the services are a proper and permissible expense.
c. The parties hereby represent and warrant that they have full power,
authority and capacity to execute and deliver this Agreement and to perform
their respective obligations under this Agreement, and that this Agreement
has been duly executed and delivered by the parties and constitutes a legal,
valid, and binding obligation of the parties, and is enforceable against the
parties in accordance with its terms, except as enforcement may be limited
2
, .'
by bankruptcy, insolvency, moratorium or other laws affecting the
enforcement of creditors' rights.
d. The Consultant represents that it is an investment advisor registered with
the Securities and Exchange Commission under the Investment Advisors
Act of 1940.
e. The parties to the contract recognize that the Board is not governed by
ERISA. However, in all of its relations with the Board, the Consultant 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 Consultant recognizes that
its primary obligation under this Agreement is to the Board and members of
the Pension Fund, and that it will place the interest of the Board and the
members above all others and will not enter into any agreement or take any
action contrary to that obligation. The Consultant 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.
f. The Consultant agrees to disclose, in writing, to the Board, within seven
business days if the Consultant 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 Consultant is named as the defendant in any
3
, .
civil action alleging fraud, negligence or breach of fiduciary responsibility in
connection with its consulting duties.
g. The Consultant and its employees will not render any legal, accounting or
actuarial advice, and will not prepare any legal, accounting or actuarial
documents. The Consultant encourages the Board to obtain such services
from competent professionals.
h. The Consultant will treat confidentially, by not disclosing to unaffiliated
persons, information furnished by the Board to the Consultant hereunder
without the Board's consent except: (I) incident to a subcontract or service
contract entered into by the Consultant to assist in performing services
hereunder, (ii) in connection with an audit or regulatory examination, or (iii)
as may otherwise be legally required.
8. This Agreement shall commence on the day and year first above written. The Fund
may terminate this Agreement upon thirty (30) days' written notice, with or without cause. The
Consultant may terminate this Agreement upon ninety (90) days' written notice, with or without
cause.
9. No assignment of this Agreement shall be made by the Consultant without the prior
written consent of the Board.
10. Professional Liability insurance shall be maintained by the Consultant during the life
of this Agreement, with the following limit of liability:
Professional Liability $1,000,000.
The Consultant shall provide the Fund with proof of insurance within 7 business days of execution
of this Agreement.
4
, .
, .
IN WITNESS WHEREOF, the parties here have duly executed this Agreement on the day
and year above written.
ATTEST:
By41:~
Signature
Countersigned:
DAHAB ASSOCIATES, INC.
~~
By' <' ..
. - - RI HARD E. DPi AB, PRESIDENT
CITY OF CLEARWATER, FLORIDA
--L-ef/ ~~~~
~nk V. Hibbard ' William B. Horne II
Trustee
Pension Attorney
City Manager
Attest:
hjr~~~v
~Cynthia E. Goudeau .. ",.' '. ......-
City Clerk
5
.... ~j- . ' ,'.
SCHEDULE A
The Fund shall compensate the Consultant for a hard dollar fee of $15,000 (Payment Amount)
to cover the cost of the investment manager search. Included within this fee is the cost of
attendance (inclusive of actual travel expenses) at two Investment Committee meetings to
present the results of the search/study.
\lIp\030014\Dahab Consulting Agreement - revised
Meeting Date: 12/12/2006
Pension Trustees Agenda
Council Chambers - City Hall
SUBJECT / RECOMMENDATION:
Approve the termination of Putnam as an international equity manager and ratify and confirm the transfer of assets to Northern Trust for the
management of the assets in a passive index fund.
SUMMARY:
Marsh McLennan the parent company of Putnam has put Putnam up for sale. So far the three interested parties in buying Putnam are:
Amvescap PLC of the U.K., Unicredito Italiano SpA of Italy, and Power Corp. of Canada. The plan's consultants John Willoughby with
Charles D. Hyman and Associates and Paul Troup with Callan Associates have recommended that the plan be early with its termination of
Putnam in an effort to preserve some capital. As mentioned at the November 2006 Trustee meeting, staff initiated the transfer of all funds
held by Putname to Northern Trust. The Pension Investment Committee has been watching Putnam's performance and if the performance
did not improve would have recommended a termination in the not too distant future. Northern Trust has a passive EAFE Fund, NTGI-QM
Enhanced EAFE that the plan already had money in. The fee for this fund is .35% for the first $100 million. Northern Trust also acted as a
transition manager for the transfer. It is important that the plan continued with its international exposure. For the year ending September
30th the S&P 500 had a return of 5.67% while the EAFE returned 19.16%. In the early part of next year the Pension Investment Committee
will come back to the Trustees for approval to start an international equity search
Type:
Current Year Budget?:
Other
None
Budget Adjustment:
None
Budget Adjustment Comments:
Current Year Cost:
Not to Exceed:
For Fiscal Year:
Annual Operating Cost:
Total Cost:
to
Review Approval: 1) Clerk 2) City Manager 3) Clerk 4) City Manager 5) Clerk