12/01/1997TRUSTEES OF THE EMPLOYEES' PENSION FUND MEETING
CITY OF CLEARWATER
December 1, 1997
Present: Rita Garvey Chair
J. B. Johnson Trustee
Robert Clark Trustee
Ed Hooper Trustee
Karen Seel Trustee
Michael J. Roberto City Manager
Pamela K. Akin City Attorney
Cynthia E. Goudeau City Clerk
Patricia O. Sullivan Board Reporter
The Chair called the meeting to order at 9:03 a.m. at City Hall.
To provide continuity for research, items are in agenda order although not necessarily discussed in that order.
ITEM #2 - Approval of Minutes
Trustee Johnson moved to approve the minutes of the November 3, 1997, meeting, as corrected by the City Clerk. The motion was duly seconded and carried unanimously.
ITEM #3 - Approve contract with ARM Capital Advisors, Inc., as a core fixed income manager, provide for smooth transition for addition through opening of safekeeping account at Sun Trust
With Trustee approval, Callan Associates, Inc., conducted a search for a core fixed income manager and presented for consideration to the PIC (Pension Investment Committee): 1) ARM
Capital Advisors, Inc.; 2) Sirach Capital Management, Inc.; 3) Brinson Partners, Inc.; 4) Sovran Capital Management Corp.; 5) Wellington Management Company, LLP; and 6) Seix Investment
Advisors. The PIC ranked the firms and after receiving presentations from the top three, ranked ARM highest. After an October 22, 1997, visit to ARM’s offices to review their facilities,
equipment, and personnel, staff was favorably impressed by ARM’s abilities, resources, and past performance. ARM has ranked in the top 10 percentile of all fixed-income managers during
the last 7 years and for the last 7 years in aggregate, ARM has ranked in the top 1 percentile. ARM has managed tax-exempt funds as a team, with no change in philosophy or process,
since inception of the product in 1988. ARM manages $2.6-billion in tax-exempt funds.
ARM’s fees, 0.4% on the 1st $25-million, 0.25% on the next $75-million, and 0.2% on the balance, are similar to charges by other fixed income managers. This fee is the lowest one ARM
charges. Considering ARM’s record of superior performance, staff is comfortable with these fees. Staff recommends funding ARM’s portfolio with $35-million: 1) $15-million from Eickhoff,
Pieper & Willoughby, Inc. and 2) $20-million from Shields Alliance. Staff will open a safekeeping account at Sun Trust, the City’s safekeeping service, and facilitate the transfer.
In response to a question, Finance Director Margie Simmons said costs will increase slightly as lower balances are subject to higher fees.
Trustee Hooper to approve the contract with ARM Capital Advisors, Inc. as a core fixed income manager, provide for the smooth transition for the addition through the opening of a safekeeping
account at Sun Trust, and that the appropriate officials be authorized to execute same. The motion was duly seconded and carried unanimously.
ITEM #4 - Other Business - None.
ITEM #5 - Adjournment:
The meeting adjourned at 9:05 a.m.