02/28/2000
TRUSTEES OF THE EMPLOYEES' PENSION FUND MEETING
CITY OF CLEARWATER
February 28, 2000
Present: Brian J. Aungst Chair
Ed Hooper Vice-Chair/Trustee
J. B. Johnson Trustee
Robert Clark Trustee
Ed Hart Trustee
Also present: Michael J. Roberto City Manager
Pamela K. Akin City Attorney
Cynthia E. Goudeau City Clerk
Brenda Moses 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 not necessarily
discussed in that order.
ITEM #2 - Approval of Minutes:
Trustee Johnson moved to approve the minutes of the February 14, 2000, meeting, as
motion
recorded and submitted in written summation by the City Clerk to each Trustee. The
carried
was duly seconded and unanimously.
ITEM #3 - Authorize transfer of portfolio from Hanson Investment Management Company to
3Bridge Capital LLC and approve contract with 3Bridge Capital LLC:
On December 31, 1999, the Pension Plan had $91 million with Hanson Investment
Management invested in equities using a “growth at a reasonable price” style. On January 6,
the investment professionals with Hanson Investment Management quit to creat their own firm,
3Bridge Capital LLC. The assets of Hanson have been taken over by Sirach Capital
management, which does not have the investment style the City utilized at Hanson. The
Pension Plan currently has $48 million invested in a fixed income style with Sirach. 3Bridge
has offered to manage the City’s portfolio the same way as they did at Hanson. Their fee is
.01% for the first $3,000,000; .005% for the next $15,000,000; and .003% for the remainder.
This is the same as the fee paid to Hanson. As an incentive to induce the City, 3Bridge has
offered to manage the City’s money for free for the first 30 days. Callan Associates, the City’s
performance measurement company, has interviewed both firms and strongly recommends the
portfolio managed by Hanson be transferred to 3Bridge. Members of the investment
committee have conducted site visits and recommend the portfolio at Hanson be transferred to
3Bridge. Staff does not recommend leaving the portfolio with Sirach as it would be equivalent
to hiring a new investment manager without performing due process and the Pension Plan
already has 2 other “growth” equity managers. Upon Trustee approval of the transfer to
3Bridge, staff will give Hanson the 30-day termination notice required by contract.
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Steve Moskun, Cash & Investment Manager with City's Finance Department, said staff
will closely monitor this transfer. In response to a question, he said staff has researched
companies for the lowest management costs and found 3Bridge to offer the best rate. Finance
Director Margie Simmons said staff considers the money manager, not the firm. This transfer
represents 18.5% of the total Pension Plan. Staff is happy with Sirach’s fixed income portfolio
but feels 3Bridge more appropriate for the balance previously handled by Hanson. It was
noted the City’s Pension Plan is in the top 4% in the entire country. Staff has confidence this
transfer is in the best interests of the City to maintain diversification among fixed income and
equities. Mr. Moskun said 3Bridge will spend more money than did Hanson for research and
personnel and expect to have over a billion dollars in assets. Staff expects this transfer will
result in better performance of the Plan as 3Bridge is an employee-owned company with more
incentive to perform.
Trustee Johnson moved to approve the transfer of portfolio from Hanson Investment
Management Company to 3Bridge Capital LLC and approve a contract with 3Bridge Capital
motion
LLC. The was duly seconded. Upon the vote being taken, Trustees Hooper, Johnson,
carried
Hart and Chair Aungst voted "Aye"; Trustee Clark voted "Nay". Motion .
ITEM #4 - Other Business – None.
ITEM #5 - Adjournment
The meeting adjourned at 9:16 a.m.
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