04/29/2002
TRUSTEES OF THE EMPLOYEES' PENSION FUND MEETING
CITY OF CLEARWATER
April 29, 2002
Present: Brian J. Aungst Chair
Ed Hart Vice-Chair/Trustee
Whitney Gray Trustee
William C. Jonson Trustee
Absent: Hoyt P. Hamilton Trustee
Also Present: William B. Horne II City Manager
Pamela K. Akin City Attorney
Steve Moskun Cash & Investments Manager
Cynthia E. Goudeau City Clerk
Brenda Moses Board Reporter
The Chair called the meeting to order at 9:05 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 4/15/02
Trustee Jonson moved to approve the minutes of the April 15, 2002, meeting, as
motion
recorded and submitted in written summation by the City Clerk to each Trustee. The
carriedmotioncarried
was duly seconded and unanimously. The was duly seconded and
unanimously.
ITEM #3 - Authorize Staff to conduct a search for a custodian for the Employee Pension Fund,
authorize Callan & Associates to assist with the search, authorize the cost of the search,
including staff travel of approximately $3,500 and Callan’s fee of up to $30,000 to be paid from
the pension fund
Cash and Investments Manager Steve Moskun said the Employee’s Pension Fund
uses a third party custodian for the safekeeping of the various securities/assets of the pension
fund.
At December 31, 2001 the Employee’s Pension Fund had assets of $441,921,590.
Currently, SunTrust is our custodian for $307,508,467 or 70% of those assets. State
Street is the custodian for$60,050,193 or 14%. The remaining balance is in the form of mutual
funds held in trust by the corresponding money manager. The plan has used SunTrust since
1985 and State Street since 1993 as custodians
Over the past year two separate problems have occurred at our custodian that have
cause staff major concerns. In researching what is industry standards on one of those
problems staff consulted with four of the leading providers of custodian services. During those
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discussions staff has learned that the pension plan can obtain superior services to what we are
currently receiving. One of the services that staff would like is the ability to have online access
to the custodial records. Currently staff must wait for three weeks to receive a printout in the
mail. Online access would be a significant benefit to staff.
The Investment Committee unanimously recommends the search for a new custodian.
The City contracts with Callan & Associates to provide performance measurement and
to provide information on investment managers. Callan has extensive knowledge and
experience with all of the custodians.
Callan’s fee for the search will be $25,000 plus travel expenses not to exceed $5,000.
Up until now Callan’s fees are paid by directing investment trades through a selected broker.
Our money managers use this selected broker only if they cannot get better execution
someplace else. The pension plan may have to supplement these directed trades if necessary
with a cash payment.
The cost of committee member travels to investigate/research the top ranked custodian
(s) is estimated at $3,500. The actual amount will be affected by the location of the
custodian(s) and the number of custodian(s) that need to be researched. Staff may also use
the trip to visit money managers if the money managers are located in a city staff is already
visiting.
The Investment Committee will come back to the Trustees in late summer or early fall
with the results of the search for approval.
In response to a question, Commissioner Hibbard said he felt this expense is
reasonable and that it is time for some due diligence.
Trustee Gray moved to authorize staff to conduct a search for a custodian for the
Employees Pension Fund, authorize Callan & Associates to assist with the search, authorize
the cost of the search, including staff travel of approximately $3,500 and Callan’s fee of up to
motioncarried
$30,000 to be paid from the pension fund. The was duly seconded and
unanimously.
ITEM #4 – Resolution #02-10 authorizing the conversion of 24,700 shares of Metro-Goldwyn-
Mayer, Inc. common stock from physical form to Depository Trust Corporation eligible
electronic form, approve the “Irrevocable Stock/Bond Power” form
Mr. Moskun said on May 23, 2000, Denver Investment Advisors participated in a Stock
Purchase Program for Metro-Goldwyn-Mayer, Inc. for 24,700. The shares were delivered in
physical form to our safekeeping custodian in the name of the City of Clearwater. These
shares should have been delivered in a Depository Trust Corporation electronic format.
To convert from physical form to electronic form the Trustees need to approve
Resolution 02-10 and the Irrevocable Stock/Bond power form.
Without exception, all of the other stock the pension plan owns is in Depository Trust
Corporation electronic format.
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Denver Investment Advisors cannot trade this security while it is in physical form in the
name of the City.
Trustee Jonson moved to authorize the conversion of conversion of 24,700 shares of
Metro-Goldwyn-Mayer, Inc. common stock from physical form to Depository Trust Corporation
motion
eligible electronic form, approve the “Irrevocable Stock/Bond Power” form. The was
carried
duly seconded and unanimously.
City Clerk Cyndie Goudeau read Resolution #02-10 and read it by title only.
Commissioner Gray moved to pass and adopt Resolution #02-10 and authorize the
motioncarried
appropriate officials to execute same. The was duly seconded and
unanimously.
ITEM #5 – Adjourn
The meeting adjourned at 9:10 a.m.
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