03/14/2005
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TRUSTEES OF THE EMPLOYEES' PENSION FUND MEETING
CITY OF CLEARWATER
March 14, 2005
Present:
Frank Hibbard
William C. Jonson
Hoyt Hamilton
John Doran
Chair
Trustee
Trustee
Trustee
Absent:
Carlen Petersen
Trustee
Also Present:
William B. Horne II
Garry Brumback
Pamela K. Akin
Richard Ebelke
Cynthia E. Goudeau
Brenda Moses
City Manager
Assistant City Manager
City Attorney
Human Resources Assistant Director
City Clerk
Board Reporter
The Chair called the meeting to order at 1 :08 p.m. at City Hall.
To provide continuity for research, items are in agenda order although not
necessarily discussed in that order.
Approval of Minutes:
Trustee Hamilton moved to approve the minutes of the February 14, 2005, meeting, as
recorded and submitted in written summation by the City Clerk to each Trustee. The motion
was duly seconded and carried unanimously.
1. Accept the emplovees listed below into membership in the City of Clearwater's Employees'
Pension Plan.
Name, Job, Class, & Dept./Div.
Hire Date
Ekatrini Gerakious, Americorps Clearwater Coordinator/Police 1/3/05
Spiro Mannossos, Gas Technician I/Gas 12/13/04
Andrea Wells, Senior Staff Assistant/Legal 9/30/02
Kathleen Coakley, Customer Service Rep.lCustomer Service 1/10/05
Erin Keefe, Management Intern/City Manager 1/10/05
Matthew Anderson, Police Officer/Police 1/10/05
David Hassett, Police Officer/Police 1/10/05
Joseph Lespier, Police Officer/Police 1/10/05
Daniel Cote, Custodial Worker/Parks & Recreation 1/10/05
Suzanne Jackson, Systems Programmer/Information Technology 1/10/05
Mark Pellechio, Public Utilities Technician II/Public Utilities 1/10/05
Richard Hannigan, Gas Technician I/Gas 1/10/05
Christopher Lang, Senior Marine Lifeguard/Marine & Aviation 1/9/05
Vanessa Rogers, Police Cadet/Police 1/10/05
Jeffrey Naiman, Police Officer/Police 1/10/05
Pension Trustees 2005-03-14
Pension Elig.
Date
1/3/05
12/13/04
12/25/04
1/10/05
1/10/05
1/10/05
1/10/05
1/10/05
1/10/05
1/10/05
1/10/05
1/10/05
1/9/05
1/10/05
1/10/05
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Alexander West, Public Utilities Technician IIPublic Utilities 1/10/05
Terry Rongey, WWTP Operator AlPublic Utilities 1/24/05
Jeremy Peplow, TV Production Specialist/Public Communications 1/24/05
Kenneth Mobley, WWTP Operator Trainee/Public Utilities 1/24/05
1/10/05
1/24/05
1/24/05
1/24/05
Andrea Wells was originally employed as part-time on 9/30/02; changed to full-time and
pension eligible as of 12/25/04.
Trustee Jonson moved to accept the recommendation of the Pension Advisory
Committee. The motion was duly seconded and carried unanimously.
2. Mark Petrie, Public Services Department. and Linda Burch, Police Department. be allowed
to vest their pensions under Section(s) 2.397 and 2.398 of the Employees' Pension Plan as
approved by the Pension Advisorv Committee.
Mark Petrie, Materials Tester, Public Services Department, was employed by the City on
November 24, 1986, and began participating in the Pension Plan on that date. Mr. Petrie
terminated from City employment on January 14, 2005.
Linda Burch, Police Service Technician, Police Department, was employed by the City
on January 23, 1995, and began participating in the Pension Plan on that date. Ms. Burch
terminated from City employment on January 24, 2005.
The Employees' Pension Plan provides that should an employee cease to be an
employee of the City of Clearwater after completing ten or more years of creditable service
(pension participation), such employee shall acquire a vested interest in the retirement benefits.
Vested pension payments commence on the first of the month following the month in which the
employee normally would have been eligible for retirement.
Section 2.393 (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. Mr. Petrie
would have completed at least 20 years of service and reached age 55 on November 24,2006.
His pension will be effective December 1, 2006. Ms. Burch would have completed 20 years of
service and reached age 55 on January 24, 2015. Her pension will be effective February 1,
2015. These pensions were approved by the Pension Advisory Committee on February 10,
2005.
Trustee Doran moved to allow Mark Petrie and Linda Burch to vest their pensions under
Sections 2.397 and 2.398 of the Employees Pension Plan as approved by the Pension Advisory
Committee. The motion was duly seconded and carried unanimously.
3. Janice Kina, Development & Neiahborhood Services Department: Lois Klein, Librarv
Department: Sam Brown, Jr.. Solid Waste Department: and Terrv O'Neill. Fire Department. be
aranted reaular pensions under Section(s) 2.393 and 2.397 of the Employees' Pension Plan as
approved by the Pension Advisorv Committee.
Janice King, Code Enforcement Inspector, Development and Neighborhood Services
Department, was employed by the City on January 6, 1975, and her pension service credit is
effective on that date. Her pension will be effective March 1, 2005.
Pension Trustees 2005-03-14
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. Based on an average salary of approximately $41,976 per year over the past five years,
the formula for computing regular pensions, and Ms. King's selection of the Joint & Survivor
Annuity, this pension will approximate $34,633 annually.
Lois Klein, Librarian III, Library Department, was employed by the City on April 6, 1979,
and her pension service credit is effective on that date. Her pension will be effective February 1,
2005.
Based on an average salary of approximately $55,056 per year over the past five years,
the formula for computing regular pensions, and Ms. Klein's selection of the 100% Joint &
Survivor Annuity, this pension will approximate $37,787 annually.
Sam Brown, Jr., Solid Waste Supervisor I, Solid Waste Department, was employed by
the City on August 20, 1980, and his pension service credit is effective on that date. His
pension will be effective March 1, 2005.
Based on an average salary of approximately $45,860 per year over the past five years,
the formula for computing regular pensions, and Mr. Brown's selection of the Joint & Survivor
Annuity, this pension will approximate $30,821 annually.
Trustee Hamilton moved to accept the recommendation of the Pension Advisory
Committee. The motion was duly seconded and carried unanimously.
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4. Accept the recommendations of the Asset Allocation Study performed bv Kalson &
Associates and authorize staff to take the necessary actions to implement the
recommendations.
In October 2004, the Trustees authorized the hiring of Kalson and Associates to conduct
an asset allocation study of the pension plan investments. The goal of this study was to find
the asset mix that would generate the highest possible return with an acceptable amount of
risk.
Some of the recommendations made will require going to referendum for voter approval
and others will simply require the reallocation of funds from one investment type to another
including the hiring and termination of investment managers.
The following is a summary of the recommendations of the Asset Allocation Study
performed by Kalson & Associates:
Changes requiring voter approval via a referendum:
1. Add Real Estate Investment Trusts (REITs) as an allowable investment up to 15% of
the portfolio. REITs are companies that primarily own buildings and land.
2. Increase the allowable amount of Internationallnvestmentfrom 10% to 20% of the
portfolio to provide for the addition of emerging market equity investments.
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3. Increase the maximum equity allocation from 65% to 70%.
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4. Allow up to 10% of the portfolio to be invested in High Yield Bonds.
Changes not requiring voter approval via a referendum:
5. Add a Mid Capitalization Value Equity Manager.
6. Add a Small Capitalization Growth Equity Manager.
7. Add a REIT's Manager (if investment type approved via referendum)
8. Add an active International EAFE Manager to replace the current passive EAFE
Manager.
Upon acceptance by the Trustees of the Asset Allocation Study recommendations, staff
will work with the Pension Plan's Attorney and City Attorney to draft the appropriate language
for the voter referendum. In addition, staff will start the process to select a consultant to assist
with the various investment manager searches.
Joe DeRosa, Kalson & Associates, gave a presentation regarding the study his firm
performed.
In response to a question, Finance Director Margie Simmons said any ordinance change
would go before the voters and staff is looking at a November 2005 referendum.
Trustee Jonson moved to accept the recommendations of the Asset Allocation Study
performed by Kalson & Associates and authorize staff to take the necessary actions to
implement the recommendations. The motion was duly seconded and carried unanimously.
In response to a question, Ms. Simmons said investment time constraints could be
included in the referendum.
5. Approve a contract with Callan Associates Inc. for investment consultino services with an
annual fee of $72,000 and authorize appropriate officials to execute same.
At the Trustee's direction, staff issued a Request for Proposal (RFP) for Investment
Performance Measurement. The criteria used to evaluate the proposals included qualifications
and resources of the firm and staff, fees, and the quality of their reports.
A total of 24 firms responded to the RFP. The RFP committee ranked the responses
and requested additional information from the top eleven ranked firms. Those firms are:
Callan Associates
Consulting Services Group LLC
Frank Russell Company
GRS Asset Consultants
Kalson & Associates
Marquette Associates, Inc.
Mercer Investment Consulting
Merrill Lynch Consulting
New England Pension Consulting
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Palmer & Cay
PFM Advisors
The RFP committee reviewed the second round of submittals and selected three
finalists for presentations. After those presentations the RFP committee ranked the firms as
follows:
Callan Associates
Palmer & Cay
Kalson & Associates
The annual fee for the performance measurement service will be $72,000. Any
additional services (such as manager searches) will require additional fees and will need the
approval of the Trustees.
In response to a question, Mr. Moskun said staff was impressed with Callan Associates
staff and their extensive database.
Trustee Doran moved to approve a contract with Callan Associates Inc. for investment
consulting services with an annual fee of $72,000 and authorize appropriate officials to execute
same. The motion was duly seconded and carried unanimously.
Other Business - None.
Adjourn
The meeting adjourned at 1 :24 p.m.
~j/~
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Employee's Pension Plan Trustees
Attest:
Pension Trustees 2005-03-14
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