01/08/2004
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PENSION ADVISORY COMMITTEE MEETING
CITY OF CLEARWATER
January 8, 2004
Present:
John Lee
Hoyt P. Hamilton
Frank Hibbard
Nathan Hightower
William C. Jonson
Vice-Chair
Committee Member/Commissioner
Committee Member/Commissioner
Committee Member
Committee Member/Commissioner
Absent:
John Schmalzbauer
Tom Jensen
Committee Member
Committee Member
Also Present: Rick Ebelke
Patricia O. Sullivan
Assistant Human Resources Director
Soard Reporter
The Vice Chair called the meeting to order at 9:01 a.m. at City Hall.
To provide continuity for research, items are in agenda order although not
necessarily discussed in that order.
2 - Approval of Minutes
Member Hamilton moved to approve the minutes of the regular meeting of December
11, 2003, as submitted in written summation to each board member. The motion was duly
seconded and carried unanimously.
3 - Emplovees to be Heard - None.
4 - Action Items
a) Review and Action on Employee Requests for Years of Service Pension:
1. William L. Sara - Police Department
2. Charles McPherson - Parks & Recreation Department
3. Godfrey C. Howell - Public Utilities
Member Hibbard moved to approve Years of Service Pensions for William L. Sara,
Charles McPherson, and Godfrey C. Howell. The motion was duly seconded and carried
unanimously.
Pension Advisory 2004-01-08
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b) Review and Action on Requests for Survivor Benefits:
1. Children of Robert Maltas, Public Utilities
On December 22, 2003, Elizabeth Maltas applied for survivors' benefits on behalf of the
minor children of Robert Maltas, a City employee who passed away on December 15, 2003.
Member Hamilton moved to approve benefits for survivors of Robert Maltas. The
motion was duly seconded and carried unanimously.
c) Approval of New Hires as Plan Members:
As of December 23, 2003, the City had 1778.44 FTEs out of 1895.4 budgeted positions.
Sandra Harriger was hired on January 4, 1999, and although she has been paying into the
Pension Plan since that date, she never was formally approved by the PAC (Pension Advisory
Committee) and Trustees. Kayla Grant originally was hired on May 13, 2003, as part-time;
status changed to full-time and pension eligible as of December 1, 2003.
Member Hibbard moved to accept the following employees into membership in the
Pension Plan:
Kathy Day, Police Communication Operator Police Department
Marsha Beall, Staff Assistant Parks & Recreation
Anthony Graham, Parking Technician Engineering
Sandra Harriger, Human Resources Tech. Strategies for Success
Lonnie Baker, Jr., Public Service Tech I Public Services
Monica Reed, Librarian II Library
Ulysee Barber, Solid Waste Worker Solid Waste
Leonard Herndon, Systems Analyst Finance
Joanne Howard, Librarian I Library
Scott DeRosa, Parks Service Technician I Parks & Recreation
Judy Hill, Library Assistant Library
Kayla Grant, Library Assistant Library
Michael Ralph, Library Assistant Library
Daise Castillo, Library Assistant Library
Scott Boulding, Library Assistant Library
Mona Kaushal, Systems Analyst Official Rec. & Leg Svcs.
Tracy Malenfant, Systems Analyst Parks & Recreation
Laura McNally, Library Assistant Library
Frank McCormick, Jr., Field Service Rep. Customer Service
Joyce Susz, Library Assistant Library
Allison Cox, Parks Service Technician I Parks & Recreation
Vicky Britton, Field Service Representative Customer Service
Donovan Burns, Senior Marine Lifeguard Marine & Aviation
The motion was duly seconded and carried unanimously.
Pension Advisory 2004-01-08
Date of Pension
Emplovment Elia. Date
10/20/03
12/01/03
12/01/03
01/04/99
12/01/03
12/01/03
12/01/03
12/01/03
11/17/03
11/17/03
12/01/03
05/13/03
11/29/03
12/01/03
12/15/03
12/15/03
12/15/03
12/15/03
12/15/03
12/15/03
12/15/03
12/15/03
11/30/03
10/20/03
12/01/03
12/01/03
01/04/99
12/01/03
12/01/03
12/01/03
12/01/03
11/17/03
11/17/03
12/01/03
12/01/03
11/29/03
12/01/03
12/15/03
12/15/03
12/15/03
12/15/03
12/15/03
12/15/03
12/15/03
12/15/03
11/30/03
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. 5 - Pendinq/New Business
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Increase to Pension Plan Legal Services Agreement with Klausner & Kaufman
On May 12, 2003, the Pension Trustees approved a legal services agreement with
Klausner & Kaufman, which authorized payments to Klausner & Kaufman in the amount not to
exceed $60,000 for the period May 12, 2003 through September 30,2004.
Payments from May 12 through November 2003 equal $48,397.02:
May 12 - 29, 2003
June 2003
July 2003
Aug 2003
Sept 2003
Oct 2003
Nov 2003
Total
$ 975.00
4,911.59
5,572.74
5,368.30
5,277.63
8,921.12
17,370.64
$48,937.02
These payments include both hourly rates paid to Klausner and Kaufman as well as
reimbursement for expenses incurred on the plan's behalf, such as medical exams, copies,
travel expenses, etc. It is anticipated that increasing the not to exceed amount from $60,000 to
$140,000 will allow payments to be made to Klausner and Kaufman for the duration of the fiscal
year, which ends September 30, 2004.
Finance Director Margie Simmons said a large portion of November's bill covered
medical expenses related to disability applications. It was requested staff provide a breakdown
of payments to Klausner and Kaufman, separating hourly rates from reimbursed expenses. It
was questioned if this law firm is more expensive than the plan's previous counsel. Ms.
Simmons said costs are based on how much work is requested of the attorneys. Hourly rates
are similar. Klausner and Kaufman recently worked on PAC rules, which cost additional money.
Ms. Simmons said this request is based on her estimate. Remaining funds would roll over to
next year's budget. She was pleased that Klausner and Kaufman submits their bills promptly,
on the fifth of each month. The previous attorneys also billed the plan for reimbursements.
After Ms. Simmons reviews the monthly statement, it is forwarded to the Human Resources
Director and City Attorney for review. Staff is mindful of costs.
Member Hibbard moved to recommend approval of authorizing up to an additional
$80,000 to be paid to Klausner and Kaufman, increasing the not to exceed amount from
$60,000 to $140,000 for the period May 12, 2003 through September 30,2004. The motion
was duly seconded and carried unanimously.
Termination of Invesco Capital Management
For the last year, Invesco has performed at the 79th percentile (one being the best and
one hundred the worst). For the last two years, they have performed at the 49th percentile.
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However, during this period when staff would have thought value-oriented managers would do
well, Invesco only delivered an "average" performance. Additionally, John Rogers, leader of the
Invesco international discipline when Invesco was hired, has been given more management
responsibilities. It is unlikely that he can devote the attention to the international discipline that
he did when the Plan hired Invesco.
Invesco currently is subject to legal proceedings involving securities and consumer fraud
charges and are fighting the charges. That battle, our advisors feel, will create an unnecessary
distraction for Invesco. The Plan's advisors, John Willoughby of Charles D. Hyman and
Company, and Paul Troup of Callan Associates Inc. recommend that the plan terminate
Invesco. Monies from Invesco will be distributed among existing money managers to rebalance
the Plan's assets to Domestic Equity 55%, International Equity 5%, and Domestic Fixed Income
40%. The Plan's attorney, Klausner and Kaufman, PA has been notified of the decision to
terminate Invesco and concurs.
Staff had reviewed this issue with the City Commission in December. In response to a
question, Cash & Investments Manager Steve Moskun said the fund will be divided between
domestic equity and domestic fixed income and have less international value. Ms. Simmons
said in December staff had contacted Invesco and given the firm 30 days notice regarding this
action. In response to a question, Mr. Moskun reviewed efforts by Putnam to admit and resolve
problems, and institute changes so they do not reoccur. He said Invesco has taken a different
approach, denying that problems exist. The plan remains invested in Putnam, which reported
improved earnings in December.
Member Jonson moved to recommend the Pension Trustees ratify and confirm the
termination of Invesco Capital Management, transferring the total assets held by Invesco of
approximately $19 million dollars to Northern Trust, the plan custodian, where they will be
distributed to other existing money managers as required to keep the Plan balanced within
current investment guidelines. The motion was duly seconded and carried unanimously.
6 - Director's Reports - None.
7 - Committee Members to be Heard
All were wished a Happy New Year.
8 - Adiournment
The meeting adjourned at 9: 13 a.m.
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Pension Advisory Committee
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Board Reporter
Pension Advisory 2004-01-08
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