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01/10/2002PENSION ADVISORY COMMITTEE MEETING CITY OF CLEARWATER January 10, 2002 Present: Dick Fitzgerald Chair Whitney Gray Vice Chair /Commissioner John Lee Committee Member Ed Hart Committee Member/Commissioner John Schmalzbauer Committee Member Bill Jonson Committee Member/Commissioner Tom Jensen Committee Member Also Present: Rick Ebelke Assistant Human Resources Director Lee Dehner Pension Advisory Committee Attorney Deb Ford Human Resources Analyst Margie Simmons Finance Director 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 Member John Schmalzbauer moved to approve the minutes of the regular meeting of December 13, 2001. The motion was duly seconded and carried unanimously. ITEM #3 - Employees to be Heard – None. ITEM #4 - Action Items a) Review and Action on Employee Requests for Years of Service Pension 1. Michael Teyner – Public Services Technician II, Public Utilities Department 2. John Jeffries, Jr. – Wastewater Treatment Plant Operator A, Public Utilities Department. b) Approval of New Hires as Pension Plan Members As of December 31, 2001, the City had 1720.55 FTEs out of 1834.7 budgeted positions. Rachel Franklin originally was hired as permanent part-time and changed to full-time and pension eligible as of December 2, 2001. Member Gray moved to accept the following employees into membership in the Pension Plan: Date of Pension Employment Elig. Date Daniela Riccelli, Utilities Chemist Public Utilities 12/3/01 12/3/01 Jarred Stiff, Police Cadet Police 12/3/01 12/3/01 Charles Redinger, Police Cadet Police 12/3/01 12/3/01 Dana Harrison, Police Recruit Police 12/3/01 12/3/01 Arban Goodrum, Police Recruit Police 12/3/01 12/3/01 Kurt Zamor, Police Recruit Police 12/3/01 12/3/01 David Ganote, Police Com. Oper. Trne. Police 12/3/01 12/3/01 Joel Morley, Police Recruit Police 12/3/01 12/3/01 Norma Skinner, Staff Assistant II Engineering 12/3/01 12/3/01 John Bennett, Police Recruit Police 12/3/01 12/3/01 Jeff McCann, Police Recruit Police 12/3/01 12/3/01 Vernard Berrien, Parks Ser. Tech. I Parks & Recreation 12/3/01 12/3/01 James Jones, Jr., Custodial Worker Parks & Recreation 12/3/01 12/3/01 Mark Viola, Firefighter Fire 12/3/01 12/3/01 Todd Johnson, Firefighter Fire 12/3/01 12/3/01 Kris Familiari, Firefighter Fire 12/3/01 12/3/01 Steve Salagaras, Firefighter Fire 12/3/01 12/3/01 David Demarest, Police Recruit Police 12/3/01 12/3/01 Timothy Downes, Police Recruit Police 12/3/01 12/3/01 Edmund Kardauskas, Police Cadet Police 12/3/01 12/3/01 Lisa Brown, Public Information Spec. Gas 12/3/01 12/3/01 Rachel Franklin, Recreation Leader Parks & Recreation 6/4/01 12/2/01 * Suzanne Judge, Police Com. Oper. Trne. Police 12/3/01 12/3/01 Renee McSwain, Pol. Com. Oper. Trne. Police 12/3/01 12/3/01 The motion was duly seconded and carried unanimously. ITEM #5 - Pending/New Business Terminate the contract with 3 Bridge Capital as a large cap value equity manager Steve Moskun, Cash & Investments Manager, addressed the Committee concerning the Finance Department’s request to terminate the City’s contract with 3 Bridge Capital as a large cap value equity manager. For the year ending September 30, 2001, 98 percent of large capital value equity managers outperformed 3 Bridge. During the past year, the Trustees have reduced the money 3 Bridge manages from $85,236,247 to $24,480,169 due to performance concerns. Earlier this year, the Trustees added Capital Guardian as a large cap value manager with the intention that if 3 Bridge did not improve it would be terminated. Both of the plan’s financial advisors and the Pension Investment Committee recommend termination of this contract. Under the terms of the City’s contract with 3 Bridge, the City must provide 30 days written notice if the contract will be terminated. Staff is recommending that the funds from 3 Bridge be divided between Ark (deep discount large cap value) and Capital Guardian (large cap relative value) such that after the distribution, both Ark and Capital Guardian have approximately the same amount of money. The only cost that will be incurred due to the cancellation of the contract will be trading costs. Mr. Moskun explained that the City will receive the portfolio from 3 Bridge and will work with Bank of New York. Stocks that are not wanted will go to the Bank of New York who will liquidate them. The money received will be divided between the managers. Member Bill Jonson moved to recommend to the Trustees that the contract be terminated. The motion was duly seconded and carried unanimously. Conversion of MGM stock from physical to electronic Steve Moskun advised the Committee that the pension plan owns shares of MGM stock which were received in physical form rather than in electronic format. The pension Trustees must pass a resolution to allow the stock to be converted to electronic format so it can be sold. The wording of the resolution has not been finalized. However, staff needs a recommendation from the Committee to the Trustees to take whatever action is necessary to allow the conversion of the stock. There will be no costs incurred for this. Member Jonson moved to recommend that the Trustees take whatever action is necessary to make the conversion. The motion was duly seconded and carried unanimously. ITEM #6 – Director’s Reports Rick Ebelke, Assistant Human Resources Director, advised the Committee that the correct FTE figure is 1720.55. Margie Simmons, Finance Director, provided the Committee with a public meeting notice for February 1, 2002, to review the actuarial assumptions with Steve Metz. Any members who want to attend may do so and participate in the discussion. After the meeting, Mr. Metz will provide a report that will be discussed with the Pension Advisory Committee (PAC) at the February 14 meeting which will be lengthy. At the conclusion of the February 14 PAC meeting, the Pension Investment Committee will hold its quarterly meeting. Any members who plan to attend the Investment Committee should plan on being there for most of the day. Lee Dehner, pension attorney, advised the Committee that the packets containing the special tax notice that is provided to employees who request refunds of their pension contributions have been revised in accordance with EGTERRA and forwarded to the City. Any employees who have not yet received their refund should be provided with the new packets since the changes will affect them. The next PAC meeting is scheduled for February 14, 2002. ITEM #7 - Committee Members to be Heard Member Jonson asked that staff indicate on the agenda how long the meeting is expected to last if known. Member Schmalzbauer will not be at the February 14 meeting since he will be on vacation. ITEM #8 - Adjournment The meeting adjourned at 9:26 a.m.