07/10/2003PENSION ADVISORY COMMITTEE MEETING
CITY OF CLEARWATER
July 10, 2003
Present: Whitney Gray Chair/Commissioner
John Lee Vice-Chair
Hoyt P. Hamilton Committee Member/Commissioner
Nathan Hightower Committee Member
John Schmalzbauer Committee Member
Absent: Frank Hibbard Committee Member/Commissioner
Tom Jensen Committee Member
Also Present: Stu Kaufman Pension Advisory Committee Attorney
Joe Roseto Human Resources Director
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 of June 3, 2003
Member Hamilton moved to approve the regular Pension Advisory Committee meeting minutes of June 3, 2003, as submitted in written summation to each board member. 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 Pensions:
Matthew Moore, Library
Douglas Wlasiuk, Solid Waste/General Services
Joseph Egger, Police
Walter Yasensky, Fire
Carol Turcotte, Police
Charles Watson, Parks & Recreation
Wayne Meissner, Police
Member Schmlazbauer moved to approve Years of Service Pensions for Matthew Moore, Douglas Wlasiuk, Joseph Egger, Walter Yasensky, Carol Turcotte, Charles Watson, and Wayne Meissner.
The motion was duly seconded and carried unanimously.
b. Approval of New Hires as Plan Members:
As of June 26, 2003, the City had 1770.96 FTEs of 1844.9 budgeted positions.
Member Lee moved to accept the following employees into membership in the Pension Plan:
Pension Elig.
Name, Job. Class, & Dept./Div. Hire Date Date
Justin Lutz, Police Officer/Police 5/19/03 5/19/03
Jesse Combs, Parks Svc Tech. I/Parks & Rec. 5/19/03 5/19/03
Jonathan Roberts, Life Hazard Safety Inspector/Fire 5/19/03 5/19/03
Gregory Anderson, Public Svcs Tech. I/Public Svcs 5/19/03 5/19/03
Shante Dean, Police Cadet/Police 5/19/03 5/19/03
Monica Rodriguez, Police Cadet/Police 5/19/03 5/19/03
Dan McCue, Police Cadet/Police 5/19/03 5/19/03
Kellie Ciotti, Police Cadet/Police 5/19/03 5/19/03
Ryan Brinson, Traffic Engineering Assistant/Engineering 5/19/03 5/19/03
Dennis Cason, Police Recruit/Police 5/19/03 5/19/03
Kent Reeves, Police Recruit/Police 5/19/03 5/19/03
Bryan Karnes, Police Recruit/Police 5/19/03 5/19/03
Randy Bodle, Police Recruit/Police 5/19/03 5/19/03
Robert Palm, Warehouse Clerk/Solid Waste/Gen Svcs 6/2/03 6/2/03
Casey Lawrence, Air Cond. Tech./Solid Waste/Gen Svc 6/2/03 6/2/03
David Bradford, Jr., Management Intern/Parks & Rec 6/2/03 6/2/03
Richard Baird, Air Cond. Tech./Solid Waste/Gen Svcs 6/2/03 6/2/03
Norrise Shellman, Water Plant Op. Trainee/Public Utilities 6/2/03 6/2/03
Grant Nelson, Solid Waste Worker/Solid Waste/Gen Svcs 6/2/03 6/2/03
Cornelius Collins, Solid Waste Worker/Solid Waste/Gen Svcs 6/2/03 6/2/03
Joshua Payne, Senior Marine Lifeguard/Marine & Aviation 5/31/03 5/31/03
Louis Anderson, Parks Svc Tech I/Parks & Rec 6/16/03 6/16/03
Michelle Sheldon, Customer Svc Rep/Customer Svc 6/16/03 6/16/03
Shari Lepper, Customer Svc Rep/Customer Svc 6/16/03 6/16/03
Derek Ferguson, Systems Analyst/Information Technology 6/16/03 6/16/03
Carrie Mehling, Police Communications Op Trainee/Police 6/16/03 6/16/03
Elizabeth Renfroe, Police Communications Op Trainee/Police 6/16/03 6/16/03
The motion was duly seconded and carried unanimously.
ITEM #5 – Pending/New Business:
a. Contract approval for Atlanta Capital Management/Systematic Financial Management
The Trustees previously authorized Callan to conduct a search for a small cap value equity manager.
The following is the list of small cap value equity managers that Callan recommended to the Investment Committee:
Ark Asset Management Co., Inc.
Atlanta Capital Management Co. LLC
Systematic Financial Management
Boston Partners Asset Management
Chartwell Investment Partners
Northpointe Capital
After reviewing information provided on the above managers, the Investment Committee ranked the managers and conducted interviews with the top three. Staff also visited the top three
managers.
The Investment Committee recommends to the Trustees that they add two small cap equity managers. Atlanta Capital and Systematic are firms that are on the opposite ends of the small
cap value spectrum. Atlanta Capital invests in small cap firms that are of high quality and tend to be well known. The annual turnover rate for Atlanta Capital’s portfolio is about
40%. Systematic invests in small cap firms that had a positive earnings surprise and positive free cash flow. The firms in Systematic’s portfolio tend to be lesser-known firms. The
annual turnover rate of Systematic’s portfolio is about 170%. Both firms consistently out perform their benchmark, the Russell 2000 Value Index.
Atlanta Capital charges a management fee of .7%. Systematic charges a management fee of 1%. Both fees are in line with industry standards given their investment styles.
The Investment Committee recommends that each manger be funded with $15 million. The source of the funding will be determined at the time of funding. At that time the entire portfolio
will be rebalanced and the funding will come from parts of the portfolio that are over funded.
In response to a question, Cash & Investments Manager Steve Moskun said Systematic Financial Management is formula-driven. Part of their management style includes promptly canceling
business with companies that do not perform to Systematic’s expectations. In response to a question, Mr. Moskun reviewed the costs associated with the proposed contracts.
In response to a question, Mr. Moskun said the .7% management fee for Atlanta Capital is low for a small cap value manager. The 1% management fee being proposed for Systematic Financial
Management is slightly higher than the industry average, as Systematic would perform more research than the average firm normally would. These costs would be offset by increased earnings
realized by both of these firms as they consistently outperform the market index.
Member Hightower moved to recommend to the Trustees approval of contracts with Atlanta Capital and Systematic Financial Management. The motion was duly seconded and carried unanimously.
b. Gwen Legters – Set Hearing Date for Non-job-connected Disability Hearing
Human Resources Director Joe Roseto requested a date be schedule for a non-job-connected disability hearing for Gwen Legters. He said the City does not anticipate this employee would
return to work and is not disputing this application.
Consensus was to schedule the hearing for the next meeting in August.
c. Elizabeth Alvarez – Set Hearing Date for Job-connected Disability Hearing
Mr. Roseto requested a date be scheduled to hear a job-connected disability hearing for Police Officer Elizabeth Alvarez. He anticipated some discussion would be necessary regarding
this case. The IME (Independent Medical Examination) doctor’s report and related information has been provided to the PAC (Pension Advisory Committee).
Discussion ensued regarding the next meeting date. Consensus was to reschedule the August 14 meeting to August 28 at 9:00 a.m. Both Ms. Legters and Ms. Alvarez’s cases would be heard
at that meeting.
ITEM #6 – Director’s Reports
Mr. Roseto congratulated members Schmalzbauer and Jensen for their reappointment to the PAC.
In response to a question, Mr. Roseto said a pending disability case involving an employee who was given a disability pension a number of years ago would be brought before the PAC.
The former employee was given notice that she must be seen by an IME doctor or risk the loss of her pension benefits. The employee has not been cooperating with the request.
Attorney for the Board Stu Kaufman said to ensure the City has given the employee the legal benefit of due process, she will again be notified of the potential for the loss of her pension
benefits. In response to a question, Mr. Roseto said notices for IME doctor appointments are sent via certified mail. He said employees receiving disability benefits are required to
check in with the City on an annual basis regarding their status. Mr. Kaufman stated that this employee would not receive credit for hours she was on disability benefits.
ITEM #7 – Committee Members to be Heard
Members Lee and Hamilton congratulated members Schmalzbauer and Jensen for their reappointment to the PAC. Members Lee and Schmalzbauer also thanked the City for their handling of
the pension election.
ITEM #8 - Adjournment
The meeting adjourned at 9:25 a.m.