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MINUTES OF MEETING HELD
AUGUST 3, 2016
A meeting of the Board of Trustees was called to order at 1:04PM in the Lobby
Conference, Palm Beach Gardens, Florida. Those persons’ present were:
TRUSTEES OTHERS
Rick Rhodes, Chair Audrey Ross, Administrator
Martin Cohen, Vice Chair Dan Johnson, Investment Consultant
Jon Currier Pedro Herrera, Attorney (via telephone)
It was noted that this meeting was held in the Lobby Conference room last minute due to
recording issues in the Council Chambers.
PUBLIC COMMENTS
N/A
MINUTES
The Trustees reviewed the minutes of the July 11, 2016 regular meeting.
Marty Cohen made a motion to approve the July 11, 2016 minutes. The motion was
seconded by Jon Currier and it carried 3-0.
INVESTMENT MONITOR REPORT: THE BOGDAHN GROUP (DAN
JOHNSON)
Mr. Johnson presented the Board with the June 30, 2016 ICMA DROP report. He noted
that all is well here and there are no changes or recommendations.
Mr. Johnson reviewed the June 30, 2016 quarterly report. He noted that the big event
during the quarter was the BREXIT, which did slightly affect the RBC portfolio because
they are invested in international funds. He reviewed the Plan’s asset allocation and
noted that they are in line with their relative targets and there is no recommendation for
rebalancing at this time. The Plan ended the quarter with $78M in assets and Mr.
Johnson commented that overall the Plan has more money coming in than going out
which is a positive. For the quarter ending June 30, 2016 the total fund was slightly
behind the index net of fees at 1.18% versus 2.11%. For the fiscal year to date the total
fund is up 5.43%, but still trailing the index at 7.73%. Mr. Johnson briefly reviewed each
manager’s performance during the quarter and noted that the total equities were the
largest detractor and “other assets” (BlackRock) was the largest contributor. All
domestic equity and fixed income managers were positive for the quarter but trailing their
respective indexes. Both international equity mangers were negative, but EuroPacific
outperformed their index and RBC did not. Real estate is doing well and remains
positive. Lastly he discussed the Templeton Global Bond fund which is still negative and
trailing the index and he will discuss this more in detail shortly.
Mr. Johnson gave a brief fund update as of July 31, 2016. The Plan’s assets have
increased to $79M and they are up 2.01% for the quarter and 7.5% for the fiscal year to
date.
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Mr. Johnson discussed the Templeton Global Bond fund. He explained that they are
looking to either compliment this fund with another manager or replace it altogether. He
stated that the Bogdahn Group is still comfortable with their firm and product because he
thinks it is more the market place affecting them and things will turn around for them
soon, but ultimately it is the Board’s decision. Mr. Johnson stated that nothing stands out
to him in the investment policy guidelines that they are violating either. The Board
tabled this discussion for when all the Trustees are present and to also give Templeton a
change to rebound as the market environment is starting to turn around as well.
ATTORNEY REPORT: SUGERMAN & SUSSKIND (PEDRO HERRERA)
Mr. Herrera gave a brief update on the BankCorpSouth Litigation case. The defendants
appealed the motion but another court date has not been scheduled as of yet. Mr. Herrera
commented that he will update the Board as more information becomes available.
Mr. Herrera reminded the Trustees that their annual Form 1 Disclosure forms were due
July 1, 2016. If any Trustees have not filed their forms yet, they need to do so quickly
because the State will start assessing fees effective September 1, 2016.
Mr. Herrera stated that there are some Trustee educational opportunities coming up such
as the fall FPPTA School, the Division of Retirement conference and the IFFA school.
ADMINISTRATIVE REPORT: RESOURCE CENTERS (AUDREY ROSS)
DISBURSEMENTS
The Board reviewed the disbursements presented for approval by the Administrator.
A motion was made by Marty Cohen to approve the disbursements as presented by
the Administrator. The motion was seconded by Jon Currier and carried 3-0.
Ms. Ross presented the Board with the 2017 meeting dates, which remain on the same
schedule as this year.
Ms. Ross presented the Board with the proposed administrative budget for the fiscal year
beginning October 1, 2016 as required under the new State Law. This budget will be
filed with the Plan Sponsor for compliance purposes.
A motion was made by Jon Currier to approve the fiscal year 2016-2017
administrative budget as presented. The motion was seconded by Marty Cohen and
carried 3-0.
Ms. Ross stated that at the last meeting the Board made a motion to issue a Custodial
RFP. She presented the Trustees with the RFP and the list of Custodians that it will be
sent to. The Trustees concurred and Ms. Ross stated that she will have the responses
back for the Board to review at their next meeting.
OLD BUSINESS
Mr. Cohen explained that back in November 2013 the Board changed some of their
assumptions and one was the assumed rate of return. The assumed rate of return is being
lowered from 7.85% to 7.25% over time (currently they are at 7.65%). Mr. Cohen stated
that he would like to see the assumed rate of return go down even more to 6.5%. The
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Trustees had a very lengthy discussion regarding this change and ultimately tabled this
discussion for when the Actuary is present at one of the meetings in early 2017.
OTHER BUSINESS
Ms. Ross stated that the June 30, 2016 GHA report is available in the Plan’s drop box.
Ms. Ross presented the Board with the September 30, 2016 audit engagement letter from
Steve Gordon’s firm KSDT. She noted that the audit fee this year increased by $280 for
a total fee of $7,280. The Trustees noted that the total fee still remains relatively low
compared to other firms and they are pleased with his services.
A motion was made by Marty Cohen to approve the September 30, 2016 Audit
Engagement Letter as presented by KSDT. The motion was seconded by Jon
Currier and carried 4-0.
There being no further business, the meeting adjourned at 2:24PM.
Respectfully submitted,
Tom Murphy, Secretary