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City of Palm Beach Gardens Police Officers’
Pension Fund
Minutes of the Meeting Held
March 10, 2016
The regular meeting of the Board of Trustees of the City of Palm Beach Gardens
Police Officers’ Pension Fund was called to order at 9:07 AM by Jay Spencer in the
Council Chambers at the Palm Beach Gardens City Hall at 10500 North Military Trail,
Palm Beach Gardens, Florida.
TRUSTEES PRESENT OTHERS PRESENT
Jay Spencer, Chairman Audrey Ross (Resource Centers)
Marc Glass, Trustee Bonni Jensen (KKJ&L)
Brad Seidensticker, Trustee John McCann (Thistle Asset Consulting –
Greg Mull, Trustee via teleconference)
John Manuel, Trustee Steve Stack (Highland Capital)
PUBLIC COMMENTS
N/A
INVESTMENT CONSULTANT REPORT
Thistle Asset Consulting – Presented by John McCann (via teleconference)
Mr. McCann reviewed the Calen table for the end of 2015 and noted that large cap
growth was the best performing asset class during the year and emerging markets
was the worst performing asset class. As of December 31, 2015 the total fund’s
assets were up to $78.9M and Mr. McCann reviewed the Plan’s current asset
allocation. He noted that Real Estate is still underweighted but that will change once
American Realty makes another capital call. Mr. McCann reviewed the Plan’s
performance for the quarter ending December 31, 2015 and noted that the total Plan
net of fees was slightly behind the index at 5.06% versus 5.55%. He reviewed each
manager’s performance for the quarter and noted that most of the manager’s
outperformed their indexes with the exception of Highland Capital and the
International equity funds. The Trustees discussed the fixed income ranking which
seemed low this quarter. Mr. McCann explained that the universe ranking on the
fixed income side is not very comparable but as long as you are outperforming the
relative index then we are in good shape (the universe ranking has a lot of high yield
bonds in it which this Plan does not, but there is no other universe to compare
against for fixed income so we have to stick with this one and have been since the
beginning of time). Mr. McCann stated that overall he is very pleased with the
portfolio and does not have any recommendations at this time.
Mr. McCann discussed the Thistle/Bogdahn merge effective April 1, 2016. He
explained that this transition will be very beneficial for his company as well as his
clients as he will now have a huge back office support team, which means that it will
now free up a lot of his time so that he can go back to solely focusing on the
portfolios. Although he reassured the Board that nothing will change up front and
that they will still see either himself or Mr. Vavrica at the pension Board meetings.
Next quarter the Board will see the name change as well as a reporting format
change, but that is it. Ms. Jensen stated that there is a consent letter that the Board
will need to approve and execute regarding the merge and noted that she does not
have any issues with the merge. Mr. Spencer commented that he was also
personally contacted prior to the meeting by Mr. McCann regarding this merge and
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he does not foresee any issues as long as they continue to receive the same great
service that they have always received in the past form Mr. McCann Company.
Lastly Mr. McCann noted that all fees will remain the same.
After Mr. McCann departed the meeting the Trustees had a discussion on their
current fees with Thistle/Bogdahn and how long they are good for. Also since the
Board is moving out of the International mutual funds to Rhumbline, the fees that his
firm charges for the International mutual fund account reviews should be removed.
The Board would like Ms. Jensen to reach out to Mr. McCann to find out the specifics
on the fees.
MOTION: Mr. Seidensticker made a motion to authorize Ms. Jensen to
contact Mr. McCann and negotiate his fees for anything less
than what they are currently paying and for a 3 year contract.
SECOND: Mr. Mull seconded the motion.
CARRIED: The motion carried unanimously 5-0.
INVESTMENT MANAGER REPORT
Highland Capital Management – Presented by Steve Stack
Mr. Stack briefly updated the Board on the current market environment during the
quarter ending December 31, 2015. He noted that it was a good quarter for equites
as they were up 4.50%, but still lagging the index at 7.32%. Although things have
turned around since the quarter ended and as of current they are down -6.3%. Mr.
Stack discussed the fixed income portfolio which remained slightly positive for the
quarter at 0.05% versus the index at -0.57%. As of current they remain up 1.91%.
Overall the portfolio is doing well despite the market environment and he
commented that they will remain underweighted in the corporate bonds as they are
taking a latter approach across the portfolio.
ATTORNEY REPORT
KKJ&L - Presented by Bonni Jensen
Ms. Jensen presented the Board with information on the Leadership Conference for
Trustees. She explained that Donald Trone who is a frequent speaker at FPPTA is
offering the Trustees to attend his leadership conference in West Point in April 2016
at a discounted price. Mr. Spencer stated that he thinks this would be a great
conference and would like the other Trustees to considering attending. If the
Trustees cannot attend this conference than he would like them to try and make it to
the Division of Retirement conference in May 2016.
Ms. Jensen notified the Board that the IRS mileage rate decreased to 54 cents per
mile effective January 1, 2016.
Ms. Jensen presented the Board with her firm’s memo regarding the insurance
premium tax (IPT) database reminder. She stated that this memo will also be
provided to the City to make sure their database is updated.
ADMINISTRATOR REPORT
Resource Centers – Presented by Audrey Ross
N/A
MINUTES
MOTION: Mr. Mull made a motion to approve the minutes from the
December 5, 2015 regular meeting.
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SECOND: Mr. Manuel seconded the motion.
CARRIED: The motion carried unanimously 5-0.
DISBURSEMENTS APPROVALS
MOTION: Mr. Glass made a motion to approve the disbursements.
SECOND: Mr. Manual seconded the motion.
CARRIED: The motion carried unanimously 5-0.
BENEFIT APPROVALS
MOTION: Mr. Manual made a motion to approve the applications to enter
the DROP for Veronica Rodriguez, Timothy Roman, & Michelle
Rose, the applications to exit the DROP for Richard Geist, Todd
Thomas, Kathleen Hatchett, Joseph Sheehan & Steven Fee, the
applications for distributions from DROP accounts (1/15/2016)
for Shree Brown, Gwen Fleming & Robert Thomas, the
application for distribution from DROP accounts (2/15/2016)
for Richard Geist & Todd Thomas, the application for
distribution from DROP account (3/15/2016) for Gwen
Fleming, the application for a refund of contribution for
Nouman Raja.
SECOND: Mr. Glass seconded the motion.
CARRIED: The motion carried unanimously 5-0.
FINANCIAL STATEMENTS
The board reviewed and discussed the financial statements that were provided
through January 2016.
The board received and filed the financial statements through January 2016.
OTHER BUSINESS
The Trustees had a very lengthy discussion regarding reserve officers and in-service
distributions. Ms. Jensen explained that there is an IRS provision regarding in-
service distributions that allows a retiree to actively work and collect a pension at the
same time, but this Plan currently does not have that provision written in their
Ordinance. The Trustees discussed what could happen if the Plan is not incompliance
with the IRS and directed Ms. Jensen to reach out to the City to get this resolved as
soon as possible. Ms. Jensen commented that she will more than likely need to
reach out to a tax advisor to see what the implications could be as well.
MOTION: Mr. Glass made a motion to authorize Ms. Jensen to reach out
to the City’s Finance Director to set up a meeting regarding the
current rehires and how the Plan stands now, and to also
authorize Ms. Jensen to take any appropriate actions after the
meeting with the City to move forward with correcting the
current situation of rehires after retirement and to also make
sure that this situation is fixed going forward.
SECOND: Mr. Manuel seconded the motion.
CARRIED: The motion carried unanimously 5-0.
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Mr. Glass discussed the items that the PBA is looking at in regards to the upcoming
negotiations and the different costs studies that the City and the Union want
completed. Ms. Jensen noted that the Board can allow the City and the Union to use
the Plan’s Actuary, GRS, but the pension Board does not pay for any studies that the
City or the Union request (each party pays for their own studies). Ms. Jensen did
remind the Trustees that during this next contract the City and the Union do need to
discuss and document how they are going to distribute the excess State money as
this is a new requirement of the State for the Share accounts.
MOTION: Mr. Glass made a motion to authorize Ms. Jensen to send a
letter to the City and the Union on behalf of the pension Board
asking the parties to keep the distribution of the excess State
money status quo.
SECOND: Mr. Mull seconded the motion.
CARRIED: The motion carried unanimously 5-0.
AJOURN
There being no further business, the Trustees officially adjourned the meeting at
11:36AM. The next meeting is scheduled for Wednesday June 1, 2016 at 9AM.
Respectfully submitted,
_____________________________
Brad Seidensticker, Secretary