HomeMy WebLinkAboutAgenda Police Pension 042111 Agenda
City of Palm Beach Gardens Police Officers’
Pension Fund
M EETING OF A PRIL 21, 2011
LOCATION: City Council Chambers’
10500 North Military Trail
Palm Beach Gardens, FL 33410
TIME: 9 AM
1. Call Meeting To Order
2. Roll Call:
• Lt. Jay Spencer, Chairman
• David Pierson, Secretary
• Jules Barone, Trustee
• Brad Seidensticker, Trustee
• Wayne Sidey, Trustee
3. Custodial RFP Interviews:
• Comerica Bank – Felecia Reli ef, Assistant Vice President
• Salem Trust Company – Karen Russo, Senior Vice President & Regional Mgr
• Wells Fargo Institutional Retirement & Trust – Patrick Laratta, Vice President
4. GRS – Steve Palmquist
• Discussion of Excess Chapter 185 Money
5. Investment Manager Report – ICC Capital (Steve Stack)
6. Investment Consultant Report – This tle Asset Consulting (John McCann)
7. Attorney Report – Law Offices of Perry & Jensen (Bonni Jensen)
• Discussion Regarding Multiple Buybacks
• Memo Regarding Proposed State Legi slative Changes to Pensions – PCB
GVOPS 11-17 & SB 1128, as amended
8. Administrator Report – Resource Centers (Audrey Ross)
9. Approval of Minutes
• January 27, 2011 Regular Meeting
10. Disbursements
11. Benefit Approvals
12. Financial Statements
13. Old Business
• Update on George Smith’s Prior Contributions
14. Other Business
• Chairman – Update on March 1, 2011 Meeting with the City Regarding the
Pension Funds Funding and Unfunded Liability
15. Public Comments
16. Adjourn
Next Meeting Date:
Thursday July 21, 2011 @ 9AM
PLEASE NOTE:
Should any interested party seek to appeal any decision of this Board with respect to any matter considered at such
meeting or hearing, s/he will need a record of the proceedings and for such purpose may need to ensure that a verbatim
record of the proceedings is made, which record includes the testimony and evidence upon which the appeal is to be
based.
In accordance with the Americans With Disabilities Act of 1990, persons needing a special accommodation to participate
in this meeting should contact the The Pension Resource Center, LLC no later than four days prior to the meeting.
Minutes 1-27-11.doc
Page 1 of 7
City of Palm Beach Gardens Police Officers’
Pension Fund
Minutes of the Meeting Held
January 27, 2010
The regular meeting of the Board of Truste es of the City of Palm Beach Gardens
Police Officers’ Pension Fund was called to order at 1:03 PM by Chairman 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, Chair Audrey Ross (Resource Centers)
Brad Seidensticker, Trustee Bonni Jensen (Law Offices of Perry & Jensen)
Jules Barone, Trustee Steve Stack (ICC Capital Management)
Donna Cannon (PBG Clerk’s Office)
John McCann (Thistle Asset Consulting)
Steve Palmquist (GRS)
Jim Burdick (CBH)
Alan Knopf, ARK Consulting Associates
PRESENTATION OF THE SEPTEMBER 30, 2011 AUDITED FINANICAL
STATEMENTS
Cherry, Bekaert & Holland (CBH) – Presented by Jim Burdick
Mr. Burdick reviewed the audit engagement letter and stated that they issued an
unqualified opinion which is the highest level that can be issued. There were no
significant efficiencies found within the inte rnal controls, or no material weaknesses
found while performing the audit. Alth ough he did note that they found one
miscalculated benefit that is in the process of being corrected. Mr. Burdick also reported
that they did not consult with any other CPA’s during the audit.
Mr. Burdick briefly discussed th e management discussion and analysis letter which is a
narrative overview of the au dit process. The net assets increased to $41,403,852 in
2010 from $34,032,253 in 2009, and the employ er contributions also increased to
$3,955,968 from $3,349,679. But the employ ee contributions decreased to $779,843,
which was primarily due to more members entering the DROP during the fiscal year. In
addition the benefit payments increased as well as the refund of contribution payments
during the fiscal year. Mr. Burdick reported that after all the additions and all the
deductions the plan had a net increase of $7,371,599m which is compared to the net
increase of $5,688,180 last year. Lastly Mr . Burdick reviewed the financial footnotes
and stated that he added in a DROP tabl e which separates out the plans designated
benefits (for DROP benefits only) versus unde signated assets. He also briefly mentioned
that the admin expenses decreased this year which is ve ry beneficial to the plan. Ms.
Jensen recommended that they need to go back and look at the changes in plan
provisions in 2006, as there were more amen dments then what is documented in this
report. Mr. Burdick stated th at he will revise that sect ion to reflect all the correct
amendments and will reissue a clean final copy of the report.
MOTION: Mr. Seidensticker made a mo tion to approve the September 30,
2010 Audited Financials Statements as presented by the
Auditor, with the one revision to the 2006 changes in plan
provisions and actuarial methods.
Minutes 1-27-11.doc
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SECOND: Mr. Barone seconded the motion.
CARRIED: The motion carried unanimously 3-0.
Ms. Ross commented to the Trustees that this years audit went very smooth and we
did not have any issues like we encoun tered last year. She commented that she
thinks this is due to the personnel change the CBH recently had (in which she
actually thought was not going to go over very well). Ms. Ross noted that the new
person she works with relating to the fiel d work on the audit is very knowledgeable
and professional. Overall th e audit process this year was very pleasant, and she
stated that she looks forward to th e same smooth process next year.
PRESENTATION OF THE SEPTEMBE R 30, 2011 ACTUARIAL VALUATION
REPORT
Gabriel, Roeder, Smith & Company (G RS) – Presented by Steve Palmquist
Mr. Palmquist reviewed the participant data and commented that there were 11 new
DROP members during the fiscal year, so th erefore the employee contributions were
less. He also noted that the payroll dramatically decreased because of less
active members, and also the higher paid employees are retiring. Therefore, the
City’s contributions will decrease for the fiscal year beginning October 1, 2011. The
City’s contribution for th e upcoming fiscal year is $3,785,539, versus the
$3,885,572 they paid last fiscal year. He commented that with more members
entering the DROP in 2011 it will probably ha ve the same effect on payroll as it did
this year.
Mr. Palmquist reported that the Plan ha d an net actuarial loss of $348,981, which
was primarily due to the investments bein g under the assumed rate of return of
7.5% (it was noted that the market valu e return on the in vestments on 9/30/2010
were 9.8%, but according to the smoothing method the actuarial return was only
5.6%). He reported that the plans fund ed ratio increased from 56.2% to 58.8%,
which is right on track. He comment ed that since the board changed their
assumptions and mortality table 4 years ago it has only benefited them. If the board
did not make those changes then the funded ratio would not be as high as it
currently is. The total chapter revenue re ceived for the fiscal year was $435,832,
which means the plan now has $482,519 in th eir reserve account that can only be
used to buy benefits. Mr. Palmquist reported that the plans unfunded liability as of
October 1, 2010 is $29,393,731, which increa sed from $26,562,613 last year. He
explained that they predicted 5 new retire es during the fiscal year and there were
actually 11, so that is considered a negative experience for the plan. So for the next
fiscal year they only expect to have 2 ne w retires, although th ere are already more
then that that have applied. Therefore the plan will prob ably have another negative
experience next fiscal year as well. Lastly Mr. Palmquist noted that the investment
income fees are only about 62 basis points which are low and also a positive factor
for the plan.
MOTION: Mr. Barone made a motion to approve the September 30, 2010
Actuarial Valuation Report as presented by the Actuary.
SECOND: Mr. Seidensticker seconded the motion.
CARRIED: The motion carried unanimously 3-0.
BOARD DISCUSSION:
Mr. Spencer asked Mr. Palmquist what the board and members can do today to keep
things moving in a positive direction and to reduce the plan unfunded liability. Mr.
Minutes 1-27-11.doc
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Palmquist stated that you can lower the as sumed rate of return which would help
keep things cost neutral. Also by decrea sing the expected numbe r of disabilities will
help save some cost, and by not allowing members to use their mustering out money
in their FAS calculation. The board discusse d different ideas that could help cut the
plan unfunded liability cost and Mr. Spen cer recommended lowering the assumption
rate down to 5.5%, but doing it gradually over a period of time. Mr. Seidensticker
commented that he would like to table this discussion until they have the opportunity
to speak to the City regarding the letter they sent out stating that they would like
the Police and Fire pension board reps, City reps and Union reps to meet to discuss
their unfunded liabilities.
Lastly, Ms. Jensen commented that at this time the board shou ld state what their
anticipated return will be over the long term and short term.
MOTION: Mr. Seidensticker made a motion that the Plan’s Actuary and
Consultant anticipate that the fund’s long term and short term
return will be 7.5%.
SECOND: Mr. Barone seconded the motion.
CARRIED: The motion carried unanimously 3-0.
Ms. Jensen stated that she will send a letter to the Division of Retirement stating the
long term goals.
INVESTMENT MANAGER REPORT
ICC Capital – Presented by Steve Stack
Mr. Stack commented that 5 out of the 10 years the fund has outperformed their
assumed rate of return, but it is unfor tunate what happened in 2008 because that
set back the fund. He ex plained that the last 10 years have been the most
challenging for Cities and overall this fund has held up very well. Mr. Stack then
reviewed the performance for the quarter and stated that the build America bond
program is continuing so ICC will keep buying into them. The worst performer in the
portfolio was US Treasuries, and the bond market is now more challenging then
equities so they are keeping their durati on low on all bonds. Mr. Seidensticker
questioned what ICC is doing to protect the portfolio against a “bond burst”. Mr.
Stack commented that they are moving away from Treasuries and moving more into
Corporates, and right now they are actually seeing a rally in mortgage pools so that
is where they would go if both Corporates and Treasuries sell off.
INVESTMENT CONSULTANT REPORT
Thistle Asset Consulting – Presented by John McCann
Mr. McCann reviewed Callen Peri odic table of investment returns and stated that this
table proves that diversification is great. He then reviewed the funds compliance
checklist for the quarter ending December 31, 2010 and stated that we are inline in
all areas except that the total fund is trailing for the 3 year period. At the end of the
quarter there was 62% in equities, 367% in fixed income and 1% in cash. Mr.
McCann reported that that the total fund net of fees was behind the index for the
quarter at 5.89% versus 6.97%. The total fixed income was also behind at -1.86%
versus -1.28%, although the total equiti es were ahead of the index at 11.59%
versus 11.56%. He then review ed each mangers performance:
Rhumbline S&P 500 – Slightly behind the index for the quarter at 10.73%
versus 10.76%.
Rhumbline S&P 400 – Inline with the index for the quarter at 13.50%.
Minutes 1-27-11.doc
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Rhumbline S&P 600 – Fell short of the benchmark for the quarter at 16.14%
versus 16.24%.
ICC Large Cap Growth – Had a great quarter althou gh they were behind at
11.65% versus the index at 11.83%.
ICC Fixed Income – It was a hard quarter for fixed income. The fund was
negative and behind the benchm ark at -1.78% versus -1.29%.
International Equity – Outperformed significantly for the quarter at 7.48%
versus the index at 6.65%.
International Fixed Income – Although it was a negative quarter, they still
outperformed the benchmark at -1.37% versus -1.45%.
Mr. McCann noted that the fund is below ta rget in the S&P500 fund, and above in the
fixed income account. Therefore he re commends to the board to rebalance by
transferring $1.7M from fixe d income to S&P500.
MOTION: Mr. Seidensticker made a motion to rebalance according to the
policy by transferring $1.7M from ICC Capital’s fixed income
account to Rhumbline’s S&P500 account.
SECOND: Mr. Barone seconded the motion.
CARRIED: The motion carried unanimously 3-0.
Lastly Mr. McCann presented the board with a fee increase. He proposed to add in
an additional $750 per quarter to manage and review the 2 new International
mangers the Fund recently hired. The board discussed the proposal and the dollar
amount.
MOTION: Mr. Seidensticker made a motion to increase the plans
Investment Consultant’s (Thistle Assets) quarterly fee by an
additional $500 per quarter for management of the 2 new
International fixed income accounts.
SECOND: Mr. Barone seconded the motion.
CARRIED: The motion carried unanimously 3-0.
ATTORNEY REPORT
Law Offices of Perry & Jensen - Presented by Bonni Jensen
Ms. Jensen provided the board with th e revised statement of policy regarding
buyback of police/non-intervening military services. She reviewed the changes and
briefly stated that she removed the vestin g clause and added in the 90 day window
language.
MOTION: Mr. Seidensticker made a motion to approve and accept the
revised statement of policy re garding buyback of police/non-
intervening military services that was prepared by the Plan’s
Attorney.
SECOND: Mr. Barone seconded the motion.
CARRIED: The motion carried unanimously 3-0.
Ms. Jensen noted that the IRS mileage reim bursement increased by a penny to $.51.
Minutes 1-27-11.doc
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Ms. Jensen reviewed the summary of the responses that were received from the
Custodians regarding the RFP that was issued on behalf of this board. She noted
that Comerica did not state whether or not they purchase mutual funds on behalf of
the board, and the boards intent is to move to a Custodian that does offer that
service. The board discussed the response s and narrowed down their selection to 3
Custodians that they would like to invite to their next meeting for an interview. Their
selections are: Comerica (depending on wh ether or not they purchase mutual funds
on behalf of the board), Salem Trust and Wells Fargo. Ms. Jensen confirmed with
the Trustees that their intent is for her to confirm with Comerica on whether of not
they offer that service, and if they do not then they will not be part of the board’s
selection for an interview. If they do, then they will be invited to the next meeting
as well. The Trustees concurred.
Ms. Jensen updated the board on the prop osed house bill 303. She briefly reviewed
what the proposals were and stated that th ere are 3 pieces to it; one pertaining to
FRS, one pertaining to Chapter 175 & 185 plan s (which this fund is), and one related
to all other Governmental plans. Also Ms. Jensen reported that there is a senate bill
290 out there that is applicable to the FR S only. It was noted by the end of the
meeting that the house bill 303 was already withdrawn.
ADMINISTRATOR REPORT
Resource Centers – Presented by Audrey Ross
Ms. Ross presented the board with the 2011 Fiduciary Liability insurance renewal.
She explained that she receiv ed a quote for both the $1M policy (which is what the
board has always purchased) and also the $3M as directed. The $1M policy can be
renewed for $6,379.82, as the $3M prem ium is $18,013.64. The board discussed
what coverage is necessary for this fund.
MOTION: Mr. Barone made a motion to renew the Fund’s 2011 Fiduciary
Liability Insurance for $6,379.82 ($1M Policy).
SECOND: Mr. Seidensticker seconded the motion.
CARRIED: The motion carried unanimously 3-0.
Ms. Ross stated that they need to sched ule the remaining 2011 meeting dates. The
board scheduled them for the 3 rd Thursday of the 1 st month preceding the end of the
quarter at 9AM (Thursday April 21, 2011 @ 9AM, Thursday July 21, 2011 @ 9AM and
Thursday October 20, 2011 @ 9AM).
Ms. Ross announced that she re ceived a letter from FPPTA which states that the fund
won a door prize and will receive 5 free Tr ustee registrations to the upcoming FPPTA
summer conference at the SeaWorld Resort in Orlando. Ms. Jensen noted that any
Trustee who attends will need to fill out a gift form.
MINUTES
MOTION: Mr. Barone made a motion to approve the minutes from the
October 21, 2010 regular meeting.
SECOND: Mr. Seidensticker seconded the motion.
CARRIED: The motion carried unanimously 3-0.
Minutes 1-27-11.doc
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DISBURSEMENTS APPROVALS
MOTION: Mr. Seidensticker made a motion to approve the
disbursements.
SECOND: Mr. Barone seconded the motion.
CARRIED: The motion carried unanimously 3-0.
BENEFIT APPROVALS
MOTION: Mr. Barone made a motion to approve the applications to enter
the DROP for Ernest Carr, George Betshca and Robert Thomas.
SECOND: Mr. Seidensticker seconded the motion.
CARRIED: The motion carried unanimously 3-0.
MOTION: Mr. Seidensticker made a moti on to approve the application for
a refund of contributions for Cokes Watson.
SECOND: Mr. Barone seconded the motion.
CARRIED: The motion carried unanimously 3-0.
FINANCIAL STATEMENTS
The board reviewed and discu ssed the financial statemen ts that were provided
through December 2010.
The board received and filed the financial statements through December
2010.
OLD BUSINESS
Ms. Jensen noted that Mr. Pierson and Mr. Seidensticker were reappointed to serve
another 4 year Trustee term on this pension board.
OTHER BUSINESS
Mr. Spencer explained that a member by the name of George Smith was employed
with the City back in 1992 and for some re ason did not start contributing to the
pension plan until sometime in 1996. With that said the Actuary did a calculation
reflecting what his contributions would have been for that time period, and Mr.
Spencer wants the board to consider allowi ng Mr. George the option to repay back
his contributions for that ti me frame. Ms. Jensen recommended to the board that
they should research this situation more as Mr. Georg e may have been with the
group of members who opted out of the plan and then reentered sometime in 1995.
The board discussed Mr. George’s situatio n and the letter from the Actuary and
decided to table this di scussion until more information is researched.
Mr. Spencer explained that curre ntly there are some retirees who are still paying into
the VEBA through pension deductions. Th e Pension Resource Centers is deducting
the member’s premium from their monthly pe nsion check and then sending it over to
the VEBA fund. Currently there is a di screpancy on the amou nts that are being
deducted because of how the amount is calc ulated. Mr. Spencer explained that it is
not the Pension Resource Centers or the pe nsion board’s responsibility to calculate
the amounts to be deducted from the reti ree’s pension check for the VEBA, so he
asked GRS to prepare a quote for the VEBA board so they can see how much it will
Minutes 1-27-11.doc
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cost them to have a calculation completed. Ms. Jensen noted that the board does
not need to take any action on the letter an d that it just needed to be forwarded to
the VEBA Attorney and Chair.
Mr. Spencer reviewed a letter that he rece ived from the City Manager regarding the
Police pension board’s participation in a meet ing with the City reps and Union reps.
He stated that the City wants to get together with all parties to help find ways to cut
City costs. Mr. Seidensticker briefly reviewed a letter that he put together in
response to the City’s letter. The Trust ees discussed the letter and commented that
at every meeting they always discuss ways to help reduce costs and save money.
Also the board can not make or change benefits, they can only administer them as
they are. The board understands the City ’s concerns and they look forward to
meeting with all parties to help come up with plan saving ideas.
PUBLIC COMMENTS
Mr. Knopf introduced himself to the board an d stated that he is a Consultant for the
class action law firm Weiss & Laurie out of New York. He commented that he has
done class action work for over 20 years with this firm and he brings in over 50% of
their cases. Mr. Knopf explai ned that his office is local and that he does business
with the Fire pension board. He stated th at he would like to have the relationship
with the board as he understands that most of this funds assets are in index funds so
it would be very unlikely for them to be a lead plaintiff in a case.
AJOURN
There being no further business, and the fu ture meetings are scheduled for the 3rd
Thursday of the first month proceeding th e quarter. The next regular meeting was
scheduled for Thursday April 21, 2011 at 9AM; the Trustees offi cially adjourned the
meeting at 5:31PM.
Respectfully submitted,
_____________________________
DAVID PIERSON, Secretary
PALM BEACH GARDENS POLICE PENSION FUND
STATEMENT OF POLICY REGARDING
BUYBACK OF POLICEI NON-INTERVENING MILITARY SERVICE
WHEREAS, the Palm Beach Gardens Police Pension Fund ("Plan"), and the City
of Palm Beach Gardens Code of Ordinances, Section 50-127 provides that participants
may purchase prior police officer or non-intervening military service as "credited service"
in this Plan; and
WHEREAS, the Trustees desire to adopt a Statement of Policy regarding the
buyback of prior police officer and non-intervening military service;
NOW, THEREFORE, it is hereby resolved that the following Statement of Policy
Regarding Buyback of Police Officer/Non-Intervening Military Service is hereby adopted:
I. TIME AVAILABLE FOR PURCHASE
A. A Member may purchase years or fractional parts of years of service that a
member:
1. Previously served as a police officer with the City of Palm Beach
Gardens and for which accumulated contributions were withdrawn
from the Fund;
2. Previously served as a Police Officer with any other municipal, county
state or federal law enforcement department or agency; or
3. Previously served in the United States Military (before beginning
employment with the City of Palm Beach Gardens Police
Department).
B. A Member shall not be eligible to purchase prior service if such service is or
will form the basis for a pension from another retirement system or plan.
This exclusion does not apply to military service.
II. APPLICATION PROCESS
A. A Member shall make application to buyback service time on a form provided
by the Board of Trustees. A copy of the form is attached to this Policy.
B. A police officer may request to purchase some or all available years of
service.
C. The Trustees shall review and approve all requests for buybacks in
accordance with this Statement of Policy.
D. Upon approval of application for buyback, the cost shall be calculated by the
Fund's actuary as follows:
1. Previous Palm Beach Gardens Service calculation based upon
repayment of refund with interest, from the date of withdrawal to the
date of repayment.
2. Previous Police Officer or Military Service calculated based upon
salary and contribution rate in effect at the time that purchase is
requested; plus the amount required to make the cost neutral; plus
the cost for professional services
E. After the amount of the buyback is calculated and the Member has elected
to purchase permissive service, the Member shall execute a "Buyback
Contract" which shall set forth the specific buy back provisions for that
individual Member.
Page 2 of 5
F. The request for buyback may be made at any time during employment but
such request can only be made once.
G. The credit purchased under this policy will count for all purposes, excluding
vesting.
III. FUNDS AVAILABLE FOR PAYMENT
A Member may pay for the cost of the purchase of time with any of the following
sources, if available.
A. A Member may pay for the buyback out of pocket, in one lump sum payment;
or
B. Using rollovers from other qualified plans; or
C. The police officer can buy back this time over a period equal to the length of
time being purchased or five years, whichever is greater, at an interest rate
which is equal to the fund's actuarial assumption.
IV. REPAYMENT PERIOD
A. The time period for repayment is 5 years or a period equal to the amount of
time being purchased.
B. Members must determine whether they are purchasing the service within 90
days of receipt of the certified letter containing the statement from the
Actuary showing the cost of the buyback.
C. Repayment must begin within six months of the request for credit.
D. While in repayment status, no credit will be given for any years of service
until the full number of years of service to be purchased has been
repurchased.
Page 3 of 5
E. If a member becomes disabled and entitled to a benefit while in the process
of completing a buyback, then the member will not have to complete the
buyback, but any payments made before disability is determined shall remain
with the Fund.
F. If a Member terminates employment with the City of Palm Beach Gardens
Police Department before attaining 5 years of service (with the City) or
before completing entire service buyback repurchase, then any buyback
contributions made shall be refunded to the Member without interest.
V. COST OF CALCULATIONS
A. Participants must pay the cost of the actuary's calculation for the buyback.
However, each member will be entitled to one free calculation.
INTENTIONALLY LEFT BLANK
Page 4 of 5
THIS STATEMENT OF POLICY REGARDING BUYBACK OF POLICE
OFFICER/NON-INTERVENING MILITARY SERVICE is adopted by the Board of Trustees
of the PALM BEACH GARDENS POLICE PENSION
----=::J~Q"'-!....!.-\\\..::!.-\J:::....:::;\Q:..!....!.V--=--\li--' 2011.
, .-
TRUSTEES
Witnessed by:
2l ·th
FUND on this day of
BSJllb
October 25,2010
H:\PBG 0003\Buyback\201 0.1 0.25 .PBG -Buyback Policy -CLEAN.wpd
Page 5 of 5
Sec. 50-127. Prior police office r ser vice.
1. Unless otherw ise prohibited by law, the y ear s or fra ctional par ts of y ear s that a police of fice r
previously serve d in the United States Military Service , or the y ear s or fra ctional par ts of y ear s
that a police of fice r pre viously serve d as a police office r with the city during a per iod of
employ ment and for which ac cumulated c ontributions were w ithdrawn fr om the fund, or the
y ear s and fr actional pa rts of y ear s that a police of fice r ser ved as a police off icer with any other
municipal, county , state or f eder al law e nforc ement ag ency shall be adde d to the y ear s of cr edited
se rv ic e pr ov ide d th a t:
(a) The police office r contributes to the f und the sum that would have be en contr ibuted, based on
the police of fice r's salary and the e mploy ee c ontribution rate in ef fec t at the time that the cr edited
service is requeste d, had the police office r bee n a member of this sy stem for the y ear s or
fra ctional par ts of y ear s for whic h the cr edit is requeste d plus amount actuar ially deter mined such
tha t th e c re dit ing of se rv ic e do e s n ot r e su lt i n a ny c os t to the fu nd plu s p a y me nt o f c os ts f or a ll
profe ssional service s rende red to the boa rd in conne ction with the purcha se of y ear s of cr edited
service .
(b) Pay ment by the police of fice r of the r equire d amount may be made within six months of the
reque st for cr edit and in one lump sum pay ment, or the police office r ca n buy back this time over
a per iod equal to the leng th of time being purcha sed or f ive y ear s, whicheve r is g rea ter, a t an
int e re st r a te wh ic h is e qu a l to the fu nd 's a c tua ri a l a ssu mpt ion . A po lic e of fi c e r m a y re qu e st t o
purcha se some or a ll y ear s of servic e. No c redit shall be g iven for a ny service until all y ear s of
service which ar e to be r epurc hased, ha ve bee n repur chase d.
(c) The c redit purc hased unde r this section shall count for a ll purposes, except vesting .
(d) I n no event, howe ver, ma y cre dited service be purc hased pur suant to this section for prior
se rv ic e wi th a ny oth e r m un ic ipa l, c ou nty , o r s ta te po lic e de pa rt me nt, if su c h p ri or se rv ic e fo rm s
or will form a ba sis of a re tirement bene fit or pension fr om another r etireme nt sy stem or plan.
This subsection does not apply to mili tary service .
(Ord. N o. 2, 2010, § 9, 2-18-10)
Editor's note: Ord. No. 2, 2010, § 9, a dopted Fe b. 18, 2010, repe aled f ormer § 50-127, and
enac ted a ne w § 50-127 a s set out here in. Forme r § 50-127 pe rtained to similar subject matter .
See the Code Compar ative Ta ble for c omplete der ivation.
H:\PBG 00 03 \Buy ba ck\Sec 50 -1 27 municod e 2-7-11 .w pd
F
THE LAW OFFICES OF
PERRY & JENSEN, LLC
ANN H. PERRY
aperry@perryjensenlaw. wm
MEMORANDUM
VIA ELECTRONIC MAIL DELIVERY
BONNI SPATAW JENSEN
bsjansen@perryjensenlaw.com
TO: PALM BEACH GARDENS POLICE OFFICERS' PENSION FUND
Board of Trustees
FROM: Bonni S. Jensen
Fund Legal Counsel
DATE: April, 201 1
RE: ANNUAL FORM 1 FILING
Attached is Commission on Ethics (CE) Form 1 "Statement of Financial Interests"
which must be filed by Trustees with the Supervisor of Elections for the county in which
they reside, prior to July 1 each year. The instructions for filing and completing the form
are also attached. Please note that it is recommended that current or former law
enforcement officers and firefighters do not use their home addresses on the form; if you
do not have a post office box, you may use your work address.
You may also complete the form online using your keyboard to fill in the information,
tabbing from one section to the next. However, you must print the completed form, sign
and date it, then send it to the Supervisor of Elections for the county in which you
reside. There is no current system available to file online.
It is important that you timely file this form because the penalty for failure to timely
file is $25.00 per day, to a maximum of $1,500.00. I suggest that you file this form by
certified mail, return receipt requested, and keep a photo copy of the form for your files.
Several Trustees have had to show proof of filing in the past, so it is my practice to always
get a receipt for such documents.
If you have any questions or if I may be of any assistance to you at all, please do
not hesitate to contact me or one of my assistants.
BSJ/ks
E-Copy: Administrator
400 EXECUTIVE CENTER DRIVE, SUITE 207t WEST PALM BEACH, FLORIDA 33401-2922
561'686'6550 *' '% %k&Rh%s&LL BOARDS\2011\2011 Form 1-ALL FUNDS wpd
11
FORM 1
NAME OF SOURCE
OF INCOME
STATEMENT OF
Please address, print agency or type name, your and name, position maillng below: I FINANCIAL INTERESTS
SOURCES DESCRIPTION OF THE SOURCES
ADDRESS PRINCIPAL BUSINESS ACTIVITY
I
LAST NAME - FIRST NAME - MIDDLE NAME
MAILING ADDRESS :
NAME OF
BUSINESS ENTITY
CITY : ZIP : COUNTY :
NAME OF AGENCY :
NAME OF OFFICE OR POSITION HELD OR SOUGHT :
NAME OF MAJOR SOURCES ADDRESS PRINCIPAL BUSINESS
OF BUSINESS' INCOME OF SOURCE ACTIVITY OF SOURCE
You are not limited to the space on the lines on this form. Mach additional sheets, if necessary.
CHECK ONLY IF 0 CANDIDATE OR NEW EMPLOYEE OR APPOINTEE
2010
I
FOR OFFICE
USE ONLY:
ID Code
ID No.
Conf. Code
P. Req. Code
I I I I I I
8 I I
FILING INSTRUCTIONS for
when and where to file this form
are located at the bottom of page 2.
INSTRUCTIONS on who must
file this form and how to fill it out
begin on page 3.
PART C - REAL PROPERTY [Land, buildings owned by the reporting person]
(If you have nothing to report, you must write "none" or Wan)
OTHER FORMS you may need
to file are described on page 6.
~~~
CE FORM I -Effective: January 1.201 1. Refer to Rule 34-8.202(1). F.A C. (Continued on reverse side) PAGE 1
PART D - INTANGIBLE PERSONAL PROPERTY [Stocks, bonds, certificates of deposit, etc.]
(if you have nothing to report, you must write "none" or "nla")
TYPE OF INTANGIBLE I BUSINESS ENTITY TO WHICH THE PROPERTY RELATES
NAME OF BUSINESS ENTITY
ADDRESS OF BUSINESS ENTITY
PART E - LIABILITIES [Major debts]
(if you have nothing to report, you must write "none" or "nla")
NAME OF CREDITOR ADDRESS OF CREDITOR
~~ ~
PRINCIPAL BUSINESS ACTIVITY
POSITION HELD WITH ENTITY
I OWN MORE THAN A 5%
INTEREST IN THE BUSINESS
NATURE OF MY OWNERSHIP INTEREST
IF ANY OF PARTS A THROUGH F ARE CONTINUED ON A SEPARATE SHEET, PLEASE CHECK HERE 0
SIGNATURE (required): DATE SIGNED (required):
FILING INSTRUCTIONS:
WHAT TO FILE: WHERE TO FILE: WHEN TO FILE:
After completing all parts of this form, including
signing and dating it, send back only the first
sheet (pages 1 and 2) for filing.
If you have nothing to report in a particular
section, you must write "none" or "n/a" in that
section(s).
Facsimiles will not be accepted.
If you were mailed the form by the Commission lnitia/ly, each local officer/empioyee, state
on Ethics or a County Supervisor of Elections for officer, and specified state employee must
your annual disclosure filing, return the form to file within 30 days of the date of his or her
that location. appointment or of the beginning of employ-
ment. Appointees who must be confirmed by
of Elections of the county in which they perma- if that is less than 30 days from the date of their nently reside. (If you do not permanently reside in Florida, file with the Supervisor of the county appointment'
where your agency has its headquarters.) Candidates for publiclyelected local office
Loca'officer~~m~'oyeesfi'e with the Sumrvisor the Senate must file prior to confirmation, even
NOTE:
MULTIPLE FILING UNNECESSARY
Generally, a person who has filed Form 1 for
calendar or fiscal year is not required to file
second Form 1 for the same vear. However.
State officers or specified state employees
file with the Commission on Ethics, P.O. Drawer
15709, Tallahassee, FL 32317-5709; physical
address: 3600 Maclay Boulevard, South, Suite a
a a 201, Tallahassee, FL 32312.
candidate who PreViOUdY filed-FOrm 1 t~~ause
of another public position must at least file a COPY
of his or her original Form 1 when qualifying.
Candidates file this form together with their
qualifying papers.
To determine what category your position
falls under, see the "Who Must File" Instructions
on page 3.
must file at the same time they file their
qualifying papers.
Thereafter. local officerslemployees, State
officers, and specified state employees are
required to file by July 1st following each
calendar year in which they hold their posi-
tions.
Finally, at the end of office or employment,
each local officer/employee. state officer, and
specified state employee is required to file a
final disclosure form (Form IF) within 60 days
of leaving office or employment.
:E FORM 1 -Effective: January 1,2011. Refer to Rule 34-8.202 (1). F.A.C. PAGE 2
INSTRUCTIONS FOR COMPLETING FORM 1
STATEMENT OF FINANCIAL INTERESTS
WHO MUST FILE FORM 1:
911 persons who fall within the categories of "state officers," "local officerslemployees." "specified state employees," as well as candidates for elective local offie,
are required to file Form 1. Positions within these categories are listed below. Persons required to file full financial disclosure (Form 6) and officers of the judicial
branch do not file Form 1 (see Form 6 for a list of persons who must file that form).
STATF OFFl- include the following positions for state officials:
1) Elected public officials not serving in a political subdivision of the
state and any person appointed to fill a vacancy in such office. unless
required to file full disclosure on Form 6.
2) Appointed members of each board, commission, authority. or council
having statewide jurisdiction, excluding members of sole advisory bodies:
but including judicial nominating commission members; Directors of the
Florida Black Business Investment Board, Enterprise Florida, Scripps Florida
Funding Corporation, Workforce Florida, and Space Florida; Members of the
Florida Commission on Tourism, Florida Substance Abuse and Mental Health
Corporation, and the Council on the Social Status of Black Men and Boys; and
Governors and senior managers of Citizens Property Insurance Corporation
and Florida Workers' Compensation Joint Underwriting Association.
3) The Commissioner of Education, members of the State Board of
Education, the Board of Governors, and the local Boards of Trustees and
Presidents of state universities.
LOCAL 0 FFlCERSlEMPLOYEES include the following positions
for officers and employees of local government:
1) Persons elected to office in any political subdivision (such as munici-
palities, counties, and special districts) and any person appointed to fill a
vacancy in such office, unless required to file full disclosure on Form 6.
2) Appointed members of the following boards, councils, commissions,
authorities, or other bodies of any county, municipality, school district, inde-
pendent special district, or other political subdivision: the governing body
of the subdivision; a community college or junior college district board of
trustees; a board having the power to enforce local code provisions; a board
of adjustment; a planning or zoning board having the power to recommend,
create, or modify land planning or zoning within the political subdivision,
except for citizen advisory committees, technical coordinating committees,
and similar groups who only have the power to make recommendations to
planning or zoning boards; a pension board or retirement board empowered
to invest pension or retirement funds or to determine entitlement to or amount
of a pension or other retirement benefit.
3) Any other appointed member of a local government board who is
required to file a statement of financial interests by the appointing authority or
the enabling legislation. ordinance, or resolution creating the board.
4) Persons holdina anv of these Dositions in local aovernment: Mavor: -, county or city manager; chief adminisirative employee of-a county, municipal-
INTRODUCTORY INFORMATION (At Top of FO~):
..
.. INSTRUCTIONS FOR COMPLETING FORM 1:
address If YOU +ubuzv 't a written recruest for confi- Person$
listed in Section 119.071(4)(d), F.S.. are encouraged to provide an address
other than their home address.
DISCLOSURE PERIOD: The tax year for most individuals is the calendai
year (January 1 through December 31). If that is the case for you, then
your financial interests should be reported for the calendar year 2009; jus1
check the box and you do not need lo add any information in this part 01
the form. However, if you file your IRS tax return based on a tax year that is
not the calendar year, you should specify the dates of your tax year in this
portion of the form and check the appropriate box. This is the time frame
or "disclosure period" for your report.
MANNER OF CALCULATING REPORTABLE INTERESTS: As noted in
this portion of the form, the Legislature has given filers the option of report-
ing based on &r thresholds that are comparative (usually, based on
percentage values) p~ thresholds that are based on absolute dollar values.
The instructions on the following pages specifically describe the differeni
thresholds. Simply check the box that reflects the choice you have made.
You must use the type of threshold you have chosen for each part of the
form. In other words, 8 YOU choose to report based on absolute dollar
value thresholds, you cannot use a percentage threshold on any part 01
the form.
If your name, mailing address, public agency, and position are
alrea@ printed on the form, you do not need to provide this informa-
tion unless it should be changed. To change any of this information,
write the correct information on the form, then contact your agency's
financial disclosure coordinator. Your coordinator is identified in the
financial disclosure portal on the Commission on Ethics website:
www.ethics.state.fl.us.
NAME OF AGENCY This should be the name of the governmental unit
which you serve or served, by which you are or were employed, or for
which you are a candidate. For example, "City of Tallahassee," "Leon
County," or "Department of Transportation."
OFFICE OR POSITION HELD OR SOUGHT Use the title of the office
or position you hold, are seeking, or held during the disclosure period (in
some cases you may not hold that position now, but you still would be
required to file to disclose your interests during the last year you held that
position). For example, "City Council Member," "County Administrator,"
"Purchasing Agent," Or "Bureau Chief." If YOU are a candidate for Office Or
are a new employee or appointee, check the appropriate box.
MAILING ADDRESS: If your home address appears on the form but
you prefer another address be shown, change the address as described
above If you are an active or former officer or employee listed in Section
119.071(4)(d). F.S., whose home address is exempt from disclosure,
the Commission is required to maintain the confidentiality of your home
(CONTINUED on page 4) cp
ity, or other political subdivision; county or municipal attorney; chief county or
municipal building inspector: county or municipal water resources coordina-
tor; county or municipal pollution control director; county or municipal envi-
ronmental control director; county or municipal administrator with power to
grant or deny a land development permit; chief of police; fire chief; municipal
clerk; appointed district school superintendent; community college president;
district medical examiner: purchasing agent (regardless of title) having the
authority to make any purchase exceeding $20,000 for the local govemrnen-
tal unit.
5) Officers and employees of entities serving as chief administrative officer
of a political subdivision.
STATF EMPLOYEES include the following positions
for state employees:
Employees in the office of the Governor or of a Cabinet member who
are exempt from the Career Service System, excluding secretariat, clerical,
and similar positions.
2) The following positions in each state department, commission,
board, or council: Secretary, Assistant or Deputy Secretary, Executive
Director, Assistant or Deputy Executive Director. and anyone having the
power normally conferred upon such persons, regardless of title.
3) The following positions in each state department or division: Director,
Assistant or Deputy Director, Bureau Chief, Assistant Bureau Chief, and any
person having the power normally conferred upon such persons, regardless
of title.
4) Assistant State Attorneys, Assistant Public Defenders, Public
Counsel, full-time state employees serving as counsel or assistant counsel
to a state agency, administrative law judges, and hearing officers.
5) The Superintendent or Director of a state mental health institute estab-
lished for training and research in the mental health field, or any major state
institution or facility established for corrections, training, treatment, or reha-
bilitation.
6) State agency Business Managers, Finance and Accounting Directors,
Personnel officers, Grant Coordinators, and purchasing agents (regardless
of title) with power to make a purchase exceeding $15,000.
7) The following positions in legislative branch agencies: each employ-
ee (other than those employed in maintenance, clerical, secretarial, or similar
positions and legislative assistants exempted by the presiding officer of their
house): and each emDlovee of the Commission on Ethics.
1)
CE FORM 1 - Effective.January 1. 2011. Refer to Rule 34-8.202(1). F.A.C. PAGE 3
*
PART A - PRIMARY SOURCES OF INCOME
[Required by Sec. 112.3145(3)(a)l or (b)l. Fla. Stat.]
Part A is intended to require the disclosure of your principal sources of
income during the disclosure period. You do not have to disclose the amount
of income received. The sources should be listed in descending order,
with the largest source first. Please list in this part of the form the name,
address, and principal business activity of each source of your income which
(depending on whether you have chosen to report based on percentage
thresholds or on dollar value thresholds) either:
exceeded five percent (5%) of the gross income received by you in
your own name or by any other person for your benefit or use during the
disclosure period, or
exceeded $2,500.00 (of gross income received during the disclosure
period by you in your own name or by any other person for your use or
benefit).
You need not list your public salary received from sewing in the
position(s) which requires you to file this form, but this amount should be
included when calculating your gross income for the disclosure period. The
income of your spouse need not be disclosed. However, if there is joint
income to you and your spouse from property held by the entireties (such as
interest or dividends from a bank account or stocks held by the entireties),
you should include all of that income when calculating your gross income and
disclose the source of that income if it exceeded the threshold.
"Gross income" means the same as it does for income tax purposes,
including all income from whatever source derived, such as compensation for
services. gross income from business, gains from property dealings, interest,
rents, dividends, pensions, social security, distributive share of partnership
gross income, and alimony, but not child support.
Examples:
- If you were employed by a company that manufactures computers
and received more than 5% of your gross income (salary, commissions,
etc.) from the company (or, alternatively, $2,500). then you should list
the name of the company, its address, and its principal business activity
(computer manufacturing).
- If you were a partner in a law firm and your distributive share of
partnership gross income exceeded 5% of your gross income (or,
alternatively. $2,500), then you should list the name of the firm. its
address, and its principal business activity (practice of law).
- If you were the sole proprietor of a retail gift business and your gross
income from the business exceeded 5% of your total gross income (or,
alternatively, $2,500), then you should list the name of the business, its
address, and its principal business activity (retail gift sales).
- If you received income from investments in stocks and bonds, you
are required to list only each individual company from which you derived
more than 5% of your gross income (or, alternatively, $2.500). rather
than aggregating all of your investment income.
- If more than 5% of your gross income (or, alternatively, $2,500)
was gain from the sale of property (not just the selling price), then
you should list as a source of income the name of the purchaser, the
purchaser's address, and the purchaser's principal business activity. If
the purchaser's identity is unknown, such as where securities listed on
an exchange are sold through a brokerage firm, the source of income
should be listed simply as "sale of (name of company) stock." for
example.
- If more than 5% of your gross income (or, alternatively, $2,500)
was in the form of interest from one particular financial institution
(aggregating interest from all CD's, accounts, etc., at that institution),
list the name of the institution, its address, and its principal business
activity.
PART B - SECONDARY SOURCES OF INCOME
[Required by Sec. 112.3145(3)(a)2 or (b)2, Fla. Stat.]
This part is intended to require the disclosure of major customers,
clients, and other sources of income to businesses in which you own an
interest. You will not have anything to report unless :
(a) If you are reporting based on percentage thresholds:
(1) You owned (either directly or indirectly in the form of an
equitable or beneficial interest) during the disclosure period more
than five percent (5%) of the total assets or capital stock of a
business entity (a corporation, partnership, limited partnership,
proprietorship, joint venture, trust, firm, etc., doing business in
Florida); and
(2) You received more than ten percent (10%) of your gross income
during the disclosure period from that business entity; and
(3) You received more than $1.500 in gross income from that
business entity during the period.
(1) You owned (either directly or indirectly in the form of an
equitable or beneficial interest) during the disclosure period more
than five percent (5%) of the total assets or capital stock of a
business entity (a corporation. partnership, limited partnership.
proprietorship, joint venture, trust, firm, etc., doing business in
Florida); and
(2) You received more than $5,000 of your gross income during
the disclosure period from that business entity.
If your interests and gross income exceeded the appropriate thresholds listed
above, then for that business entity you must list every source of income to
the business entity which exceeded ten percent (10%) of the business entity's
gross income (computed on the basis of the business entity's most recently
completed fiscal year), the source's address, and the source's principal
business activity.
(b) If you are reporting based on dollar value thresholds:
Examples:
- You are the sole proprietor of a dry cleaning business, from which
you received more than 10% of your gross income (an amount that was
more than $1,500) (or, alternatively, more than $5,000. if you are using
dollar value thresholds). If only one customer, a uniform rental company,
provided more than 10% of your dry cleaning business, you must list
the name of the uniform rental company, its address, and its principal
business activity (uniform rentals).
- You are a 20% partner in a partnership that owns a shopping mall
and your partnership income exceeded the thresholds listed above. You
should list each tenant of the mall that provided more than 10% of the
partnership's gross income, the tenant's address and principal business
activity.
- You own an orange grove and sell all your oranges to one marketing
cooperative, You should list the cooperative. its address, and its principal
business activity if your income met the thresholds.
PART C - REAL PROPERTY
[Required by Sec. 112.3145(3)(a)3 or (b)3, Fla. Stat.]
In this part, please list the location or description of all real property (land
and buildings) in Florida in which you owned directly or indirectly at any time
during the previous tax year in excess of five percent (5%) of the property's
value. This threshold is the same, whether you are using percentage
thresholds or dollar thresholds. You are not required to list your residences
and vacation homes; nor are you required to state the value of the property
on the form.
Indirect ownership includes situations where you are a beneficiary of
a trust that owns the property, as well as situations where you are more
than a 5% partner in a partnership or stockholder in a corporation that owns
the property. The value of the property may be determined by the most
recently assessed value for tax purposes, in the absence of a more current
appraisal.
The location or description of the property should be sufficient to
enable anyone who looks at the form to identi the property. Although a
legal description of the property will do, such a lengthy description is not
required. Using simpler descriptions, such as "duplex, 115 Terrace Avenue,
Tallahassee" or 40 acres located at the intersection of Hwy. 60 and 1-95. Lake
County" is sufficient. In some cases, the property tax identification number of
the property will help in identifying it: "120 acre ranch on Hwy. 902, Hendry
County, Tax ID # 13145863.''
(CONTINUED on page 5) p
3E FORM 1 - Effective:January 1, 2011. Refer to Rule 34-8.202(1). F.A.C. PAGE 4
,
Examples:
- You own 113 of a partnership or small corporation that owns both a
vacant lot and a 12% interest in an office building. You should disclose
the lot, but are not required to disclose the office building (because your
113 of the 12% interest-which equals 4%-dces not exceed the 5%
threshold).
- If you are a beneficiary of a trust that owns real property and your
interest depends on the duration of an individual’s life, the value of your
interest should be determined by applying the appropriate actuarial table
to the value of the property itself, regardless of the actual yield of the
property.
PART D - INTANGIBLE PERSONAL PROPERTY
[Required by Sec. 112.3145(3)(a)3 or (b)3, Fla. Stat.]
Provide a general description of any intangible personal property that. at
(1) ten percent (10%) of your total assets (if you are using percentage
thresholds), pc
(2) $10,000 (if you are using dollar value thresholds),
any time during the disclosure period, was worth more than:
and state the business entity to which the property related. Intangible per-
sonal property includes such things as money, stocks, bonds, certificates of
deposit, interests in partnerships. beneficial interests in a trust. promissory
notes owed to you, accounts receivable by you, IRA’S, and bank accounts.
Such things as automobiles, houses, jewelry, and paintings are not intan-
gible property. Intangibles relating to the same business entity should be
aggregated; for example, two certificates of deposit and a savings account
with the same bank. Where property is owned by husband and wife as ten-
ants by the entirety (which usually will be the case), the property should be
valued at 100%.
Calculations: In order to decide whether the intangible property exceeds
10% of your total assets, you will need to total the value of all of your assets
(including real property, intangible property, and tangible personal property
such as automobiles, jewelry, furniture, etc.). When making this calculation,
do not subtract any liabilities (debts) that may relate to the property-add
only the fair market value of the property. Multiply the total figure by 10% to
arrive at the disclosure threshold. List only the intangibles that exceed this
threshold amount. Jointly owned property should be valued according to the
percentage of your joint ownership, with the exception of property owned by
husband and wife as tenants by the entirety, which should be valued at 100%.
None of your calculations or the value of the property have to be disclosed on
the form. If you are using dollar value thresholds, you do not need to make
any of these calculations.
Examples for persons using Comparative (percentage) thresholds:
- You own 50% of the stock of a small corporation that is worth
$100,000, according to generally accepted methods of valuing small
businesses. The estimated fair market value of your home and other
property (bank accounts, automobile, furniture, etc.) is $200,000. As
your total assets are worth $250,000, you must disclose intangibles
worth over $25.000. Since the value of the stock exceeds this threshold,
you should list ‘stock” and the name of the corporation. If your accounts
with a particular bank exceed $25,000, you should list ”bank accounts”
and bank‘s name.
- When you retired, your professional firm bought out your partner-
ship interest by giving you a promissory note, the present value of
which is $100,000. You also have a certificate of deposit from a bank
worth $75,000 and an investment portfolio worth $300,000, consisting
of $100,000 of IBM bonds and a variety of other investments worth
between $5,000 and $50,000 each. The fair market value of your
remaining assets (condominium, automobile, and other personal prop-
erty) is $225,000. Since your total assets are worth $700,000, you must
list each intangible worth more than $70,000 Therefore, you would list
‘promissory mte” and the name of your former partnership, “certificate
of deposit” and the name of the bank, “bonds” and ‘IBM,” but none of
the rest of your investments.
PART E - LIABILITIES
[Required by Sec. 112.3145(3)(a)4 or (b)4. Fla. Stat.]
In this part of the form, list the name and address of each private or
governmental creditor to whom you were indebted for a liability in any amount
that, at any time during the disclosure period, exceeded:
(1) your net worth (if you are using percentage thresholds),
(2) $10,000 (if you are using dollar value thresholds)
You are not required to list the amount of any indebtedness or your net
worth. You do not have to disclose any of the following: credit card and retail
installment accounts, taxes owed (unless reduced to a judgment), indebted-
ness on a life insurance policy owed to the company of issuance. contingent
liabilities, and accrued income taxes on net unrealized appreciation (an
accounting concept). A “contingent liability” is one that will become an actual
liability only when one or more future events occur or fail to occur, such as
where you are liable only as a guarantor, surety, or endorser on a promissory
note. If you are a “co-maker^ and have signed as being jointly liable or jointly
and severally liable, then this is not a contingent liability: if you are using the
$10,000 threshold and the total amount of the debt (not just the percentage
of your liability) exceeds $10,000, such debts should be reported.
Calculations for persons using comparative (percentage) thresholds: In
order to decide whether the debt exceeds your net worth, you will need to
total all of your liabilities (including promissory notes, mortgages. credit card
debts, lines of credit, judgments against you, etc.). Subtract this amount from
the value of all your assets as calculated above for Part D. This is your “net
worth.” You must list on the form each creditor to whom your debt exceeded
this amount unless it is one of the types of indebtedness listed in the para-
graph above (credit card and retail installment accounts. etc.). Joint liabilities
with others for which you are “jointly and severally liable.” meaning that you
may be liable for either your part or the whole of the obligation, should be
included in your calculations based upon your percentage of liability, with
the following exception: joint and several liability with your spouse for a debt
which relates to property owned by both of you as “tenants by the entirety”
(usually the case) should be included in your calculations by valuing the asset
at 100% of its value and the liability at 100% of the amount owed.
Examples for persons using comparative (percentage) thresholds:
- You owe $15,000 to a bank for student loans, $5,000 for credit
card debts, and $60,000 (with your spouse) to a savings and loan for a
home mortgage. Your home (owned by you and your spouse) is worth
$80,000 and your other property is worth $20,000. Since your net worth
is $20,000 ($100,000 minus $80,000), you must report only the name
and address of the savings and loan.
- You and your 50% business partner have a $100,000 business loan
from a bank, for which you both are jointly and severally liable. The
value of the business, taking into account the loan as a liability of the
business, is $50,000. Your other assets are worth $25,000, and you
owe $5,000 on a credit card. Your total assets will be $50,000 (half of
a business worth $50,000 plus $25.000 of other assets). Your liabilities.
for purposes of calculating your net worth, will be only $5,000, because
the full amount of the business loan already was included in valuing the
business. Therefore, your net worth is $45,000. Since your 50% share
of the $100,000 business loan exceeds this net worth figure, you must
list the bank.
PART F - INTERESTS IN SPECIFIED
BUSINESSES
[Required by Sec. 112.3145(5), Fla. Stat.]
The types of businesses covered in this disclosure are only: state and
federally chartered banks; state and federal savings and loan associations;
cemetery companies; insurance companies (including insurance agencies);
mortgage companies; credit unions; small loan companies; alcoholic bever-
age licensees; pari-mutuel wagering companies, utility companies, entities
controlled by the Public Service Commission; and entities granted a franchise
to operate by either a city or a county government.
(CONTINUED on page 6) .*
CE FORM 1 - Effective:January 1, 2011. Refer to Rule 34-8.202(1). F.A.C. PAGE 5
I
.
You are required to disclose in this part of the form the fact that you
owned during the disclosure period an interest in, or held any of certain posi-
disclosure period, an officer, director, partner, proprietor, or agent (other than
a resident agent solely for service of process).
If you have or held such a position or ownership interest in one of these
ness, its address and principal business activity, and the position held with
the business (if any), Also, if you own(ed) than a 5% interest in the
business, as described above, you must indicate that fact and describe the
nature of your interest,
tions with, particular types of businesses listed above. You are required to
form of an equitable or beneficial interest) at any time during the disclosure
perid more than five percent (5%) of the total assets or capital stock of one
of the types of business entities granted a privilege to operate in Florida that
are listed above. You also must complete this part of the form for each of
these tvms of businesses for which vou are. or were at any time durina the
make this disclosure if You own or owned (either directly Or indirectly in the types of businesses, list (vertically for each business): the name of the busi-
.. - (End of Instructions.)
PENALTIES
A failure to make any required disclosure constitutes grounds for and may be punished by one or more of the following: dis-
qualification from being on the ballot, impeachment, removal or suspension from ofice or employment, demotion, reduction in
salav, reprimand, or a civil penalty not exceeding $1 0,000. [Sec. 11 2.31 7, Florida Statutes]
Also, if the annual form is not filed by September lst, a fine of $25 for each day late will be imposed, up to a maximum
Denaltv of $lSOo.lSection 112.3145. ES. 1.
OTHER FORMS YOU MAY NEED TO FILE
IN ORDER TO COMPLY WITH THE ETHICS LAWS
In addition to filing Form 1, you may be required to file one or more of the special purpose forms listed below, depending on your particular position,
business activities, or interests. As it is your duty to obtain and file any of the special purpose forms which may be applicable to you, you should carefully
read the brief description of each form to determine whether it applies
Form IF - Final Statement of Financial Interests: Required of local officers, state officers, and speci-
fied state employees within 60 days after leaving office or employment.
This form is used to report financial interests between January 1 st of the
last year of office or employment and the last day of office or employ-
ment. [Sec. 112.3145(2)(b), Fla. Stat.]
Form 1X - Amended Statement of Financial Interests: TO be used by local officen, state officers, and speci-
fied state employees to correct mistakes on previously filed Form 1’s.
[Sec. 112.3145(9), Fla. Stat.]
Form 2 - Quarterly Client Disclosure: Required
of local officers, state officers, and specified state employees to
disclose the names of clients represented for Compensation by them-
selves or a partner or associate before agencies at the same level of
government as they serve. The form should be filed by the end of the
calendar quarter (March 31, June 30, Sept. 30, Dec. 31) following the
calendar quarter in which a reportable representation was made. [Sec.
112.3145(4), Fla. Stat.]
Bid for Public Business: Required of public officers and
public employees prior to or at the time of submission of a bid for public
business which otherwise would violate Sec. 112.313(3) or 112.313(7),
Fla. Stat. [Sec. 112.313(12)(b), Fla. Stat.]
Form 4A.- Disclosure of Business Transaction, Relationship, Or Interest: Required of public officers and
employees to disclose certain business transactions, relationships, or
interests which otherwise would violate Sec. 112.313(3) or 112.313(7),
Fla. Stat. [Sec. 112.313(12) and (12)(e), Fla. Stat.]
State Ofhers: Required to be filed by a state officer within 15
days after having voted on a measure which inured to his or her special
Form, 3A - Statement .of Interest in Competitive
Form 8A - Memorandum of Voting Conflict for
private gain (or loss) or to the special gain (or loss) of a relative. busi-
ness associate, or one by whom he or she is retained or employed. Each
appointed state officer who seeks to influence the decision on such a
measure prior to the meeting must file the form before undertaking that
action. [Sec. 112.3143, Fla. Stat.]
Form 88 - Memorandum of Votin Conflict for County, Municipal, and Other i! oca1 Public officers: Required to be filed (within 15 days of abstention) by
each local officer who must abstain from voting on a measure which
would inure to his or her special private gain (or loss) or the special gain
(or loss) of a relative, business associate, or one by whom he or she is
retained or employed. Each appointed local official who seeks to influ-
ence the decision on such a measure prior to the meeting must file the
form before undertaking that action. [Sec. 112.3143. Fla. Stat.]
local officers, state officers, specified state employees, and state
procurement employees to report gifts over $100 in value. The form
should be filed by the end of the calendar quarter (March 31, June 30,
September 30, or December 31) following the calendar quarter in which
the gift was received. [Sec. 112.3148, Fla. Stat.]
Form 9 - Quarterly Gift Disclosure: Required of
Form 10 - Annual D@losure of Gifts from Governmen tal Entities and Direct Support Organizations and Honorarium Event Rela fed Expenses: Required of local officers, state officers, specified
state employees, and state procurement employees to report gifts
over $100 in value received from certain agencies and direct support
organizations; also to be utilized by these persons to report honorarium
event-related expenses paid by certain persons and entities.The form
should be filed by July 1 following the calendar year in which the gift or
honorarium event-related expense was received. [Sec. 112.3148 and
112.3149. Fla. Stat.]
AVAILABILITY OF FORMS; FOR MORE INFORMATION
-are available from the Supervisor of Elections
n your county; from the Commission on Ethics, Post Office Drawer
15709, Tallahassee, Florida 3231 7-5709; telephone (850) 488-7864;
and at the Commission’s web site: www.ethics.state.fl.us.
Questions . about any of these forms or the ethics laws may be
addressed to the Commission on Ethics, Post Office Drawer 15709,
Tallahassee, Florida 3231 7-5709; telephone (850) 488-7864.
CE FORM 1 - Effeclive.Januafy 1. 2011. Refer to Rule 348.202(1). F.A C PAGE 6
I
Page 1 of 1
. . . - - -.
Audrey Ross
From: Karl Seifel, Jr. [karl@perryjensenlaw.com]
Sent: Tuesday, April 19, 201 1 2:06 PM
To: Lt. Jay Spencer; Jules Barone; Brad Seidensticker; David Pierson; Wayne Sidey
cc: Audrey Ross; ThePensionTeam
Subject: Palm Beach Gardens Police Pension Fund - Form 1
Attachments: PBG Memo-2010 Form1 .pdf; 2010 Form 1 .pdf
Sender ALLOWED [ Remove ] [ I&?& ] detalls
Vanquish Anti-Spam Control Panel
- "" "_
Trustees:
It's time to file Form 1 again. Be sure to send it by a means that will provide you with proof of
delivery (for example: Certified MailReturn Receipt Requested) You must also keep a copy of
the completed form for your files.
The attached form may be simply completed by clicking on the page and typing. You may print
it out once you have entered all the required information. Or, you may print out the blank form
and complete it by hand.
If you would like us to mail it in for you, please complete the Form 1, Sim & Date it on the
back and send it to our office (see address below). We will send you a copy for your records by
regular mail.
If you have any questions, please do not hesitate to contact us.
&e w, ,$k. <karl@perryjensenlaw.com> Y Y
Legal Assistant - Pension Team of Bonni Jensen
THE LAW OFFICES OF PERRY & JENSEN, LLC
400 Executive Center Drive, Suite 207
West Palm Beach, FL 33401-2922
561 -686-6550 (Phone)
56 1-686-2802 (Fax)
The Law Offices of Perry Bi densen, L1.C is proud tu be an
ABA-EPA Law Office Climate Challenge Partner.
Think before you print!!
PALM BEACH GARDENS POLICE
PENSION FUND
Benefit Approvals
Meeting of April 21, 2011
APPLICATION TO ENTER THE DROP
JOSEPH SHEEHAN DATE OF BIRTH 03/28/1961
DATE OF HIRE 06/22/1988
DATE OF TERMINATION 02/01/2011
AGE AT RETIREMENT 49 YEARS
YEARS AT SERVICE 22.6 YEARS
FORM OF BENEFIT 100% J&S
MONTHLY BENEFIT AMOUNT $7,088.84
SUPPLEMENTAL BE NEFIT $ 275.00
APPLICATION FOR DISTRIBUTION OF DROP ACCO UNT
(MAY 15, 2011)
RONALD COUNCIL DATE OF RETIREMENT 09/17/2009
DATE OF BIRTH 03/09/1956
TYPE OF DISTRIBUTION PARTIAL LUMP SUM
AMOUNT REQUESTED $97,000.00
TAX WITHHOLDING (20%) $19,400.00
TOTAL NET DISTRIBUTION $77,600.00
APPLICATION FOR REFUND OF CONTRIBUTIONS
JOSE PICO DATE OF BIRTH 12/08/1961
DATE OF HIRE 09/10/2007
DATE OF TERMINATION 03/25/2010
YEARS OF SERVICE 2 YEARS & 6 MTHS
TOTAL REFUND $11,914.39
TAX WITHHOLDING (20%) $ 2,382.87
TOTAL NET REFUND $ 9,531.51
APPROVED: ______________________________________, CHAIRMAN
APPROVED ______________________________________, SECRETARY
____________________________________, DATE
r Page 1 of2
Audrey Ross
From: Bonni S. Jensen [bsjensen@perryjensenlaw.com]
Sent:
To: Jay Spencer
Cc: Audrey Ross; ThePensionTearn@perryjensenlaw.com
Subject: Re: Palm Beach Gardens Police Pension Fund - Buyback Policy
Sender ALLOWED [ Remove 3 [ Block 3 details
Vanquish Anti-Spam Control Panel
I I-""__ ~" -~
Tuesday, February 08,201 1 4:35 PM
So far here is what I have found:
George Smith did not participate in the pension plan from his date of hire.
During his employment he made two requests to purchase time in the pension plan.
The first request was from his date of hire 4/12/89 to 10/1/95. The buyback application
was filled out by Mr. Smith.
The second request was for the period from May 13, 1992 to April 30, 1996. This request
was completed by ASI.
Both times calculations were made for the buyback. Not sure whether he took advantage
of either.
I am still looking to determine when he became a member of the pension plan. It was either
October 1, 1995 or May 1, 1996. Since he chose not to participate in the pension plan, he will
need to be treated the same as someone who is buying time from another entity for any time
before his participation in the plan.
Please contact me if you have any questions. We will continue to look for the exact date that he
participated in the pension plan.
TO SEND MAIL TO MY ENTIRE TEAM, PLEASE RESPOND TO
THEPENSIONTEAMOPERRY JEN SENLA W.COM
Bonni S. Jensen <bsiensen@perryiensenlaw.com>
Law Offices of Perry & Jensen, LLC
400 Executive Center Drive, Suite 207
West Palm Beach, Florida 33401
Telephone: (561)686-6550
Facsimile: (561)686-2802
CONFIDENTIALITY NOTICE: This communication is confidential, may be
privileged and is meant only for the intended recipient. If you are not
the intended recipient, please notify the sender ASAP and delete this
message from your system.
IRS CIRCULAR 230 NOTICE: To the extent that this message or any
attachment concerns tax matters, it is not intended to be used and
cannot be used by a taxpayer for the purpose of avoiding penalties
Comerica Bank
Client Solutions
Preseniation to:
PALM BEACH GARDENS -
Palm Beach Gardens Police Officers' Pension Fund
April 21, 2011
Representin nk
Felecia Relief, Client Service Team, Relationship Manager
Page 2
Agen
I. Overview of Comerica
II.
I I I. Relationship Conversion
IV. Competitive Pricing
V. Why Comerica?
Come rica’s So I uti o n s
Paae 3
section
?age 4
Cornerica Incorporate
Comerica is a diversified financial services company
headquadered in Dallas, Texas:
i Established in I849
,- Among the 25 largest banking companies in the
U.S. with $53.7 billion in assets (as of December 31. 2010)
7 Among the IO largest commercial business lender
7 Located in Michigan, Florida, California and Texas
with select businesses operating in several other
states, Canada and Mexico
Page 5
.. ...
Lmge enorrgh to offer the tec?mology yorr need. . .
Small enough to offer high-torrch, personal service you deserve.
Institutio
Over 1,000 clients and $83 billion in trust assets
Trust powers in all 50 states
Over 400 professionals in Comerica’s trust division
In-house compliance attorneys
Relationship Managers average over 18 years in
the industry
Relationship Management and operations report to
the same executive and are located in the same
office
Page 5
Cornericsb9 B
Gardens
7 Comerica Bank - Florida
-3 - Over 30 years
. p+ 4.- -:+ - Headquartered in Boca Raton 3k’*
$ -? c - Over 170 colleagues work in Florida ‘-+
- Currently 11 Banking Centers
- Full Service Banking, Palm Beach Gardens,
Florida
__~__--_____ . - - - . . - - -
Florida Headquarters. Boca Raton
Pagt 7
Palm Beach Gardens
2401 PGA Blvd. Suite 198
Palm Beach Gardens. FL 33410
561-691-5900
800-81 3-81 99
The Services We Provide To South Florida Clients
Trust Services
Full Service Retail Banking
Wealth Management & Planning
Small Business Banking
Business Leasing
Merchant Services
Treasury Management
Middle Market Banking
Commercial Real Estate
National Dealer Services
US Corporate Banking
Nonprofit and Healthcare Banking
Page 8
.v. - .,
Charitable Contributions Board and Community Involvement ncl udes :
Since 2000, over $1.5 million and over 7.000
volunteer hours have been contributed in
Florida
7 Civic and Community Programs
7 Health & Human Services
7 Arts & Culture
7 Education Programs
7 Housing & Economic Development
Programs
7 United Way
.
Alzheimer's Association
American Heart Association
American Lung Association
Business Development Board of Palm Beach
Chamber of Commerce of Palm BeachlNorth Palm
Beach
Community Financing Consortium
Consumer Credit Counseling on Palm Beach
Executive Women Outreach
Friends of McArthur State Park
Hospice of Palm Beach County
Hospice By the Sea
Jewish Federation of Palm Beach County
Leukemia and Lymphoma Society of Palm Beach County
Local Initiatives Support Corporation
Neighborhood Renaissance
Northwood University
Place of Hope
Urban League of Palm Beach
Villages of Hope
YMCA of the Palm Beaches
Page C
Section IL
7 Custody and Reporting
- Safekeeping and trade settlement for domestic and global securities
- Timely and accurate investment accounting
- GASB 40 Reporting
7 Services delivered by a seasoned
- No turnover of key contacts
- Attentive and responsive service
- Operating from a single location
Client Service Team
7 “Right Size” Provider
- Focus on Municipalities
- Focus on Florida
7 Technology
7 Competitive Fee Structure
Page 11
~ Broadest range of
services available.. . As you need them ... Fully integrated.
Securities Settlement & Safekeeping
Income & Dividend Collection
Corporate Action & Class Action 0
Processing
Asset Pricing 0
0
Accounting Attentive, veteran service
team - Daily
- Monthly Securities Lending
e Cashsweep
Training and Education
Plan Accounting Services
Full Accrual, Trade Date Reporting
GASB 40 reporting
Performance Measurement & Analytics
- Attribution Analysis - Customized Benchmarks
I nvest men t Compliance Mon itori ng
Pag2 12
7 Vast experience working with Municipalities
> Participates in various client board meetings, providing support and
assistance in fiduciary oversight responsibilities
7 Pro-active in providing assistance, expertise and best practices
P Experienced and knowledgeable in Comerica's systems and reports
i Engages in regular dialogue with you and your portfolio managers
> Coordinates with other professionals inside and outside the Bank to
ensure that your account runs efficiently
Felecia Relief, Assistant Vice Presl
Ms. Relief is a Relationship Manager in the Institutional Trust C ient Administration
Department and works specifically with municipality clients. She has 24 years
experience in the financial service and customer service industries, which includes
I I years as a Relationship Manager. Prior to joining Comerica Bank in 2000, she
was the Benefits Coordinator/Team Leader at Salomon Smith Barney, Inc. Ms.
Relief is a graduate of Grambling State University, where she earned a Bachelor
of Science degree in Management.
Cvnthia Corbv, Senior Trust Aaa[\~s-i:
Ms. Corby is a Senior Trust Analyst in the Institutional Trust Client Administration
Department. She started her financial career at Comerica in 1986. She has a vast
knowledge of the trust department, having worked in various capacities of increasing
responsibility .
Relationship Manager
Felecia Relief, Asst Vice Presideni
f re1 ief @co mer ica . co m
(313) 222-9814
Back-up Relationship Manager
Dan Berd, Vice President
daniel-a - berd@comerica.com
(3 13) 222-5472
Responsibilities
Oversees account relationship
Coordinates w o r kf I ow
Resolves and researches problems
Completes special projects as requested
Trust Account An a I yst
:3 I 11 i.\y u 3 i';?y
(31 3) 222-4747
Cynthia a corby@comerica.com
>. 1 - *
--
Back-up Account Analyst
Sarah Grant
Sara hj grant@comerica. com
(31 3) 222-41 50
-
Responsi bilities
0 Researches trade settlement and
income issues
3 Verifies accuracy of reports
3 Handles capital actions
1 Resolves statement issues
. Coordinates preparation of Plan
' Open new accounts
Reviews overdrafts and excess cash daily
Accountings
Page 15
7 Custody Online
- Navigation
- Reports
- Customization
- Downloading
- Electronic Statements
I Benefit Payments Online
- Inquiry and processing
capabilities
7 Custom Reports
- Representativ
Alpena ERS
Auburn Hills ERS
Auburn Hills Health
Battle Creek Police & Fire
Brighton Fire (LOSAP)
Berrien County ERS
Birmingham ERS
Birmingham Retiree Health Care
Chowan County ERS
City of Alexandria Fire & Police
(effective 4/29/2011)
City of Alexandria Supplemental
RP (effective 4/29/2011)
City of Alexandria OPEB
(effective 4/29/201 I)
City of Clayton ERS
City of Fort Myers General
City of Plano Police & Fire
Clawson Fire
Clinton Township Police & Fire
Dearborn General
Dearborn Police & Fire
Dearborn Police & Fire Revised
Dearborn Post Employment Health
Dearborn Heights General
Fund
Dearborn Heights Police & Fire
Detroit Police Benefit/Protection
Detroit Transportation
Ferndale ERS
Ferndale Police & Fire
Franklin Regional Retirement
Genesee County ERS
G re at e r 0 r I a n d o Av i at i c I!
Grosse Pointe ERS
Grosse Pointe 401 (h)
Grosse Pointe Woods
Grosse Pointe Shores
Harper Woods ERS
Highland Park ERS
Independence Township
lnkster Police & Fire
lshpeming P&F Retirement
Jackson County
Jackson Police Fire Act 345
Kent District Library
Livonia ERS
Livonia VEBA
Lake Worth Police Relief
Fund - Division iI
System
Authority
Southfield ERS Macomb County ERS
Macomb County Retiree Medical Southfield Health Care
Plan Spring Hill (LOSAP)
State of Michigan Legislative RS
Sterling Heights General
Sterling Heights Police & Fire
Taylor General
Village of Beverly Hills
Village of Palm Springs
Village of Pairn Spriacis
Midland County ERS
n'iiramar Firefighters ZS
City of Monroe ERS
Monroe County ERS
Mt. Clemens ERS
Northern Virginia Regional Park
Oak Park ERS
Oakland County Road
Authority General
i-iazardoiis Commission RS
Ohio State Highway Patrol
Pompano Beach Poiice and
Firefighters' Retirenient
System
Pontiac Police & Fire VEBA
Reading Fireman
Reading Officers
Royal Oak Retirement System
Roseville ERS
St. Clair Shores General
St. Clair Shores Police & Fire
Saulte Ste. Marie Police/Fire
Shelby Township Fire & Police
Volunteer Firefighters of New
York State
Warren General
Warren General Health
Warren Police & Fire
Warren Police & Fire Health
Waterford Township ERS
Waterford Township Police &
West Bloomfield ERS
West Bloomfield Health Care
Westland Police & Fire
Wyoming ERS
Fire
Secti II
Page 13
. .. . .
. ....~ .
Relationship team responsible for smooth conversion, no “hand off’
7 Customized conversion plan
,- Coordination of all internal resources
- Trust Operations Department (to ensure smooth movement of assets)
- Legal (to ensure timely and efficient execution of trustkustody documents)
7 Dedicated training - before, during and after conversion
7 Minimal impact on the Palm Beach Gardens Police Officers’ Pension Fund
Page ;3
. ..
I To Be Completed By: I Action 1
2 months prior to
transition
Provide Comerica with a copy of the existing trust. plan document and amendments. IRS
Determination letter and trust statements.
2 months prior Provide Comerica with names and phone numbers of contacts at prior
ma nag ers ,
2 months prior
~
Instruct prior custodian to transfer assets and Paying Agency responsibilities to Comerica Bank
on July 1. 201 1. Provide a copy of the notification letter to Felecia Relief at Comerica Bank.
Comerica can provide sample letter. I 1 month prior Inform investment managers of Comerica Bank's appointment as successor trusteekustodian.
Provide copies of the notification letters to Felecia Relief at Comerica.
I 1 month prior I Inform Comerica of decisions on what reporting services are required. I
2 weeks prior
~
Provide Comerica with an executed trust agreement and other required documentation. 7
Page 25
Action To Be Completed
By:
Imonth prior
1 month prior
1 month prior
Contact prior custodian to review transition activities and to obtain a preliminary list of assets.
Review asset listings from prior custodian to identify items requiring special re-registration
procedures.
Review trust and plan documents. Forward standard trust agreement to the client and or their
attorney for review.
2 weeks prior
2 weeks prior
1 month prior I Send security and cash delivery instructions to prior custodian.
Coordinate with investment managers to prepare for any trades. which would settle on or after
July 1. 201 1 at Comerica Bank (assuming cash and securities are being transferred from prior
custodian) .
Execute trust agreement(s). forward an executed copy to client for their file(s).
1
Transition day
Transition day
1 month prior
Receive cash transfers and inform investment managers of availability.
Receive securities delivered physically with appropriate powers and tax waivers from pr-or
custodian and immediately begin preparing them to be sent out to the transfer agents for re-
registration. Comerica will keep investment managers informed of status.
~
Send investment managers procedural letter covering the requirements for entering security
orders and for cash management.
1 week prior Review final asset listing from prior custodian. Monitor receipt of all daily transactions from prior
custodian between the time they prepared the final asset lists until all accounts are zeroed out.
Post conversion I Review prior custodian's statements to confirm Comerica received all assets. I
~~~
Post conversion
~ ~~ ~
Commence regular reporting procedures with July 31. 201 1 cash transaction and asset r statement.
I ' PES2 21
To Be Completed By:
Three weeks post
conversion
Action
~~~~~~~~
File a certified final asset statement for each portfolio and the total trust with the client and
Comerica Bank.
Review transition activities and provide Comerica Bank with a preliminary list of assets by
tax lot held for each porffolio showing original trade date. number of shares or par value of
each lot, location code. CUSIP. book value and market value if available.
1 month prior
~~
Arrange for Comerica Bank to receive monthly statements commencing June 30. 201 0 and
until accounts are zeroed out.
Provide final lists of assets with same information as outlined above. 48 hours before the
actual transfer. Fax asset lists to Comerica Bank in the morning.
Update Comerica Bank on all daily transactions between the times the final asset lists are
prepared until all accounts are zeroed out.
All trades with settlements on or after July 1. 201 1 should settle at Comerica Bank.
assuming cash and securities are transferred on July 1. 201 1.
Transmit cash balances to Comerica Bank via Federal Funds wire. Comerica Bank should
be telephoned in advance of wire by 1O:OO a.m. EST.
Deliver all securities to Comerica Bank as per instructions via DTCC. Fed Book Entry.
and/or physical with proper paperwork attached.
2 weeks prior
1 week prior
When accounts are
zeroed out
Transition day
Transition day
Transition day
Provide Comerica Bank with a list of securities as of June 30. 201 0 Transition day
(Fax in morning)
When accounts are
zeroed out
Transfer any cash credited on or after July 1. 201 1 to Comerica Bank on a daily basis with
a description and breakdown by account.
Page 22
To Be Completed By: Action
2 weeks prior Finish review of trading and settlement instructions provided by Comerica Bank. clarify any
questions and resolve any procedural issues with Comerica Bank.
Cease trading through prior custodian and begin processing of trades with settlements on or
after July 1. 201 1 at Comerica Bank. (This assumes cash will be transferred to Comerica
Bank to cover purchase(s) and securities are received in good form to cover sale(s).)
Transition day
Transition day Plan to invest cash balances sent by prior custodian: Comerica Bank will verify amounts
upon receipt of funds.
ko Mixed Sources
Pq. 24
CO.\IERIC.I B.4YK
CLSTODI.4L SERIICES FEE SCHEDULE
P.IL.\I BE.ICH G.IRDESS
POLICE OFFICERS' PE3SIOX Fl'SD
Fiduciary Fee I I1 c 1 ti d eci
S!llKl annuall! per x~otiiit
5.0 basis poiriis on iilvt 550 niillion
-.> basis poinis on the iiext S50 million
Responsibility Fees
Account Fee
Xlarket \'slue Fee
Separately held securities are under SlOO IIII
Jlininiurn annual responsibility fee of S6.000
Account and market \Aue fees apply to minimum
7- '
Special Asset Fees
Commingled. Jlutual funds. other bank collecti\ e fUI1ds. iorei~il stdirities. pi\ 3te Fl3CtliltntS c?r unique 3Sst'IS I\ ith estensi\-e reponing
requirements.
Activity Fees
Buy Sell Jlaturit> Included Checks ( LuIlip Sui11 I" S'lj per ~he~k 1 plus postage)
Internet Access Included Pension Pa! 111ti1ts" Quoted in a separate j<hedtik
\\.ire Transfer Out
Other Services
r On-line services are wailable at no additional charge
r Foreign securities with non-C.S. settlement \\ill be chrtrged under a global iustod\ schedule
F Performance Jleasurement \\ill be charged under Comerica's Pcrforniance I Ieasurenieiit Senices Fee Ssliedule
r Other estraordinap senkes. including tax reporting. may be quoted jtpsraiely based on die scope and costs ofihe asti\ it!
r Compliance Jlonitoring is a\.ailal?le and quoted under a separate sdicdule
Cash Sweep
Coinerica makes a\ ailable a \.ariety of highI\ rated cash in\ estinenr hiirids for autoniatcd. saint-da) in\ tj1nieilf of cajli balances resulting from
income or trade senlenient. .A cash s\veep charpe ofnvenp basis poinis ij netted 10 the ~~niilgj oftlie fund. Please note that Conierica ma!
recei\.e a senicing fee for non-proprietary money market funds.
* Conicria uses 3 genersl disbursement chcLbing xcc'at io 77
rccmr. 11oat Float is emed at the Fed Funh izii'. 35 TU'P
3re tr~nzlPrreJ from !tour trust ziiount to the geneizl dihnsrncnt
month For lunip sum distributions. the tr.msfer ;!pidI> ~'iiuis on :!x
presentr.1 for p! n:ciit or the fund5 zie diiyosc.! of piiuzni io 2n
improxed funds 3\ ~il~bilit?. for rtxipent~ Ciencizii! Co:i:ericJ i
procedures ma! zppI>
Conierica's fees are billed yuanerly in arrears and will be direct debited io ill? appropriaie trust aiiount( s I.
Proposal valid for 120 days
S 1 .Oil0 each annuall!
S 1 7 per \\ ire
tiii' L~XLI. :> I
Pace 25
COMERICA BANK PENSION PAYMENT SERVICES
FEE SCHEDULE FOR
PALM BEACH GARDENS POLICE OFFICERS’ PENSION FUND
Periodic Payments (Checks & EFT) S2.00 per payment (plus postage)
Luiiip Suiii Payiients S20 per payiient (plus postage)
Third Party Deductions S 100 per third party (per year)
CD-ROM Pens io 11 Registers s 100 per Illonth
Manual Ne\v Retiree Setup
(L4~itomated set-ups will be processed at no charge.)
S3 per new Retiree
Other Senices Provided At Xo Additional Charge:
7 All tax ~\-itlilioldin~ipa~-ments and reporting to taxing entities.
7 1099R, W3 and other related tax forms produced and distributed to benefit
recipients.
r Call Center Services with unlimited call volumes.
7 Mes sag i 11 g o 11 c he c ks/E F T c o 11 fi 1-111 a t i o 11 s .
7 Conversions from client operations or other service proL-iders.
7 Initial set-up and ongoing On-line access.
Pace 26
- . - . -. . . . . .
Pege 2T
-. * The Palm Beach Gardens Police Officers' Pension Fund is a **'::x.
with Comerica's core competencies and market focus
1 .i .
-- - !- ensures that our veteran ..^ -. Our continual i,-,v~s .rc: a . :, ,
Client Service Team has the technology and tools to meet the Palm Beach
Gardens Police Officers service delivery needs now and in the future
1' .... -- L - -,- , I
We listen. We understand. We make it work.
Page 28
.
General Disc 10s u re:
Comerica's Wealth & Institutional Management team consists of various divisions and affiliates of Comerica
Bank and also subsidiaries of Comerica Bank including World Asset Management, Inc.; Wilson, Kemp &
Associates, Inc.; Comerica Insurance Services, Inc. and its affiliated insurance agencies; and Comerica
Securities, Inc. Investment products are not insured by the FDIC. are not deposits or other obligations of or
guaranteed by Comerica Bank or any of its affiliates. and are subject to investment risks, including possible
loss of the principal invested.
?age 29
rPITAL MANAGEMENT
SECTOR MARKETS
SFIIIIRlflFC
PALM BEACH GARDENS POLICE PENSION FUND
Investment Review
Quarter Ending
March 31,2011
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PALM BEACH GARDENS POLICE PENSION FUND
Table of Contents
Quarter Ending
March 31,2011
11 Scctiolr 11
Fixed Income Review
I Scctioii Ill
I Palm Beach Gardens Police Pension Fund Growth
ZCC Capital Management, Znc.
First Quarter 207 7 ICC Fixed Income Commentary
“The End of Quantitative Easing”
With June fast approaching an important question we must ask ourselves is, “What will the end of
Quantitative Easing mean for both the equity and fixed income markets?” Our economy has been flushed
with a tremendous amount of public money over the past couple of years. Whether or not the economy is
ready for the transition back to a credit system reliant mainly on private capital rather than government
support will largely determine how financial markets behave over the next few quarters. In the spotlight
during the coming weeks and months will be the battle in Congress over raising the debt ceiling and more
importantly the debate over the 2012 and beyond fiscal budget. How aggressively Congress tackles the
budget deficit issue and in what manner will have serious implications on the amount of new Treasury
bond supply and thus the general direction of interest rates over the longer term.
In a world where market expectations are not firmly anchored and where the economic outlook is
unusually uncertain we expect to see a more broad volatile trading range for the ten year treasury
somewhere between 3.25% and 4.25% throughout 201 1. If Federal Reserve officials deem it necessary
to reduce their Treasury holdings by selling them back into the market, we can expect a rather sharp rise
in rates in the near term. We assign a very low probability to the Fed taking this particular course of
action any time soon but will continue to monitor Federal Open Market Committee language closely for
clues as to their intentions going forward. A more probable scenario would be for Fed purchases to
gradually come to a halt sometime in June and for rates to drift moderately higher as the decrease in
demand from the Fed is picked up domestically and from other central banks around the world. However,
if the U.S. economy turns out not to be ready for the handoff from government to private credit creation
then we expect yields to once again move downward. The almighty dollar may hold the key as to
whether or not financial markets continue on an upward trajectory. The weakening dollar, surely a
stealthily intended byproduct of quantitative easing, has helped boost U.S. equity markets by allowing
foreign investors the ability to pick up shares of quality U.S. companies “on the cheap”. It is possible that
an end to Quantitative Easing could usher in a stronger dollar as the Fed, for lack of a better term, stops
“printing” money. If the dollar rises too quickly or significantly we would expect to see lower inflation
expectations, along with weaker equity and commodity prices. A revisit to the flight to quality trade would
ensue resulting in lower government bond yields in the near term.
There is no doubt that currently the global economy sits at a critical juncture in the recovery process after
coming out of the greatest financial crisis the world has seen since the Great Depression. We must not
lose sight of this fact even though equity markets have regained a large percentage of lost market value
over the past two years. As we have said before, so far markets have taken kindly to Quantitative Easing
but whether or not the recent move higher reflects a monetary illusion or a sustainable recovery has yet to
be determined. Credit creation is paramount for any economy to grow at a steady robust rate. The level
of debt overhang remaining at the nations banks, two years after the great debt binge crash, will largely
determine the ultimate success or failure of the upcoming Federal Reserve handoff.
If the end of Quantitative Easing wasn’t enough we have a wonderful drama brewing in our nation’s
capital. True, the political theater coming out of Washington D.C. to this point has been largely ignored
by investors. In the coming months, however, the critical debate over how to tackle the U.S. fiscal deficit
will take center stage. This debate and eventual policy outcome will have serious implications not only on
quality of life issues here in the U.S. but also as to how the world will view U.S. credit worthiness over the
longer term. For certain, trillion dollar deficits cannot be sustained over time. The all powerful bond
market will be watching!
So how does all this translate into portfolio management? Even if the transition of easy monetary policy
goes off without a hitch, there are many other compelling reasons to maintain positions in longer duration
assets. Natural disasters, nuclear crises, ongoing wars, European debt woes and high unemployment
levels are a few that come to mind. Balancing these events is the fact that large budget deficits combined
with expectations of stronger growth are not consistent with current U.S. Treasury yields. Therefore, we
1
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e
are currently biased towards the higher range of our rate outlook with portfolios positioned in a defensive
manner approximately 15% below benchmark duration. During the first quarter, we further increased our
overweighting to intermediate high grade U.S. corporate bonds. We also decreased our Build America
Bond and longer term U.S. Treasury holdings. We continue to be concentrated in the 4-8 year duration
bucket and have slightly increased our exposure to high coupon government mortgage-backed securities.
This positioning helped us outperform our benchmarks as the corporate sector led all others during the
first quarter. Volatility, as we have previously discussed, will continue presenting a myriad of tactical
opportunities both in credit and duration based trades.
The first chart represents yield curve changes during the first quarter 201 1, as well as the rise off of the
lowest yields printed back in December of 2008 when QE1 was first announced. Yield curve changes
going back to December of 2008 are an important case study because they reflect a period in which the
economy was aided by enormous monetary expansion. At first thought, one would think nearly $600
billion worth of asset purchases would drive yields on Treasury bonds down as increased demand would
drive prices higher. The charts below tell a different story however. Investors essentially got out of the
Fed's way and instead bought risky assets as evidenced by flat treasury index returns and large spread
sector returns. The total return for the 20+ year Treasury Index over this time was a staggering -17.3%.
Factor in S&P 500 gains greater than 60% off their lows back in March 2009 and you get a vivid picture
as to the voracious appetite for risk assets since the inception of Quantitative Easing. The second chart,
illustrating the volatile nature of interest rates, is one that we have shown before but is critical to our way
of thinking about rate movements and our approach to tactical duration decisions.
Yield Curve Changes
5.000.
4.OO0h
3.00°h
Ten Year Treasury Year over Year Change in Yield ' 3.00%
1.00% -
2
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PALM BEACH GARDENS POLICE PENSION FUND FIXED INCOME
Investment Review
Quarter Ending
March 31,2011
PALM BEACH GARDENS POLICE PENSION FUND FIXED INCOME
Investment Performance Report
Quarter Ending
March 31,2011
Total Return Summary
Portfolio Allocation
Investment Performance by Asset Category
Fixed-Income Analysis
Purchases & Sales
-
Page ...... 1
Page ...... 2
Page ...... 3
Page ......
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4
8
13 Realized Gains/ Losses
Portfolio Summary Page ...... 17
Portfolio Appraisal Page ...... 18
ZCC Capital Management, Inc.
n
a a a a e a a a a e a a a a a a a e a a
0 a e e a e e a a a a a a a
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PALM BEACH GARDENS POLICE PENSION FUND FIXED INCOME
Total Return Summa y
Quarter Ending
March 31,2011
Fisca 1 Year to Since Inception Current Qtr Date (04/?O/94 - O.WW41)
I
Starting Value $15,265,736 $17,047,858 $1,625,387 1
Ending Value I $14,300,168 I $14,300,168 1 $14,300,168
Difference ($965,568) ($2,747,690) $1 2,674,781
Net Contributions/ (Withdrawals) ($1,056,011) ($2,568,550) $6,653,678
Gaid(Loss) from Investments $90,443 ($179,140) $6,021,104
I TOTALRETURNI 0.59% I -1.16% I 178,!M0/0 I
1 ANNUALIZED TOTAL RETURN 7.42% I
ICC Capital Management, Inc. a 1 a
PALM BEACH GARDENS POLICE PENSION FUND FIXED INCOME
Portfolio Allocation at Market
Quarter Ending
March 31,2011
Asset Allocatiort:
O!OO (Mkt)
Market Value
as of ly3#0
CASH/ EQUIVS
3.1 %
FIXED INCOME
96.9%
Market Value
as of 03/32/22
CASH/EQUIVS
2.4%
I FIXED INCOME
Mkt Value Mkt Value O/O Mkt Value Mkt Value O/O
as of ly3l/lO as of ly3l/lO as of 03/31/11 as of 03/31/11
3ash/Equivs $472,856 3.1 % $340,555 2.4%
?xed $14,792,880 96.9% $1 3,959,613 97.6%
rota1 $15,265,736 100.0% $14,300,168 100.0%
ICC Capital Maizngenient, lnc.
2
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PALM BEACH GARDENS POLICE PENSION FUND FIXED INCOME
Investment Performance by Asset Category
Quarter Ending
March 31,2011
Quarter
6.00
4.00
2.00
0.00
Oh3 0.42 0.59 0.42
W ACCOUNT ~ W BCAG
0.47 0.42
BONDS TOTAL GROSS OF FEES TOTAL NET OF FEES
- ~ ~ -
W BCAG Fiscal Year to Date , WACCOUNT ~
~ ~~
0.00
-2.00
-4.00
-6.00
- I r- 7 1- --r
-0.88 -0.88 -1.39 -1.16 -0.88 -1.17
~ ~ ~ - - -~ ~~
-~ ~~ ~~- ,,
~
BONDS TOTAL GROSS OF FEES TOTAL NET OF FEES
Since Inception Annualized (04/30/94 - 03/32/21)
12.00 7
7.42
6.22 6-42 6.42 6.42
-J, I-
BONDS TOTAL GROSS OF FEES TOTAL NET OF FEES
The red total bar rcprc7sents the Burclays Capital Aggregate Index.
ICC Capital Management, Inc.
3 n
PALM BEACH GARDENS POLICE PENSION FUND FIXED INCOME
Fixed Income Analysis (Page 1 of 4)
Quarter Ending
March 31,2011
Average Quality - AA- Average Duration - 4.00 Current Yield - 4.35
ICC Core Fixed Income Portfolio
Mortgage Pools
24 2% Municipal Bonds
2 0%
Government Sponsored
8.7%
US Treasuries
4.8%
Corporate Bonds
60.3%
Average Quality - AA Average Duration - 5.47 Current Yield - 3.64
Barclaws Capital GovernmenVCredit Index
Corporate Bonds
Government Sponsored 30.1 %
18.7%
A
PA L
US Treasuries
3.2%
Averape Oualitu - AA Average Duration - 5.12 Current Yield - 4.02
Barclaws Capital Aggregate - Index
US MBS
33.0%
US Treasuries
32.9%
Government Sponsored
12.0%
CMBS Corporate Bonds
2.4%
ABS
0.3% 19.4%
ICC Cnpitnl Mnrzngenzenf, Inc-.
4
PALM BEACH GARDENS POLICE PENSION FUND FIXED INCOME
Fixed Income Analysis (Page 2 of 4)
Quarter Ending
March 31,2011
Sectors and Market Indices Performance VS. Core Fixed Income Portfolio 1Q11
4.00
2.05
2.00
0.00
-2.00
-0.16
A A V
Municipal Bonds Coupon Maturity S&P Rating Moody's Rating
Commonwealth Fing Auth Pa Rev 5.653% 6/1/2024 AA- AA3
Utah St 4.554% 71 1 / 2024 AAA AAA
GovernmenVAgency Bonds Coupon Maturity S&P Rating Moody's Rating
Fannie Mae 2.000% 10/25/ 2016 AAA AAA
Freddie Mac 5.900% 6/ 15/ 2022 AAA AAA
Fannie Mae 5.625% 11/ 15/2021 AAA AAA
Fannie Mae 6.000% 4/ 28/ 2021 AAA AAA
Us Treasury 3.625% 2/15/2021 AAA AAA
Us Treasury 1.250% 2/15/2014 AAA AAA
Us Treasury 2.750% 2/28/2018 AAA AAA
ZCC Capital Management, Inc.
5
PALM BEACH GARDENS POLICE PENSION FUND FIXED INCOME
Fixed Income Analysis (Page 3 of 4)
Quarter Ending
March 31,2011
ICC Capital Management, Inc.
6
PALM BEACH GARDENS POLICE PENSION FUND FIXED INCOME
Fixed Income Analysis (Page 4 of 4)
Quarter Ending
March 31,2011
Portfolio Duration vs. Index Duration (Ratio) +INDEX -W- ACCT
~~ 1.8% -
1.4% ~-
L-, AGG RESS IVF-
1 NEUTRAL I
A A A A
I v I m
1 I m I
I)FFFNSIVEI
! 0.2% +-- ~ '_-- 1-- 1
3/31/2009 6/30/2009 9/30/2009 12/31/2009 3/31/2010 6/30/2010 9/30/2010 12/31/2010 3/31/2011
ZCC %tal Management, lnc. I
7
ICC Capital Management
PURCHASE AND SALE
PALM BEACH GARDENS POLICE PENSION FUND FIXED INCOME
From 12-31-10 To 03-31-11
Trade Settle
Date Date Quantity
PURCHASES
01-1 1-1 1 01-14-1 1
02-02- 1 1 02- 10- 1 1
01-20-1 1 01-25-1 1
01-20-1 1 01-25-1 1
03-02-1 1 03-07-1 1
01-12-11 01-18-11
01-18-11 01-20-11
01-26-1 1 01-28-1 1
02-04-1 1 02-08-1 1
03-03-1 1 03-07-1 1
03-03-1 1 03-07-1 1
03-15-11 03-17-11
02-10-11 02-15-11
SALES
03-08-1 1 03-1 1-1 1
02-15-1 1 02-16-1 1
02-15-1 1 02-16-1 1
02-04- 1 1 02-09- 1 1
02-04-1 1 02-09-1 1
01-18-11 01-21-11
200,000.000
756,741.760
220,000.000
245,000.000
180,000.000
175,000.000
400,000.000
245,000.000
350,000.000
180,000.000
180,000.000
300,000.000
160,000.000
170,000.000
400,000.000
200,000.000
190,000.000
100,000.000
125,000.000
Unit
Security Price -Amount
BERKSHIRE HATHAWAY FIN
4.250% Due 01-15-21
FG POOL #GO5900
6.000% Due 03-01-40
MORGAN STANLEY
1.903% Due 01-24-14
OCCIDENTAL PETROLEUM CORP
4.100% Due 02-0 1-2 1
STATE STREET COW
2.875% Due 03-07-16
US TREASURY NB
1.000% Due 01-15-14
US TREASURY NB
2.625% Due 11-15-20
US TREASURY NB
3.875% Due 08-15-40
US TREASURY NB
3.875% Due 08-15-40
US TREASURY NB
1.250% Due 02-15-14
US TREASURY NB
2.750% Due 02-28-18
US TREASURY NB
3.625% Due 02-15-21
WELLS FARGO & COMPANY
3.676% Due 06-15-16
99.49
108.64
100.00
100.59
99.58
99.78
93.78
89.02
86.47
99.95
98.77
103.23
100.67
198,984.00
822,12 8.9 8
220,000.00
246,457.75
179,253.00
174,6 17.19
375,125 .OO
2 18,088.28
302,640.63
179,90 1.56
177,778.12
309,703.12
161,078.56
3,565,756.19
CITIGROUP INC 109.60 186,326.80
6.010% Due 01-15-15
FANNIEMAE 96.32 3 85,300.00
1.750% Due 10-21-15
GOLDEN WEST FINL 105.33 2 10,668.00
4.750% Due 10-01-12
GOLDMAN SACHS GROUP INC 101.72 193,271.80
5.375% Due 03-15-20
GOLDMAN SACHS GROUP INC 101.72 101,722.00
5.375% Due 03-15-20
JOHNS HOPKTNS UNIVERSITY 109.83 137,285.00
5.250% Due 07-0 1 - 19
8
ICC Capital Management
PURCHASE AND SALE
PALM BEACH GARDENS POLICE PENSION FUND FIXED INCOME
From 12-31-10 To 03-31-11
Trade Settle Unit
Date Date Quantity Security Price Amount
02-09-1 1 02-14-1 1
03-31-1 1 04-05-11
01-04-1 1 01-06-1 1
01-04-11 01-06-11
01-14-11 01-18-11
01-14-11 01-18-11
02-02-1 1 02-04-1 1
02-02-1 1 02-04-1 1
02-14-1 1 02-16-1 1
02-22-1 1 02-23-1 1
02-22-1 1 02-23-1 1
03-04-1 1 03-07-1 1
03-04-1 1 03-07-1 1
03-04- 1 1 03-07- 1 1
155,000.680 NOVANT HEALTH INC
5.850% Due 11-01-19
160,000 UNIVERSITY VA UNIV REVS
5.000% Due 09-01-40
120,000.000 US TREASURY N/B
3.375% Due 11-15-19
345,000.000 US TREASURY N/B
3.375% Due 11-15-19
500,000.000 US TREASURY N/B
1.875% Due 08-31-17
315,000.000 US TREASURY N/B
1.875% Due 10-31-17
400,000.000 US TREASURY N/B
2.625% Due 11-15-20
200,000.000 US TREASURY N/B
3.875% Due 08-15-40
240,000.000 US TREASURY NB
3.875% Due 08-15-40
110,000.000 US TREASURY N/B
3.875% Due 08-15-40
45,000.000 US TREASURY NIB
3.875% Due 08-15-40
175,000.000 US TREASURY N/B
1.000% Due 01-15-14
160,000.000 US TREASURY NB
1.250% Due 09-30-15
175,000.000 US TREASURY NB
1.250% Due 10-31-15
103.37
94.23
101.97
101.97
96.09
95.67
92.91
87.77
87.02
87.94
87.94
99.55
96.6 1
96.36
160,229.70
150,769.60
122,362.50
3 5 1,792.19
48 0,429.69
30 1,366.4 1
371,625.00
175,531.25
208,837.50
96,73 1.25
39,571.88
174,207.03
154,575.00
168,628.91
PRINCIPAL PAYDOWNS
03-01-11 03-14-11 19,971.040 FG POOL #GO5900
01-01-11 01-15-1 1 2,710.200 FGCI #G12205
02-01-11 02-15-11 2,304.620 FGCI #G12205
03-01-1 1 03-15-1 1 2,232.090 FGCI #G12205
01-01-1 1 01-15-1 1 209.120 FGCI N #E313455
02-01-11 02-15-11 85.180 FGCI N #313455
6.000% Due 03-01-40
4.500% Due 06-01-21
4.500% Due 06-01-21
4.500% Due 06-0 1-2 1
4.500% Due 04-01-19
4.500% Due 04-01-19
9
4,171,23 1.5 1
100.00 19,971.04
100.00 2,7 10.20
100.00 2,3 04.62
100.00 2,232.09
100.00 209.12
100.00 85.18
ICC Capital Management
PURCHASE AND SALE
PALM BEACH GARDENS POLICE PENSION FUND FIXED INCOME
From 12-31-10 To 03-31-11
Trade Settle Unit
Date Date Quantity Security Price Amount
03-01-1 1 03-15-1 1
01-01-1 1 01-15-11
02-01-1 1 02-15-1 1
03-01-1 1 03-15-1 1
01-01-11 01-15-11
01-01-11 01-15-11
02-01-11 02-15-11
02-01-1 1 02-15-1 1
03-01-11 03-15-11
03-01-11 03-15-11
01-01-11 01-15-11
02-01-11 02-15-11
03-01-1 1 03-25-1 1
01-01-11 01-15-11
02-01-11 02-15-11
03-0 1 - 1 1 03-25- 1 1
01-01-11 01-15-11
01-01-11 01-15-11
02-01-11 02-15-11
02-01-11 02-15-11
03-01-11 03-25-11
03-01-1 1 03-25-11
5 1.400 FGCI N #B 13455
4.500% Due 04-0 1 - 19
145.300 FGCI N #G12323
4.500% Due 08-01-21
148.020 FGCI N #G12323
4.500% Due 08-01-21
121.630 FGCI N #G12323
4.500% Due 08-0 1-2 1
2,300.750 FGLMC #GO2268
6.500% Due 08-01-36
7,850.890 FGLMC #GO2268
6.500% Due 08-0 1-36
2,220.300 FGLMC #GO2268
6.500% Due 08-01-36
7,576.400 FGLMC #GO2268
6.500% Due 08-01-36
2,038.980 FGLMC #GO2268
6.500% Due 08-01-36
6,957.670 FGLMC #GO2268
6.500% Due 08-01-36
2,601.380 FNCI M #254371
5.500% Due 07-0 1 - 17
1,108.120 FNCI M #254371
5.500% Due 07-01-17
85 1.030 FNCI M #254371
5.500% Due 07-01-17
4.000% Due 08-01-20
4.000% Due 08-01-20
4.000% Due 08-01-20
4.500% Due 05-01-19
4.500% Due 05-01-19
4.500% Due 05-01-19
4.500% Due 05-01-19
4.500% Due 05-01-19
4.500% Due 05-01-19
1,627.380 FNCI N #255888
667.190 FNCI N #255888
245.890 FNCI N #255888
53.435 FNCI N #725445
1,72 1.4 15 FNCI N #725445
45.800 FNCI N #725445
1,475.430 FNCI N #725445
40.677 FNCI N #725445
1,3 10.393 FNCI N #725445
10
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.0 1
100.00
~00.00
100.00
100.01
100.00
51.40
145.30
148.02
121.63
2,3 00.75
7,850.89
2,220.30
7,576.40
2,038.98
6,957.67
2,601.38
1,108.12
85 1.03
1,627.38
667.19
245.89
53.44
1,721.41
45.80
1,475.43
40.68
1,3 10.39
Trade
Date
01-01-1 1
02-01-1 1
03-01-11
01-01-1 1
02-01-1 1
03-01-1 1
0 1-01- 1 1
02-01- 1 1
03-01-11
01-01-11
02-01-1 1
03-01-1 1
01-01-11
02-0 1-1 1
03-01-1 1
01-01-11
02-01-11
03-01-1 1
01-01-1 1
02-01 -1 1
03-01-1 1
01-01-11
ICC Capital Management
PURCHASE AND SALE
PALM BEACH GARDENS POLICE PENSION FUND FIXED INCOME
From 12-31-10 To 03-31-11
Settle Unit
Date Quantity Security Price Amount
01-15-11
02-15-1 1
03-25-1 1
01-15-11
02-15-11
03-25-1 1
01-15-11
02-1 5-1 1
03-25-1 1
0 1-0 1-1 1
02-0 1-1 1
03-20-1 1
0 1-20-1 1
02-20-1 1
03-20-1 1
01-20-1 1
02-20-1 1
03-20-1 1
01-15-1 1
02-15-1 1
03-15-1 1
01-14-11
2,650.060 FNCI N #825335
301.200 FNCI N #825335
301.010 FNCI N #825335
490.620 FNCI N #829053
632.210 FNCI N #829053
605.100 FNCI N #829053
4.000% Due 05-01-20
4.000% Due 05-01-20
4.000% Due 05-01-20
4.000% Due 08-01-20
4.000% Due 08-01-20
4.000% Due 08-01-20
6.500% Due 09-01-36
6.500% Due 09-01-36
6.500% Due 09-01-36
5.500% Due 07-20-38
5.500% Due 07-20-38
5.500% Due 07-20-38
6.000% Due 07-20-38
6.000% Due 07-20-38
6.000% Due 07-20-38
5.000% Due 05-20-39
5.000% Due 05-20-39
5.000% Due 05-20-39
6.000% Due 08-15-36
6.000% Due 08-15-36
6.000% Due 08-15-36
6.000% Due 07-15-16
5,901.300 FNCL # 256394
8,503.970 FNCL # 256394
5,029.860 FNCL # 256394
7,815.070 G2 POOL # 4194
6,135.080 G2 POOL # 4194
5,282.540 G2 POOL # 4194
2,703.970 G2 POOL # 4195
2,653.590 G2 POOL # 4195
2,076.890 G2 POOL # 4195
8,412.890 G2 POOL # 4447
5,095.180 G2 POOL # 4447
4,66 1.340 G2 POOL # 4447
4,65 1 SO0 GN POOL # 782 1 19
4,082.190 GN POOL # 7821 19
5,627.760 GN POOL # 7821 19
433.120 GNJO M #781313
11
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
2,650.06
301.20
301.01
490.62
632.21
605.10
5,901.30
8,503.97
5,029.86
7,815.07
6,135.08
5,2 82.54
2,7 03.97
2,653.59
2,076.89
8,412.89
5,095.18
4,661.34
4,65 1 SO
4,082.19
5,627.76
433.12
e e ICC Capital Management
PURCHASE AND SALE
PALMBEACH GARDENS POLICE PENSION FUND FIXED INCOME
From 12-31-10 To 03-31-11
e
e Trade Settle Unit
Date Date Quantity Security Price Amount e
02-01-1 1 02-14-1 1
03-01-11 03-14-11
01-01-1 1 01-15-1 1
02-01-11 02-15-11
03-01-11 03-15-11
01-01-1 1 01-15-1 1
02-01-11 02-15-11
03-01-11 03-15-1 1
01-01-11 01-15-11
02-01-1 1 02-15-1 1
03-01-1 1 03-15-1 1
539.960 GNJO M #781313
493.180 GNJOM#781313
428.390 GNSF 5.5% POOL #714005
6,898.550 GNSF 5.5% POOL #714005
6,955.010 GNSF 5.5% POOL #714005
4,903.900 GNSF M #552509
248.620 GNSF M #552509
4,998.050 GNSF M #552509
53.450 GNSF M #582153
52.380 GNSF M #582153
1,593.490 GNSF M #582153
6.000% Due 07-15-16
6.000% Due 07-15-16
5.500% Due 10-15-39
5.500% Due 10-15-39
5.500% Due 10-15-39
6.000% Due 04- 15-32
6.000% Due 04-15-32
6.000% Due 04-15-32
6.000% Due 06-15-32
6.000% Due 06-15-32
6.000% Due 06-15-32
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
100.00
539.96
493.18
428.39
6,898.55
6,955.01
4,903.90
248.62
4,998.05
53.45
52.38
1,593.49
179,883.16
12
e a
0
0 a a
0
ICC Capital Management
REALIZED GAINS AND LOSSES
PALM BEACH GARDENS POLICE PENSION FUND FIXED INCOME
From 12-31-10 Through 03-31-11
Gain Or Loss
Open Close cost
Date Date Quantity Security Basis Proceeds Short Term Long Term ~____
12-15-06 01-01-11
01-08-07 01-01-11
02-21-07 01-01-11
08-24-06 01-01-11
09-08-04 01-01-1 1
05-23-02 01-01-11
09-08-05 0 1-01-1 1
01-08-07 0 1-01-1 1
09-1 5-04 0 1-0 1-1 1
01-29-07 01-01-11
09-08-05 01-01-1 1
08-23-05 01-01-1 1
06-13-02 01-01-11
03-10-10 01-01-11
12- 18-09 0 1-0 1-1 1
07-22-08 01-01-11
04- 15-02 0 1-0 1-1 1
12-03-09 01-01-1 1
07-02-02 01-01-11
02-22-10 01-0 1-1 1
02-23-10 01-04-11
02-05-10 0 1-04- 1 1
08-30-10 01-14-11
11-23-10 01-14-11
03-25-09 01-1 8-1 1
12-15-06 02-01-1 1
0 1-08-07 02-0 1-1 1
2,300.750 FGLMC #GO2268
7,850.890 FGLMC #GO2268
2,710.200 FGCI #G12205
6.500% Due 08-01-36
6.500% Due 08-01-36
4.500% Due 06-01-21
4.500% Due 08-01-21
4.500%Due 04-01-19
5.500% Due 07-01-17
4.000% Due 08-01-20
6.500% Due 09-01-36
4.500% Due 05-01-19
4.500%Due 05-01-19
4.000% Due 05-01-20
4.000% Due 08-01-20
6.000% Due 06-15-32
5.000% Due 05-20-39
5.500% Due 07-20-38
6.000% Due 07-20-38
6.000% Due 04-15-32
428.390 GNSF 5.5% POOL #714005
5.500% Due 10-15-39
433.120 GNJO M #781313
6.000% Due 07-15-16
4,651.500 GNPOOL# 782119
6.000% Due 08-15-36
120,000.000 US TREASURY NIB
3.375%Due 11-15-19
345,000.000 US TREASURY NIB
3.375%Due 11-15-19
500,000.000 US TREASURY NE3
1.875%Due 08-31-17
3 15,000.000 US TREASURY NIB
1.875% Due 10-31-17
125,000.000 JOHNS HOPIUNS
UNIVERSITY
5.250% Due 07-01-19
6.500% Due 08-01-36
6.500% Due 08-01-36
145.300 FGCIN #G12323
209.120 FGCIN #B13455
2,601.380 FNCIM #254371
1,627.380 FNCIN #255888
5,901.300 FNCL # 256394
53.435 FNCIN #725445
1,721.415 FNCIN#725445
2,650.060 FNCIN #825335
490.620 FNCIN #829053
53.450 GNSF M #582153
8,412.890 G2 POOL # 4447
7,815.070 G2 POOL # 4194
2,703.970 G2 POOL # 4195
4,903.900 GNSF M #552509
2,220.300 FGLMC #GO2268
7,576.400 FGLMC #GO2268
2,348.57
8,014.05
2,6 14.92
139.3 1
208.50
2,590.00
1,583.64
6,019.33
53.48
1,652.02
2,578.84
475.90
53.36
8,817.76
8,293.74
2,70 1.01
4,843.37
454.76
446.65
' 4,980.74
116,737.50
338,854.69
495,937.50
3 11,751.56
123,741.25
2,266.44
7,733.85
13
2,300.7 5
7,850.89
2,710.20
145.30
209.12
2,60 1.38
1,627.38
5,901.30
53.44
1,721.41
2,650.06
490.62
53.45
8,412.89
7,8 15.07
2,703.97
4,903.90
428.39
433.12
4,651.50
122,362.50
3 5 1,792.19
480,429.69
301,366.4 1
137,285.00
2,220.30
7,576.40
-47.82
-163.16
95.25
5.99
0.62
11.38
43.74
-1 18.03
-0.04
69.39
71.22
14.72
0.09
404.87
478.67
2.96
60.53
-26.37
-13.53
-329.24
5,625.00
12,937.50
-15,507.81
-10,385.15
13,543.75
-46.14
-157.45
e e e e IC€ Capital Management
REALIZED GAINS AND LOSSES
PALM BEACH GARDENS POLICE PENSION FUND FIXED INCOME
From 12-31-10 Through 03-31-11
Gain Or Loss
Open Close cost
Date Date Quantity Security Basis Proceeds Short Term Long Term ___~
c
0
a
a e
0
02-21-07 02-01-1 1
08-24-06 02-01-1 1
09-08-04 02-01-1 1
05-23-02 02-01-1 1
09-08-05 02-01-1 1
01-08-07 02-01-11
09- 15-04 02-0 1 - 1 1
0 1-29-07 02-0 1- 1 1
09-08-05 02-01-1 1
08-23-05 02-01-11
06-13-02 02-01-11
03-10-10 02-01-11
12-18-09 02-01-11
07-22-08 02-01-1 1
04-15-02 02-01-11
07-02-02 02-01-1 1
02-22-10 02-01-1 1
12-03-09 02-01-1 1
01-18-11 02-02-11
01-26-11 02-02-11
04-1 6-1 0 02-04- 1 1
04-16-10 02-04-1 1
09-10-09 02-09-11
02-04-1 1 02-14-1 1
09-30-10 02-15-11
12-12-07 02-15-11
e a a -
2,304.620 FGCI #G12205
4.500% Due 06-01-21
4.500% Due 08-01-21
4.500% Due 04-01-19
5.500% Due 07-01-17
4.000% Due 08-01-20
6.500% Due 09-01-36
4.500% Due 05-01-19
4.500% Due 05-01-19
4.000% Due 05-01-20
4.000% Due 08-01-20
6.000% Due 06-15-32
5.000% Due 05-20-39
5.500% Due 07-20-38
6.000% Due 07-20-38
6.000% Due 04-15-32
6.000% Due 07-15-16
6.000% Due 08-15-36
5.500% Due 10-15-39
400,000.000 US TREASURY NB
2.625% Due 11-15-20
200,000.000 US TREASURY NB
3.875% Due 08-15-40
190,000.000 GOLDMAN SACHS
GROUP INC
5.375% Due 03-15-20
GROUP INC
5.375% Due 03-15-20
155,000.000 NOVANT HEALTH INC
5.850% Due 11-01-19
240,000.000 US TREASURY NB
3.875% Due 08-15-40
400,000.000 FANNIE MAE
1.750% Due 10-21-15
200,000.000 GOLDEN WEST FWL
4.750% Due 10-01-12
148.020 FGCI N #GI2323
85.180 FGCIN#B13455
1,108.120 FNCIM #254371
667.190 FNCIN#255888
8,503.970 FNCL # 256394
45.800 FNCI N #725445
1,475.430 FNCI N #725445
301.200 FNCIN #825335
632.210 FNCIN #829053
52.380 GNSF M #582153
5,095.180 G2 POOL # 4447
6,135.080 G2 POOL # 4194
2,653.590 G2 POOL # 4195
248.620 GNSF M #552509
539.960 GNJO M #781313
4,082.190 GNPOOL # 782119
6,898.550 GNSF 5.5% POOL #714005
100,000.000 GOLDMAN SACHS
2,223.60
141.91
84.93
1,103.27
649.26
8,674.05
45.83
1,415.95
293.11
613.24
52.29
5,340.39
6,s 10.85
2,650.68
245.55
556.83
4,371.13
7,323.24
375,125.00
178,031.25
189,768.20
100,045 .OO
154,975.20
207,525.00
400,000.00
195.640.00
2,304.62
148.02
85.18
1,108.12
667.19
8,503.97
45.80
1,475.43
301.20
632.21
52.38
5,095.1 8
6,135.08
2,653.59
248.62
539.96
4,082.19
6,898.55
371,625.00
175,53 1.25
193,271.80
10 1,722.00
160,229.70
208,837.50
385,300.00
2 10.668.00
81.02
6.11
0.25
4.85
17.93
-170.08
-0.03
59 48
8.09
18.97
0.09
-245.2 1
-375 77
2.91
3.07
-16.87
-288.94
424.69
-3,500.00
-2,500.00
3,503.60
1,677.00
5,254.50
1,312.50
-14.700.00
15,028.00
14
ICC Capital Management
REALIZED GAINS AND LOSSES
PALM BEACH GARDENS POLICE PENSION FUND FIXED INCOiME
From 12-31-10 Through 03-31-11
Gain Or Loss
Open Close Cost
Date Date Quantity Security Basis Proceeds Short Term Long Term
~~
02-04-1 1 02-22-1 1
01-26-11 02-22-11
12-15-06 03-01-1 1
0 1-08-07 03-0 1 - 1 1
02-21-07 03-01-1 1
08-24-06 03-01-1 1
02-02-1 1 03-01-1 1
09-08-04 03-01-1 1
05-23-02 03-01-11
09-08-05 03-01-11
01-08-07 03-01-11
09-1 5-04 03-01 - 1 1
01-29-07 03-01-11
09-08-05 03-01-1 1
08-23-05 03-01-1 1
06-13-02 03-01-11
03-10-10 03-01-11
12-1 8-09 03-01-1 1
07-22-08 03-01-11
04- 15-02 03-0 1- 1 1
07-02-02 03-01-11
02-22-1 0 03-0 1-1 1
12-03-09 03-01-11
01-12-11 03-04-11
10-05-10 03-04-11
11-03-10 03-04-11
12-03-09 03-08-1 1
110,000.000 US TREASURY NIB
3.875% Due 08-15-40
45,000.000 US TREASURY N/B
3.875% Due 08-15-40
6.500% Due 08-01-36
6.500% Due 08-01-36
4.500% Due 06-01-21
4.500% Due 08-01-21
6.000% Due 03-0 1-40
4.500% Due 04-01-19
5.500% Due 07-01-17
4.000% Due 08-01-20
6.500% Due 09-01-36
4.500% Due 05-01-19
4.500% Due 05-01-19
4.000% Due 05-01-20
4.000% Due 08-01-20
6.000% Due 06-15-32
5.000% Due 05-20-39
5.500% Due 07-20-38
6.000% Due 07-20-38
6.000% Due 04-15-32
6.000% Due 07-15-16
6.000% Due 08-15-36
5.500% Due 10-15-39
175,000.000 US TREASURY NE3
1.000% Due 01-15-14
160,000.000 US TREASURY N/B
1.250% Due 09-30-15
175,000.000 US TREASURY N/B
1.250% Due 10-3 1-1 5
170,000.000 CITIGROUP INC
6.010Y0Due 01-15-15
2,038.980 FGLMC #GO2268
6,957.670 FGLMC #GO2268
2,232.090 FGCI #G12205
121.630 FGCI N #G12323
19,971.040 FG POOL #GO5900
51.400 FGCIN#B13455
851.030 FNCIM #I254371
245.890 FNCIN#255888
5,029.860 FNCL # 256394
40.677 FNCI N #725445
1,3 10.393 FNCI N #725445
301.010 FNCIN#825335
605.100 FNCI N #829053
1,593.490 GNSF M #582153
4,661.340 G2 POOL # 4447
5,282.540 G2 POOL # 4194
2,076.890 G2 POOL # 4195
4,998.050 GNSF M #I552509
493.180 GNJO M #781313
5,627.760 GN POOL # 7821 19
6,955.010 GNSF 5.5% POOL #714005
15
95,115.63
40,05 7.03
2,081.36
7,102.26
2,153.62
116.61
21,696.66
51.25
847.3 1
239.28
5,130.46
40.71
1,257.57
292.92
586.95
1,590.75
4,885.67
5,606.10
2,074.62
4,936.36
508.59
6,026.10
7,383.18
174,6 17.19
160,325 .OO
1 75,929.69
173.031.10
96,73 1.25 1,6 15.62
39,571.88 -485.15
2,038.98
6,957.67
2,232.09
121.63
19,971.04 -1,725.62
51.40
851.03
245.89
5,029.86
40.68
1,3 10.39
301.01
605.10
1,593.49
4,661.34 -224.33
5,282.54
2,076.89
4,998.05
493.18
5,627.76
6,955.01
174,207.03 -410.16
1543 75.00 -5,750.00
168,628.91 -7,300.78
186.326.80
-42.38
-144.59
78.47
5 02
0.15
3.72
6.61
-100.60
-0.03
52.82
8.09
18.15
2.74
-323.56
2.27
61.69
-15.41
-398.34
-428.17
13,295.70
e
a
e a a a
a
e
e a e *
e a
e ..
0 e *
0
e
e
a
ICC Capital Management
REALIZED GAINS AND LOSSES
PALM BEACH GARLIENS POLICE PENSION FUND FIXED INCOME
From 12-31-10 Through 03-31-11
Gain Or Loss
Open Close
Date Date Quantity
~~
07-22-10 03-31-1 1 160,000
TOTAL GAINS
TOTAL LOSSES
TOTAL REALIZED GAINLOSS
cost
Security Basis Proceeds Short Term Long Term
UNIVERSITY VA UNIV 162,496.00 150,769.60 -1 1,726.40
REVS
5.000% Due 09-01-40
26,671.22 47,940.38
-75,483 66 -3,491 74
4,355,478. 8,812.44 44,448.64
4,363 80
16
e a a e e e e e e e a e e e e a a a e e
0
c a
0
0 e e e
0 a a e e
e e ..
e e a a
ICC Capital Management
PORTFOLIO SUMMARY
PALM BEACH GARDENS POLICE PENSION FUND FImD INCOME
March 31, 2011
Pct. Cur. Est.Annua1
Security Type Total Cost Market Value Assets Yield Income
~~
Cash & Equivalents
CASH AND 340,555.34 340,555.34 2.4 0.1 224.77
EQUIVALENTS
340,555.34 340,555.34 2.4 0.1 224.77
--
Fixed Income
CORPORATE BONDS 8,05 1,100.96 8,336,502.64 58.3 4.1 3 3 8,885.29
MUNICIPAL BONDS 265,000.00 276,073.00 1.9 4.9 13,606.70
GOVERNMENT 667,3 82.80 663,014.14 4.6 2.7 18,075.00
BONDS
MORTGAGE POOLS 3,214,861.23 3,353,895.72 23.5 5.3 177,756.1 1
GOVERNMENT 1,182,482.00 1,197,2 14.99 8.4 4.4 53,106.25
SPONSORED BOND
Accrued Interest 132,912.34 0.9 ~-
13,380,826.99 13,959,612.84 97.6 4.3 60 1,429.35
PORTFOLIO 82.3 300,168. 00.0 601,654.11
17
ICC Capital Management
PORTFOLIO APPMSAL
PALM BEACH GARDENS POLICE PENSION FUND FIXED INCOME
Murch 31, 2011
Unit
Quantity Security cost
cAsn AND EQUIVALENTS
CASH & CASH EQWALENTS
CORPORATE BONDS
165,000.000 CITIGROUP INC
200,000.000 AT&T INC
200,000.000 FRANKLIN
5.300% Due 10-17-12
4.950% Due 01-15-13
RESOURCES INC
2.000% Due 05-20-13
135,000.000 NATIONAL RURAL
UT% COOP
5.500% Due 07-01-13
CAP cow
1.875% Due 09-16-13
5.250% Due 10-15-13
135,000.000 IBM CORP
6.500% Due 10-15-13
125,000.000 BAKER HUGHES LNC
6.500% Due 11-15-13
220,000.000 MORGAN STANLEY
1.903% Due 01-24-14
125,000.000 GENERAL
DYNAMICS CORP
5.250% Due 02-01-14
INTERNATIONAL
3.875% Due 02-15-14
3.625% Due 03-15-14
GROUP INC
6.000% Due 05-01-14
120,000.000 MORGAN STANLEY
6.000% Due 05-13-14
360,000.000 P MORGAN
5.700% Due 11-15-14
5.125% Due 01-15-15
130,000.000 PEPSICO INC
3.100% Due 01-15-15
400,000.000 BANK OF NEY YORK
MELLON
2.950% Due 06-18-15
185,000.000 GENERAL ELEC CAP cow
3.500% Due 06-29-15
155,000.000 MORGAN STANLEY
4.000% Due 07-24-15
co
2.125% Due 09-13-15
135,000.000 GENERAL ELECTRIC
85,000.000 GOLDMAN SACHS
125,000.000 HONEYWELL
255,000.000 COCA-COLA CO
130,000.000 GOLDMAN SACHS
65,000.000 GOLDMAN SACHS
205,000.000 HEWLETT-PACKARE
104.77
100.30
101.56
99.84
101.22
98.44
99.24
99.76
100.00
99.53
99.56
104.24
103.81
99.65
110.29
99.74
99.90
99.87
99.86
99.65
101.34
Total
cost
340,555.34
340,555.34
172,875.45
200,592.00
203,128.00
134,789.40
136,652.40
83,674.00
133,97 1.30
124,702.50
220,000.00
124,410.00
124,452.50
265,819.65
134,958.20
119,581.20
397,032.75
64,829.10
129,868.70
399,484.00
184,739.15
154,465.25
207,738.80
18
Price
105.52
106.51
101.09
109.11
99.97
107.38
112.59
112.61
101.98
110.55
106.71
105.92
109.81
108.78
109.91
106.86
103.75
101.84
102.21
101.63
98.06
Market
Value
340,555.34
340.555.34
174,112.29
213,021.40
202,188.80
147.296.07
134.953.69
9 1,276.65
151,997.85
140,756.87
224,359.96
138,192.25
133,390.50
270,106.7 1
142.75 1.83
130,542.00
395,688.24
69,457.70
134,871.62
407,368.40
189,096.08
157,523.40
201,025.46
Pet.
Assets
~
2.4
2.4
~
1.2
1.5
1.4
1.0
0.9
0.6
1.1
1.0
1.6
1.0
0.9
1.9
1.0
0.9
2.8
0.5
0.9
2.8
1.3
1.1
1.4
Cur.
Yieid __
01
41
~
50
46
20
50
19
49
58
58
19
47
36
34
55
55
52
48
30
29
34
39
22
ICC Capital Management
PORTFOLIO APPRAISAL
PALM BEACH GARDENS POLICE PENSION FUND FIXED INCOME
Murch 31, 2011
Quantity
165,000.000
200,000.000
190,000.000
300,000.000
215,000.000
180,000.000
225,000.000
160,000.000
150,000.000
115,000.000
100.000.000
195,000.000
225,000.000
115.000.000
120,000.000
125,000.000
115,000.000
180,000.000
120,000.000
115,000.000
140,000.000
155,000.000
Security
MICROSOFT CORP
1.625% Due 09-25-15
WAL-MART STORES
INC
1.500% Due 10-25-15
PROCTER & GAMBLE corn
1.800% Due 11-15-15
SAN DEGO GAS &
ELECTRIC
5 300% Due 11-15-15
E1 DU PONT DE
NEMOUR & CO
1.950% Due 01-15-16
STATE STREET COW
2.875% Due 03-07-16
AT&T INC
5.625% Due 06-15-16
WELLS FARGO &
COMPANY
3.676% Due 06-15-16
MCDONALD'S CORP
5.300% Due 03-15-17
VERIZON
COMMUNICATIONS
5.500% Due 04-01-17
NATIONAL RURAL
UTE. COOP
5.450% Due 04-10-17
MERCK & CO INC
6.000% Due 09-15-17
MCDONALD'S COW
5.800% Due 10-15-17
CONS EDISON CO OF
NY
5.850% Due 04-01-18
AMGEN INC
5.700% Due 02-01-19
CISCO SYSTEMS INC
4.950% Due 02-15-19
CHEVRON COW
4.950% Due 03-03-19
BLACKROCK INC
5 000% Due 12-10-19
CONOCOPHILLIPS
6.000% Due 01-15-20
BgEING CO
4.875% Due 02-15-20
BAXTER
INERNATIONAL INC
4.250% Due 03-15-20
GEORGE
WASHINGTON
UNIVERSlTY
4.896% Due 09-15-20
Unit
cost
99.56
99.09
99.20
111.89
99.86
99.58
101.36
100.67
98.90
102.45
99.68
115.26
102.47
99.96
99.78
98.81
99.97
99.61
101.29
98.96
99.61
100.00
Total
Cost
164,275.65
198,190.00
188,480.00
335.658.00
214.690.40
179,253.00
228,071.25
161,078.56
148,348.50
117,812.90
99,680.00
224,757.00
230,555.25
114,949.40
119,732.40
123,518.75
114,964.35
179,298.00
121,544.40
113,801.70
139,456.80
155,000.00
19
Price
96.81
95.67
97.67
111.42
96.27
99.34
111.87
100.59
111.49
110.26
110.60
115.36
114.48
113.11
111.77
107.35
110.34
104.91
114.83
106.85
101.49
100.34
Market
Value
159,744.09
191,339.60
185,567.49
334,271.10
206,970.39
178,812.00
251,698.05
160,945.60
167,241.75
126,800.38
110,600.70
224,956.87
257,59 1.02
130,073.62
134,127.12
134,190.75
126,888.01
188,829.18
137,801.88
122,882.79
142,080.54
155,530.10
Pct.
Assets
1.1
1.3
___
1.3
2.3
1.4
1.3
1.8
1.1
1.2
0.9
0.8
1.6
1.8
0.9
0.9
0.9
0.9
1.3
1.0
0.9
1.0
1.1
Cur.
Yieid
1.7
1.6
__
1.8
4.8
2.0
2.9
5.0
3.7
4.8
5.0
4.9
5.2
5.1
5.2
5.1
4.6
4.5
4.8
5.2
4.6
4.2
4.9
ICC Capital Management
PORTFOLIO APPRAISAL
PALM BEACH GARDENS POLICE PENSION FUND FIXED INCOME
Murch 31, 2011
Cur.
Yield
4.3
-
4.1
5.4
Unit Total
cost cost
99.49 198,984.00
Market Pct.
Price Value Assets
99.96 199,926.40 1.4
Quantity Security
200,000.000 BERKSHIRE
HATHAWAY FIN
4.230% Due 01-15-21
PETROLEUM CORP
4.100% Due 02-01-21
CHICAGO
5.420% Due 10-01-30
Accrued Interest
245,000.000 OCCIDENTAL
215,000.000 UNIVERSITY OF
100.59 246,457.75 99.04 242,657.55 1.7
99.90 2 14,778.5 5 100.00 214,997.85 1.5
91,732.93 0.6
8,428,235.58 58.9 8,051,100.96 4.1
5.3
4.5
5.3
MUNICJPAL BONDS
140,000 COMMONWEPLLTH
FING AUTH PA REV
5.653% Due 06-01-24
4.554% Due 07-01-24
UNIV REVS
5.000% Due 09-01-40
Accrued Interest
125,000 UTAHST
0 UNIVERSITYVA
100.00 140,000.00 106.24 148,743.00 1.0
100.00 125,000.00
0.00 0.00
101.86 127,330.00 0.9
94.3 1 0.00 0.0
4,727.86 ' 0.0
280,800.86 2.0 265,000.00 4.9
1.2
2.8
3.6
GOVERNMENT BONDS
180,000.000 US TREASURY N/B
1.250% Due 02-15-14
180,000.000 US TREASURY NE3
2.750% Due 02-28-18
300,000.000 US TREASURY N/B
3.625% Due 02-15-21
Accrued Interest
99.95 179,90 1.56
98.77 177,778.12
103.23 309,703.12
100.06 180,112.50 1.3
99.24 178.635.94 1.2
101.42 304.265.70 2.1
2,012.29 0.0
665,026.43 4.7 667,382.80
17,498.20
41,392.97
2,837.63
51,954.89
28,022.01
30,904.20
23,420.39
57,910.85
3,096.69
84,831.56
2.7
5.5
5.1
4.3
4.3
3.8
3.8
3.8
4.3
4.3
5.4
MORTGAGE POOLS
16,967 950 GNJO M #781313
6 000% Due 07- 15-1 6
41,574 860 FNCI M #254371
5 500% Due 07-01-17
2,846 020 FGCI N #B13455
4 500% Due 04-01-19
54,067 630 FNCI N #725445
4 500% Due 05-01-19
28,795 900 FNCI N #825335
4 000% Due 05-01-20
3 1,757 690 FNCI N #255888
4 000% Due 08-01-20
24,144 730 FNCI N #829053
4 000% Due 08-01-20
60,020 960 FGCI #G12205
4 500% Due 06-01-21
4 500% Due 08-0 1-2 1
6 000% Due 04-15-32
3,229 922 FGCI N #G12323
85,891 790 GNSF M #552509
103.12
99.56
99.71
96.09
97.3 1
97.3 1
97.00
96.48
95.88
98.77
108.41
108.53
105.65
105.70
104.37
104.37
104.37
105.53
105.53
18,395.70
45,119.37
3,006.92
57,149.65
30,055.72
33,147.09
25,201.06
63,339.16
3.408.49
0.1
0.3
0.0
0.4
0.2
0.2
0.2
0.4
0.0
110.65 95.035.66 0.7
20
20,713.080 GNSF M #582153
6.000% Due 06-15-32
327,325.362 FGLMC #GO2268
6.500% Due 08-01-36
303,976.332 GN POOL # 782119
6.000% Due 08-15-36
324,697.700 FNCL # 256394
6.500% Due 09-01-36
245,701.650 G2 POOL # 4194
5.500% Due 07-20-38
96,343.692 G2 POOL # 4195
6.000% Due 07-20-38
G2 POOL # 4447
5.000% DueO5-20-39
#7 14005
5.500% Due 10-15-39
6.000% Due 03-01-40
Accrued Interest
3 11,234.624
355,954.951 GNSF 5.5% POOL
736,770.720 FG POOL #GO5900
ICC Capital Management
PORTFOLIO APPRAISAL
PALMBEACH GARDENS POLICE PENSION FUND FIXED INCOME
Quantity Security
GOVERNMENT SPONSORED BOND
425,000.000 FANNIE MAE
2.000% Due 10-25-16
200,000.000 FANME MAE
6.000% Due 04-28-21
265,000.000 FANNIE MAE
5.625% Due 11-15-21
300,000.000 FREDDIE MAC
5.900% Due 06-15-22
Accrued Interest
March 31, 2011
Unit Total
Cast Cost
99 83 20,677 48
102.08 334,127.83
107 08 325,492.16
102.00 33 1,19 1.77
106.12 260,750.88
99 89 96,238.20
104.81 326,212.79
106.16 377,868.43
108.64 800,432.32
3,2 14,86 1.23
100.00 425,000.00
99.20 198,394.00
99.32 263,198.00
98.63 295,890.00
1,182,482.00
Price
110.65
112.33
110.09
112.44
108.21
109.28
106.27
108.45
Market
Value
Pet.
Assets
22,918.15
367,672.47
334,653.62
365,076.13
265,869.58
105,285.64
330,735.34
386,025.67
0.2
2.6
2.3
2.6
1.9
0.7
2.3
2.7
108.83 801,800.31 5.6
14,813.01 0.1
3,368,708.73 23.6
95.67 406,589.42 2.8
100.40 200,799.00 1.4
102.99 272,917.67 1.9
105.64 316,908.90 2.2
19,626.25 0.1
1,216,84 1.24 8.5
Cur.
Yield
5.4
5.8
5.4
5.8
5.1
5.5
4.7
5.1
__
5.5
5.3
2.1
6.0
5.5
5.6
4.4
RTF 82.3
21
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PALM BEACH GARDENS POLICE PENSION FUND GROWTH
Investment Review
Quarter Ending
March 31,2011
ICC Capital Management, lnc. a
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e e e e e e e e e e e e e e e e e e e e e e e e e e
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Investment Performance Report
Quarter Ending
March 31,2011
Total Return Summary Page ...... 1
Investment Performance by Asset Category Page ...... 3
Portfolio Sector Diversification Page ...... 4
Investment Performance by Sectors Page ...... 5
Brokers Commission Page ...... 7
Portfolio Allocation Page ...... 2
Portfolio Attributes Page ...... 6
Purchases & Sales Page ...... 8
Portfolio Summary Page ...... 10
Portfolio Appraisal Page ...... 11
Realized Gains/ Losses Page ...... 9
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PALM BEACH GARDENS POLICE PENSION FUND GROWTH
Total Return Summa y
Quarter Ending
March 31,2011
;#artsng Value
Fnding Value
Difference
Net Contributions/ (Withdrawals)
Sai&Loss) porn Investments
Fiscal Year to Since Inceptioi tr Date (02/28/07 - 03/31/"11) I
I I I
$5,7933563
$6,199343
$405,680
($678)
$406358
$l,Zuu,uUu
$6,199,543
$4,999,543
$3,516,392
$1,483.150
TOTAL RETURN I 7.M% I 19.38% I 21.12% 1
1 ANNUALIZED RETURN 1 4.80%
ZCC *tal Management, Inc.
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PALM BEACH GARDENS POLICE PENSION FUND GROWTH
Portfolio Allocation at Market
Quarter Ending
March 31,2011
Asset AI Zoea tioii:
ZOO/O (Mkt)
Market Value
as of 1y3lbO CASH/EQUIVS
-1.7%
Market Value
as of 03/3lb1 CASH/EQUIVS
0.4% --
EQUITY 7 99.6%
I
Mkt Value Mkt Value O/O Mkt Value Mkt Value O/O
as of 1y3l/lO as of ly3l/lO as of 03/31/11 as of 03/31/11
Cas Wquivs -$96,956 -1.7% $26,434 0.4%
I I I I
ICC Capital Maringerirent, Inc.
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PALM BEACH GARDENS POLICE PENSION FUND GROWTH
Investment Pevormance by Asset Catego y
Quarter Ending
March 31,2011
I BACCOUNT BINDEX 1 Quarter
15.00
10.00
5.00
0.00
6’89 6.03 7.11 7.01 6.03 v4--’ I
4
TOTAL NET OF FEES
/- - L_r
EQUITY TOTAL GROSS OF FEES
I
I A
Fiscal Year to Date ACCOUNT INDEX
40.00
30.00
20.00
10.00
0.00
I
EQUITY TOTAL GROSS OF FEES TOTAL NET OF FEES
Since Inception Annualized (02/28/07 - 03/32/c11) ACCOUNT INDEX
10.00
8.00
6.00
4.00
2.00
0.00
3-89 3.73
4.80 - 3.73
I
4.34 ’J W’J
I I
EQUITY TOTAL GROSS OF FEES TOTAL NET OF FEES
The red total bar represents the Russell 1000 Growth Index.
ZCC Cuaitul Munuaement, Inc.
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PALM BEACH GARDENS POLICE PENSION FUND GROWTH
Portfolio Sector Diversification
Quarter Ending
March 31,2011
Top Ten Holdings
Security % of equities Return for Quarter
THOMAS & BETS CORP. 3.95% 23.13%
APPLE COMPUTER INC. 3.67% 8.04%
TARGET CORPORATION
PARKER-HANNIFIN CORP.
MICROSOFT CORP.
ALBEMARLE CORP.
DARDEN RESTAURANTS INC.
MICRON TECHNOLOGY INC.
3.40%
3.22%
3.04%
2.90%
2.86%
2.80%
-16.45%
12.63%
-8.48 %
7.40 %
7.06%
43.02%
CONCH0 RESOURCES INC. 2.78% 22.39%
CIGNA CORP. 2.65% 20.90%
sector Sector Contribution
% of Portfolio Return for Quarter
Materials
Industrials
Telecommunications consumer Discretionary
Consumer Staples
Financials
Health Care
Information Technology
~UtilitieS
Energy
6.96%
21.70%
2.01 %
12.03%
7.45 %
12.40%
4.47%
13.69%
17.33%
1.96%
7.18%
4.20%
4.27%
0.35%
-2.37%
19.32%
7.18%
10.44%
9.11 %
6.86%
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PALM BEACH GARDENS POLICE PENSION FUND GROWTH
Investment Performance by Sectors
Quarter Ending
March 31,2011
Index Sector Returns for 1 Q11
30.0
20.0
10.0
0.0
-1 0.0
14.1 16.6
8.3
Sector Diversification Relative to the Russell 1000 Growth Index
24.0 OVERWEIGHT
8.1
1.9 12.0- 3.8 0.5
0.0 -0.3 -2.3 -1.9
-12.0 I'
UNDERWEIGH -12.9
-24.0
PALM BEACH GARDENS POLICE PENSION FUND GROWTH e e e
ICC -
e e
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CAPITALIZATION
0 R1mG -
BETA
ICC -
RlOOOG - e e e
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5YEAREPSGROWTH
Growth Portfolio Attributes
Quarter Ending
March 31,2011
MARKET CAPlTALlZATlON 12/31/2010 3/31/2011 9/30/2010 6/30/2010
42.4 40.2 45.6 43.4
91.1 85.2 76.0 69.5 100.0
75.0 , 4d , 50.0
25.0
0.0 4~ 7 , 4~ I 3/31/2011 12/31/2010 9/30/2010 6/30/2010 I
BETA 3/31/2011 12/31/2010 9/30/2010 6/30/2010
1.00 1.00 1.01 1.01 1.50
1.00 1.00 1.00 1.00 1.01 1.00 1.01 1.00
0.50
0.00
1.00 1.00 1.00
I 3/31/2011 12/31/2010 9/30/2010 6/30/2010
3/31/2011 12/31/2010 9J30/2010 6/30/2010
1.00 0.90 1.00 1.50 I 3.0 T
2.0 I
0.0
1.40 , I 7 I 1.a
1.40 1.40 1.50 1.70
1.0 1 o.90
I 3/31/2011 12/31/2010 9/30/2010 6/30/2010 I
12/31/2010 3/31/2011 9/30/2010 6/30/2010
17.4 16.5 15.3 12.4
14.9 15.1 14.4 13.3
30'0 T
~
PRICyEARNlNGS
20.0 ~~~ 10.9 15.1 15.3 14,4
0.0
3/31/2011 12/31/2010 9/30/2010 6/30/2010
3/31/2011 12/31/2010 9/30/2010 6/30/2010 15.0
9.0 3.0 3.0 5.0
7.0 4.0 4.0 5.0
3 YR EPS GROWTH
0.0 5.0 ll 5.0 5.0 4.0 4.0
I 3/31/2011 12/31/2010 9/30/2010 6/Yu/zu10 I
12/31/2010 3/31/2011 9/30/2010 6/30/2010
14.0 19.0 20.0 14.0
11.0 12.0 13.0 13.0
5 YR EPS GROWTH
30.0 T I 14,0 , I 19.0 , I 20.0 , I , -
,
20.0
12.0 13.0 I4.O 13.0 - 1, 0
10.0
0.0
3/31/2011 12/31/2010 9/30/2010 6/30/2010
ICC Capital mnagement, Inc.
0 6
e
0 PALM BEACH GARDENS POLICE PENSION FUND GROWTH
0
0
0
Date Trans Ticker Security $Amount Shares Price Comm PerSh
The Griswold Company
1/19/2011 Sell MRVL Marvell Technology Group $10,593.95 500 $21.23 $20.00 $0.04
1/19/2011 Sell MRVL Marvell Technology Group $8,475.16 400 $21.23 $16.00 $0.04
1/19/2011 Sell MRVL Marvell Technology Group $10,593.95 500 $21.23 $20.00 $0.04
1/19/2011 Sell MRVL Marvell Technology Group $16,950.31 800 $21.23 $32.00 $0.04
1/19/2011 Sell MRVL Marvell Technology Group $57,207.30 2700 $21.23 $108.00 $0.04
1/19/2011 Sell MRVL Marvell Technology Group $42,375.78 2000 $21.23 $80.00 $0.04
'Total: The Griswold Company $146,196.45 6,900 $276.00 $0.04
Edgetrade2
1/3/2011 Sell BGC
1/12/2011 Buy DRI
Broker Commission Summary Report
Quarter Ending
March 31,2011
1/18/2011
2/ 7/2011
2/16/2011
2/ 2/ 201 1
2/22/2011
2/ 22/ 201 1
2/22/2011
12/22/2011
0
2/22/2011
2/22/2011
2/22/2011
12/23/2011
3/11/2011
3 /24/2011
3/25/2011
3/ 25/ 2011
3/25/2011
e 13/24/2011
0
0
3/25/2011 Sell UPS
3/25/2011 Sell UPS
3/25/2011 Buy IEX IdexCorp $124,735.09 2900 $43.00 $29.00 $0.01
Total: Edgetrade 2 $1,071,815.10 20,600 $206.00 $0.01
13/25/2011
sell
BUY
BUY
BUY
BUY
sell
sell
sell
sell
Sell
sell
sell
sell
sell
Sell
sell
sell sell
BUY
ENR
MJN
ALB
WLL
PEP
SPN
SPN
SPN
SPN
SPN
SPN
CF
PH
FII
FII
UPS
UPS
UPS
UPS
General Cable Corp Del New
Darden Restaurants Inc
Energizer Holdings Inc
Mead Johnson Nutrition Co
Albemarle Corp
Whting Petroleum Corp
Pepsico Inc.
Superior Energy Services Inc
Superior Energy Services Inc
Superior Energy Services Inc
Superior Energy Services Inc
Superior Energy Services Inc
Superior Energy Services Inc
Cf IndUSTries Holdings Inc.
Parker-Hannifin Corp.
Federated Investors Inc-C1 B
Federated Investors Inc-C1 B
United Parcel Svc Inc
United Parcel Svc Inc
United Parcel Svc Inc
United Parcel Svc Inc
United Parcel Svc Inc
United Parcel Svc Inc
$143,985.47
$59,601.49
$57,751.85
$40,255.25
$40,276.39
$121,619.80
$126,587.40
$15,143.27
$3,785.82
$3,785.82
$22,714.90
$68,144.71
$11,357.45
$65,299.69
$42,595.40
$28,950.12
$1 5,790.98
$7,221.29
$36,106.45
$7,221.29
$7,221.29
$7,221.29
$14,442.59
4100 $35.13
1300 $45.84
800 $72.20
700 $57.50
700 $57.53
1000 $121.61
2000 $63.28
400 $37.87
100 $37.87
100 $37.87
600 $37.87
1800 $37.87
300 $37.87
500 $130.61
500 $85.18
1100 $26.33
600 $26.33
100 $72.22
500 $72.22
100 $72.22
100 $72.22
100 $72.22
200 $72.22
$41.00 $0.01
$13.00 $0.01
$8.00 $0.01
$7.00 $0.01
$7.00 $0.01
$10.00 $0.01
$20.00 $0.01
$4.00 $0.01
$1.00 $0.01
$1.00 $0.01
$6.00 $0.01
$18.00 $0.01
$3.00 $0.01
$5.00 $0.01
$5.00 $0.01
$11.00 $0.01
$6.00 $0.01
$1.00 $0.01
$5.00 $0.01
$1.00 $0.01
$1.00 $0.01
$1.00 $0.01
$2.00 $0.01
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ICC Capital Management
PURCHASE AND SALE
PALMBEACH GARDENS POLICE PENSION FUND GROWTH
From 12-31-10 To 03-31-11
Trade Settle Unit
Date Date Quantity Security Price Amount
PURCHASES
02-07-1 1 02-10-1 1
01-12-1 1 01-18-1 1
03-25-1 1 03-30-1 1
02-02-1 1 02-07-1 1
03-11-1 1 03-16-1 1
02-22-1 1 02-25-1 1
02-16-1 1 02-22-1 1
700.00 ALBEMARLE CORP
1,300.00 DARDEN RESTAURANTS INC
2,900.00 IDEX CORP
700.00 MEAD JOHNSON NUTRITION CO
500.00 PARKER-HANNIFIN CORP.
2,000.00 PEPSICO INC.
1,000.00 WHTING PETROLEUM CORP
57.54 40,276.39
45.85 59,60 1.49
43 .O 1 124,735.09
57.51 40,255.25
85.19 42,595.40
63.29 126,587.40
12 1.62 12 1.6 19.80
SALES
02-23-1 1 02-28-1 1
01-18-11 01-21-11
03-24-1 1 03-29-1 1
03-24-1 1 03-29-1 1
01-03-11 01-06-11
01-19-1 1 01-24-1 1
01-19-1 1 01-24-1 1
01-19-11 01-24-1 1
01-19-11 01-24-11
01-19-1 1 01-24-1 1
01-19-11 01-24-11
02-22-1 1 02-25-1 1
02-22-1 1 02-25-1 1
02-22-1 1 02-25-1 1
02-22-1 1 02-25-1 1
02-22-1 1 02-25-1 1
02-22-1 1 02-25-1 1
03-25-1 1 03-30-1 1
03-25-1 1 03-30-1 1
03-25-1 1 03-30-1 1
03-25-1 1 03-30-1 1
03-25-1 1 03-30-1 1
03-25-1 1 03-30-1 1
500.00 CF INDUSTRIES HOLDINGS INC.
800.00 ENERGIZER HOLDINGS INC
600.00 FEDERATED INVESTORS INC-CL B
1,100.00 FEDERATED INVESTORS INC-CL B
4,100.00 GENERAL CABLE CORP DEL NEW
400.00 MARVELL TECHNOLOGY GROUP
500.00 MARVELL TECHNOLOGY GROUP
800.00 MARVELL TECHNOLOGY GROUP
2,700.00 MARVELL TECHNOLOGY GROUP
2,000.00 MARVELL TECHNOLOGY GROUP
500.00 MARVELL TECHNOLOGY GROUP
1,800.00 SUPERIOR ENERGY SERVICES INC
300.00 SUPERIOR ENERGY SERVICES INC
400.00 SUPERIOR ENERGY SERVICES INC
100.00 SUPERIOR ENERGY SERVICES INC
100.00 SUPERIOR ENERGY SERVICES INC
600.00 SUPERIOR ENERGY SERVICES INC
100.00 UNITED PARCEL SVC INC
500.00 UNITED PARCEL SVC INC
100.00 UNITED PARCEL SVC INC
100.00 UNITED PARCEL SVC INC
100.00 UNITED PARCEL SVC INC
200.00 UNITED PARCEL SVC INC
130.60
72.19
26.32
26.32
35.12
21.19
21.19
21.19
21.19
21.19
21.19
37.86
37.86
37.86
37.86
37.86
37.86
72.21
72.21
72.2 1
72.2 1
72.2 1
72.2 1
5 5 5,670.82
65,299.69
57,751.85
15,790.98
28,950.12
143,985.47
8,475.16
10,593.95
16,950.31
57,2 07.3 0
423 75.7 8
10,593.95
68,144.7 1
11,357.45
15,143.27
3,785.82
3,785.82
22,7 14.90
7,22 1.29
36,106.45
7,22 1.29
7,22 1.29
7,22 1.29
14,442.59
662,340.73
0 a a a a a a a a a a a a a
0 a a a a a a a a a a a a a e a a a
0 a e a a e
0 a a
0
ICC Capital Management
REALIZED GAINS AND LOSSES
PALMBEACH GARDENS POLICE PENSION FUND GROWTH
From 12-31-10 Through 03-31-1 I
Gain Or toss
Open Close
Date Date Quantity SecuriQ
~~
09-09-10 01-03-1 1 4,100 00 GENERAL CABLE CORP
DEL NEW
INC
GROUP
GROUP
GROUP
GROUP
GROUP
GROUP
SERVICES INC
10-30-07 02-22-1 1 300 00 SUPERIOR ENERGY
SERVICES INC
01-28-08 02-22-11 400 00 SUPERIOR ENERGY
SERVICES INC
04-22-08 02-22-1 1 100 00 SUPERIOR ENERGY
SERVICES INC
08-13-08 02-22-1 1 100 00 SUPERIOR ENERGY
SERVICES INC
04-07-09 02-22-1 1 600 00 SUPERIOR ENERGY
SERVICES INC
12-22-10 02-23-1 1 500 00 CF INDUSTRIES
HOLDINGS INC
03-12-09 03-24-1 1 600 00 FEDERATED INVESTORS
10-15-09 01-18-11 800 00 ENERGIZER HOLDINGS
10-12-07 01-19-11 400 00 MARVELL TECHNOLOGY
10-30-07 01-19-1 1 500 00 MARVELL TECHNOLOGY
01-28-08 01-19-11 800 00 MARVELL TECHNOLOGY
02-27-08 01-19-1 1 2,700 00 MARVELL TECHNOLOGY
03-07-08 01-19-1 1 2,000 00 MARVELL TECHNOLOGY
04-22-08 01-19-1 1 500 00 MARVELL TECHNOLOGY
10-12-07 02-22-1 1 1,800 00 SUPERIOR ENERGY
INC-CL B
04-07-09 03-24-11 1,100 00 FEDERATED INVESTORS
INC-CL B
06-06-07 03-25-1 1 100 00 UNITED PARCEL SVC INC
07-26-07 03-25-1 1 500 00 UNITED PARCEL SVC INC
10-30-07 03-25-1 1 100 00 UNITED PARCEL SVC INC
01-28-08 03-25-11 100 00 UNITED PARCEL SVC INC
08-13-08 03-25-1 1 100 00 UNITED PARCEL SVC INC
04-07-09 03-25-1 1 200 00 UMTED PARCEL SVC INC
TOTAL GAINS
TOTAL LOSSES
TOTAL REALIZED GAINLOSS 144,684 47
9
Cost
Basis
99,682 07
52,891 92
6,808 00
8,834 00
9,488 00
32,054 67
21,596 40
5,785 00
59,942 70
10,362 00
16,467 00
4,575 00
4,636 00
8,454 00
63,737 15
11,948 94
24,077 02
7,120 39
37,875 00
7,509 00
7,077 00
6,379 00
10,356 00
517,656.26
Proceeds
143,985.47
57,751 85
8,475.16
10,593.95
16,950.31
57,207.30
42,375.78
10393.95
68,144.71
11,357.45
15,143.27
3,785.82
3,785.82
22,7 14.90
65,299.69
15,790.98
28,950.12
7,22 1.29
7,22 1.29
7,22 1.29
7.221.29
36,106.45
Short Term Long Term
44,303.40
4,859.93
1,667.1 6
1,759.95
7,462.3 1
25,152.63
20,779 38
4,808.95
8,202.01
995.45
- 1,323.73
-789.18
-850.18
14,260.90
1,562.54
3,842.04
4,873.10
100.90
-1,768.55
-287.71
144.29
842.29
14,442.59 4,086.59
45,865 94 103,837 85
662,340.73 45,865.94 98,818.53
0 00 -5,019 35
ICC Capital Management
PORTFOLIO SUMMARY
PALM BEACH GARBENS POLICE PENSION FUND GROWTH
Mcirch 31. 2011
Pct. Cur. Est.Annua1
Security Type Total Cost Market Value Assets Yield Income -~
Cash & Equivalents
CASH AND 26,433.71 26,433.71 0.4 0.1 14.64
EQUIVALENTS
26,433.71 26,433.71 0.4 0.1 14.64
- -___
Equities
COMMON STOCK
MATERIALS
INDUSTRIALS
TELECOMMUNICATIONS
CONSUMER
DISCRETIONARY
CONSUMER
STAPLES
ENERGY
FINANCIALS
HEALTH CARE
INFORMATION
TECHNOLOGY
UTILITIES
COMMON STOCK
3 3 6,6 93.73
1,050,007.48
120,675.54
750,691.63
473,668.74
547,706.09
27 5,227.86
624,239.06
664,034.5 1
82,769.25
4,925,7 13.89
429,344.00
1,339,496.00
124,23 3 .OO
742,855 .OO
460,080.00
765,88 1 .OO
275,753.00
844,818.00
1,070,039.82
120,609.00
6,173,108.82
6.9 0.9
21.6 0.8
2.0 0.0
12.0 0.8
7.4 2.4
12.4 0.8
4.4 0.3
13.6 0.6
17.3 0.5
1.9 3.2
99.6 0.8
- --
3,980.00
10,317.00
0.00
5,852.00
11,036.00
5,808.00
940.00
5,246.00
5,036.00
3,888.00
52,103.00
__-
4,925,7 13.89 6,173,108.82 99.6 0.8 52,103.00
4,952,147.60 6,199,542.53 100.0 0.8 52,117.64
10
e e e e e e e e e e e e e e e e e e e e e e e e e e e e e e
e a e e e e a e e e e
1-
ICC Capital Management
PORTFOLIO APPRAISAL
PALMBEACH GARDENS POLICE PENSION FUiW GROWTH
March 31, 2011
Unit Total
Quantity Security cost cost
CASH AND EQUIVALENTS
CASH & CASH EQUIVALENTS 22,176.71
DIV CASH ACCRUAL ACCT 43 7.00
26,433.71
COMMON STOCK
MATERIALS
3,000.00 ALBEMARLE COW
1,600.00 CLIFFS NATURAL
1,700.00 NEWMONT MINING
RESOURCES INC
cow
INDUSTRIALS
22,500.00 AMR cow
2,200.00 EXPEDITORS INTL
WASH INC
1,300.00 GENERAL
DYNAMJCS CORP
4,900.00 GENERAL ELECTRIC
co.
2,900.00 IDEX COW
2,100.00 PARKER-HANNIFIN cow.
12,500.00 SOUTHWEST
AIRLINES co.
cow 4,100.00 THOMAS &BETS
2,400.00 TOR0 CO
TELECOMMUNICATIONS
1,200.00 AMERICAN TOWER
CORPORATION
11,100.00 CLEARWIRE
CORP-CLASS A
CONSUMER DISCRETIONARY
3,600.00 DARDEN
RESTAURANTS INC
12,900.00 INTERPUBLIC
GROUP COMPANIES
INC.
2,900.00 NORDSTROM INC.
8,600.00 PULE COW
4,200.00 TARGET
CORPORATION
48.87 146,623.98
71.79 114,868.00
44.24 75,201.75
336,693.73
7.43 167,184.14
36.61 80,550.58
67.90 85,273.64
22.40 109,778.48
43.01 124,73 5.09
79.59 167.148.36
7.84 98,061.25
25.86 1 06,028.98
45.10 108,246.96
1,050,007.48
37.42 44,907.00
6.83 75,768.54
120.675.54
48.28 173,795.80
9.78 126,145. 82
41.45 120,197.17
11.68 100,436.82
54.79 230,116.02
CONSUMER STAPLES
2,600.00 CVS CAREMARK cow
750,691.63
34.61 89,974.00
11
Market Pct. Cur.
Assets Yield
~~
Price Value
22,176.7 1 0.4 0.1
4,257.00 0.1 0.0
26,433.11 0.4 0.1
~-
59.77 179,310.00 2.9 0.9
95.28 157,248.00 2.5 0.8
54.58 92,786.00 1.5 1.1
-__
429,344.00 6.9 0.9
6.46 145,350.00 2.3 0.0
50.15 110,330.00 1.8 0.8
99,528.00 1.6 2.5 76.56
20.05 98,245.00 1.6 2.4
43.65 126,585.00 2.0 7
94.68 198,828.00 3.2 1.4
12.63 157,875.00 2.5 0.1
59.47 243,827.00 3.9 0.0
158,928.00 2.6 1.1
1,339,496.00 21.6 0.8
-___ 66.22
51.82 62,184.00 1.0 0.0
5.59 62,049.00 1.0 ?
124,233.00 2.0 0.0
~~
49.13 176,868.00 2.9 ?
12.57 162,153.00 2.6 0.0
44.88 130,152.00 2.1 1.0
7.40 63,640.00 1.0 2.7
50.01 210,042.00 3.4 1.4
742,855.00 12.0 0.8
--
34.32 89,232.00 1.4 1.5
0
0 a a
0 e
0 e a
0 a a a
0 a
0
0 a a a a
0
ICC Capital Management
PORTFOLIO APPRAISAL
PALMBEACH GARDENS POLICE PENSION FUND GROWTH
Mcirch 31, 201 I
Quantity Security
2,600.00 MEAD JOHNSON
2,000.00 PEPSICO INC.
3,300.00 SYSCO COW
NUTRITION CO
ENERGY
2,300.00 ATWOOD OCEANICS
INC
1,600.00 CONCH0
RESOURCES INC
1,800.00 CONOCOPHILLIPS
600.00 EXXON MOBILE cow.
CORP
PETROLEUM CORP
1,400.00 OCCIDENTAL PETE
2,000.00 WHTING
FINANCIALS
1,300.00 AFFILIATED
MANAGERS GROUP
INC
500.00 FRANKLIN RES INC
2,600.00 MORGAN STANLEY
HEALTH CARE
1,500.00 ABBOT LAB COM
1,100.00 BECTON DICKINSON
& co
1,200.00 CERNER COW
3,700.00 CIGNA COW
1,600.00 GENZYME CORP
5,700.00 MYLAN
LABORATORIES
1,500.00 STRYKER COW
14,250.00 SUPERGEN INC
INFORMATION TECHNOLOGY
650.00 APPLE COMPUTER
3,300.00 BROADCOM COW
3,800.00 EMC COW
6,400.00 JDS UNIPHASE COW
2,800.00 MARVELL
INC
TECHNOLOGY
GROW
TECHNOLOGY INC
7,400.00 MICROSOFT CORP.
1,550.00 NETAPP INC
15,100.00 MICRON
Unit Total
cost cost
60.83 158,16 1.46
63.29 126,587.40
29.98 98,945.88
473,668.74
26.43 60,779.57
65.40 104,641.96
60.36 108,646.56
65.99 39,592.32
80.30 112.425.88
60.81 121.619.80
547,706.09
86.3 1 112,206.38
102.36 5 1,180.60
43.02 111,840.88
275,227.86
52.35 78,521.00
64.29 70,720.77
49.24 59,088.16
21.95 81,228.98
69.84 111,738.88
19.65 11 1,999.49
53.08 79,623 60
2.20 3 1,3 18.18
624,239.06
126.32 82,107.55
26.68 88,029.30
15.32 58,202.97
10.44 663 15.23
9.74 27,284.00
5.76 87,008.20
29.49 218,234.26
23.45 3 6,3 53 .OO
664,034.5 1
Price
57.93
64.41
27.70
46.43
107.30
79.86
84.13
104.49
73.45
109.37
125.08
27.32
49.05
79.62
111.20
44.28
76.15
22.66
60.80
3.10
345.51
39.38
26.56
20.84
15.55
11.47
25.39
48.15
Market Pct. Cur.
Assets Yield Value
150,618.00 2.4 1.8
~~
128,820.00 2.1 2.8
91,410.00 1.5 3.5
460.080.00 7.4 2.4
___~
106,789.00 1.7 ?
171,680.00 2.8 ?
143,748.00 2.3 2.1
50,478.00 0.8 2.0
146,286.00 2.4 1.3
146,900.00 2.4 ?
-__
765,881.00 12.4 0.8
142,181.00 2.3 ?
62,540.00 1.0 0.7
71,032.00 1.1 0.7
275,753.00 4.4 0.3
~__
73,575.00 1.2 3.3
87,582.00 1.4 2.1
133,440.00 2.2 0.0
163,836.00 2.6 0.1
121,848.00 2.0 0.0
129,162.00 2.1 0.5
91,200.00 1.5 0.2
44,175.00 0.7 0.0
844.818.00 13.6 0.6
~___
226,530.20 3.7 0.0
129,954.00 2.1 0.9
100,928.00 1.6 0.0
133,376.00 2.2 0.0
43,540.00 0.7 0.0
173,197.00 2.5 0.0
187,856.00 3 0 2.0
12 00
1,070,039.82 173 05
____ 74,628 62
12
a e e e e e e e e e e e e
e e e
ICC Capital Management
PORTFOLIO APPRAISAL
PALM BEACH GARDENS PQLICE PENSION FUND GROWTH
hlarch 31. 201 1
Unit Total Market Pct. Cur.
Assets Yield ___~ Quantity Security cost cost Price Value
UTILITIES
19 32
82,169 25 120,609 00 19 32
COMMON STOCK Total 4,925,713 89 6,173,105 52 99 6 0 8
-__ 8,100 00 NV ENERGY INC 10 22 82,769 25 14 89 120,609 00
~~
TOTAL PORTFOLIO 4,952,147.60 6,199,542.53 100.0 0.8
e
0
0 a e e e
a
13
1 cc
390 North Orange Avenue . 27th Floor
Orlando, Florida . 32801 . 800-480-6445 . www.icccapitaI.com
SALEM TRUST
c OMPANY
State of Florida Government Series
Publication date: March 30, 201 1
S&P 500: 1,328.24
1 0-Year Treasury Note: 3.45%
Research provided by. . .
m
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MANAGEMENT
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CHICAGO NEW YORK MILWAUKEE TAMPA
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The Overall Economic Outlook. . .
Florida’s recovery continues as the State’s unemployment rate for February dropped to 11.5% from 11.9% during January. The State’s
unemployment rate is still a huge 2.6% higher than the national unemployment rate of 8.9%. The Agency for Workforce Innovation reported
that 67 of Florida’s 67 counties reported a decrease in unemployment for February. The State’s economic growth is expected to lag the
national recovery. On the national level, economic momentum is coming from exports and the manufacturing sector.
According to S&P/Case-Shiller 20 City Index, home prices decreased 0.2% during January after decreasing 0.4% during December. The Index
has decrease 3.1% over the past year. Prices fell in 19 cities from December 2010 to January 2011. This drop in prices was the sixth
consecutive monthly decline. Eighteen of the 20 cities in the Index showed a year-over-year decline. Tampa and ten other major cities of the
Index are at their lowest level since the housing bust of 2006/2007. January home prices for Miami and Tampa decreased 1.3% and 1 .O%,
respectively. For the past 12 month period, Miami and Tampa home values decreased 4.7% and 7.0%, respectively.
Vacant homes continue to put downward pressure on home prices. According to CNN Money, 17.5% of Florida’s housing stock is vacant. The
rate of vacancy drops to 10% if vacation properties are excluded. Although the number of foreclosures decreased during February, the
decreased should be considered temporary because of the delays from the controversy surrounding the process. RealtyTrac believes
foreclosures will surge in a catch-up with an overall increase of 20% by year-end. The rental market continues to do well as more people now
prefer to rent rather than own in a down market. Many households are forced to rent, given they abandoned their homes. At some point in the
near future, the higher cost of renting will push some households back into the housing market.
The NAHBMlells Fargo Housing Market Index of builder confidence increased slightly during March to 17. The regional index for the South
increased from 18 in February to 20 for March. Two of its three components in the national index held steady, as only single family sales in the
next six months increased to 27 from 25. According to the report, builders continue to face problems with inaccurate appraisals and with
obtaining production financing.
The recent predictions of a massive wave of municipal defaults are misplaced, at least for the near term. Local governments, as well as the
State, have to make fiscal adjustments, maybe painful adjustments, to reduce downgrade risk and possible default. Austerity is the new buzz
word. Pension liabilities come up with every discussion about the municipal debt market. Some investors, academics and policymakers agree
that state and local governments should discount their employee pension liabilities at their cost of capital, which is exactly what‘s being done
with corporate plans and the federal government. Nonetheless, investors are clamoring for more disclosure and comparability. While muni
rates have followed Treasuries of late, the spreads have narrowed after the knee jerk reaction at the end of 2010. Taxable municipals have
outperformed their tax-exempt alternatives. The scarcity of recent supply has been the driver for the credit tightening. Any new increase in the
BABs program will be not have much U.S. Congressional support due to the debate on the federal deficit .
Florida’s tourism has bounced back according to several tracking trade agencies. The increase in consumer confidence over the past year has
increased bookings. The oils spill problems are now memories. The recent run up in energy costs can curtail some vacation plans. While the
addition energy costs for travel may be an addition charge to a vacation, it is the effect on consumer confidence that alter future vacation
plans.
1 he Uverall hconornic Uutlook . . I 3
-
I1
IO
9
8
7
6
5
4
3
2
I 52
I 37
I72
I IO
98
88 n
71
63 n
51
46
41
IO
9 8 7 6 5 4 3 2 1
0 I 2 3 4
-
-
-
...
-100 -
-?.so - -3w -
-350 - a-
450 - -m -
-550 - a-
450 ?
-4
1 I-
How 'l'he States Are Doing . .
(E45E)
Copyright 201 1 Ned Davis Research, Inc. Further distribution prohibited without prior permission. All Rights Reserved.
See NDR Disclaimer at www.ndr.wm/wpyright.html . For data vendor disclaimers refer to www.ndr.wmhendorinfo/ .
4
Florida's economic rebound is lagging the national average.
? t
How 'l'he States Are Doing; . . .
Monrhly Data 11/30/1979 - 2/28/2011 Recession Probabilitv Model Based on State Conditions
100
95
90
85
80
75
70
65
60
55
50
45
40
35
30
25
20
15
10
5
0
Shaded areas represent
National Bureau of
Economic Research recessions
Numbers indicate length of
Leads (-)and Lags (+) in
months from reference turning
dates (shown below)
5
IO0
95
90
85
80
75
70
65
60
55
50
45
40
35
30
25
20
15
10
5
0
:-) 2222222:,:, "
copyright 201 1 Ned Davis Research, Inc. Further distribution prohibited without prior permission. All Rahts Reserved.
See NDR Disclaimer at www.ndr.com/mpyright.html . For data vendor disclaimers refer to www.ndr.com/vendorinfo/ .
T L
How The States Are Doing . .
FY 1979 - FY 201 1 Fiscal Condition of the States
I I 68
64
60
56
52
48
44
40
36
32
28
24
20
16
12
8
4
Total Year-End Balances = General Fund + Budget Stabilization Fund 68
64
60
56
52
48
44
40
36
32
28
24
20
16
12
8
4
1
'Figures for prior fiscal year are preliminary.
'Figures for current fiscal year are based on appropriations. i I FY 201 1 = $36.2 billion rl n n
t
7
s N 8 n 11
10
9
8
7
6
5
4
3
2
11
10
9
8
7
6
5
4
3
2
E360)
Source: National Association of State Budget Ofticers, www.nasbo.org n I. ... .:
. . . . . . . ._. . .... , ,.
\ I
V FY 2011 = 5.6% 1
, ,. .. .. , , . , , , . ., Year-End Balances as Percentage of Expenditures.. :*.I ,- ;' . .. '..: ,' ,' . '" .' ' .. '" ' - .. '-.' - - - "- - ' - -' ,. .. ..
@3wyright 2011 Ned Davis Research, Inc. Further distribution Drohibited without Drior oarmission. All Rohts Reserved.
See NDR Disclaimer at www.ndr.com/copyright.html . For data vendor disciaimers refer to www.idr.cMnhrendorinfo/ .
How The States Are Doing . .
guarierly Data ~/~I/IYJL - 1~/31/2010 State and Local Government Debt as % of GDP
I I
20.8
20.4
20.0
19.6
19.2
18.8
18.4
18.0
17.6
17.2
16.8
16.4
16.0
15.6
15.2
14.8
14.4
14.0
13.6
13.2
12.8
12.4
12.0
11.6
11.2
10.8
10.4
10.0
9.6
9.2
8.8
8.4
8.0
- 20.8
- 20.4
- 20.0
Gross Domestic Product = $14861.0 Billion - 19.6
- 19.2
- 18.8
- 18.4 - 18.0
- 17.6
- 17.2
- 16.8
16.4 - 16.0
- 15.6
- 15.2
- 14.8
- 14.4
- 14.0
- 13.6
- 13.2
. .. .. * - 12.8
... - 12.4
- 12.0
- 11.6
- 11.2
- 10.8
- 10.4 - 10.0 - 9.6
- 9.2
- 8.8
- 8.4 Data Subject To Revisions By
The Federal Reserve Board - 8.0
=21.1% State i3 Local Government Debt = $3135.2 Billion
55-Year Mean = 16.4%
A
15.1
13.5 . * . . .: .. .
I
I""I""I'.''I""I""I."'I""I""I'"'I"'',""~ '
Eosoa) 1955 1960 1965 1970 1975 1980 1985 1990 1995 ZOO0 2005 2010
&Copyright 201 1 Ned Davis Research, Inc. Further distribution prohibited without prior permission. All Rights Resewed.
See NDR Disclaimer at www.ndr.com/copyright.htmi . For data vendor disclaimers refer to www.ndr.comhrendorinfo/ .
How The States Are DninP
Performance of State 8, Local Government Payrolls vs
I
Monthly Data 6/30/2007 - 2/29/2012 mrage of Last Six Expansions
i
103.8
103.6 . . Recession
103.4 ' I ended in June 2009,
'< . ... 103.2 '
103.0
,. .. ....
Current Expansion
(-1
102.8
102.6
102.4
102.2 -
102.0 -
101.8 -
101.6 -
101.4 -
101.2 -
101.0 -
100.8 -
100.6 -
100.4
100.2
100.0
99.8
99.6
99.4
99.2
99.0
98.8
98.6
98.4
98.2
98.0
97.8
97.6
97.4
97.2
97.0
96.8
%.6
96.4
96.2
96.0
95.8
- - - -
- -
- - - - - Average of Last Six
Post World War II Expansions"
(-1
S DI M J S D1 M
Florida, like other states, have cut payrolls.
'Dates used for determining economic expansions
are those designated by the National Bureau of
Economic Research. The data has been adjusted
for ease of comparison with the current cycle.
Expansion starting dates used: November 1970,
March 1975, July 1980. November 1982,
March 1991, and November 2001.
- 103.8
- 103.6 - 103.4 - 103.2 - 103.0 - 102.8 - 102.6 - 102.4
102.2 - 102.0 - 101.8 - 101.6
- 101.4
101.2
101.0 - 100.8 - 100.6 - 100.4 - 100.2 - 100.0 - 99.8 - 99.6 - 99.4 - 99.2 - 99.0 - 98.8 - 98.6
- 98.4 - 98.2
- 98.0
- 97.8 - 97.6 - 97.4 - 97.2 - 97.0 - 96.8
- 96.6 - 96.4 - 96.2
- 96.0 - 95.8
-
- -
S D1 M J S DI M J S DI
2008 2009 2010 201 1 2012
dopyright 2011 Ned Davis Research, Inc. Further distribution pmhibited without prior permission. All Rights Resewed.
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State and local governments look to layoffs to help balance their budgets.
Hnw The States Are DninP, . . 9
Quarterly Data W3Wl982 - lU31/2010 Compensation Costs for State & Local Government and Its Components (Quarterly % Changes)
i Compensation
12/31/2010 = 0.6%
2.4
2.2
2.0
1.8
1.6
1.4
1.2
1 .o
0.8
0.6
0.4
0.2
- 2.4 - 2.2 - 2.0
- 1.8
- 1.6 - 1.4
2.2
2.0
1.8
1.6
1.4
1.2
1 .o
0.8
0.6
0.4
0.2
0.0
1 Wages and Salaries
12/31/2010 = 0.5%
- 2.2 - 2.0
- 1.8 - 1.6 - 1.4
- 1.2
1.0 - 0.8
- 0.6 - 0.4
0.2 - 0.0
-
-
Benefits
12/31/2010 = 0.8% 1;
-I -0.2
2.4 -
2.2
2.0 -
1.8 -
1.6 -
1.4 -
1.2
1.0 -
0.8 -
0.6 -
0.4 -
0.2 -
0.0 -
-0.2 -
-
- - 1.4
1.2
1.0 - 0.8 - 0.6 - 0.4 - 0.2 - 0.0
- -
b
I U
I I I I I 1 1
Tun41 1985 1990 1995 2000 2005 2010 ..
copyright 201 1 Ned Davis Research, Inc. Further distribution prohibited without prior permission. All Rights Resewed.
See NDR Disdaimer at www.ndr.com/copyright.html . For data vendor disclaimers refer to www.ndr.comhrendorinfo/
10 Can Local Government Sell Bonds; What Does It Cost.
Monthly Data 1/31/1984 - 2/28/2011 Barclays Capital Municipal Bond Price Index
109
108
107
106
105
104
103
102
101
100
99
98
97
96
95
94
93 92
91
90
89
88
87
I09
108
107
106
105
104
103
102
101
100
99
98
97
96
95 94
93 92
91
90
89
88
87
loo00 9OOo 8000 7000
6OOo 5000
4Ooo 3000 2000
lo00
-1000 -2000 -3000 -4Ooo -5000
-6Ooo -7000 -8000
-9Ooo loo00 1 1000
0
W
222222222
* .. . .... .
Net Flow for 2/28/2011 = $-3346 Million
Includes State Municipal Bond Funds t source: investment mmnv Institute. mnv.ici.om w +ll000
:~309) Municipal Bond Mutual Funds Customer Purchases Minus Redemptions
mpyright 2011 Ned Davis Research, Inc. Further distribution prohibited without prior permission. All Rights Reserved.
See NDR Disclaimer at www.ndr.codcopyright.html . For data vendor disclaimers refer to www.ndr.codvendorinfo/ .
.. Can Local Government Sell Bonds; What Does It Cost.
Daity Data 1/02/2002 - 3/29/2011 Municipal Yield Curve (20-2, 10-2, 5-2)
420
390
360
330
300
270
240
210
180
150
120
90
60
3/29/2011 = 386 - Daily Close of AAA-rated Securities 20-Year minus 2-Year
- In basis points
- 420 - 390 - 360 - 330
300 - 270 - 240 - 210 - 180
- 150 - 120
- 90 - 60
-
I I
300 1 IO-Year minus 2-Year 3/29/201 I = 264 4 300
270 270
240- 240
210 - - 210
180 180
150 150
120 120
90 90 -
60 60 -
30 30 -
5-Year minus 2-Year 3/29/2011 = 114 7 140
-
-
-
-
-
- -
- -
-
- -
140
130
120
110
100
90
80
70
60
50
40
30
20
10 10
I
'M J S DIM J S DIM J S DIM J S
85999 2002 2003 2004 2005 2006 2007 2008 2009 2010 201 1
aopyright 2011 Ned Davis Research, Inc. Further distribution prohibited without prior permission. All Rights Reserved.
See NDR Disclaimer at www.ndr.mmlcopyright.html . For data vendor disclaimers refer to www.ndr.w~endorinfd .
Fear of potential state and local government defaults began to subside during March.
Y 'ost . . 4
FALt MARKET VIEID- CURVES i@i-sT-
The above chart illustrates generic taxable and tax-free municipal security yield levels (as of 3/30/11).
.. .. .
The Housing Market Is Important To Florida . .
Quarterly Datn 3/31/1952 - 12/31/2010 Household Real Estate Ratios
30
29
28
27
26
25
24
23
22
21
Household Real Estate / Household Tangible Assets
76 -
74
72 -
70 -
68 -
66 -
-
Mean = 68.0%
12/31/2010 = 70.9%
Owners' Equity in Household Real Estate / Household Net Worth 22 -
Mean = 18.7%
18 -
17 -
16 -
15 -
30
29
28
27
26
25
24
23
22
21
76
14
72
70
68
66
64
62
22
21
20
19
18
17
16
15
14
13
12
aopyright 2011 Ned Davis Research, Inc. Futther distributim prohibited without prior permission. All Rights Reserved.
See NDR Disdaimer at www.ndr.wmlwpyright.hbnl . For data vendor disdaimen refer to www.ndr.conVvendorinfd
The loss of household net wealth from decreased home values weighs heavily on consumer confidence
and spending.
, ..
The Housing Market Is Important IO Florida . . .
6.4
6.2
6.0
5.8
5.6
5.4
5.2
5.0
4.8
4.6
4.4
4.2
4.0
3.8
3.6
3.4
3.2
3.0
2.8
2.6
2.4
1.9
1.8
1.7
1.6
1.5
1.4
1.3
1.2
1.1
1 .o
0.9
0.8
0.7
1955 1960 1965 1970 1915 1980 1985 1990 1995 2005
EM~A) Residential Spending as a % of Household Net Worth
Gopyright 201 1 Ned Davis Research. Inc. Further distribution prohibited without prior permission. All Rights Reserved.
See NDR Disclaimer at www.ndr.wm/copyright.html . For data vendor disclaimers refer to www.ndr.com/vendorinfo/ .
1 he Housing Market Is lrnportant lo Florida . .
2009
1807
1626
1463
1316
1184
1065
959
863
776
698
628
565
60
50
40
30
20
10
0
-10
-20
-30
-40
-50
-60
-70
70
60
50
40
30
20
10
0
-10
VI
Quarter!v Data 9/30/1990 - 12/31/2010 (Log Scale) Housing Starts vs Demand and Standards For Residential Mortgages
Q4 2010 = 538 In thousands
Builders are very reluctant to put holes in the ground as long as there is a glut of homes to be sold.
Increasing Demand 04 2010 = -8%
Decreasing Demand
:' . .':,:, ' ,:
Net % of Commercial Banks
Reporting Increasing Demand
for Residential Mortgages
NDR Estimates since Q2 2007 Net % of Commercial Banks
Tightening Standards
for Residential Mortgages
At least banks are no longer tightening their mortgage lending standards.
Tighter Standards
h d
Q4 2010 = 8.2% Easier Standards
I I I 1
1995 2000 2005 2010
2009
1807
1626
1463
1316
1184
1065
959
863
776
698
628
565
60
50
40
30
20
10
0
-10
-20
-30
-40
-50
-60
-70
70
60
50
40
30
20
10
0
-10
mpyright 201 1 Ned Davis Research, Inc. Further distribution prohibited without prior permission. All Rights Reserved.
See NDR Disclaimer at www.ndr.comlcopyright.htm1 . For data vendor disclaimers refer to w.ndr.comlvendorinfo/
1 he Housing Market Is lmportant lo filorida 1
Quarterly Data 3/31/1988 - 12/31/2010
Types of Financing for New Home Purchases (as a % of Total)
'Includes houses reporting other types of financing Conventional Financing' 12/31/2010 = 60.0% 92 -
88 -
84 -
80 -
76 -
72 -
68 -
64-
60 -
FHA-Insured Financing 12/31/2010 = 21.5%
27 -
24 -
21 -
18 -
15 -
12 -
9-
6-
.... 12/31/2010 = 12.3% ............... ....... VA-Guaranteed Financing. 13
12
11
10 -
9-
8-
7-
6-
5-
4-
3-
-
,.. - -
. ..... . Cash Financing 12/31/2010 = 6.2% ...... ...... .. .. , ... ..
... . ,. , .. ,. , ................
..* -. 11
10
- -
9-
8-
7-
6-
5-
4-
I I I I I
1990 1995 2000 2005 2010 (FM33E>
92
88
84
80
76
72
68
64
60
27
24
21
18
15
12
9
6
13
12
11
10
9
8
7
6
5
4
3
11
10
9
8
7
6
5
4
\------I
&?Copyright 201 1 Ned Davis Research, Inc. Further distribution prohibited without prior permission. All Rghts Resewed.
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16
The Housing Market Is Important To Florida . . .
80
70
60
50
40
30
20
90
80
70
60
50
40
30
20
10
80
70
60
50
40
30
20
60
'
8
Monthly Data 1/31/1985 - 3/31/2011 NAHBMlells Fargo Housing Market Index and Its Components
3/31/2011 = 17 80 -
- 70
- 60
50
40
30
20
- National Association of Home Buildersl Sales Conditions Good
Wells Fargo Housing Market Index (HMI)
A.&
-
-
-
Sales Conditions Poor
- 90
80
70
60
IV 50
40
30
20
10
- 80
- 70
- 60
- Current Single Family Home Sales 3/31/2011 = 17
-
-
-
- - - -
Expected Sales of Single Family Homes in the Next Six Months 3/31/2011 = 27
- 40
Traffic of Prospective Home Buyers 3/31/2011 = 12
17
See NDR Disdaimer at www.ndr.comlcopyright.hbnl . . For data vendo; disdaimers refer to - www.ndr.mdvendotinfo/ .
Home builders remain very cautious about starting new projects.
According to a National Association of Realtors@ (NAR) 3/21/2011 press release, sales of existing homes and condominiums in Florida rose in February. In information released by Florida
Realtd existing homes sales increased 13% during February with a total of 13,701 homes sold statewide compared to 12,164 homes sold during February 2010. Existing condo sales in
Florida increased 29% or 1,560 units during February 201 1 over the same month last year.
During February, 17 of Florida's metropolitan statistical areas (MSAs) reported higher existing home sales and 18 MSAS rebrted'higher existing condos sales: February marked the third
month in a row that Florida Realtors reported increased year-over-year sales.
, ,. .
,. . . . .,
,. .. ,., , . , , , ,.. . . . . . . , . . . . . . .. -. , , . .. ,. ., ,. ,.... . .. , , .. . ,. ,.... .
FbtWdta&rb
Jrbaovllk
Florida's existing home median sales price for February 201 1 was $121,900, a 2% decrease from the same moth last year. The Florida existing condo median sales price for February 201 1
was $77,300. a 14% decrease from February 2010. Foreclosure and other distressed properties sales continue to downwardly distort the median price.
201 159 31 $171,100 S19opoO -10
122 109 12 $152,500 5146,900 4
1.017 843 21 SlM.300 $142.400 -11
Florida Sales Report - February 2U11
Single-Family, Existing Homes
I RealtorsolCs MdhlStlkdRiec
I I I I I
Autaoad.
--Bndrr*oll
TW
268 239 12 m,Ym S96.m 1
8% 747 19 8137.700 $IW.Mo -11
145 122 19 5151Mo 5167.100 -10
L.tclrd-uima€Ilvm I 284 I 252 I 13 I %3@ I $101,500 1 -18
~
m~lwuvik-*B.v I 562 I 357 I 57 I $87.700 I 5106.400 I -18
bti&UiI 540 I 445 I 21 I $147,- I $191,100 I -W 0Cll.I 294 I 264 Ill I S7SM)o I S9o.W I -17
I -I3 I 2375 I 2P50 I 16 I $111,100 I $128.100 I =-EZzI
Florida Sales Report - February 2011
EXisthgCondominiums
I I I Rwbrsrla Mcdh.s.krRk!t 1
..... , ,.
,. ,
,.
... -. - .- .....
,.
-.
... , ,. ..
.....
,.. , ,
I ., . .. ..... .- . -.
, ..
-
I1n-g iviarket Is Important lo Plorida . . I
Monthly Data 12/31/2004 - 3/31/2011 NAHBMlells Fargo Regional Housing Market Indexes
I I
90
88
86
84
82
80
78
76
74
72
70
68
66
64
62 -
60 -
58 - 14
50 -
48 -
46 -
44-
42 -
40 -
38 -
36 -
34 -
32 -
30 -
28 -
26 -
24 -
22 -
20
18
16
14
12
10
- - - - - -
8-
6-
4 t
Region 3/31/2011
West (-1 17
South (-1 20
Northeast (-1 20
Midwest (-1 12
Builders see little interest among potential buyers. Most
builders do not have access to credit, and worry if they will
be able to meet a rebound in demand when it occurs.
- 90
88 - 86 - 84 - 82 - 80 - 78 - 76
74 - 72 - 70
- 68 - 66
-64 - 62 - 60
- 58 - 56
54 - 52 - 50
- 48 - 46
-44 - 42 - 40 - 38
-
-
-
36
34
32
30
28
26
24
22
20
18
16
14
12
10
8
6
4
I.."..." .............................................. ..I IMJ S DMJ S D'MJ S DIMJ S D'MJ S DIMJ S DIM
,.
m8C) 2005 2006 2001 2008 2009 2010 201 1
Sopyright 201 1 Ned Davis Research, Inc. Further distribution prohibited without prior permission. All Rights Reserved. ,. ,
See NDR Disdaimer at www.ndr.com/copyright.ht,ml . For data vendor disclaimers referto www,ndr.Fmlvendorinfol ..
,.
.,.. .. , ,.
,.-.. ..... ..... ..
.. ........ , , . , , , , , , , - -, ... . ,.. ,
The Housing Market Is Important To Florida 320
02/28/11 Building Permits By Florida Metro Areas
All data in thousands
FLORIDA
Cepe CwaCFort Myers FL
Deltona-DaytoM Beach-Onnond Beach FL
Fort Walton BeachCreshriw-Destin FL
Gainesville FL
JadaonvilleFL
LakeWFL
MiamIi-Fo~i LauddaleMiami Beach FL
' Naples-WcolslandFL ' OcalaFL
' OfiandoFL
Palm Bay-MelboumaTihrsville FL
Panama CiLynn Haven FL
' Pensacda-Feny Pass-Brent FL ' Port St. Lude-Fort Pierce FL
Punta Gorda FL
SatasoQBradenlon-Venice FL
Tallahassee FL
Tampa-St. Petemburg-Clearwater FL
' VemBeachFL
m YTD YTD YEAR
Feb-11 Feb-IO XCHG 2010
Qu -I* 147
4.27 5.59 -24% 30.86
0.15 0.22 -29% 1.18
0.06 0.12 -51% 0.64
0.07 0.04 92% 0.37
0.05 0.07 -37% 0.32
0.40 0.66 -39% 3.38
0.18 0.18 -2% 1.15
0.41 0.52 -21% 3.18
0.13 0.13 1% 0.77
0.04 0.W -32% 0.48
0.61 0.87 -31% 4.18
0.13 0.21 -37% 0.93
0.04 0.03 13% 0.20
0.17 0.30 43% 1.34
0.06 0.07 -13% 0.43
0.05 0.03 32% 0.29
0.22 0.29 -23% 1.70
0.07 0.09 -24% 0.55
0.67 0.67 -1% 4.40
0.04 0.05 -18% 0.31
Source: Bureau of Census. Percent changes are computed from unrounded data.
prepared by Ewmnics Department, NAHB.
NULWmY I TQlAL
YTD rn YTD YTD m YTD YEAR
For the two months of 201 1, most of Florida MSAs posted fewer new building permits than last year for the same period.
he Tourism Market Is Important To Florida . . . I
Calendar Year Visitor Numbers for 2010*
Percent of
VkltoI.8 Tots1 Most Recent Value Change
Total visitors 100.0% January-December 82.6 million 2.1%
Air Visitors 51.8% January-December 42.8 million 3.1%
NorrAQvi 48.2% January-December 39.8 million 1.1%
*preliminary
Quarter Four Visitor Numbers for 2010*
Vlsltors Total Most Recent Value e
Percent of Chang
Total Visitors 100.0% October-December 20.8 million 5.1%
Air Visitors 52.7% October-December 10.9 million 7.0%
Non-Air Visitors 47.3% October-December 9.8 million 3.0%
‘preliminary
itTisitor Volume (in mi~ions)’ Q4 20101 20.81 +5.1%
PI Car Surcharge (in millions) Dec- 1 q 9.2 +9.5%
TD Rental Car Surcharge (in millions) Jan-Dec- 1 4 119.9 +5.9%
ed Tax Collections ($ millions) Oct- 1 q 31.2 +9.4%
Florida’s tourism industry is
expected a great spring
break. Increased gasoline
prices have the potential to
blunt travel to the State.
Smith Travel Research
21
.
22
NSA Unemployment Rate by County for January 201 1 12 Month Change in Unemployment as of 1/31/11
a Ir 1
I
t. . .
f P’
While most Florida counties have high unemployment rates, many of the counties have lower unemployment rates than a year ago.
mi
11.4
87
mo
11.4
121
(07
lal
124
118
101
Hl
L7
1U
11
U
114
121
Ll
1M
l&I
10
11 1
M
1U
82
U
M
114
11 7
78
114
io1
m7
102
1M u
124
1U
112
11I
11 1
104
11o
11.4
l(1
85
112
Id
124
153
(01
14 1
lS2
11 9
121 u
14R mo
112
1Zd
127
01
lad
iai
tin
mi
I2
11 b
Re
B.2
12.5
132
10 8
11 5
10 I
12 0
11 7
11 1
168
I1
11
I4
11 e
12 0
MA
la0
UI
11 1
11 1
16
12
90 u
12s
12 1
00
12 0
io a
ma
$3 i
..
113
14l
I11
I11
7*
122
*O
127
117
11'1
110
138
It 1
114
130
la0
142
104
124
100
94
IU
124
127
e7
117
oa
*a
4
2
Florida Unemployment Rate
Through February 2011 ..
Florida’s unemployment rate decreased to 11 5% during February. Florida’s unemployment rate
still exceeds the 8.9% national rate.
The Florida Labor Market. . . r
1,200,000
1,000,000
800,000
600,000
400,000
200,000
0
Number of Unemployed in Florida
The number of unemployed workers in Florida decreased 3.06% during February.
4 -8:. ,$ oe
*....
. ... .. .. ..
3.C
.. .
09 8 4
Through February 2011
,.
, ,. .. , ,. ..
,.
.. .. , ,. , .... . ,.
.. .. . ,. .... , ,. , ,.
Florida Labor Force
9,400,000
. .. .. .. .. ..
9,200,000
. .. ..
9,000,000
8,800,000
8,600,000 ..
8,400,000
'. . .
I.
8,200,000
8,000,000 11,111111011,1111 ,,,,,,,,,,,,,,,/,,/,,,((,((,,,,
I -Labor Force -Enployed I
ased 0.25%.
The Florida Labor Market.
Florida Metro Unemployment Rates
North Port-B randento n-Sarasota
't Lauderdale-Pompano Beach-Deerfield Beach
Nest Palm B each-Boca Rat0 n-Bo ynto n Beach
Tam pa-St . P etersburg-Clearwater
Tallahassee
Sebastian-Vero Beach
- I -- -I---
Punta Gorda
Port St. Lucie-Fort Pierce
Pensacola-Ferry Pass-B rent
Panama City-Lynn Haven
Palm BayM elbourne-Titusville
Orlando -Kiss im mee
Ocala
Naples-M arc0 Island
-- I
M iami-Fort Lauderdale-M iami Beach I
Lakeland-Winter Haven
Jacksonville
Gainesville
Fort Walton Beach-CrestviewDestin 1
I
Deltona-Dayto na B each-Ormond Beach -
I Dec 2009
I Dec 202)
I Jan 2011
I Feb 2011
I I I I
Capecoral-Fort Myers
7% 8% 9% 10% 11% 12% 13% 14% 15%
During February, most of Florida's metro areas showed decreases in their unemployment rates.
Inflation.. 28
3.4
3.3
3.2
3.1
3 .O
2.9
2.8
2.7
2.6
2.5
2.4
2.3
2.2
2.1
2.0
1.9
I .8
1.7
1.6
1.5
1.4
1.3
I .2
1.1
1 .o
0.9
0.8
0.7
0.6
0.5
0.4
0.3 t
-
-
5-Year Ahead Inflation Expectations
2/28/2011 = 2.9%
(-) J IO-Year CPI Inflation Expectations
2/28/2011 = 2.2%
(-1
Implied Inflation
(IO-Year Treasury Yield (3.6%)
minus IO-Year TIPS Yield (1.2%))
2MW2011 = 2.4%
(-1
&urns: ReuiersUnjversiiy of Michigan Surveys of Consumers and
Research Department, Federal Reserve Bank of PhiladalphiaC3urvey of Professional Forecastem
3.4
3.3
3.2
3.1
3.0
2.9
2.8
2.7
2.6
2.5
2.4
2.3
2.2
2.1
2.0
1.9
1.8
1.7 - 1.6
1.5
1.4
1.3
1.2
1.1
1.0 - 0.9
- 0.8
- 0.7
- 0.6
0.5
0.4
0.3
-
-
-
-
-
-
-
-
-
1""'"'""''''~'""1'""1'""1''''' ,,, , I"""""'"'"'""'., '
2003 2004 2005 2006 2007 2008 2009 2010 201 1 3725A) 1998 1999 ZOO0 2001 2002
@.Copyright 201 1 Ned Davis Research, Inc. Further distribution prohibited without prior permission. All Rights Reserved.
See NDR Disclaimer at www.ndr.comlcopyright.html . For data vendor disclaimers refer to www.ndr.comlvendorinfo/ .
m29 Debt Lomposition.. .
. . *.
Composition of Domestic Nonfinancial Debt
12/31 /2010
Municipals
OVHr (Wnk Loans.
ConarmrCndH
CP Ob.) Y ConarmrCndH
12/31 /2000
Municipals
Numbers may not add to 100% due to mundii
wght 2011 Nmi Drr& Re6earch. Inc. Furhr dkthbutkm pr&iMW without prior prmlular. All Rlphtl Rsumed.
Sge NDR Dlsdalmw at wm.ndr.mm/mpyrQht.bl . For deh wndu di.dalnmrs mbr lo wm.ndr.cadw&ainfol
rest Rate Forecast
RETURN BOX SCORES - - 200:
4.88% 10.92%
6.95% 12.16%
7.68% 22.65%
10.8% 18.27%
Percent Change 2011 From 2010 Wear-OvePYear) Total UNts 2L, 2011
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Real GDP Indust. Dis.Pers. Personal Non-Res. Cop Treas. Hming Atdoh Net
(Cluind) GDPPrice NomGDP Cmmner Pmd. Income ComExp Fkh. Pmfits Treas. Notes10- Unempl Stads LightTmdc Expnts
(zwS$) Index (Cur.$) PdceIndcx (TotaD (ZOOS$) (2005s) (2005S) (Cur.$) Bills3-ma Year Rate (Civ.) (MIL) Saks(MIL) (ZOOS$)
Top 10 Avg. 3.4% 2.0% 5.2% 2.8% 5.4% 3.0% 3.5% 10.2% 11.3% I 0.4% 3.9% 93% I 0.73 13.5 I -379.1
February Avg. 3.2% 1.4% 4.6% 1.9% 4.4% 2.7% 3.2% 8.8% 7.9% 0.3% 3.6% 9.3% 0.67 13.1 -4332
2008 0.0% 2.2% 22% 3.8% -3.3% 1.7% -03% 0.3% -16.4% I 1.4% 3.7% 5.8% I 0.90 13.2 I -504.1
2010 2.8% 1.0% 3.8% 1.6% 5.8% 1.4% 1.8% 5.6% na I 0.1% 3.2% 9.6% I 0.59 11.6 I -421.8
rercenr uange 2011 From 2010 (YearOverYear) Average rur LO12 1 Om1 UNRi LUlL LUIL
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Real GDP Indust. Dis.Pem Personal NorrRes. Corp. Treas. Housing Auto& Net
(Chained) GDPPdce NomGDP Cmmr Prod. Income Com.Exp FkInv. Profits Treas. Notes10- UnempL Stads LightTmdc Exports
... ... I
I (ZOOS$) Index (Cur.$) PdceIndex (Total) (2005S) (2005S) (2005S) (Cm.$) B
ToplOAvg. 3.8% 2.3% 5.8% 2.7% 5.3% 3.4% 3.5% 10.6% 9.6% I
February Avg. 3.3% 1.7% 4.9% 2.0% 4.1% 2.4% 2.9% 8.1% 6.2% I
32 .. ..
Pennant Management, Inc. ("PMI") publications are designed for sophisticated investors who are aware of the risk in securities' investments and market forecasting. This analysis is - -
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Gregory Beard, BA, JD
Senior Vice President
gbeard@greatbanctrust.com
Mark A. Elste, CFA, BBA, MBA
President and Chief Investment Officer
melste@pennantmanagement .com
Jay B. Kaun, CPA, BS, MS, MBA
Senior Vice President
jkaun@pennantmanagement .com
630-810-4527
414-359-1446
414-359-1447
Scott R. Harding, CFA, BBA, MBA
Senior Vice President
sharding@pennantmanagement.com
414-577-4380
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Senior Vice President
jculhane@greatbanct rust.com
630-572-5136
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Senior Vice President
jhabanek@pennantmanagement .com
414-359-1443
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Assistant Vice President
dtrotter@pennantmanagement .com
414-577-4373
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Senior Vice President
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414-359-1456
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Senior Vice President
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414-359-1442
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Officer
cmullins@pennantmanagement .com
414-359-1045
SALEM TRUST
c QYPANY
The Safety & Soundness of Investor Assets
Qualified Custodians
Largely as a response to the Ponzi schemes orchestrated by Bernard Madoff and others
that came to light in 2008 and 2009, the Securities and Exchange Commission
amended the Custody Rule contained in the Investment Advisers Act of 1940 (the
“Act”). Among other features, these amendments, which become effective in 2010, are
intended to provide additional safeguards for client funds or securities that are deemed
to be in the custody of a Registered Investment Adviser (an “Adviser”).
The Act requires all Advisers to protect client funds and securities that are in their
custody. The term “in their custody’’ includes being in possession of client funds or
securities, having the authority to withdraw funds or securities from a client’s account,
and having the ability to act in any capacity that gives the Adviser legal ownership of,
or access to, the client funds or securities.
The Act goes on to require Advisers who have custody of client funds and securities to
maintain such client assets with Qualified Custodians who must hold the client funds
or securities in an account either under the client’s name or under the Adviser’s name
as agent or trustee for its clients. Qualified Custodians include the types of financial
institutions that clients and Advisers customarily turn to for custodial services,
including trust companies, banks, savings associations, registered broker-dealers and
registered futures commission merchants.
Prior to these amendments to the Custody Rule, Advisers generally were required to
maintain client funds or securities with a Qualified Custodian whom the Adviser
reasonablv believed sent account statement to the clients of the Adviser at least
quarterly. The Adviser had the option of sending statements directly to clients if the
Adviser agreed to undergo a surprise examination by an independent public
accountant on at least an annual basis. Now, under the amended Custody Rule,
Advisers with custody of client funds or securities must undergo an annual surprise
examination of client assets by an independent public accountant. Further, clients
must now receive, no less frequently than quarterly, account statements directly from
the Qualified Custodian rather than from the Adviser. It is believed that requiring
delivery of account statements directly to the client by Qualified Custodians will
provide greater assurance of the integrity of the account statements.
In addition, Advisers now have an obligation to perform some level of investigation
into the statement processes of the Qualified Custodian when the Adviser relies on the
Qualified Custodian to deliver account statements. Receipt of duplicate statements by
the Adviser is one example of how this obligation may be satisfied. There are specific
exceptions to the statement delivery requirement under the Custody Rule related to
pooled investment vehicles.
Trustees of a municipal retirement plan must ensure the safety of the plan’s assets.
The FPPTA educational curriculum teaches that a system of checks and balances
based on a separation of duties and responsibilities coupled with independent
reporting is the best structure to ensure the safety and soundness of a plan’s assets.
Trustees should understand how the assets of their plan are maintained and
controlled. Asking questions such as those that follow would be helpful in the effort to
achieve that understanding: Are the plan’s assets controlled in one location? Are
there strict separations of duties and accurate reporting on at least a quarterly basis?
Who is responsible for reviewing and comparing statements? To whom and how often
are the results of the review and comparison of statements reported? Trustees who
understand the answers to these questions will be prepared to ensure the safety of
their plan’s assets.
.._ . .
..,.. ..... ...... .. ............ .. *. .. .. ,-, ,. .. ................ ,.
, .- ,.
-, .. ,. ........ .. .,
.. .. .. ,.
.... .............
,. .-.. .. .. I. .......... .... _.. *. .. ,. -- . .
,.
.-- ,. ... .. ... ....... .. -., .. ,.. ........ ,.
..
1
I
I- 1
T
L r
I-A dOj NVld 01 IWII
L I--
L A
....... ......... - .. .. ..
I
I
by Bradley K. Rinsem
President & CEO, Salem Trust Company
1
r
The guardian of your plans'assets is your custodian.
.__ Despite the high ethical standards of the majority
of reputable investment firms', this last year exposed
many grievous investment frauds to an increasingly
uneasy public. Bernie Madoff was the year's most
prominent sad story, having been accused of commit-
ting one of the largest financial frauds of all time.
2008 also saw the conviction of Norman Hsu,
who promoted an $80 million hoax. Still under inves-
tigation are cases against Tom Petters, who allegedly
absconded with over $3.5 billion of investor assets,
Arthur Nadel, the Sarasota, Florida based money
imanager charged with the pearance of $350
million invested with him, Schrenkler, the
Indiana based hedge fund was arrested
in northern Florida regarding the whereabouts of over
$50 million of investor money, hd Robert Stanford,
who is charged with, defrauding investors of over $8
billion by utilizing high yield certificates of deposit held
in the Caribbean island nations of Antigua and
Barbuda.
cases was an independ-
ent custodian.
9 .,: '
.= >
A similar modus operandi tied together these
recent activities. Some money managers paid out
money from new investors to old investors, some
falsified the returns or recorded nonexistent securities
during these schemes. It is nothing new to promise
stellar returns to investors. Investment schemes affect
investors of all kinds, in all walks of life. The ruses have
ranged in degrees of elaborateness, but the large scale
losses recently suffered by Madoff's investors included
some normally very astute people, many of whom
reside here in Florida.
Because of recent media exposure of these frauds,
many are now learning the role a custodian can play
in protecting their invested assets from phantom
recordkeeping. In my mind there is no doubt that a
custodian can dramatically reduce the risk of loss
resulting from deceptive practices. Let us start by
reviewing the basics.
For our purposes a custodian is an organization
defined as separate and independent from a money
manager, and segregates the assets of one client from
another on its records. Florida statutes recognize the
importance of this basic principle and require fire,
police and general employee pension funds to use an
independent custodian. Not every state has the same
mandate. After reading about the conviction and
allegations above, I am sure the danger that could
occur is perfectly clear to you. A trust company serving
in the capacity of custodian also serves as a corporate
fiduciary. In this role, the trust company adds another
layer of checks and balances which contributes to the
highest level of protection for the client. This results in
a system where multiple parties discharge specific
independent duties that are interdependent in ensur-
ing the safety and soundness of the client.
Independence and separateness are not the only
qualities of a custodian that should be sought out.
Accuracy, timeliness, its commitment to investing in
technology, safety and soundness are additional
qualities you should look for in your custodian. These
are qualities a custodian arrives at intentionally, not
accidentally. Proactive safeguards, back up systems
and the financial well-being of the custodial company
all factor as parts of an overall line of defense against
fraud, errors or omissions.
Not everybody understands the daily tasks
charged to a custodian, or the challenges presented
by changing technologies and the ever evolving
complexities of the investment marketplace. You need
objective data on which to base your opinion of a
.. .. ,. ..
B
t
G ua rd ia n Continued from page 49
custodian's suitability.While it's never possible to know
everything about your financial service providers,
I recommend asking your custodian some very
comprehensive questions. These questions are not
easy to answer,and I think they provide a picture of the
requirements for what needs to be in place between
the time your investment manager makes a trade and
the time when you receive your statement. I will be
speaking on the topic of a custodian's safety and
soundness at the upcoming FPPTA School in Bonita
Springs on October 4-7,2009, but if you would like a
copy of my custodial services questionnaire before
then I will be happy to share it with you. You can reach
me toll-free at 877-382-5268 or e-mail me at brad.
rinsem@salem trust.com.
1.- 1 We Learned?
By Fred Nesbitt
Former Executive Director, NCPERS
When our pension plans came under attack, we
had to scurry around and play catch-up for we were
behind the curve. The opponents came after us in 36
states - starting with California, Alaska, and Colorado.
Hard work and a little luck allowed us to win two out of
the first three battles, but we realized we needed to be
prepared.
What did we learn from these attacks? First, we
could not sit back and wait for our opponents to attack
our plans. We needed to play good offense as well as
defense. We needed to be ahead of the curve by ad-
vocating for our defined benefit plans with DC add-ons.
Second, we had to educate, educate and educate
more. Those needing education included trustees,
the media, public officials, plan participants and
the general public. FPPTA does an excellent job of
educating trustees. FPPTA has held town hall meetings
across Florida to educate more leaders on the merits
of defined benefit plans. There is still much to be done
-trustees have to be advocates on behalf of their plans
and share their knowledge and information. That
doesn't mean issuing an annual report that "no one
reads or understands" or passing the buck off to the
plan administrator or actuary. Trustees need to be out
front taking and advocating the benefits of having a
defined benefit pension.
Lastly, we have a great story to tell. For over 150
years, public defined benefit plans have operated
In conclusion, even though there is no absolute
guarantee of protection from a financial fraud, the
retention of a well-qualified custodian, investment
manager, consultant, actuary and legal counsel and the
checks and balances these firms provide will go a long
way in deterring wrongdoing. Based on my decades of
service to the institutional investor community, I am
confident the care in choosing and maintaining a well-
qualified team will become one of the most important
uses of your time.
I Institutional money managers are governed by the U.i
Securities and Exchange Commission, and most of them
also practice rigorous self-regulation based on codes
of ethics that, for instance, can be found in Certified
Financial Analyst Institute guidelines.
.. ..
successfully, providing retirees and survivors guaran-
teed benefits. The best part is over 75% of the funding
comes from sources other than the taxpayers. The
intangible benefit is the recruitment and retention of
qualified employees and outstanding government
services. We need to talk about our investment and
the returns. My Pennsylvania state plan just
announced that last year, "SERS' investments earned
$5.2 billion dollars!" That's money taxpayers didn't have
to contribute.
I hope we have learned. The pressure on our plans
was reduced when the markets were doing well
and funding levels increased. However, the recent
downturn in the markets has made our plans bulls' eyes
again for attacks. A recent article in the Washington
Post talked about the problems public plans are facing
as a result of the financial collapse. It was entitled,
"Downturn Clobbers Public Pension Funds." The
article wasn't too negative; however, the posted
comments from readers should scare us all.
These comments included. "The time for govern-
ment perks such as taxpayer financed pension funds
and taxpayer financed health plans are long past."
Another reader asked,"Why do public sector employ-
ees get pensions to begin with?" And finally, one
respondent said, "The concept of a'defined pension'is
dead. It is now dog eat dog."
Have we learned our lessons from the past attacks?
I hope so - otherwise citizen comments like those
above will ensure the end of our defined benefit
pension plans.
THE PENNANT EXPRESS
I
A QUARTERLY INVESTMENT STRATEGY OUTLOOK December 31,2010
Stocks made an important cyclical low on July 2. Subsequently,
the S8P 500 has rallied approximately 24% as of December 31,
2010.
As we enter 201 1, bullish forecasts calling for further gains in 201 1
abound. Universal bullishness usually means that at least a near
term correction is likely.
Lonaer term, after a brief market pullback early in the year, we
1.6
14
2.2
20
1.8
1.6
1.4
11
0.8
0.6
0.4
2
-
-.
- 5m
-480
-440
ShP m 1a.Yrr robl R.bJm sm ~
4110 12n1Ro10-14m
400- -400 - 360 3m -
310 - -3m
Bo- -ua
uo- -7.m
200 - -ml
- im im - - im im -
80 - -10
40- r- BLl0V.r robl -40
0- 11131m10.24 0% 0
4- -4
-
440-
uo-
400-
360 -
310 -
280
uo-
ua-
-
im ~
110-
40-
0-
40-
P~ZBS~EEPPPP~~:
e A cyclical rise in marketdriven interest rates appears to be underway.
Federal Resetve monetary policy remains very accommodative, but
likely to begin to be reigned in by year end.
---- - &WbtdZOllW~.~F~-pd*uW*apapbn Mew
w
hm-. -*aw-mu-d mu--n*.tm -*-
Economic growth and employment will be positive during 2011.
However, the persistent headwinds will limit gains. While the
manufacturing and industrial sectors are leading the economic
turnaround, weak housing values will remain a major drag on - believe the current cyclical rally will likely carry stocks higher over
the next quarter. However, we believe the U.S. stock market
remains in a secular bear market that will reassert itself in the
second half of 201 1.
financial institutions and consumers for another year.
TEL (414) 359-1044
PENNANT MANAGEMENT, INC , IS A SUBSIDIARY OF US.
FIDUCIARY SERVICES, INC., AN EMPLOYEE-OWNED COMPANY
www.pennantmanagemen1. com PENNANT
MANAGEMENT
The Outlook
THE STOCK MARKET
Many of the themes we wrote about in last quarter’s
Pennant Express continue to be relevant and resonate
with investors. Stocks made an important cyclical low on
July 2, 2010. Subsequently, the S&P 500 has rallied
approximately 24% as of December 31 , 201 0.
We believe much of the market‘s second half bounce can
be attributed directly to an improvement in investor
psychology. One could argue that many of the
fundamental underpinnings of the economy have not
changed dramatically since June, but despair has been
replaced by hope. Fears that the economy would
experience a double dip recession have now faded to
black. What event changed investors’ attitudes and
helped spark a move higher in so many different assets?
We believe the primary catalyst for the market‘s advance
was the Fed’s decision to purchase $600 billion in
Treasury securities by June, 2011. By attempting to
lower the interest rate investors earn when holding stable,
safe investments like Treasuries, the Fed is hoping
investors will decide to purchase riskier assets in an
attempt to increase the return on their investments. Many
economists are skeptical that another round of
quantitative easing will have a beneficial impact, but
investors voted with their money and bid up riskier assets
I such as stocks nevertheless.
According to Barron’s, only 21% of mutual funds
outpetformed the S&P 500 in 2010. The fourth quarter
was a particularly tough one to navigate for most money
managers. The stock market was able to shrug off some
disappointing employment data and methodically move
higher. The relentless nature of the advance did not give
investors the luxury of using brief pullbacks as buying
opportunities. Thankfully, the decision to maintain a fully
invested position in most accounts allowed our clients to
capture nearly all the returns posted by the stock market.
It is always rewarding when the market moves
significantly higher and we are able to capture that move
for our clients.
D.iryLkata 12/01/1995 - 1/w/2011
S574A) NDR Crowd Sentiment Poll - Transitional Mode Basis
ocOpyighl2011 Ned Davis Rsseanh. Im. FuUar dMbution pmMM(al rri(h0Ut prior PeImiESkm. All Whb
See NDR Dktaimer fhw.ndr.mmlmpyight.hhr+or data vendor disctzhm refw*.ndr.cankdrh
As the new year begins, the stock market is near its highs, and bullish forecasts calling for
further gains in 201 1 abound. Bloomberg conducted a poll of the chief market strategists for 13
of the largest banks in the world. All 13 strategists called for the market to advance and finish
2011 higher. The December 17, 2010 USA TODAY front page headline read, “5 Wall Street
heavyweights say it’s time to GET BACK INTO STOCKS.” These are merely two examples of
the positive stories that are prevalent in the media today.
. THE STOCK MARKET, ctd. - ._
.. * . ,:: g '
1 . .,k
When the majority of investors are pessimistic and nervous, it often leads to
a buying opportunity. That was certainly the case in the third quarter of
2010, as low expectations set the stage for the powerful global stock market
rally that ensued. Unfortunately, we are now dealing with almost the
opposite situation-- an environment where nearly everyone is bullish. As
the chart on the previous page shows, universal bullishness of this
magnitude usually means that at least a near term market correction is
likely. We believe that stocks will in fact take a breather and retreat a bit in
.. January-J . '. ' .
Even though there are compelling reasons to believe the market can make
its way higher in 201 1, caution is now warranted over the very near term.
In addition to our concern that investors are too optimistic and have become
complacent, a new earnings season is just around the corner, and
expectations are extremely high. We have written several times before
about our belief that companies are eventually going to have to show sales
and revenue growth in order to push stocks higher. Thus far, better
earnings reports achieved via cost cutting have been enough to appease
investors. Nothing says that it cannot happen again, but we think investors
are likely to be disappointed this time around if the earnings improvements
. are . . .. gained primarily through cost cutting.
.*. . +..
' Our best forecast is that a January pullback in stocks would most likely give
way to the resumption of the global cyclical bull market that we have
enjoyed since March of 2009. We would not be surprised to see stocks
move another 10% higher from their 2010 closing levels. However, we
expect the cyclical rally to meet its demise sometime during the second half
of 201 1. We believe that a major market correction looms, and we assign a
very high probability that it will occur later in 2011. We currently see two
potential catalysts that could cause a significant decline: the sovereign debt
crisis in Europe and rising interest rates. .'. ..
Regarding the European debt crisis, we think the consensus has shifted
and now adopts the view that this problem is contained and is solely a
European problem. It seems to us that few investors think the crisis will
spread and impact countries outside of Europe. Unfortunately, we believe
the problem is far from resolved and is likely to spread beyond Europe. We
fully expect to see the issue reemerge in 2011 and rattle investor
confidence. ...
, .. , . ., . , ,.. , - -- .. .. .. ....,' ,I .E:,-..:' ." '... .. . E, _. *. : ..
.I* I V
S8P 500 Cycle Composite for 201 1
I h 4 64
sx ~
56
'4
52
50 -
48 -
46 -
44 -
42
40 -
38
36 -
14 -
32 -
30 -
- - -
-
-
2n -
26 -
24 -
j6
Significant
decline in 2nd 1 ;; \ half2011?
- 46
- 41
- 42
~ 40
- 1x - 16
- 14 - 12 - 10 - 28 - 26
- 24
I0
08
04
I) 2
- 22 - 20 - in
~ 16 - I4
- 12
- IO - I18
- I) 6
- u4
(! 2 -
The Outlook
THE STOCK MARKET, ctd.
The negative effect that rising interest rates
could have on the stock market are best
summarized by Tim Hayes, Chief Investment
Strategist at Ned David Research.
“If investors begin to worry
about too much growth (inflation) rather than too
little growth (deflation), then rising interest rates
might threaten to halt the global bull market.
Investors will be likely to see rising bond yields
less as a positive reflection of economic growth
and more as a negative sign of increasing
inflation. For the U.S. market, stocks could start
to respond negatively if the 10 year Treasury
yield climbs above 4%, the rate reached before
the market peak in April of 201 0.”
As we look ahead to 1Q 2011, our opinion
remains that stocks are stuck in a secular bear
market that began in 2000. We believe the next
few years will continue to see the U.S. economy
wrestle with structural unemployment. We also
think most consumers will continue to retrench
and pay down debt.
Although trying to predict what the market will do
in the year ahead is a fun exercise, all forecasts
must be used with caution. Rather than taking
our 2011 forecast as gospel and stubbornly
clinging to our thesis, we will stay open minded
and flexible, focusing on our trend based models
and trading indicators. As investors learned
once again in 2010, stocks can, and often will,
jump significantly higher even while in the midst
of a secular bear market. We try hard not to
have too many preconceived notions that would
cloud our investment decision making process
and cause us to fall out of harmonv with the
prevailing market action.
4
321 -
299-
n6
251
233 -
218 -
2001 -
186 -
172 -
159 -
146 -
133 -
125 -
115 -
- -
I Irn c
108
106
lo(
102
100
98
96
94 n
90
88
72
70
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-40 - 38 - 36
-
-
-m
-m
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-n
I ine uutiooK
THE ECONOMY
The evidence is clear, the economy is growing and that growth should continue
throughout 201 1. However, growth will not be as strong as previous recoveries.
Recent economic news is promising, indicating that the expansion has moved to
a balanced and maybe sustainable stage. For instance, unemployment claims
have been in a steady decline since October, job growth has turned positive,
consumer spending has perked up, GDP growth remains positive, and
manufacturing and industrial activity is leading the recovery’s momentum.
The risk for 2011 is the sustainability of this growing improvement in the
economy. Our economy remains on government-assisted life support. So far, the
Fed has pumped so much liquidity into the economy that some analysts say the
Fed has created an illusion of prosperity. Much of this excess liquidity has
flowed into the equity markets and into corporate balance sheets. The rise in the
market value of equity markets has increased both individual and company
confidence, a major objective of the Fed. The Federal Reserve hopes that the
economy can continue to grow itself out of its problems.
While we are optimistic that the recovery should continue to broaden into 201 1,
we are realistic that the economy still battles the same headwinds faced during
2010. These headwinds include a high unemployment rate, a weak housing
market, weak state and local governments, and relatively tight bank credit. A new
headwind is beginning to blow. We cannot forget the recent rise in oil prices
above $90 a barrel and the negative affect on consumer spending.
These headwinds work together to limit growth. For instance, the considerable
wealth destruction from the housing meltdown has worked through the economy
in a number of ways. The most obvious has been through the standard wealth
effect. Consumers reduce spending in response to a negative wealth shock.
Lower home values feeds through the credit channel as impaired home collateral
exacerbates the tightness in the credit market and makes it more difficult to
bomw. This, in turn, feeds back into the economy through lower spending and
lower investment, both in capital and labor.
The charts to the right highlight some of the current characteristics of the
prolonged weak employment market. The average worker has been out of work
an average of 22.4 weeks. One in six workers are under-employed, that is
unemployed or working part-time and wanting to work full-time. The chart on top
of the next page tells an important story. The Beveridge Curve tracks the
relationship between jobs listings against the unemployment rate. Normally, jobs -- yment rate increases with a slowing economy.
,. .. - -.,
;*!, ....- ,.. ,
I *. .. .. .. .. .. li
,.;-.,.‘: ,...,<. ,.-... , - ..:
r ..! L..
/ /! of- CMh Lbx F- R* d M.rpMI- Wm
I2r3lrMlO=lE? 1 in 6 underemployed or unemployed
4.0
Jobs listings increase and the unemployment rate decreases when the economy
expands. As we pointed out in the previous Pennant Express, that relationship
broke down several quarters ago. The top right chart shows the current Beveridge fi Curve Jobs listings have been increasing for several quarters but the #
unemployment rate has been stubbornly stable. Some believe that the increase in # 2,5 new job postings is a sign that the job environment is improving. However, the lag 2
time is too long which leads others to believe that those unemployed do not have 2.0
the skills needed to fulfill the requirements needed for the available jobs.
3.5
3.0
.....
,. ..
Increasing want ads but no meaningful drop in the
Recenldae
1.5 !
3.5 4.5 5.5 6.5 7.5 85 95 10.5'
Un*npioyrn*nt Rat. Lackluster job formation is a formable headwind as businesses have been slow to
hire workers. Whether large and small businesses are worried about the future or ~Havr~.wypn.LmGuReudl
are not willing to take on added risk, the economy suffers from low new job E 1 Cmd.M'F"UM 137
92
70
formation. The inability or unwillingness of small businesses to hire during the past
two years has been commonly cited as the main reason for the jobless recovery.
This notion is not unreasonable as about 45% of the iobs are in establishments with
1; 1 ; : :: :
Increasing oil prices act as an indirect c
on consumers resulting in decreased
consumer spending
fewer than 50 employees. New research suggests that the employment problem is
not small business hiring that matters most to a labor recovery, but rather, it is new
business formation. According to a Bank of America report, start-ups account for
about 20% of new jobs. In the early recovery stage, new start-ups account for as
much as 40% of new job growth. During the current recovery, new business
formation has been painfully slow. The slow pace of new business formation can be
partly explained by the headwind of tight credit standards. While large business can
tap the capital markets for financing, small and new businesses are highly
dependent on financing from banks, which have tightened their credit standards
over the past few years. Reports suggest that tightening has ceased and that some
banks have started to loosen their credit standards. Nonetheless, lenders are most
willing to extend credit to the best borrowers, those with a history of revenue growth ... and a high likelihood of continued profitability. ...
Now tie this back to the weak housing market headwind. Small business owners
often use their home as collateral against loans. A recent study from the Cleveland
Fed looked at the link between home prices and small business finance. Based on a
variety of surveys from the National Federal Independent Business, Small Business
Association, and others, the Fed found that more than one fifth of small business
Owners borrow against the value of their home to obtain financing. With home
prices down more than 30% from the peak and mortgage standards tight,
particularly for home equity loans or second liens, this method of financing is
virtually shut down. So without sufficient collateral for a loan to start up a new
business, new business formations suffer and impair the job recovery. In addition,
. 36 36 -
31 -
27 -
21 -
18
1s -
13 -
12 -
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-
24
10 -
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- ,. ... . c. . : *.:. \. . '
The Oiitlnnl
start-ups are more prone to borrow from small banks, which have been slower to
recover than the larger commercial banks.
Fortunately, credit conditions have started to loosen modestly over the past few
months. However, the demand for loans continues to be weak. The New York Fed
received only some or none of the credit requested. In addition, there was a
difference depending on the type of credit desired. The denial rate for a business
found that 59% of small business owners in their survey had applied for credit
during the first half of 2010. The survey found that more than three quarters
loan was 69%. The denial rate for a new business line of credit was 63%. But, the
denial rate was only 30% for the financing of a vehicle or equipment since there is
did not make it more likely to receive new credit. Many of the respondents stated
that they did not apply for credit because they did not expect they would qualify in
hard collateral behind the loan. The survey also found that previous relationships
I
Banking data prior to 3/31/2010 adjusted by NDR
to reflect FAS166 and FAS167 changes.
+NmbVIIDr-OOmO r4m*~rol-wm~~ 8g8888888800 sf: mmmmmmmmm
r4r4r4mmr4mrir4r4mr4 this environment. Gerall, the survey showed that the decline in credit is mostly al(Bo,,o)
function of weakened applicant quality and perceptions of limited credit availability,
rather than a lack of loan demand. This contrasts with the Senior Loan Officer
Survey, which shows demand for credit remained weak.
Without free-flowing credit, new businesses and jobs cannot be created. Credit
availability will improve during 201 1 as home price declines moderate. The vicious
cycle between housing, the credit market and the labor market, may be slowly
turning upward. We can continue to expect improving but lackluster job recovery
this year. The pace of new job growth will increase later in the year as home
values stabilize and banks lend more. However, more time is needed to recover
the jobs lost during the recession.
The Fed and Treasury have managed the recovery by pumping liquidity into the
economy. As mentioned earlier, the positive effects are a firming stock market and
increased consumer and business confidence. Now is the time to plan for the
consequences of a falling dollar and increased inflation. While the inflation
backdrop is currently weak, the cumulative effects of a weak dollar policy and
excess liquidity will eventually produce unwanted inflation. The headline inflation
news may seem under control, but the inflation rate for the things we actually buy
is running more than 5% annually.
3Y
36 36 Manufacturing activity is solid. *cOrn(yCo"Eadr. Nobel Prize Winner Paul Krugman shared some of his economic wisdom in a
~
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58 - 56
-54
52
-M
-48
-46
-44 - 42
38 1SVR.pa.m- 38
12/31rm0(0-57 I INW
-
January 2, 2011 NEW YORKTIMES article. He wrote, "Even though we may : 1
finally have stopped digging, we're still near the bottom of a very deep hole". His i: :
article went on to suggest that the markets may be overreacting to the recent good 1
economic news. We feel the worst is over, but the economy has hurdles to 1
overcome before economic growth becomes more self-sustaining. Growth will be - sovo. ,-~-- positive but uneven over the next year.
4a
*dtY - -40 - -
WII) im im zcca mi aun mi zm am m am mol ma) mo
The Outlook a
BONDE
THE BOND MARKET
The fixed-income markets ended 2010 on a down note as prices, which move
inversely to yields, fell to multi-month lows as market participants became more
optimistic about U.S. economic growth in the new year. Many economists have
raised their economic forecasts for 201 1, believing that the Federal Reserve's easy
monetary policy and the tax cut extensions approved by the government last month
are likely to deliver a double boost to the economic recovery. U.S. Treasury and
agency securities were the worst performing sectors within the bond market in the
last few months of the year as investors parted with low-risk investments, opting
instead for riskier assets. Higher interest rates weighed heavily upon total returns
across all bond market sectors, but higher-risk spread products generally
outperformed Treasuries.
Credit market yields moved materially lower throughout most of the first three
quarters of 2010, with low-risk Treasuries leading the way, in response to
uncertainty about the sustainability of the economic recovery, the sovereign debt
crisis in Europe, and a very expansionary Fed monetary policy. However, yields
reversed that course, and proceeded to jump sharply in the fourth quarter as the
aforementioned concerns diminished and expectations have mounted that the Fed
will not need to provide further monetary accommodation after the current round of
Quantitative Easing and its balance sheet expansion ends in June, 2011 (see
Federal Reserve Policy section). The Fed is currently engaged in a $600 billion
open-market bond purchase program, a form of quantitative easing, which has been
nicknamed QE2. One of its objectives was to artificially and further suppress
interest rates in an effort to increase spending and investment. It is interesting to
note that bond yields declined in anticipation of the initiation of this program,
bottomed within days of its announcement, and have since risen sharply. It was a
classic example of buying on the rumor and selling on the news.
Yields had overshot to the downside when the ten-year note fell to 2.33% in
October. The difference between the fair value yield on the ten-year note (below
right) and its actual yield had reached an unsustainably high level. The recent rise
in yields have brought actual yields more back in line with their fair value levels. So,
in one sense, the rise in yields has simply normalized them. This is one reason why
we do not believe that significantly higher yields are imminent within the very near
term. Also, bond market sentiment (top right, lower clip) is currently suggestive of
an oversold market. We, therefore, believe that yields are likely to remain within
recent ranges in the very near term, but that they will trend higher throughout the
year.
135 L
124 ~
114 -
1M -
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89 ~
82 -
58 -
. . . . . . ,
.. I
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7.
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4:
3.1
3.8
3
2.1
2: -
.. -- The Outlook
1 ..
THE BOND MARKET, CTD.
Interestingly, the yields on both the two and ten-year Treasury notes fell by 54
basis points in 2010, resulting in no change in the slope of the benchmark
yield curve. This apparent stability, however, masks the considerable yield
volatility that occurred throughout the year. For example, the yield on the
benchmark ten-year note began the year at 3.84%, fell to 2.33% in October,
and then ros8 to 3.56% in mid December. The rise in yields on bonds from
the lows in October to the highs in mid December caused their negative total
return for that period of time to rank among the worst five such periods within
the past 30 years.
Risk premiums, or yield spreads, within the bond market (top right) remain
low. Nonetheless, investors' appetites for risk and hunger for yield are likely to
cause them to narrow further within the near term. However, a renewed flight
to quality could occur at any time, which would favor Treasuries. We,
therefore, favor a well diversified posture within the fixed-income space.
.. <.
. ..
.. .. ,.
..' i.
, ..
-. .. I.
We expect yield volatility to continue throughout 201 1, but for yields to trend
higher throughout the year after a period of stability within the very near term.
Both investors and policy-makers are becoming increasingly persuaded that
the economic revival is gathering pace and that the day of diminished Fed
monetary accommodation is drawing nearer. We are further of the opinion
that the Fed will begin to raise its short-term interest rate targets in the fourth
quarter of this year, or early in 2012. Nonetheless, stresses within the
European debt markets, diminished fiscal stimulus in the U.S. later this year,
low levels of inflation, a downward correction in the stock market, and the
potential for slower than expected economic growth both domestically and
globally are dynamics that could serve to mitigate increases in interest rates,
and at times, push them lower. The slope of the yield curve (below right)
remains historically very steep. We expect a bear flattening of the yield curve,
in which short-term interest rates rise by more than longer-term rates, to be
the next major move in the debt markets as a Fed tightening cycle becomes
more certain. In view of all of the above, we continue to advise that bond
investors continue to shorten the overall duration of their bond holdings, and to
hold greater amounts of cash and cash equivalents in anticipation of rising
interest rate levels in the years ahead. Investors who poured into bond funds
last year are likely to be disappointed with the total returns that they realize in
the nextfew years,,
4.50 -
4.40 -
4.30 -
4.10 -
4.00 -
3.90 - 3.80 -
3.70 -
3.60 -
1.50 -
3.40 -
3.M .
3.10 -
3.00 -
1.90 -
1.80 -
170 -
160 -
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2.40 -
2.30 -
2.20 -
2.10 -
200 -
1.90 -
1.80 -
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1.60 -
1.54 -
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I30 -
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080 .
0.70 -
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0.50 -
0.40 -
0.30 - om -
0.10 -
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ve - current.
/
IWO m
600
IWO
600
800 Yn-ns
A S 0 N D I P HA U I I A S 0 ND 'I 1 A U I I A S 0 N 0 'I PM AH I I A ION D 'I
2010 mil 2.m Xl
lonths & 1 Ye
"r)
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- 420
. 4.40
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3 10 - 300 . 2.90 . 2.80
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- 0.80 . 0.m - 0.60 - 0.w . 0.40 - 0.30
. 0.10
. 0.m
-
- .. .
FEDERAL RESERVE POLICY ..
. As was widely expected, the Federal Reserve’s policy-setting Open Market Committee
announced on November 3 that it was engaging in a new program of quantitative
easing, nicknamed QE2. By purchasing securities in the open market, the Fed is
attempting to maintain interest rates at artificially low levels and to push investors and
other entities into taking more risk. The Fed hopes that by further injecting massive
amounts of liquidity into the financial system that banks will use their reserves to make
more loans, large companies will deploy their record cash balances to purchase
equipment and hire more employees, asset prices will rise promoting a kind of wealth
effect, and investors will move out on the risk spectrum. In utilizing unconventional
tools in order to energize the economy, the Fed is in effect in an experimentation mode,
not certain that they will achieve the intended objectives, and cognizant that any
benefits may come with costs, risks, and unintended consequences. In fact, an already
unintended consequence is that market driven interest rates have risen, not fallen, since
the Fed embarked upon their new securities purchase program. The more the Fed
pumps liquidity into the US. system, the greater the negative spillover to other countries
in terms of large capital flows, asset bubbles, and inflationary pressures. Logically,
unless this massive expansion of the Fed’s balance sheet (top, right) is unwound in a
timely fashion, the U.S dollar will materially devalue and rampant inflation will ensue.
History teaches us that countries cannot monetarily print their way to prosperity. With
the already huge federal debt, no appetite in Washington for more fiscal stimulus, and
short-term interest rates already near 0%, short of outright debt monetization, the Fed
has virtually exhausted all policy options other than asset purchases. With
unemployment high, inflation low, and a large output gap in terms of actual versus
potential gms domestic product, the Fed, therefore, is of the belief that it can, and has
no choice, but to accept the aforementioned risks. US. gross domestic product is
expected to grow at an annualized rate of 3-3 %% in 201 1, which should be sufficient to
prevent outright price deflation, but not sufficient to materially reduce the rate of
unemployment.
Expectations of Fed interest rate hikes have begun to creep into the federal funds and
Eurodollar futures markets. The Eurodollar futures market one-year out (below, right) is
currently forecasting a hike in the federal funds rate to 0.50% from the current level of
0-0.25%. Forecasters are similarly and generally not expecting any increase in the
federal funds rate until the first quarter of 2012, and for the rate to be at about 1.50% at
the end of 2012. The slope of the yield curve (see bond section) remains historically
very steep, If these fed funds rate expectations are realized, the yield curve can be
expected to flatten very dramatically at that time The Fed has made it very, very clear
that they do not intend to raise interest rates until we experience material and sustained
job growth. Secondly, the Fed is not currently very popular with either political party in
Washington. So, any Fed rate hikes are likely to be delinquent by historical standards.
Federal Reserve Bank Credit mI..loll-.o.D.
~”rr) Sscufitk Held By The Federal Ressrve
Fad Funds Rata FwrUuarter Advanced F”
*
I
.--.. ,... ,.... .....
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11
-
Rates, Returns and Forecasts
Courtesy o/Bhre Chip FbtoneiaIForecasls (OUOUII)
Interest Rate Forecast
I Comm. Paper, 1-month C
Bill, 3-mOr
0.3% 0.5% 0.7% 1.1% I
I T-Bill, 6-month C 0.3% 0.5% 0.8% 1.1% I
I T-Note, 2 year C 1.2% 1.5% 1.8% I
I T-Note, 10 year ? 3.7% 3.9% 4.1% I
rporate AAA Bond E
orate Baa Bond
The unwisaom OT wowas: uomg IO Exrremes ~y Lass K. punsrein
There's little wisdom in crowds - and not many knowledgeable individuals, either. In many cases, people suffer from a crippled epistemology, in the
sense that they know very few things, and what they know is wrong. This wrong headedness just gets worse when people put their heads together.
Like minded folk tend to aggregate into groups, causing their views to grow more extreme. This is where rabid diffo heads take hold and with it very
bad things can happen. This group polarization helps explain fundamentalist terrorism, Enron and the Bay of Pigs. When this sets in even direct
appeals to mason can be a waste of time. In what is an especially disturbing finding, people's false beliefs can actually be strengthened when they
are shown the emr of their ways. Extreme view of groups is not all bad as long as there is an opposing force; puffing people with humility, curiosity
and openness in power limifs the damage of extremist groups while promoting change that would probably not occur without the group. Extremism
will enrich society's argument pool and thus promote sensible solutions; when groups are left to their own devices unchecked is where the
problems sfart. Comment: Now that the stock market is up two years in a row, the average investor is getting Bullish.
72
69
66-
63
60-
57
54
51
48
45
42
39
36
Daily Data 12/01/1995 - 12/28/2010
- - 72 - - 69
-66 - - 63
-60 - - 57 - - 54 - - 51
- - 48
- - 45 - - 42 - - 39 - - 36
u 12 wat~ on w~W momin s) 1 1560
1
1560
1500
1440
1380
1320
1260
I200
1140
1080
1020 I P' 1. 4 1020
75
1996 1997 1998 1999 ZOO0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
75 7 immm = 71.8 75 Extreme Opbmlsm (Beansh)
33 33.5 33.9 33 1
30.9 Extreme Pessimism (Bullish)
SSIIA) NDR Crowd Sentiment Poll -- Transitional Mode Basis
etopylght2010 Ned Davis Research, Inc. Furtherdbtriburion prohibited withwt prbr permiasion. All Rights Reserved.
Greed is good when fear is high.
Fear is good when greed is high.
Similar to many BulVBear cycles in the
past, individual investors sold all of their
stock at what turned out to be the absolute
low in share prices in March of 2009.
Now that the market has rallied
significantly, money is now flowing back
into stock funds.
This equity flow of funds will probably last
as long as it takes for most to become
significantly more invested in stocks than
they are now currently.
In fact this retail flow of funds is exactly
what moves stock markets to their next
cyclical peak.
At that point the fuel that drives the stock
market automobile runs out.
14
Pennant Management, Inc. ("PMI") publications are designed for sophsticated investors who are aware of the risk in securities' investments and market forecasting. This analysis is
based both on technical and fundamental research. Recommendations represent the opinion of PMI, supplemented by research and opinions of third party providers whose work
may be paraphrased within. Past performance does not imply nor guarantee profitable results in the future. The information contained herein is derived from multiple sources,
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ef any of the attached.
ALA INFORMATION AND CONTENT HEREIN IS FURNISHED "AS IS'' WITHOUT m OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING BUT NOT
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IN NO EVENT WILL PMI OR ITS AFFILIATES BE LIABLE FOR ANY DAMAGES, INCLUDING WITHOUT LIMITATION DIRECT OR INDIRECT, SPECIAL,
INCIDENTAL, OR CONSEQUENTIAL DAMAGES, LOSSES OR EXPENSES ARISING IN CONNECTION WITH THIS PUBLICATION OR USE THEREOF BY ANY
PARTY OR IN CONNECTION WITH ANY ERROR OR OMISSION.
Michael Welgat, BA, JD
Chief Executive Oflcer, President
US. Fiduciary Services, Inc.
Mark A. Elste, BBA, MBA, CFA
President, Chief Executive Oflcer
Pennant Management, Inc.
Ja;v B. Kaun, BS, MA. MBA. CPA
Executive Vice President,
Pennant Management. Inc .
Gregov R. Beard BA. JD
Senior Vice President
John P. Culhane, BS, MS, MBA, CFA
Senior Vice President
Christopher J. Weber, BA
Senior Vice President
David W. Trotter, BA
Assistant Vice President
James Habanek, BBA, MBA, CFA
Senior Vice President
Pamela C. Dic, BA
Senior Vice President
Leah Davis, BBA
Investment Oficer
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ril 21, 2011
.. . ,.
Institutional Retirement and Trust
Presented by:
Patrick Laratta Karl Hutchinson
Sales Director
813.240.62 14 561.795.9934
patrick. la ra tta @ we1 lsfa rqo .corn
Re I at i o n s h i p M a nag e r
ka rl . hu tchi nson@ we1 lsfa rcjo.com
2
‘argo & (
ierica’s gre
:,I
reputation for
1
J
a
S
ornpany
t corn pa nies
trength and stabi
T kgulatory oversight - OCC, FED, DOL, SEC
1 One of the largest US. bank holding compa
1 Fully diversified financial services company
commercial and retail clients E!. I . 11,000 locatiork and the Internet
(wellsfargo.com) in all 50 states and
internationally I I . Assets of $1.4 trillion
lity
1
L
lnies
-
Our earnings diversity*
Coiiiniunity Banking.. ......................... 320.
Investments & Insurance. ...................... 15”.
Wholesale Bar~~ng/Conir.riercial Real Estate. .... g”., a Consumer Finance. ............................. Ei-.,
e Home Mortgaye/Honie Equity. ................ 19’’.
e Specialized Lending** ......................... lg*>.
Ir
3
." .Wells I Fargo & Company
mT host extensive banking network in the U.S.
-1 e
* Wells Fargo retail banking stores - 3,339
Wachovia retail banking stores - 3,314
Total combined retail banking stores - 6,653
Source: SNL Financial, 09/30/08
4
i' Investing in growth
2000 BPS&M
ActuariaI/benefits
consulting firm 2004 Strong Milwaukee,
Com plia nce, actua ria I,
consulting, and ERISA Indianapolis,
legal staff Chicago
New York,
Asset ma nag em en t I
LA
2008 Wachovia Bank
2004 PFPC - Alliance
2005 SouthTrust
2006 Ameriprise
2004 PFPC - ASP
I
12004
2002 JPMorgan Chase's
institutional trust
business: Texas,
New York
Custody, asset
management
Harris Bank's
retirement plan
services portfolio
2009 Comerica Bank's
DC recordkeeping
business
Custody, asset 2006 LaSalle Bank's
management employee benefit
trust business
Custody, asset
management
Your team
A L
II II c3 1 Establishes '.' procedures tailored to meet your specific needs
I
I
Pdlrn Beach
Garden's Police Officer's 7
Pension Fund
[I I
donsu I ta n t
Hanc#ts day-to-day
activities, imludlng all cash
movements, disbursements,
inquiries, and report setup.
Coordinates all information
flow with Investment ~~, and Consultant.
First bine contact for any
questions, issues, or special
requests.
Karl Hutchinson
Re I at ions h i p M a nag e r
1 High level point of contact for account servicing and meetings
1 Provides consultative ideas for streamlining account administration based on
experience with pension plans
Accountant Investment Manager
Rep resen ta tive
Handles reporting related Works directly with your
activities including report investment managers to
issuance, daily data audits, ensure proper processing
asset manager of trades, income
reconciliation, custom $. k;,-, collection, and corporate
reporting. Works directlt
with plan auditors and A,: i
proactive pricing on
alternative assets.
, "-
Online Products
Team
Provides training for all on
line tools and a 1-800
number for all day-to-day
questions.
Wells Fargo internal resources
Sewice Team - Relationship Managers . More than 300 relationship managers in over 60
tions around the country
15 years experience
Wells Fargo Daily Service Team . *mice coordinator and dedicated accountant for
[prospect name] are located in Minneapolis . Sit side by side with operational partners for
immediate issue resolution with top level service
Wndards
#ark with client to develop efficient ways to operate,
quch as repetitive wire codes, pre-designed letters 1
trade and cash movements, blanket authorization
tters for funding of capital calls; proactive solutions
f r dealing with day to day issues
tlrnely and accurate real-time reporting
. 5 se online product, EO, to deliver to [client name]
Legal Staff
Internal staff of four attorneys supporting
Institutional Retirement and Trust clients . Compliance and risk staff to review all procedures
aind adhere to strict compliance standards.
I
Wells Fargo Strategic Relationship Management SM
Monitor
progress and
report
Conduct
risk/ n eed s
assessment
Each step is supported by
consultative tools
Establish
goals and
measures
8
Consultative tools
I
Commercial Electronic
Office@ (CEO @)
I
. Trust Portfolio
. Trust Information
. Retirement Plan
Reporting
De I i ve ry
Pay men ts
How do we differentiate ourselves?
8
8
8
8
8
8
Dedicated service team
Fully understand our customers’ needs
Tailor our products and services to meet those needs
Service team specializes in relationships like [prospect name]
Use best in class technology
Offer consultative ideas to help customers be successful
Use customer feedback to reinvest in our business
10
Trust and custody solutions
A broad scope of services to help meet your needs
A
A
9 Mu I ti -currency reporting
Global custody services
Foreign exchange
A
A
S pecia I izec Performance measurement reporting borting Analytics and attribution tools A
r 1
A
1
Custodysewices
= Trustee/Fiduciary
Financial statements
Benefit payments
A r A
pre trust and 1 A Tax reporting
= Cashsweep
e Wells Fargo banking services
Commercial Electronic Office (CEO) L- L, custody sen
A
L
Audited statement process
All transactions are reviewed for reasonableness
All security pricing is reviewed for completeness as well as reasonability to
the prior month
Ending market value and total return for the period are reconciled to each
asset manager's portfolio reporting
Adjustments for corrections and reconciling issues are input into the system
This process is repeated for every customer account and roll-up
Reports are generated and made available in hard copy and electronic
formats
Trust Portfolio Reporting (TPR)
CI ien t experience
8
8
8
m
8
8
View, print, or download
over 50 pre-formatted
graphical and tabular
reports
Create and Save Ad Hoc
Reports
My Reports generates
frequently used reports in
just two clicks
Available in PDF, HTML,
Excel, CSV
Create and Save Account
Groups
Investment Performance,
Ana lytics, Mu Iti-Cu rrency
Re port i n g , Fi n a n c i a I An a I y s i s
Reports
rn EQUITIES
H CASH EQUIVALENTS
BONDS a NOTES
Asset Allocation by
Major Asset Group
Trust Information Delivery (TID)
Client experience
w Customer receives emai
notification of each new
w
w
y deliver
*.
View, print, or archive
information
Convenient search and
filter options
Accumulates up to
7 years history
Several report options
II ',' I
14
mm~mummmmmmmmmmm
petitive advantages
Working together to drive success
’ Financial strength and stability of Wells Fargo ensures resources and commitment
necessary to be a long-term player
trategic Relationship Management delivers “high touch” service designed to
r needs - we are a relationship bank
a difference
Senior management commitment to the continued growth of Institutional Retirement and
Strength that comes from dedicated people and experienced service team
#l commitment: anticipating and meeting your needs
will benefit you
ommitment and consultative expertise has proven history of benefiting our
h that delivers quality service
15
Questions?
16
Exhibits
17
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