2013-05-06 General Meeting & General Fund MeetingCITY OF OKEECHOBEE/OKEECHOBEE UTILITY
AUTHORITY/POLICE/FIRE PENSION BO49Q2-
REGULAR MEETING MINUTES, MAY 6, 2013
CITY HALL, 55 SE THIRD AVENUE
OKEECHOBEE, FL 34974
TRUSTEE ATTENDANCE:
CITY OF OKEECHOBEE/OUA Jamie Mullis, Chairperson
Daryl Roehm
POLICE:
Bettye Taylor, Secretary
Melisa Jahner, Secretary
Kevin Barbour
Ray Worley
FIRE: John Koepke, Chairperson Mike Skipper, Secretary
Glen Hodges Adam Crum
Gary Ritter
OTHERS PRESENT: Scott Christiansen, Attorney
Jack Evatt, Bogdahn Group
David Kelly, Bowen & Hanes
Janet McKinley, OUA Financial Liaison
Basil Coule, OUA Financial Liaison
Jay McBee, DiBartolomeo, MCBee, Hartley & Barnes, P.A.
CALL TO ORDER REGULAR MEETING: 5:00 p.m. by Jamie Mullis
2. INVESTMENT REPORTS:
A. BOWEN & HANES - David Kelly, of Bowen & Hanes, reviewed the Portfolio Summary/Appraisal and Performance
Summary and Investment History dated May 3, 2013 for the City General/OUA Fund; beginning market 9/30/12
$8,018,636.33, ending market 5/3/13 $5,914.284.23. He also presented their equity performance data to show their track
record; 2009, market 26.53 %, Bowen, 24.19%; 2010, market 14.88%, Bowen, 17.22%; 2011, market 2.04%, Bowen,
0.09%; 2012, market 15.95%, Bowen, 14.89%. Since hire date of May 18, 2009, they have underperformed 3 out of the 4
years. They have received the notification from the Trustees relaying their disappointment of their performance and have
taken a defensive approach, but the economy is currently favoring the easy and cheap money, rather than the long term
investments.
B. THE BOGDAHN GROUP - Jack Evatt, of the Bogdahn Group, presented an overview for the quarter ending
March 31, 2013. The Total Fund Market Value for the City General/OUA Fund as of 101/12 was $8,139,554.00
and ended on 3/31/2013 with $8,583,379.00. The Total Fund (Net) as of March 31, 2013, being 17.81% for
October 2011 through September 2012. According to the compliance checklist the return did not equal or exceed
the actuarial earnings assumption rate of 7% over the trailing five year period, but did for the trailing three year
period. The plan return did not equal or exceed the benchmark for the three and five year period. The plan did not
rank within the top 40th percentile of its peer group over the trailing three or five year period. The total domestic
equity returns did not meet or exceed the benchmark over the trailing three or five year period, but the tital equity
allocation was less than 60% of the total plan assets at cost and less than 70% of the assets at market. The total
`-� foreign equity was less than 15% of the total plan assets at market. The total fixed income returns did not meet or
exceed the benchmark over the trailing three and five year periods, but 85% of all fixed income investments have
a minimum rating of investment grade or higher.
Mr. Evatt mentioned the disappointment regarding Bowen & Hanes trailing performance. He then read from a
IVAMW memorandum some of their operational concerns as follows: Their operational compliance procedures fall below
acceptable standards for institutional money managers; Their manual trading procedures create inconsistency in
portfolio holdings and allocations. This leads to significant return dispersion across client accounts. The
dispersion of returns is outside of an acceptable range for our Firm; They do not provide information abot the firm
and their strategy to industry databases. Absent this institutionalized information, our research team must attempt
to create the data, although we have been unable to receive the information necessary on a consistent basis.
They view the 'Global Macro' economy and make `thematic shifts' based on their interpretation. We do not have
any issues with this approach, however, given their manual trading procedures we have observed inconsistency
in portfolio holdings, making it difficult for our research team to discern how they are implementing their strategy
for each account. As such, we cannot express with confidence if Bowen continues to manage the portfolio as they
did when hired.
At this time, we recommend to start diversifying some assets from Bowen & Hanes, and look for alternatives for a
domestic equity and insititutional international manager. Mr. Kelly of Bowen & Hanes asked whether they could
respond to each issue of concern in writing, in which the consensus of the Boards deemed fair.
C. SALEM TRUST — The Salem Trust Statements for the Receipt & Disbursement (R & D), Equity and Fixed Income
were distributed reflecting the activity for the months of January — March, 2013.
D. DIBARTOLOMEO, MCBEE, HARTLEY & BARNES, P.A. - Mr. Jay McBee, of DiBartolomeo, McBee, Hartley &
barnes, P.A. reviewed the financial statements for the year ending September 30, 2012, noting that the audit was
in accordance with the standards of the Government of Auditing Standards issued by the Comptroller General of
the United States. The results of tests, disclosed no instances of noncompliance that are required to report.
Effective as of October 1, 2012, the plan was amended to relect a change in assumption to update the mortality
rates from the 1994 group annuity tables for males and females to the RP-2000 Combined Healthy Mortality
Table. The change will be phased over a three-year period and caused the employer required contribution to
increasy by approximately $5,000. The City General/OUA Fund net assets as of September 20, 2012 were
$8,181,792.00 compared to September 30, 2011 being $6,792,069.00. He stated that each plan had increased.
3. ITEMS/REPORTS FROM BOARD ATTORNEY CHRISTIANSEN - Attorney Scott Christiansen asked whether one
Secretary could combine the General Meeting Minutes, and then each Board will add their Trustees Items
Minutes. Secretary Melisa Jahner volunteered.
He reminded everyone that the financial disclosure forms will be received soon and must be returned by July 1,
2013 to avoid penalty fines.
He then asked each board to consider approval of sending the Internal Revenue Code Ordinances to the City
Council for adoption.
4. UNFINISHED BUSINESS TO DISCUSS IN OPEN SESSION. — There was none.
5. NEW BUSINESS TO DISCUSS IN OPEN SESSION. — There was none.
8#OW 6. RECESS FROM OPEN SESSION AND CONVENE IN INDIVIDUAL SESSIONS AT 6:16 P.M.
CITY GENERAUOUA PENSION BOARD OF TRUSTEE ITEMS:
A. Motion to dispense with the reading and approve the minutes for the February 4, 2013 meeting. Kevin moved to
approve the February 4, 2013 Minutes as presented; seconded by Daryl. Motion carved unanimously.
B. Motion to approve the financial reports as presented by Basil Coule, Pension Financial Liaison: Jamie moved to
approve the financial reports 1-4 and 6_a_nd_ 8 as presented on the agenda; seconded by Melisa. Motion carried
unanimously.
1. Investment summary dated April 3, 2013 from Bowen, Hanes & Company and Portfolio summary as
of March 31, 2013.
2. Check register from January through March, 2013.
3. Statements from Salem Trust that reflects activity for the General Pension Fund fiscal year (January
1-March 30, 2013).
4. Statements from Salem Trust that reflect activity for the General Pension Fund for the months
January through March, 2013 for the following accounts: Receipt & Disbursement, Equity & Fixed
Income.
6. Approve the list of members terminated and/or contributions refunded or rolled over from 1/1/2013 to
3/31/2013: Jason Kite-OUA
8. New members enrolled from 1/1/2013 to 3/31/2013: Darin Tumer-OUA, Christopher clay-OUA.
7. (This number was not assigned on agenda).
(B).5 Review and approve Christiansen & Dehner, P.A. proposed Ordinance amending the City of
Okeechobee and Okeechobee Utility Authority Employees' Retirement System: These amendments
clarify language required by the Internal Revenue Code and are mandatory amendments that must
be made by September 30, 2013 to ensure the continuation of the plan's tax qualified status. Kevin
moved to send the proposed Ordinance to City Council for approval; seconded by Daryl, Motion
carried unanimously.
C. Unfinished or New Items from Board Members.
Jamie moved to approve the DiBartolomeo, McBee, Hartley & Barnes, P.A., Financial Statements for the year
ending September 30, 2012, as presented by Jay McBee; seconded by Kevin. Motion carried unanimously.
Jamie moved to authorize Mr. Jack Evatt, of the Bogdahn Group, to bring back information for board review
regarding alternatives for a domestic equity and insititutional international manager; seconded by Kevin.
Motion carried unanimously.
D. ADJOURN MEETING: The meeting was adjourned at 6:35 p.m.
Minutes prepared by: Melisa Jahner, Secretary
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