2008-11-10 General Meeting & All Funds Individual SessionsCITY OF OKEECHOBEE GENERAL EMPLOYEES
M OKEECHOBEE UTILITY AUTHORITY
POLICE AND FIREFIGHTERS
PENSION BOARD MINUTES
NOVEMBER 10, 2008 - 5:00 P.M.
CITY GENERAL/OUA MEMBERS
Jamie Mullis, Chair - Present
Robin Brock, Secretary - Present
Jerry O'Bannon - Present
Jess Manson - Present
Linda Tewksbury - Present
L.C. Fortner, Member - Present
POLICE OFFICERS MEMBERS
Denny Davis, Chair - Present
Bettye Taylor, Secretary -Present
Victoria Williams - Absent
Louise Chandler- Present
Bill Barlett- Absent
FIREFIGHERS MEMBERS
John Koepke, Chair - Present
Bill Douglas, Secretary -
Present
Glen Hodges - Present
Gary Ritter - Absent
Brook Conway - Present
1. The meeting was held at City Hall, 55 Southeast 3'd Avenue, Room 200,
Okeechobee, Florida, and was called to order by Chairman Jamie Mullis at 5:07
p.m.
2. INVESTMENT REPORT:
David Kelly of Bowen, Hanes & Company, presented his report. Mr. Kelly stated
that the month of October 2008 was a terrible month for the stock market, but the
Federal Reserve and the Treasury are using all resources to re -inflate the
economy. The largest asset in the country right now is cash. He stated that the
stock market is cheap and going forward.
The outlook for next year looks grim. Stick with quality and, historically, the
companies are going to be there. He advised that the Sub prime Market was
operating with loans for people with no income verification. Their company does
not deal in the real estate market, so they did not pay much attention until the
problems started to affect Wall Street. Bowen, Hanes & Company does not think
we are headed into a depression. The investment market has grounded to a halt,
and commodity cost is down.
Stock market is cheap right now, and they are focused on companies with little or
no debt. Corporation's cash net worth has never been higher. The companies
will start spending again soon. Hedge funds collect money to invest, then borrow
against their loans. They are now having to sell and are losing a lot of money.
Bowen, Hanes & Company is total manager for a lot of funds. They feel with total
control of the fund they can have more mobility with when and how to invest
money to get maximum return. This has helped them in their investment
strategies.
After consideration, they have agreed to handle the three funds as a
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consolidated fund for the flat fee of 50 basis points if they have total control of
the whole fund. The current fee is 65 basis points. Mr. Kelly said he knew we
were considering Vanguard Investments, which is a good fund, but it does not
have active management to move money when it needs to.
Normally, the Treasury Bonds and Corporation Bonds are close, but this
economy has widened the basis points between them. The Treasury Bonds are
losing value. With a trillion dollars being poured into the economy, some felt it
might spike inflation. This means their investment managers have started buying
some corporate bonds, which have an inflation index built into them.
Mr. Kelly expressed that the three plans will do well with the right mix of assets,
which requires a total manager.
MONITORING REPORT
Timothy Nash introduced himself as representative from The Bogdahn Group
and reported that it had been a very difficult quarter. October was a bad month
for the stock market and is off by one-third. Although we will not get earnings
back, the market is moving forward.
In reference to replacing Trusco with a new custodian for the Pension Boards,
Mr. Nash stated that Vanguard Investments is a passive management account.
Bowen, Hanes & Co. is a solid firm with a solid track record in Florida
municipalities. We would have a more active manager if we allow Bowen, Hanes
& Co. to take total account instead of dividing it up.
With negotiating for lower fees and preserving capital, we will be able to get
through the losses. Our portfolios are better then most, due to the stocks and
bonds that we had. Bond Managers at Trusco did a good job, and our portfolios
did well in such a tough market. Each of the Boards has a 60% equity limit with
10% in foreign investments.
After searching for the best interests of the Boards for a custodian to replace
Trusco, Mr. Nash recommends Salem Trust Company. They have an account
minimum of $4,000.00 and a fee of 6 basis points.
3. ITEMS PRESENTED BY BOARD ATTORNEY CHRISTIANSEN.
• Confirmed meeting dates for 2009
• Confirmed letters from all Boards were sent to Charles Slavin
• Reminded Police Board to elect officers
• Fiscal Year Letter #2 to City Council needs to be sent by all Boards
• Recommended that a new contract with GRS be prepared, as he does not
suggest approval of some of the items GRS has included.
• Advised that Timothy Nash would delegate the transitions to Bowen
Hanes and Salem Trust.
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4. Unfinished Business to discuss in Open Session.
There was no unfinished business.
5. New Business to discuss in Open Session.
There was no new business.
6. Open Session was recessed and convened in Individual Board Sessions.
City General Employees and OUA Pension Board of Trustees Items:
A. Board Member Jess Manson moved to approve the minutes for the
August 11, 2008 Regular Meeting. Seconded by Board Member Linda
Tewksbury. Motion carried.
B. Board Member Jamie Mullis moved to approve the Financial Reports as
presented by Basil Coule, Pension Financial Liaison, and noted as
follows, with the exception of item 6, which was denied:
1) Account Activity/Expenses Report - July through September, 2008
2) Additional Statement that reflects activity for the period October 1,
2007 through September 30, 2008
3) Check Register - July through September, 2008
4) Letter from Bowen, Hanes & Co. requesting signatures for
investment management agreement. (Executed agreement in open
meeting)
5) Letter from DiBartolomeo, McBee, Hartley & Barnes, P.A. regarding
the audit fee for September 30, 2008
6) Letter from Gabriel Roeder Smith & Co. requesting an increase in
their annual fees.
7) Letter from SunTrust requesting signatures on the authorized
person for the "Disclosure and Consent to Compensation"
8) Letter from Gabriel Roeder Smith & Co. regarding new tools and
services for review.
9) Approve the list of members terminated and/or contributions
refunded or rolled over from 07/01/08 to 09/30/08
10) Approve the list of new members enrolled from 07/01/08 to
09/30/08
Seconded by Board Member Jess Manson. Motion carried.
C. Unfinished or New Items from Board Members.
1) Board Member Jess Manson moved to give Attorney Christiansen
the authority to re -negotiate a new agreement with Gabriel Roeder
Smith & Co. Seconded by Board Member Jamie Mullis. Motion
carried.
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2) Motion was made by Board Member Jamie Mullis and seconded by
Board Member Jess Manson to approve Salem Trust Co. as
Pension Board Custodian. Motion carried.
3) Motion was made by Board Member Linda Tewksbury and
seconded by Board Member Jess Manson to approve Bowen,
Hanes & Co. as the Board's full investment manager.
D. There being no further business, Board Member Jerry O'Bannon moved
to adjourn. Seconded by Board Member Jess Manson. Motion carried.
Chairman Jamie Mullis adjourned the meeting at 7:10 p.m.
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Jamie Mullis, Chairman
Robin Brock, Secretary
Police Board of Trustees Items:
A. Louise Chandler made motion, seconded by Bettye Taylor, approved by
all for Bowen Hanes to take over as Total Manager of Portfolio.
B. Louise Chandler made motion, seconded by Bettye Taylor, approved by
all for Salem Trust contracts to be signed to make Salem new custodian
of Portfolio.
C. Louise Chandler made motion, seconded by Denny Davis, approved by all
to accept minutes from October 20, 2008.
D. Louise Chandler made motion, seconded by Bettye Taylor, approved by
all to accept expenditures for June 2008 through October 2008.
E. Bettye Taylor made motion to table GRS contract and give Scott
Christiansen permission to renegotiate contract. Seconded by Denny
Davis, approved by all.
F. The board decided to wait for reappointment of Chairman and Secretary
until we have a full board at next meeting.
Bettye Taylor made motion to adjourn meeting. Seconded by Denny Davis.
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Meeting adjourned at 6:50 PM.
Denny Davis
Chairman
Bettye Taylor
Secreta ry
Firefighters Board of Trustees Items:
A. A motion was made by Glenn Hodges, second by Brook Conway, to
accept the minutes of August 11, 2008, motion passed.
B. A motion was made by Bill Douglas, second by Glenn Hodges, to hire
Salem Co., motion passed.
C. A motion was made by Brook Conway, second by Glenn Hodges, to keep
John Koepke Chairman and Bill Douglas Secretary, motion passed.
D. A motion was made by Glenn Hodges, second by John Koepke, to allow
Bowen Hanes to do all paperwork except custodian, motion passed.
Meeting adjourned.
John Koepke, Chairman
Bill Douglas
NOTICE IS HEREBY GIVEN that if any person should decide to appeal and decision made at this
meeting of the Board of Trustees, such person will need to insure that a verbatim record of the
proceedings is made which includes the testimony and evidence upon which the appeal is based.
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