10-23-2017CITY OF EDGEWATER
POLICE OFFICERS' PENSION BOARD
QUARTERLY MEETING MINUTES
City Hall Council Chambers
Monday, October 23, 2017 at 1:30PM
TRUSTEES PRESENT: Alexander Penalta
Lawrence Leaf
Larry Brinson
Timothy Webb
TRUSTEES ABSENT: David Arcieri
OTHERS PRESENT: Ken Harrison, Sugarman & Susskind
Ferrell Jenne, Foster & Foster
Jack Evatt, AndCo Consulting
John Thinnes, AndCo Consulting
Mindy Johnson, Salem Trust Company
1. Call to Order — Alexander Penalta called the meeting to order at 1:34pm.
2. Roll Call — As reflected above.
3. Public Comment — None.
4. Approval of Minutes
The minutes from the June 19, 2017, quarterly meeting were approved upon motion by
Lawrence Leaf and second by Larry Brinson, motion carried 4-0.
New Business
a. Trustee term expirations, Larry Brinson's term will expire November 6, 2017.
i. Ferrell Jenne commented that Larry Brinson was Council appointed and
his term would expire on November 6, 2017. Larry commented that he
would like to serve another term. Ferrell commented she would inform
the City Clerk.
b. 2017-2018 administrative expenses budget.
i. Ferrell Jenne reviewed the SB 172 requirements and the proposed 2017-
2018 budget. The board had no questions.
The board voted to approve the proposed 2017-2018 budget as presented, upon motion by
Larry Brinson and second by Timothy Webb, motion carried 4-0.
c. Discussion of the Chapter 185 share plan allocation distribution method.
i. Timothy Webb commented that the membership was concerned that
senior officers would get a larger allocation. Ken Harrison explained the
current allocations were based on the number of years of credited
services. Tim commented that the fear was that the share plan would
dissolve or go under the default methodology in the near future.
ii. Ken Harrison commented there were some plans that use the equal
shares methodology.
iii. Ken Harrison commented that the Division of Retirement was looking at
a possible mandate to not reallocate share plan money for non -vested
members in case they return to the department within 5 years.
iv. Ken Harrison recommended polling the membership regarding equal
distribution.
v. Ken Harrison commented that he could draft an Ordinance Amendment
that allowed for equal share plan allocations, similar to the fire plan.
vi. Ken Harrison commented that he could draft the Ordinance changes and
the membership could review.
The board requested Ken Harrison to draft language regarding an equal distribution share
plan allocation for the board and membership to review, upon motion by Larry Brinson
and second by Timothv Webb, motion carried 4-0.
6. Old Business — None.
7. Reports
a. The Salem Trust Company, Mindy Johnson, Custodian.
i. Quarterly service report.
1. Mindy Johnson briefly reviewed the quarterly service reports.
2. Mindy Johnson reviewed the class action claims procedure for
securities litigation. Mindy commented that there hadn't been
any recoveries in the past, but any future recoveries would be
subject to a 20% fee which was charged by CCC (the third -party
vendor used by Salem Trust). Jack Evatt commented that the
plan was currently interested in all mutual funds, so there would
be no recovery fees.
3. Ken Harrison reviewed the class action document presented by
Salem Trust.
The board voted to amend the Salem Trust contract to include the processing fee of 20%
for class actions, upon motion by Larry Brinson and second by Timothy Webb, motion
carried 4-0.
The board voted to approve Option A as stated on Salem Trust's directions for processing
class actions, upon motion by Timothv Webb and second by Lawrence Leaf, motion
carried 4.0.
4. Mindy Johnson reviewed the confirmation of receipt of
statements. The board had no questions.
AndCo Consulting, Jack Evatt & John Thinnes, Investment Consultants.
i. Quarterly
report as of September 30, 2017.
1.
Jack Evatt explained that he was taking on a larger role within
the firm that would require him to spend more time in the office.
Jack introduced John Thinnes and informed the board that John
would be attending future meetings.
2.
John Thinnes reviewed the September 30, 2017, quarterly
report, commenting that all allocations were within the
Investment Policy Statement (IPS) and there was no need for
rebalancing.
3.
Market value of the fund as of September 30, 2017, was
$9,450,032.
4.
Gross total fund returns for the quarter were 3.16%, slightly
underperforming the policy benchmark of 3.33%. Trailing total
fund gross returns for the 1, 3, and 5-year periods were 11.80%,
6.56%, and 8.50%. Since inception (10/1/2000) gross returns
were 5.07%, slightly underperforming the policy benchmark of
5.18%.
5.
John Thinnes commented that the market value was up an
additional $50,000 to date, making the market value of assets
approximately $9,500,000.
6.
Jack Evatt reviewed the private real estate allocation and
commented it was a way to take some money from fixed income.
7.
Jack Evatt reviewed core real estate and four primary property
types.
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8. Jack Evatt reminded the board the board there is a queue to get
in and out of the investment, so there's some illiquidity to this
asset class.
9. Jack Evatt reviewed the required minimum investment for each
real estate manager.
10. Jack Evatt reminded the board that they had invested in real
estate before, through Principal.
11. Jack Evatt reviewed Principal and American Realty, highlighting
the sector allocations, redemption terms and management fees.
12. Jack Evatt reviewed the expected returns, commenting that he
recommended American Realty, as they had been around a long
time and were very customer friendly.
13. Jack Evatt commented the allocations to real estate would be
$950,000, taken from Integrity Fixed Income. Jack reviewed the
process for capital calls, commenting it would take 6 to 9 months
before the plan was fully invested.
14. Jack Evatt advised that the board could request American Realty
to attend the next meeting and make a formal presentation.
15. By consensus, the board requested that American Realty comes
to the next meeting to present.
c. Sugarman & Susskind, Ken Harrison, Board Attorney.
i. Update on IRS determination letter.
1. Ken Harrison commented that the IRS determination letter was
still pending.
2. Ken Harrison commented he had received additional documents
concerning the time that Martha Miles had received a refund.
8. Consent Aaenda
a. Payment Warrants for Ratification.
i. Warrants #35, #36, #37, #38, #39 & #40
b. Payment Warrants for Approval.
i. None
c. Fund activity report for June 13, 2017 — October 16, 2017.
The board voted to approve the consent agenda as presented, upon motion by Larry
Brinson and second by Lawrence Leaf, motion carried 4-0.
9. Staff Reports, Discussion, and Action
a. Foster & Foster, Ferrell Jenne, Plan Administrator.
i. Ferrell Jenne commented that the Fiduciary Liability Policy had been
bound through the City.
ii. Ferrell Jenne reminded the board that the Division of Retirement
Conference would be held on November 15 — 17, 2017 in Orlando.
iii. Ferrell Jenne reviewed the State Monies and commented the plan would
be receiving approximately $9,000 more than the prior year. State
Annual Report had been approved and the money had been deposited
into the fund.
10. Trustee Reports, Discussion, and Action — None.
11. Adjournment — The meeting adjourned at 2:50pm.
12. Next Meeting — Monday, December 11, 2017, 1:30PM.
pectfully u mitted by: =Approved:b�-,,...
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II Jen e, PI n Administrator Alexander Penalta, Chairman
A ro d the Pension Board: E
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