06-17-2019CITY OF EDGEWATER
GENERAL EMPLOYEES' PENSION BOARD
QUARTERLY MEETING MINUTES
City Hall Council Chambers
Monday, June 17, 2019 at 10:30AM
TRUSTEES PRESENT: Bridgette King
Tiana DeWees
Tyna Hilton
Tim Sopko
TRUSTEES ABSENT: Brenda DeWees
OTHERS PRESENT: Bonni Jensen, Klausner, Kaufman, Jensen & Levinson
Frank Wan, Burgess, Chambers & Associates
Michelle Rodriguez, Foster & Foster
Julie Christine, City of Edgewater, Human Resources Director
Richelle Hayes, American Realty Advisors
Cali to Order — Bridgette King called the meeting to order at 10:33am.
2. Roll Call — As reflected above.
3. Public Comments — None.
4. Approval of Minutes
The minutes from the March 11, 2019, quarterly meeting were approved, upon motion by
Tyna Hilton and second from Tiana DeWees; motion carried 4-0.
New Business
a. New Trustee Update
i. Michelle Rodriguez introduced new Union Representative Trustee; Tiana
DeWees, and thanked her for her service on the board.
Old Business — None.
Reports
a. Burgess, Chambers & Associates, Frank Wan, Investment Consultant
i. Quarterly Report as of March 31, 2019.
1. Frank Wan reviewed the current market environment and
commented in March 2019, the yield on the benchmark ten-year
Treasury Note fell to 2.42%. Frank advised the board he did not
feel a recession was imminent, although he would continue to
closely monitor risk.
2. The market value of the plan as of March 31, 2019, was
$12,197,312.
3. The total funds gross returns for the quarter were 8.3%, slightly
overperforming the benchmark of 8.1%. Trailing total fund gross
returns for the 1, 3, and 5 -year periods were 5.0%, 7.8% and 5.4%
respectively. The 1 -year underperformed the benchmark of 5.7%,
the 3 -year slightly outperformed the benchmark of 7.5%, and the 5 -
year underperformed the benchmark of 5.9%.
4. Frank Wan reviewed the plan's current asset allocation and
advised the board to consider private real estate because currently
there was a supply shortage which allowed rents to be raised by 5-
6%.
Frank Wan recommended the board change the share class of
their Ceredex holdings from an Institutional Class to an R6 Class
because it was less expensive. Tim Sopko asked why Ceredex
was allowing the board into the R6 Class. Frank commented the
plan portfolio now met the requirements to invest in the R6 Class.
The board voted to change its Ceredex holdings from an Institutional Class to an R6 Class
upon the recommendation of the investment consultant upon motion by Tyna Hilton and
second bV Tim Sopko: motion passed 4-0.
American Realty Advisors, Richelle Hayes, Investment Manager
i. Richelle Hayes reviewed the makeup and principles of the firm. Richelle
reviewed the four investment vehicles offered by her firm; Industrial, Office,
Multi -family and Retail. Richelle explained Industrial properties were more
desirable because of their lower cost and Office properties tended to be the
most expensive.
Note: The board recessed at 11:18am,
!Vote: The board reconvened at 11:19am.
ii. Richelle Hayes advised the board their firm typically paid for property with
80% upfront cash and with only a 20% loan. Richelle advised the board
the next capital call was in October and fees were 110 basis points and
would not change.
Note: The board recessed at 11:25am.
Note: The board reconvened at 11:26am.
iii. Frank Wan commented the Investment Policy Statement (IPS) would need
to be changed. Tyna Hilton asked if there would he an administrative cost
to implement the changes. Bonni Jensen commented she would only need
three to four hours to complete the work at a rate of $325 per hour. Tim
Sopko asked which funds would be sold to invest in the realty fund and
Frank commented he would sell bonds. Tyna Hilton asked if Frank
recommended this investment and Frank verified that he did.
iv. The board discussed the advantages of investing plan assets in real
estate.
v. Frank Wan reviewed the proposed changes to the current IPS. Frank
advised the board he added a 10% allocation for real estate with a range of
5-15%.
vi. Bonni Jensen asked Frank to change the statement "trustees shall be
required to receive continuing education' to "trustees are encouraged to
receive continuing education." Bonni advised the boars} proposed changes
to the IPS were in compliance with Fforida Statutes, Tim Sopko asked if
the City needed to approve the IPS and Bonni commented they did not.
The board voted to accept the recommended changes to the Investment Policy Statement
upon motion by Tyna Hilton and second by Tiana DeWees; motion carried 4-0
The board voted to hire American Realty Advisors to invest in real estate upon the
recommendation of the Investment Consultant upon motion bV T na Hilton and second b
Tim Sopko; motion carried 4-0.
Klausner, Kaufman, Jensen and Levinson, Bonni Jensen, Plan Attorney
i. Changes in Tax Rules for Alimony
1. Bonni Jensen reviewed the changes in the tax treatment for
alimony payments, which now required the member to pay the
taxes on the amount of alimony paid. Bonni advised the board she
would prepare a memo for the administrator to give to members
requesting advise on this issue.
ii. Cancer Presumption Memo
1. Bonni Jensen advised the board the cancer presumption bill did
pass and would go into effect July 1, 2019.
iii. Financial Form 1 Memo
1. Bonni Jensen advised the board the deadline for submitting their
Financial Disclosure forms was July 181. She then reviewed the
various ways to file the Form 1 and commented sending it via
email gave an immediate verification of receipt.
iv. Senate Bill 248 Memo
1. Bonni Jensen reviewed the changes to the Public Records
Exemption Law that expanded the definition of home address.
v. Bonnie Jensen advised the board that she was looking at the current plan
document to ensure the language that allowed retirees to continue working
while receiving a benefit was correct.
vi. Bonni Jensen commented she checked the plan Ordinance and it allowed
the board to create their own travel policy rather than using the City's travel
pol icy.
1. Julie Christine commented she sent an email to Bridgette King
regarding the City's requirements for boards to abide by the policy.
Julie asked how high the spending limit was and Bonni Jensen
advised her there was no strict limit, however, Trustees were
expected to act in the best interest of the participants and defray
costs. Bonni commented the board could adopt the IRS provisions
that allowed for changes in per diem based on geography.
vii. Tyna Hilton asked if the administrator could start contacting terminated
employees who had pension contributions on deposit or were eligible to
receive a retirement benefit. Michelle Rodriguez advised the board she
would start the process.
8. Consent Agenda
a. Ratification of Warrants
i. Warrant #47, #48 and #49
b. New invoices for payment approval
i. None
c. Fund Activity Report for March 5, 2019 through June 10, 2019
The board voted to approve the consent agenda as presented, upon motion by Tim So ko
and second by Tyna Hilton; motion carried 4-0.
9. Staff Reports, Discussion, and Action
a. Foster & Foster, Michelle Rodriguez, Plan Administrator
i. Upcoming educational opportunities
1. Michelle Rodriguez reviewed upcoming educational opportunities
for the board, including the FPPTA Fall Trustee School, October 6
through October 9, 2019, at the Sawgrass Marriot in Ponte Verde
Beach, FL.
10. Trustee Reports, Discussion and Action - None.
Adjournment — The meeting adjourned at 12:28pm.
10. Next Meeting — September 16, 2019, at 10:30am.
Respectfully submitted by: Approved
/yby:
s .-
p
Michelle Rodriguez, Plan Administrt r Trustee
Date Approved by the Pension Board: I' L l-