01-24-2001 Special Meeting MIAMI SHORES VILLAGE
GENERAL EMPLOYEE PENSION BOARD
SPECIAL MEETING
JANUARY 24,2001
1. CALL TO ORDER
The special meeting of the Miami Shores Village General Employee Pension Board was held on Wednesday,
January 24,2001 in the Conference Room of the Village Hall. The meeting was called to order at 8:05 A.M.
2. ROLL CALL
In order for the record to reflect those present the roll was called with the following members present:
Councilwoman Mary Ross Agosta
Thomas J. Benton
Joseph Charles
Henry Courtney
Les Forney
Wendy Reiner(via telephone)
Richard Trumble
Also Present: Steve Cypen, Pension Board Attorney
Mark A. Malatak,Plan Administrator
Lisa Keeley,Recording Secretary
Jeff Swanson,Merrill Lynch(via telephone)
3. BACKGROUND AND PURPOSE OF MEETING-Mark A.Malatak
Mr. Malatak explained the meetings primary function was to determine whether the Board would like to
continue with Sanford C. Bernstein as a value fund manager. In light of recent changes presented to the
Village by the firm,Mr.Malatak sought directives on whether or not to continue negotiations with Bernstein.
First, the firm now advises that funds invested with their firm will be commingled unless a three million
dollar minimum is met by the fund. Originally,a separately managed account was proposed. Second,the
firm is advising that management fees will increase from the 60 basis points to include additional 12(B)fees.
4. DISCUSSION REGARDING THE RETENTION OF SANFORD C.BERNSTEIN& CO
Mr. Cypen advised that the information should have been disclosed during the original presentation as the
firm is governed by their prospectus. Mr. Swanson suggested that these changes could have been an
oversight on the part of the presenter,Mr.Joe Lawrence. In most presentations,portfolio managers are not
present to fully disclose the firms policies and schedules. Mrs. Ross Agosta expressed concern regarding
the tactic used by Sanford C. Bernstein during their presentation in so much as the method becomes an
ethical issue. Because the Boards' previous experience with the commingled STI fund has been
disappointing at best,Mr. Swanson suggested that a separate account,rather a commingled account,would
allow for a fund more tailored to the Board's guidelines and objectives.
There was discussion regarding any possible misrepresentation from the Village regarding the actual funding
amounts. Mr. Malatak indicated that the numbers provided were preliminary. However, Mr. Swanson
confirmed that the funding amounts were made very clear. Mr.Charles inquired as to the performance levels
between the two managers. Mr. Swanson indicated that there is very little difference on the fixed income
investments, although performance has been slightly better with the Boston Company. Mr. Swanson also
pointed out that a recent merger between Sanford C.Bernstein and Alliance has created a gigantic company
inferring the amount of Village Pension monies is small compared to other clients. He suggested that the
Boston Company could more personalize the fund management and investments.
i
General Employee Pension Board January 24,2001 Page 2
Mr.Malatak indicated that the Board should first decide whether to keep Sanford C.Bernstein as the value
fund manager. Should the Board decide to terminate negotiations with Bernstein,they would then choose
an alternative manager. Mr. Benton moved that the current negotiations with Sanford C. Bernstein be
discontinued and terminated effective immediately. Mr. Trumble seconded the motion and the%rte of the
General Employee Pension Board was unanimous in favor.
Mr. Courtney left at this time
5. DISCUSSION REGARDING OTHER POSSIBLE INVESTMENT MANAGERS
Mr.Forney asked if the Boston Company would commingle the Village funds and if they had a separate fee
schedule. Mr.Malatak confirmed that in conversation with representatives from the Boston Company,they
would hold a separate account for any investment monies and the fee schedule would be negotiated,however,
would not include 12(B)fees.
Mr.Forney moved that the plan administrator begin negotiations with the Boston Company,including review
ofthe contract by Mr.Cypen.Pending no complications with the negotiations,the General Employee Pension
funds,originally designated to Sanford C. Bernstein&Co. should be moved to the Boston Company. The
motion was seconded by Mr. Trumble. The vote of the General Employee Board was unanimous in favor.
6. DISCUSSION REGARDING ASSET SPLIT BETWEEN GROWTH AND VALUE
MANAGER.
There was no discussion on this item.
7. OTHER BUSINESS.
Mr. Malatak explained that as the current Trustee, SunTrust Banks of Florida, Inc., will no longer be
handling the accounts as the Village has terminated the investment manager, STI. As a note in reviewing
the contract for the new trustee,Colonial Bank,Mr.Cypen noticed a supplemental fee of 25 basis points for
the money market account held by Goldman Sachs. Mr.Malatak indicated that there is very little cash held
in that account,thus the fee should be minimal over the year. Mr.Swanson remarked that in general,trustees
breakeven on their service fees,but obtain earnings by charging a nominal fee on the money market account.
The other proposal received from Salem Trust also included the supplemental fee. As Mr.Malatak has had
previous experience with Colonial Bank,the Board agreed to proceed with them.
8. ADJOURNMENT
The January 24, 2001 special meeting the General Employee Pension Boards was adjourned at 8:50 A.M.
Maryoss Agosta, Chai erson Thomas J. Benton, Secretary
Lisa Keeley, Recoring Secretary
"NOTE: Due to technical difficulties,an audio recording of the January 24, 2001 meeting
of the Miami Shores Village General Employee Pension Board was not furnished.