Loading...
09-21-1995 Special MeetingMIAMI SHORES VILLAGE PENSION BOARD SPECIAL MEETING SEPTEMBER 21, 1995 The special meeting of the Miami Shores Village Pension Board was held on September 21, 1995 411 at the Miami Shores Village Hall. The meeting was called to order at 8:02 A.M. by Mr. Louis Imburgia, Jr. A call of roll revealed the following members were in attendance: • Present: Louis S. Imburgia, Chairman Joseph Charles Officer Timothy Dearden William Heffernan Walter Latimer Richard Tremble Absent: Michael Couzzo, Secretary Also Present: William Fann, Village Attorney Patricia Varney, Plan Administrator 1. APPOINTMENT OF SECRETARY FOR TODAY'S MEETING Due to Mr. Couzzo's absence, Mr. Heffernan moved that Mr. Latimer be appointed as Acting Secretary. Mr. Charles seconded the motion and the vote was unanimous in favor. 2. DISCUSSION AND POSSIBLE ACTION REGARDING THE NCNB REAL ESTATE FUND Ms. Varney explained that there are two choices that can be made regarding the NCNB Real Estate Fund. The Board can either elect to have Arthur Anderson act on the Board's behalf with a deadline of September 29, 1995 or the Board can select its own option with a deadline of October 31, 1995. Mr. Charles asked if Merrill Lynch had given any input as to what election should be made. Ms. Varney said they did not. Ms. Varney stated that in her research, she found that the real estate investment consisted of unimproved land. Selecting Option 1 would give a cash out payment of $141.25 per share. With 2,525 shares, the total payment would be $357,560. The June 30, 1995 statement ending balance was $359,019. The fund would lose approximately $1,400.00. Selecting Option 3 would be a liquidation over twelve years. At that time, there is to be an approximate value of $228.14 per share. This would be an increase of 5% per year. Pension Board September 21, 1995 Page 2 Mr. Heffernan expressed some concern that Merrill Lynch was not present to assist the Board in this decision, since they are investment experts. He felt they should have explained the various options to the Board. Ms. Varney stated that Ms. Karen Cole of Merrill Lynch had not received any of the information from NCNB regarding the Real Estate Fund and therefore could not assist in answering any questions. Discussion ensued regarding the various election options. Mr. Latimer stated that since this is a long term fund, the amount of risk in real estate is too great considering the purpose of the Board's investment. He then inquired if it was possible to join other cities in litigation. Mr. Fann stated that it was possible, if we joined a city in current litigation. Mr. Charles noted that when the investment of the Pension Plan is compared to other municipal plans, the real estate investment makes our Plan look bad. Mr. Charles called for a straw vote to see who would like to stay in or get out of the fund. The vote was not taken at this time. Mr. Heffernan stated that real estate could quadruple in two years. Since Richmond is an assemblage of land, it is possible that the value could increase. However, there is too much speculation involved at this time to know what will occur. He noted that the Board could not make an informed decision based on the current information. Mr. Fann noted that Arthur Anderson is currently performing an evaluation and will base their decision on the survey that the Board will complete. Mr. Latimer moved that a non-binding vote be taken regarding this issue. The motion died due to lack of a second. Mr. Heffernan made a motion to select Option B1 of the Arthur Anderson Option Election Authorization form which allows Arthur Anderson to make a decision from all four options and which allows them to provide a release to NCNB if Option 2 or 4 is chosen. Mr. Charles seconded the motion. The vote was as follows: In Favor: Mr. Trumble, Mr. Dearden, Mr. Imburgia, Mr. Heffernan, Mr. Charles Opposed: Mr. Latimer The Board then proceeded to answer the Participating Trust Election Profile/Survey Form on a consensus basis. (A copy of the this survey is attached as part of the permanent record.) The interrogatories were numbered 1-13 with the first question being `Based on your current investment policy, how does your plan view the relative attractiveness of the real estate class as compared to other asset classes?" Mr. Heffernan moved that the Board adopt the following answers to questions 1-13 in the Participating Trust Election Profile/Survey Form submitted by Arthur Anderson: 1. Less Attractive 5. Unattractive 9. N/A 2. Staying the Same 3. Uncertain 4. Uncertain 6. No 10. Remote - All the way across 7. No 11. Uncertain S. N/A 12. No answer 13. No answer • • Pension Board September 21, 1995 Page 3 Mr. Latimer seconded the motion and the vote was unanimous in favor. Mr. Heffernan requested that a response be elicited from Arthur Anderson as to which election they will choose on our behalf. 3. APPROVAL OF AUGUST 10,1995 MINUTES Mr. Charles asked that Line 1 on Page 2, Item 2 which reads "Ms. Varney explained that the Pension Summary Plan must be revised every two years." be amended to read "Ms. Varney explained that the Pension Summary Plan must be revised every two years, if there are any changes." He noted that the Plan would not need revision if there were no changes. Mr. Latimer moved for approval of the August 10, 1995 Pension Board meeting minutes as amended. Mr. Charles seconded the motion and the vote was unanimous in favor. 4. ADJOURNMENT The special Pension Board meeting of September 21, 1995 was adjourned at 9:20 A.M. il.NuERSEN ARTHURANDERSEN&Co, SC PARTICIPATING TRUST ELECTION PROFILE/SURVEY FORM CONFIDENTIAL • For All Participating Trusts: Please confirm or correct the following information: Plan Name Plan Year -End Plan Sponsor Miami Shores Village Authorized Fiduciary Patricia Varney Address 10050 N.E. Second Avenue Miami Shores, FL 33138 Phone Number Fax Number (305) 795-2209 (305) 756-8972 Correction, If Applicable Miami Shores Pension Plan September 30 Please complete the following questions as completely as possible: Type of Participating Trust/Plan Defined Benefit Pension ❑ Money Purchase Pension 40 ❑ Profit Sharing (without Code § 401(k) salary deferrals) ❑ Profit Sharing (with Code § 401(k) salary deferrals) ❑ Stock Bonus Plan or ESOP ❑ Other Plan Control Number 345 -2 - Selected Information (As of the latest available date): Date Amounts (As Of) Total Plan Assets: $10,414, 543 6/30/95 • Total Accumulated Benefit Obligations (if the plan is a defined benefit pension plan): 7,424,548 9/30/94 Total Number of Plan Participants: 94 9/30/94 What are the current asset allocation percentages, current target allocation ranges, and target annual rates of return for the following asset classes? (Enter percentage ranges or N/A.) Current Target Asset Allocation Target Annual Allocation Range Rate of Return Equity securities: 56 % 50 % Fixed income investments: 40 % 50 % Real estate: 3 % % Cash 1 % % Other. % 0/6 Total 8 % 100% 100% Overall 8 % Based on your current investment policy, how does your plan view the relative attractiveness of the real estate asset class as compared to other asset classes (e.g., equities, fixed income)? ❑ Very Attractive ❑ Attractive C Less Attractive (At present) ❑ Unattractive ❑ Uncertain/No Opinion Is your plan currently increasing or decreasing its allocation to the real estate asset class? • ❑ Increasing ❑ Decreasing ® Staying the same Plan Control Number 345 • -3- Based on your plan's current investment policy or approach, are your plan's real estate investments intended to be restricted primarily or solely to income-producing property? ❑ Solely income-producing ❑ Primarily income-producing ❑ No such restrictions ® Uncertain What is your general opinion as to the merits of nonincome -producing real estate (i.e., land held for development and subsequent sale) as a plan investment? ❑ Very Attractive ❑ Attractive ❑ Less Attractive ❑ Unattractive ® Uncertain/No Opinion What are your current views regarding the attractiveness of the REF as a real estate investment vehicle as compared to other real estate investment opportunities? ❑ Very Attractive ❑ Attractive ❑ Less Attractive Li Unattractive ❑ Uncertain/No Opinion Is your plan currently frozen (Le., no additional benefits are accruing under a defined benefit plan or no additional contributions are contemplated under a defined contribution plan)? ❑ Yes (23 No Is your plan currently considering or in the process of being terminated? ❑ Yes ❑ No If your plan is currently considering or in the process of being terminated, when do you expect to distribute plan assets? •0 Immediately ❑ Within a year ❑ Within two years ❑ Longer than two years ❑ Uncertain ❑ Not Applicable Plan Control Number 345 • -4 - If your plan is a defined benefit plan which plans to distribute all of its assets within the next two years, who has the right to any assets in excess of accrued plan benefits on termination? ❑ Plan Sponsor (employer) ❑ Plan Participants ❑ Uncertain X Not Applicable What is the probability that it will be necessary to liquidate your investment in the REF in the time period indicated below in order to pay benefits under your plan, considering, for example, ongoing cash flow needs and the likelihood of plan termination? (Place an X on the line that is most appropriate for each time period.) 0-5 Years 5-10 Years 10-12 Years Over 12 Years Remote X X X X Unlikely Possible Probable Highly Probable Definite Uncertain/No Opinion In your opinion, what is the likelihood that your plan will initiate any litigation in connection with your plan's investment in the REF, taking into consideration the applicable statutes of limitations? ❑ Remote ❑ Unlikely ❑ Possible ❑ Probable ❑ Highly probable ❑ Definite ® Uncertain/No Opinion If possible, probable, highly probably, or definite, why? Plan Control Number 345 -5 - If your answer to the prior question was possible, probable, highly probable, or definite, in your opinion, is it likely that the benefits from any potential litigation (e.g., possible revenues) would exceed the sum of related costs (Le., litigation costs, including attorneys' fees, travel expenses, copying expenses, etc.), and the value of the foregone additional potential compensation from providing NationsBank a release (Le., the present value of any right to participate in any increase in the REF's unit value two years after the settlement valuation date under Option 2 or the present value of any minimum floor price guarantee under Option 4)? • ❑ Yes ❑ No ❑ Uncertain What other factors, if any, do you feel should be considered in deciding which investment option is most appropriate for your plan, and what are your related opinions? Factor(s) Opinion(s) For Defined Contribution Participating Trusts Only (i.e., Plans with Individual Accounts): Does your plan currently allow participants to direct investments in connection with their individual account balance? ❑ Yes ❑ No • If yes, is the REF investment by itself one of the investment options available to plan participants? ❑ Yes ❑ No Plan Control Number 345 Is the REF investment by itself one of several real estate investment options available to plan participants? D Yes D No Is the REF investment part of a larger pooled real estate option available to plan participants? • D Yes • D No Signature of Authorized Plan Fiduciary 2 a Name (Please Print) Patricia Varney Title Plan Administrator Plan Control Number 345