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11-14-1996 Regular Meeting• MIAML SHORES VILLAGE PENSION BOARD NOVEMBER 14, 1996 The regular meeting of the Miami Shores Village Pension Board was held on Thursday, November 14, 1996 in the Chamber of the Village Hall. The meeting was called to order at 8:05 A.M. with the following members present: Present: Absent: Also Present: William Heffernan Joseph Charles Officer Timothy Dearden Walter Latimer Richard Trumble Michael R. Couzzo, Jr. Louis S. Imburgia, Jr., Chairman Mark Ulmer, Village Attorney Patricia Varney, Plan Administrator EMERGENCY AGENDA ITEM - APPOINTMENT OF ACTING CHAIRMAN Due to Mr. Imburgia's absence, Officer Dearden moved to appoint Mr. Heffernan as Acting Chairman for today's meeting. Mr. Charles seconded the motion. The vote was unanimous in favor. Due to the late arrival of Jeff Swanson, Merrill Lynch, Mr. Heffernan proceeded with the agenda. 2a. INVESTMENT REPORT FROM MR. DON BRYANT, BARNETT CAPITAL ADVISORS, INC. Mr. Bryant reported that the total return for the quarter was 3.4%. The fixed income account was up 1.8% for the quarter equal to the Lehman Govt/Corp return. The equity portfolio was up by 4.7% compared to 3.1% of the S&P 500 return. Mr. Swanson arrived at this time. • Pension Board November 14, 1996 Page 2 1. DISCUSSION AND POSSIBLE ACTION REGARDING THE STATEMENT OF INVESTMENT POLICY - Jeff Swanson, Merrill Lynch Mr. Swanson reviewed the Statement of Investment Policy noting the amendments that were made as per the Board's request. He stated that the format was changed slightly to include an addendum for each portfolio manager. Mr. Charles questioned what a reasonable rate of return was. Mr. Swanson stated that Merrill Lynch would determine what reasonable is based on the market conditions. Discussion regarding the policy continued. Mr. Heffernan concluded that a preamble should be included in the general objective of the policy which would allow the termination of a manager at anytime at the discretion of the Board. Mr. Charles noted that the policy states that an investment manager who does not achieve the outlined objectives may be terminated. He asked that the word may be changed to "will." Mr. Ulmer questioned what a domicile outside of the United States. Mr. Swanson stated that the headquarters are outside of the United States with corporation outside of the laws of the United States. Mr. Ulmer noted that the State Statute requires that the corporation be a United States corporation or a state corporation. Mr. Heffernan asked that on page three, under equity securities #2, the word domicile be changed to incorporated. Mr. Ulmer concurred adding that it be incorporated in the United States or one of its States. Officer Dearden left at this time. Mr. Ulmer noted that the contracts with Barnett Banks Trust Company and SunBank Capital Management provide terminable clauses. Mr. Heffernan asked that the Village Attorney provide the Board with language regarding the concerns of Mr. Charles. Mr. Ulmer stated that nothing in the investment policies supersedes any provision contrary to contract. Mr. Swanson noted that the policy is separate from the contract. It is merely a communication of goals and guidelines for the managers. Mr. Ulmer noted that all of the investments (upon changing domicile to incorporated) are authorized by the State Statute with the possible exception of the CMO's. Once the policy is adopted by the Board, the policy must be approved by the Village Council and incorporated into . the Village Ordinances as a variance from the State Statute. Mr. Ulmer again noted that it is not the intention of the Board to modify the contract of the investment managers by adopting the statement of investment policy. Mr. Latimer moved for approval of the statement of investment policy subject to approval by the Village Attorney in final form. Mr. Charles seconded the motion. The vote was unanimous in favor. Pension Board November 14, 1996 Page 3 2b. INVESTMENT REPORT FROM PHILIP ROBERT, STI CAPITAL MANAGEMENT Mr. Robert reported that the total return for the quarter was up 2.6%. The equity portfolio had a • return of 3.3% compared to 3.1% of the S&P 500. The fixed income account had a return of 1.5% just under the Lehman Gov't/Corp of 1.8%. Mr. Robert spoke of the issue regarding defined contribution and defined benefit plans. 2C. INVESTMENT REPORT FROM KAREN COLE, MERRILL LYNCH Ms. Cole reported that the total fund had a return of 3.0% compared to the target index of 2.4%. She reviewed the asset allocation of the portfolio and the growth of the portfolio since inception. The equity portfolio return of 3.9% was ahead of the 3.1% S&P 500. The fixed income account return of 1.6% was under Lehman Govt/Corp by 0.1%. The portfolio ranked 43 in comparison to other Florida Municipal clients. 3. DISCUSSION AND POSSIBLE ACTION REGARDING ATTENDANCE AT ADAPTING A DEFINED CONTRIBUTION PLAN CONFERENCE. Mrs. Varney explained that the information was brought to the Board at Mr. Heffeman's previous request for information regarding a defined contribution plan. Mr. Heffernan noted that the type of contribution plan may become an issue in the future as the current trend is toward a defined contribution. It should be a topic of discussion for the Board to be kept on the back burner. 4. REQUEST APPROVAL OF PAYMENT TO BARNETT BANKS TRUST COMPANY, N.A. Mr. Latimer moved for approval of payment to Barnett Banks Trust Company, N.A. in the amount of $9,826.16 for quarterly management fees ending September 30, 1996. Mr. Trumble seconded the motion and the vote was unanimous in favor. 5. REQUEST APPROVAL OF PAYMENT TO SUNTRUST Mr. Latimer moved for approval of payment to SunTrust in the amount of $11,917.88 for quarterly management fees ending September 30, 1996. Mr. Trumble seconded the motion and the vote was unanimous in favor. • • Pension Board November 14, 1996 Page 4 6. REQUEST APPROVAL OF PAYMENT TO BARNETT BANKS TRUST COMPANY, N.A. Mr. Latimer moved for approval of payment to Barnett Banks Trust, N.A. in the amount of $423.00 for quarterly administrative services ending September 30, 1996. Mr. Trumble seconded the motion and the vote was unanimous in favor. 7. REQUEST APPROVAL OF REIMBURSEMENT TO MIAMI SHORES VILLAGE Mr. Latimer moved for approval of reimbursement to Miami Shores Village in the amount of $1,150.00 for payment made to Gabriel, Roeder, Smith & Company for preparation of proposed ordinance. Mr. Trumble seconded the motion and the vote was unanimous in favor. 8. REQUEST APPROVAL OF PAYMENT TO GABRIEL, ROEDER, S1YIITH & COMPANY Mr. Latimer moved for approval of payment to Gabriel, Roeder, Smith & Company in the amount of $2,430.00 for annual services and actuarial impact statement. Mr. Trumble seconded the motion and the vote was unanimous in favor. 9. REQUEST APPROVAL OF PENSION BOARD MEETING DATES. Mr. Charles moved for approval of the Pension Board meeting dates for 1997. Mr. Trumble seconded the motion and the vote was unanimous in favor. 10. APPROVAL OF THE AUGUST 8,1996 MINUTES. Mr. Charles moved for approval of the August 8, 1996 minutes as submitted. Mr. Trumble seconded the motion and the vote was unanimous in favor. 11. BOARD COMMENTS There were no Board comments. Pension Board 12e ADJOURNMENT November 14, 1996 Page 5 The Pension Board meeting of November 14, 1996 was adjourned at 9:15 A.M. • • William Heffe •A ' g Chairman