MINUTES OF THE REGULAR MEETING OF THE FIREFIGHTERS PENSION BOARD AUGUST 24, 2011 Present: Vice Chair Michael Hartley, Secretary/Treasurer Pamela Nadalini (left at 10:28 a.m.) and Trustees Sheila Roberson and Scott Snow Absent: Chair T.. J. Broom Others Present: Attorney Pedro Herrera, Mr. Howard Bos of Richmond Capital, Mr. Chris Greco, Rusty Creighton, and Christine Turner of Sawgrass Asset Management, Plan Member Mike Martino, Pension Plans Administrator Benita Saldutti, Pension Analyst Gail Loeffler, and Staff Member Diane Torres CALL TO ORDER Vice Chair Hartley called the meeting to order at 9:07 a.m. APPROVAL OF THE MINUTES OF THE REGULAR MEETING OF JUNE 22, 2011 On a motion of Trustee Snow and a second of Trustee Roberson, it was moved to approve the minutes of the regular meeting of June 22, 2011. Motion carried unanimously. RETIREMENT REQUEST: MARY BOUTIELLER, JEFF GUELI, RODRICK PAIGE Ms. Saldutti stated that Mary Boutieller has requested to retire September 24, 2011, at 51 years of age, with 21.58 years of service, and has selected the option to leave 50% to her spouse as a survivor benefit with no lump sum payment. On a motion of Secretaryrreasurer Nadalini and a second of Trustee Snow, it was moved to approve the retirement request of Mary Boutieller. Motion carried unanimously. Ms. Saldutti stated that Jeff Gueli has requested to retire September 24, 2011, at 51 years of age, with 28.49 years of service, and has selected a partial lump sum with a lifetime only benefit meaning no survivor benefit will be provided upon his death. On a motion of Trustee Snow and a second of Secretary/Treasurer Nadalini, it was moved to approve the retirement request of Jeff Gueli. Motion carried unanimously. Ms. Saldutti stated that Roderick Paige has requested to retire September 23, 2011, at 46 years of age, with 26.4 years of service, and has selected the option to leave 75% to his spouse as a survivor benefit with no lump sum. On a motion of Trustee Roberson and a second of Trustee Snow, it was moved to approve the retirement request of Roderick Paige. Motion carried unanimously. August 24, 2011 I SHARE LOAN REQUEST OF JIMMY LOPEZ Ms. Saldutti stated that Mr. Jimmy Lopez is requesting a Share loan in the amount of $10,000 which is in addition to the loan he obtained approximately two years ago. On a motion of Trustee Snow and a second of Secretary/Treasurer Nadalini, it was moved to approve the share loan request of Jimmy Lopez. Motion carried unanimously. INVESTMENT REVIEW: RICHMOND CAPITAL Mr. Bos presented the portfolio summary as of July 31, 2011, stating the market value of the portfolio is $21,665,587. Secretary/Treasurer Nadalini questioned the market's reaction to the recent change in credit rating particularly the treasury sector. Mr. Bos stated that people still believe U.S. Treasury bonds are the safest investment. He continued that portfolio holdings are included in the investment review per the request of the Secretary/Treasurer Nadalini. INVESTMENT REVIEW: SAWGRASS ASSET MANAGEMENT Mr. Creighton presented the portfolio results for the period ending June 30, 2011 stating the Fund value was $20,024,680 as of June 30, 2011. He stated that the portfolio increased 3.1% at the end of the second quarter which is approximately 230 basis points ahead of the benchmark. He continued that the firm avoided substantial loss by eliminating from the portfolio four of the bottom 10 performing companies. Trustee Roberson requested the inclusion of cash flow for the Fund since inception in future reports. Secretary/Treasurer Nadalini questioned the possibility of including the quality ratings and any changes in patterns of companies in future reports, particularly the top 10 holdings. Mr. Creighton stated that the S&P 500 measures quality which is generally the strength of the balance sheet. He continued that a standardized measure for quality ratings does not exist. Therefore, the opinion of the S&P 500 can be provided, however, the projected growth rate or historic trend lines will not be included. Mr. Greco stated that the report will be different than the bond report. He continued that the Board may want the stock rating. He continued that the information will be sent to Ms. Saldutti prior to the September 28, 2011, Firefighters' Pension Board meeting. APPROVAL OF BUDGET Ms. Saldutti stated that the only increases to the budget for fiscal year 2011-12 are related to the cost of paying benefits, primarily pension increases, for the Pension Staff. She stated that the Commission has reviewed the proposed budget but the budget must be approved by the Board. She continued that the only Commission comment pertaining to the budget is related to the high cost of legal expenses. August 24, 2011 2 On a motion of Trustee Snow and a second of Trustee Roberson, it was moved to approve the Pension Department budget for fiscal year 2011-12. Motion passed unanimously. APPROVAL OF ENGAGEMENT LETTER OF BOBBITT, PITTENGER & COMPANY Ms. Saldutti stated that the engagement letter is to secure the audit services for the next fiscal year. She continued that the same services will be provided with a proposed price increase from $9,750 per year to a price not to exceed price $10,200 for services rendered the upcoming year. She continued that the Board may wish to consider proposals from other companies in the next few years to assure complete independence. Vice Chair Hartley requested an item for discussion of considering changing companies be placed on a future Agenda when all Trustees are present. Ms. Saldutti stated that the Board should considering changing companies as early as February 2012 to provide Staff an opportunity to issue a Request for Proposals (RFP) and make a decision based on the information submitted. Vice Chair Hartley noted Board consensus to place an item concerning the possibility of changing companies on the Agenda of the February 2012 Firefighters' Pension Board meeting. On a motion of Trustee Roberson and a second of Trustee Snow, it was moved to approve the letter of engagement of Bobbitt, Pittenger & Company. Motion passed unanimously. ATTORNEY'S REPORT Legislative Update Attorney Herrera explained the effective date for implementation of the new law will be either July 1, 2011, or the date the new collective bargaining agreement is ratified by all parties subsequent to July 1, 2011. Governmental Accounting Standards Board (GASB) Attorney Herrera explained the changes to two rules proposed by GASB which pertain to the manner in which the plan sponsors and pension funds report net pension liability on financial statements. He continued that the implementation of changes is anticipated for the spring of 2012. Educational Opportunities Attorney Herrera stated that the Florida Public Pension Trustees Association (FPPTA) Conference is scheduled for October 3, 4, and 5, 2011, in Tampa. He continued that the International Foundation of Employee Benefits Conference is scheduled for the last week of October in New Orleans. August 24, 2011 3 OTHER MATTERS Assumed Rate of Return Ms. Saldutti stated that an item to discuss the assumed rate of return will be placed on the Agenda for the September 28, 2011, Firefighters Pension Board meeting. Receipt of State Funds Ms. Saldutti stated that the State funds were received earlier in the current week. She continued that the total distribution from the State was $695,000 meaning each retiree eligible to receive the 13th check will be paid $3,760 on September 30, 2011. Contractual Relationships Vice Chair Hartley questioned the length of contractual relationship with Gabriel Roeder Smith & Company (GRS). Ms. Saldutti stated that the Board has had a contractual relationship with GRS since approximately 1991. Following a discussion concerning the process followed for enewal of contractual agreements, Vice Chair Hartley noted agreement of the Board to request Staff and the Attorney to provide timeframes for all contractual relationships to determine appropriate times to issue an RFP in search for comparable pricing and service. Educational Opportunities Trustee Roberson stated that she is interested in attending the Florida Public Pension Trustees Association (FPPTA) Conference scheduled for October 3, 4, and 5, 2011, in the City of Tampa if her schedule permits. Vice Chair Hartley stated that he and Trustee Snow will be attending the FPPTA Conference. Next Meeting The next regular meeting will be September 28, 2011, at 9:00 a.m. in the City Commission Chambers. ADJOURN The meeting was adjourned at 11:03 a.m. Vice Chair Michael Hartley Secretary/Treasurer Nadalini August 24, 2011 4