MINUTES OF THE REGULAR MEETING OF THE POLICE OFFICERS' PENSION BOARD, JUNE 17, 2011 Present: Chair Ron Baty, Vice-Chair Jody Hudgins, Trustees Kevin Stiff and Tim Van Schultz Absent: Secretary/Treasurer Pamela Nadalini Others Present: Attorney Lee Dehner, Mr. David Bunzel and Padraig Connolly of Aletheia Research, Mr. JD Sitton and Gregory Pittenger of JP Morgan, Pension Plans Administrator Benita Saldutti, Pension Analyst Gail Loeffler, and Staff Member Diane Torres CALL TO ORDER Chair Baty called the meeting to order at 8:18 a.m. APPROVAL OF THE REGULAR MEETING MINUTES OF MAY 27, 2011 On a motion of Trustee Van Schultz and a second of Trustee Stiff, it was moved to approve the minutes of the regular meeting of May 27, 2011. Motion carried unanimously. APPROVAL RE: DROP RETIREMENT REQUEST OF JOHN LEBLANC Ms. Saldutti stated that John LeBlanc has applied for DROP retirement beginning July 1, 2011, and has selected the normal option which provides a death benefit of two-thirds to his spouse after his death. On a motion of Vice Chair Hudgins and a second of Trustee Van Schultz, it was moved to approve the DROP retirement request of John LeBlanc. Motion carried unanimously. INVESTMENT REVIEW: ALETHEIA RESEARCH Mr. Connolly gave an overview of the SEC settlement. He stated that additional staff has been added to ensure that the firm maintains proper compliance in all areas. Mr. Bunzel presented the portfolio performance through March 31, 2011. He stated that the portfolio is high quality holdings with a heavy emphasis on both energy and materials. Vice Chair Hudgins questioned how the characteristics of the Plan's portfolio compare with the top 20 holdings of the composite portfolio shown in the report. Mr: Connolly stated composite portfolio is representative of the Plan's portfolio with the exception of approximately four companies. An exact answer will be provided once the calculations are completed later in the meeting. INVESTMENT REVIEW: JP MORGAN June 17, 2011 - Mr. Sitton presented the quarterly investment review for the quarter ending March 31, 2011, stating the value of the account is $12,546,525 with $2 million in the contribution queue. He continued that the portfolio performed at 3.4% VS. the benchmark of 4.0%. He continued that the strategic property fund has $13.5 billion in assets with $2.2 billion in the contribution queue. REVIEW OF SUNSHINE LAW Attorney Dehner encouraged the Trustees to read the overview of the Sunshine law included in the Agenda packet. He recommended that Trustees not discuss pension issues outside a public meeting which is properly noticed, accessible to the public, with minutes recorded that are subsequently approved. He continued that Trustees should not utilize a third party as a conduit between Trustees. Ms. Saldutti requested that a summary of the gift law be provided. Attorney Dehner stated that that State Statutes provide that Trustees should not receive anything of value if they reasonably believe someone may want to influence their vote on an issue. STATUS RE: DISABILITY REQUEST OF RICHARD CONWAY AND JANINE CROUGH Attorney Dehner stated that he has not yet received the interrogatories and signed medical releases from Richard Conway. He continued that he is still waiting for additional records for Janine Crough. INVESTMENT REVIEW: ALETHEIA RESEARCH (CONTINUED) Mr. Connolly stated that only four of the 20 top holdings are not included in the Pension Plan's portfolio. He continued that the 16 top holdings represents 53% of the Plan's assets, however, the price to earnings (PE) ratios of the composite portfolio are representative of the Pension Fund's portfolio. OTHER MATTERS: Aletheia Research Trustee Stiff stated that he is not pleased with the presentation given by Aletheia Research as the presenters were not prepared and did not have information pertaining to the Fund and did not answer questions. Vice Chair Hudgins requested Staff to search the minutes for the presentation previously given by Aletheia Research and forward the findings to Trustees. Legislative Update Attorney Dehner reported that SB 1128 is effective July 1, 2011, or the date all parties sign the new collective bargaining agreement, whichever is later. He addressed the June 17, 2011 2 definition of compensation which can be used for benefit calculation purposes and stated that any overtime in excess of 300 hours prior to the effective date will not be lost. Frontier Capital Ms. Saldutti stated that the Fund has completed its transition from Buckhead to Frontier Capital. She continued that the firm has been most agreeable to work with and everything has proceeded well. 1999 Benefits Trustee Stiff requested the Pension Plan benefits in place as of March 12, 1999, which cannot be reduced by the City. He asked the amount available to purchase additional benefits. Ms. Saldutti stated that the Fund has $843,000 allocated for additional benefits, but the Plan can only be amended by the City Commission. Next Meeting The next regular meeting will be at 8:15 a.m. on Friday, July 22, 2011, in the City Commission Chambers. ADJOURN The meeting was adjourned at 9:24 a.m. Chair Baty Secretary/reasurer Nadalini June 17, 2011 3