Pension Board of Trustees

City of Wilton Manors General Employee & Police Pension Board of Trustees Minutes March 7, 2017 I. Pledge of Allegiance II. Call To Order ~~'f(J(1q} • I Chairpersona4*l called the meeting of the Wilton Manors Pension Board of Trustees to order at 5:45 p.m. Ill. Roll Call Barbara Bihus, Shawn Chadwick, Biagio Balistreri, John Pilch & Chairman Joshua Kroon Others Present: Joan Wall , Eric Leventhal & Steve Gordon, Auditors, John Small, Southeastern Advisory Services, Bill Bell & Jim Skesavage, Atlanta Capital & Bob Mays, Finance Director IV. Comments from the Public None V. Consent Agenda Chairman Kroon asked for a motion to approve the consent agenda and also asked if anyone wanted any item pulled from the Consent Agenda for further discussion and if not he would like a motion to approve the Consent Agenda. Approval of Minutes: Trustee Balistreri said that on page 6 of 7 in the minutes under the first bullet point it states "The Pension Plan is funded entirely by the contributions made by the City". There are 10 members in the plan that contributes to the Plan too. It was discussed and agreed to add the word almost between funded and entirely. Correction "funded almost entirely". With this correction Trustee Balistreri made the motion to approve the consent agenda, seconded by Trustee Bihus. Vote: Ayes: Bihus, Chadwick, Pilch, Balistreri and Chairman Kroon. Nayes: None Motion to Receive and File: Attorney Levinson said the bills were paid and said that the Board could ratify the motion of the bills. Trustee Chadwick made the motion, seconded by Trustee Bihus. Vote: Ayes: Balistreri, Pilch, Bihus, Chadwick & Chairman Kroon. Nayes: None VI. New Business 1. Kabat, Schertzer, DelaTorre, Taraboulos & Co- Presentation Financial Statements Steve Gordon introduced himself to the board and said he has been doing the audit for the board for three years. Also present was Steve's partner Eric Leventhal. Eric said he would present the year ended September 30, 2016 financial statements to the board. •!• Independent Auditor's Report- It is a clean unmodified opinion is what the board wants to hear and it is important for the City as well. •!• Page 8 this is going to show what the net position was as of September 30, 2016. The total net position restricted for pensions increased in 2016 $23,683,755 and 2015 was less $23,065,544. Page 1 of 5  City of Wilton Manors GE & Police Pension Board of Trustees Minutes Page 2 of 5 March 7. 2017 •!• Page 9 shows the statement of changes in fiduciary net position and how they arrived at this figure •!• Addition of deductions that came into the plan. •!• Total Contributions came down 2016 $1 ,702,141., 2015 was $1 ,741 , 118 •!• The plans assets are the results of the investments. •!• Net Investment Income for 2016$1,717,354 compared to a loss in 2015 ($1 ,489,322) •!• The way things are going we could expect the same results in 2017. •!• Investment expenses went down due to going from active managers to passive managers •!• Total Additions went up in 2016 $3,419,495 and in 2015 it was $261 ,770 •!• Administrative Expenses went up slightly and on page 20 shows a schedule of these fees. In 2016 $95,119 and 2015 $88,375, this was primarily due to Actuarial fees , because of GASB 67 had to be met. •!• Total Deductions went down 2016$2,801 ,284 and 2015$2,844,553 •!• The Net Increase 2016 $618,22 and in 2015 a decrease ($2,582,327) •!• This basically shows how we got from point A to point B. Eric mentioned that GASB 72 came out in 2016 and what this is an expanded disclosure on the investments, the fair value measurements breaks out into different levels, Level 1 - 2 - 3. • Level 1 - Quoted Prices in Active Markets for Identical Assets • Level2- Significant Other Observable Inputs • Level 3- Significant Unobservable Inputs (We do not have an of these) Attorney Levinson asked if they received full cooperation from everyone to prepare the audit. Eric & Steve both said they received full cooperation from everyone and no additional item were found during the audit. Attorney Levinson went over the incident that occurred at the City of Miami Beach, and he asked Steve Gordon about our internal controls. Steve said that they do not have the situation where one person is in charge of a certain portion of a set of books. In our case he said we have good controls, we do not have the same structure as a City has. Joan Wall does our bookkeeping and looks over cash accounts and they have to balance every month. In addition to that we have an investment advisor who doesn't touch the investments but he looks at the reports, they can't write checks or withdraw money. We have several people looking at these accounts for the plan. A City is a very complex organization, there is a lot of management and a lot of people are in charge or responsible for different areas. Steve said the entire management of the fund is right here, the board approves every single check that goes out and Joan Wall monitors the bank statement every month. Steve Gordon said he would recommend the Board vote to accept the audit. Trustee Chadwick made the motion to accept the Financial Statements as presented, seconded by Trustee Pilch. Vote: Ayes: Bihus, Balistreri, Pilch , Chadwick & Chairman Kroon. Nayes: None City of Wilton Manors GE & Police Pension Board of Trustees Minutes Page 3 of 5 March 7. 2017 VII. Other Business 1. Atlanta Capital Investment Managers Bill Bell, CFA Portfolio Manager-Core Equities, Principal and Jim Skesavage, Director of Marketing & Client Service, Principal Jim Skesavage gave the recap of Atlanta Capital: • Founded in 1969 in Atlanta, Georgia • Singular focus on High Quality stocks and bonds • Owned by employees & Eaton Vance Corporation • Employ 42 professionals (19 are equity partners) • There is a lot of stability in the organization • They manage about 15 Cities in the state of Florida Bill Bell went over additional information: • Consistent Growth & Stability in Earnings • They have a consistent return pattern. • Investment Objective- "to outperform over a long term by participating in rising markets and protecting capital during declining markets" • Investment Philosophy & Process- "believe that companies with a demonstrated history of consistent growth & stability in earnings provide attractive returns with moderate risk over the long-term." • They meet with the management teams several times before they buy. • They look for fair prices or a discounted price if they can get it. • # of Holdings is 50 • Page 12 of report High Quality SMID Cap Companies • Page 13 of report High Quality SMID Transactions 2. Southeastern Advisory Services Fourth Quarter- December 31, 2016 John Small was present to go over the 4th quarter performance with the Board. •!• S & P had a good quarter 3.8%, 1 year 12%, 3 year 8.9% •!• The EAFE Index down -0.7% for the quarter, 1 year 1.0% and -1.6% for 3 year •!• Barclays U.S. Aggregate -3.0% for the quarter that was caused by rising interest rates, 1 year 2. 7% and 3 year 3.0% •!• 91 Day Treasury Bills 0.1% for the quarter, 1 year 0.3% and 3 year 0.1% •!• CPI 0.0% for the quarter, 1 year 2.1% and 3 year 1.2% Portfolio Growth •!• Quarter gain $415,195 $26,477,625 for the quarter ending 12/31/16 •!• Garcia Hamilton - Fixed ($843) & Money Market ($952,795) this loss was due to the rising interest rates. City of Wilton Manors GE & Police Pension Board of Trustees Minutes Page 4 of 5 March 7, 2017 Performance Comparison Total Fund Analysis 4th quarter 1.6%/35th - 1 year 9.0%/26th- 3 year 2.9%/90th - 5 year 7 .3%f77th Equity Analysis 4th Quarter •!• Vanguard Russell 1000 3.8%/79th for the quarter •!• Vanguard Mid Cap Value 4.4%/58th for the quarter •!• Eaton Vance SMID Cap 2.5%/73rd for the quarter •!• Garcia Hamilton- -1.5%/17th for the quarter Allocation of Assets for the Quarter Ending December 31, 2016 •!• Equity 59.3% -International 0.0%- Fixed Income 31.6%- Cash 9.0% Overall Median for the Period Ending 12/31/16 •!• Equity 41.4% - International 8.3% - Fixed Income 30.8% - Cash 3.3% Objectives and Policy Review The total rate of return should equal or exceed the Consumer Price Index plus 5% over a rolling three-year period. Not Achieved 2.9% The total rate of return should rank in the top half of the Wilshire Cooperative Public Fund Universe over a rolling three year period. Not Achieved 90th Each security class to exceed the appropriate selected unmanaged market index over a 3 year period •!• Garcia Hamilton Jackson - Fixed Income- Achieved 3.1% versus 2.1% Percentile rank of manager in appropriate universe must exceed the median (50th percentile) •!• GH Fixed Income -Achieved 32"d Percentile rand of manager in appropriate universe must place within the top third (33 1/3 percentile) •!• GH Fixed Income- Not Achieved 35th Composite: Equity 59.3% within range- Fixed Income 31.6% within range- Cash 9.0% within range No violation of policy The fund did very well this quarter. City of Wilton Manors GE & Police Pension Board of Trustees Minutes Page 5 of 5 March 7, 2017 3. Discussion CALPERS John Small said he sent an article "Calpers Lowers Projected Return on Investment" from the NY Times dated 12/22/16 to be added to the agenda. There was a brief discussion about this article with the Board. 4. Joan Wall, Administrator Nothing to report today. Attorney Report Attorney Levinson handed out the NASRA Issue Brief- Public Pension Plan Investment Return Assumptions. There was a brief discussion on this with the Board. Securities Litigation Policy - Something the board should consider and after a brief discuss it was decided to place this item on the agenda at a later date. Attorney Levinson said the Board is encouraged to go to conferences but we do not force anyone to go. Chairman Kroon said that Trustee Chadwick and he are going to the IFEBP School in Philadelphia, PA. May 1-4, 2017. He encouraged the new trustees to attend some of these other classes once have been certified at the FPPTA schools ~ Chairman Kroon asked Attorney Levinson if a joint meeting or workshop would be a good idea to have with the City Commissioner's and the Pension Board. Both Attorney Levinson & Bob Mays said it would be and Bob said the City Commissioner's wanted to do something like this. Bob Mays said he would get some dates together and try and set this up after our June meeting so that the Valuation would be available for the workshop. Adjournment Chairman Kroon made the motion to adjourn the meeting, seconded by Trustee Chadwick. Respectfully S~~ udith A. Hoekstra Recording Secretary