LimeBike Memorandum of Understanding

General Employees Pension Board- October 24, 2017 Minutes

MIAMI SHORES VILLAGE
GENERAL EMPLOYEE PENSION BOARD MEETING


The Miami Shores Village General Employee Pension Board and Police Retirement Board jointly met on Tuesday, October 24, 2017 at the C. Lawton McCall Community Center. The General Employee Pension Board meeting was called to order at 8:37 AM.   The following individuals were present for the meeting:
PRESENT:                                                                 ABSENT:
Tom Benton – Pro-Tem Chairman                              Averil Dorsett
Jim McCoy                                                                  Tom Longman
Angie Dorney                                                              Mac Adam Glinn
Robert Williamson
Also present were Ysabely Rodriguez, Village Clerk, Pension Plan Administrators, Doug Falcon and Yolanda Shea, Dave West of AndCo Consulting (formerly The Bogdahn Group), Pension Attorney Adam Levinson, Auditor Enrique Llerena, Alberni Caballero & Fierman,

ELECTION
The Pro-Tem Chairman asked to table the election for a Chairman/Secretary for the next meeting when they have a full quorum.

AUDIT
Mr. Enrique Llerena discussed the Miami Shores Village, Florida General Employees and Police
Officers’ Retirement System Villages Reporting for the Fiscal Year Ended September 30, 2016.
Trustee Williamson asked Mr. Llerena why this audit report is been presented so late in the year.
Mr. Llerena advised the Board that this was a clean audit and the reason he is presenting the audit at this time is because he was asked by the Board to present at this time, however, the audit was fully completed May 2017. Trustee Williamson asked that for future audits the trustees be given the audit results as soon as they are complete. Mr. Falcon advised the Board he would circulate it to the Board as soon as it becomes available to him.

Attorney Levinson reminded the Board that these types of audit are required by state law annually and one of the questions the trustees would want to know is if the auditor received full cooperation in terms of obtaining all the information necessary to perform the audit from the service providers; for example the administrator, investment consultant, custodian, legal, etc.? Mr. Llerena said he received full cooperation from all parties. Attorney Levinson asked Mr. Llerena if while performing the audit anything seemed unusual and are the internal controls in place working the way they should. Mr. Llerena said there were no items that were unusual and the internal controls in place are working properly. Attorney Levinson asked Mr. Llerena if the administrative fees for example investment, actuarial, custodian, legal and administrator seem reasonable.


Mr. Llerena responded that the expenses were all in line for the size of the fund and investments.

Mr. West advised the Board that the methodology he uses which is industry standard for calculating investment returns, is not the same methodology used by auditors and actuaries. However, although there are three different methodologies, Auditor, Actuary and Investment the results while not exact are very similar.

Trustee Dorney moved approval of the Miami Shores Village, Florida General Employees and Police Officers’ Retirement System Villages Reporting for the Fiscal Year Ended September 30, Trustee McCoy seconded the motion and the motion passed unanimously

APPROVAL OF MINUTES – July 25, 2017
The Pro tem-Chairman asked if anyone had any questions regarding the minutes of the meeting held July 25, 2017 there being no questions, Trustee Williamson moved approval of the July 25, 2017 Board meeting minutes. Trustee McCoy seconded the motion and the motion passed unanimously.

PUBLIC COMMENT:
None addressed to the General Employee Pension Board.

APPROVAL OF PAYMENT WARRANT: 2017-0011
The Pro tem-Chairman asked if anyone had any questions regarding the approval of Warrant 2017-0011, there being no questions,Trustee Williamson moved to approve Payment Warrant number 2017-0011. Trustee McCoy seconded the motion and the motion passed unanimously.

RATIFY PAYMENT WARRANT:  2017-0008 and 2017-0010
The Pro tem-Chairman asked if anyone had any questions regarding the ratification of Warrants 2017-0008-2017- 0010, there being no questions,Trustee Dorney moved to ratify payment warrant 2017-0008 and 2017-0010 as presented. Trustee
Williamson seconded the motion passed unanimously.

INVESTMENT
For the benefit of the new trustee, Mr. West gave a brief background of AndCo Consulting. He
discussed the new ownership structure of the company in terms of its owners/partners and how this partnership is finalized. They are and remain an independent consultant and believe this is a very important model for the Board to have. The firm is based on total transparency. The firm does not receive other sources of revenues other than the fees that have been established for the account on a quarterly basis. On an annualized basis they provide the auditors with their partner financial reports that confirm their fee structure. They work closely with the actuary and work out what the liability is and put together a program that meets the minimum funding requirement.

After giving the Board a brief status of the current investment market situation, he discussed the Miami Shores Village General Employees’ Pension Fund Investment Performance Review Period Ending September 30, 2017.

●      Returns were positive for major equity and fixed income indices for the 3rd quarter of 2017.
●    International equity market benchmarks continued to outpace U.S. markets through the 3rd quarter of 2017 as both developed and emerging market international equities saw benefits from continued strength in global macroeconomic data, a weakening U.S. Dollar and ongoing accommodative global central bank policies.


● The yield curve continued to flatten through the 3rd quarter of 2017 as interest rates rose
slightly from the prior quarter, but with greater magnitude in short-term maturities.


● Despite political gridlock in Washington, increased aggression between the U.S. and North Korea and several major weather events, including three hurricanes that caused catastrophic damage to Texas, Florida and Puerto Rico, domestic equity prices pushed higher during the 3rd quarter.


● Small cap stocks were the best performing capitalization segment across the spectrum for the 3rd quarter, bucking a year-to-date trend of large cap outperformance.

 

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● The 3rd quarter built on year-to-date trends as growth style indices outperformed their value
counterparts.
● Domestic equity valuations appear stretched relative to historical levels based on Forward
Price/Earnings ratios (P/E), with even the most reasonably valued indices trading well above their historical P/E valuations.
●      Sector performance within the Russell 1000 Index was largely positive for the 3rd quarter.
● Small cap sector results generally outperformed their large capitalization counterparts for the
quarter.
● Using S&P 500 sector valuations as a proxy for the market, Forward P/E ratios for eight of the GICS sectors were higher than their long-term averages at quarter-end.

Mr. West advised the Board that at this time there are no recommendations. As it stands, all the investments in the portfolio are working as expected.

Mr. West advised the Board that as an advisor he is not allowed to make a recommendation or vote on the proxy received from Greatbanc Trust Company regarding the Vanguard Funds.  He advised the Board that this proxy is more of a social investment issue and his thought would be to vote in favor with the management recommendation. Attorney Levinson advised the Board that they have three options, option 1) is to not vote, option 2) they can vote in favor of the Vanguard’s management recommendation and 3) to vote against Vanguard’s management recommendation.

Trustee Williamson moved to vote on the Vanguard Proxy page 22 as follows: #1 “All”, #2 “For”, #3 &
#7, “Abstain”, Page 23 as follows: #1 “All”, #2 & #3 “Abstain”, trustee Dorney second the motion,
One Nay, the motion passed.

ATTORNEY
Attorney Levinson discussed his Client Memorandum dated 10/13/2017 regarding Florida Retirement System (FRS) discount rate and the fact that the Florida Retirement System’s Actuarial Assumption Conference was held to review assumptions and methods used by one of the country’s largest public retirement systems. As had been suggested last year, the FRS will be lowering its discount rate (otherwise known as the “investment earnings assumption” or “assumed rate of return”) from 7.6% to 7.5%.

This concluded the attorney’s report.

ADMINISTRATOR
Mr. Falcon advised the Board that Gabriel Roeder Smith (GRS) sent a letter dated October 17, 2017 stating that as of January 20, 2017 the Florida Division of Retirement (Division) Bureau of Local Retirement Systems issued a Memorandum to announce the activation of their new online reporting portal for pension plans subject to the reporting and disclosure requirements. As a result GRS start-up fee to prepare and file the information summarized on their letter will be $1,000 - $1,250.00.  The ongoing fee in subsequent years will be $400-$500.

Mr. Falcon advised the Board that the next FPPTA conference coming up will be held January 28-31, 2018 at the Hyatt Regency in Orlando and a couple of trustees expressed their desire to attend.

There being no further business to discuss a motion was made to adjourn the meeting at 10:16 a.m. motion seconded and passed unanimously.


Approved:  At Pension meeting 1/23/2018


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APPROVAL OF MINUTES – July 25, 2017
The Pro tem-Chairman asked if anyone had any questions regarding the minutes of the meeting held July 25, 2017 there being no questions,Trustee Williamson moved approval of the July 25, 2017 Board meeting minutes. Trustee McCoy seconded the motion and the motion passed unanimously.

PUBLIC COMMENT:
None addressed to the General Employee Pension Board.

APPROVAL OF PAYMENT WARRANT: 2017-0011
The Pro tem-Chairman asked if anyone had any questions regarding the approval of Warrant 2017-0011, there being no questions,Trustee Williamson moved to approve Payment Warrant number 2017-0011. Trustee McCoy seconded the motion and the motion passed unanimously.

RATIFY PAYMENT WARRANT:  2017-0008 and 2017-0010
The Pro tem-Chairman asked if anyone had any questions regarding the ratification of Warrants 2017-0008-2017- 0010, there being no questions,

Trustee Dorney moved to ratify payment warrant 2017-0008 and 2017-0010 as presented. Trustee Williamson seconded the motion passed unanimously.

INVESTMENT
For the benefit of the new trustee, Mr. West gave a brief background of AndCo Consulting. He
discussed the new ownership structure of the company in terms of its owners/partners and how this partnership is finalized. They are and remain an independent consultant and believe this is a very important model for the Board to have. The firm is based on total transparency. The firm does not receive other sources of revenues other than the fees that have been established for the account on a quarterly basis. On an annualized basis they provide the auditors with their partner financial reports that confirm their fee structure. They work closely with the actuary and work out what the liability is and put together a program that meets the minimum funding requirement.

After giving the Board a brief status of the current investment market situation, he discussed the Miami Shores Village General Employees’ Pension Fund Investment Performance Review Period Ending September 30, 2017.

●      Returns were positive for major equity and fixed income indices for the 3rd quarter of 2017.
●    International equity market benchmarks continued to outpace U.S. markets through the 3rd quarter of 2017 as both developed and emerging market international equities saw benefits from continued strength in global macroeconomic data, a weakening U.S. Dollar and ongoing accommodative global central bank policies.
● The yield curve continued to flatten through the 3rd quarter of 2017 as interest rates rose
slightly from the prior quarter, but with greater magnitude in short-term maturities.
● Despite political gridlock in Washington, increased aggression between the U.S. and North Korea and several major weather events, including three hurricanes that caused catastrophic damage to Texas, Florida and Puerto Rico, domestic equity prices pushed higher during the 3rd quarter.
● Small cap stocks were the best performing capitalization segment across the spectrum for the 3rd quarter, bucking a year-to-date trend of large cap outperformance.

2

3
● The 3rd quarter built on year-to-date trends as growth style indices outperformed their value
counterparts.
● Domestic equity valuations appear stretched relative to historical levels based on Forward
Price/Earnings ratios (P/E), with even the most reasonably valued indices trading well above their historical P/E valuations.
●      Sector performance within the Russell 1000 Index was largely positive for the 3rd quarter.
● Small cap sector results generally outperformed their large capitalization counterparts for the
quarter.
● Using S&P 500 sector valuations as a proxy for the market, Forward P/E ratios for eight of the GICS sectors were higher than their long-term averages at quarter-end.

Mr. West advised the Board that at this time there are no recommendations. As it stands, all the investments in the portfolio are working as expected.

Mr. West advised the Board that as an advisor he is not allowed to make a recommendation or vote on the proxy received from Greatbanc Trust Company regarding the Vanguard Funds.  He advised the Board that this proxy is more of a social investment issue and his thought would be to vote in favor with the management recommendation. Attorney Levinson advised the Board that they have three options, option 1) is to not vote, option 2) they can vote in favor of the Vanguard’s management recommendation and 3) to vote against Vanguard’s management recommendation.

Trustee Williamson moved to vote on the Vanguard Proxy page 22 as follows: #1 “All”, #2 “For”, #3 &
#7, “Abstain”, Page 23 as follows: #1 “All”, #2 & #3 “Abstain”, trustee Dorney second the motion,
One Nay, the motion passed.

ATTORNEY
Attorney Levinson discussed his Client Memorandum dated 10/13/2017 regarding Florida Retirement System (FRS) discount rate and the fact that the Florida Retirement System’s Actuarial Assumption Conference was held to review assumptions and methods used by one of the country’s largest public retirement systems. As had been suggested last year, the FRS will be lowering its discount rate (otherwise known as the “investment earnings assumption” or “assumed rate of return”) from 7.6% to 7.5%.

This concluded the attorney’s report.

ADMINISTRATOR
Mr. Falcon advised the Board that Gabriel Roeder Smith (GRS) sent a letter dated October 17, 2017 stating that as of January 20, 2017 the Florida Division of Retirement (Division) Bureau of Local Retirement Systems issued a Memorandum to announce the activation of their new online reporting portal for pension plans subject to the reporting and disclosure requirements. As a result GRS start-up fee to prepare and file the information summarized on their letter will be $1,000 - $1,250.00.  The ongoing fee in subsequent years will be $400-$500.

Mr. Falcon advised the Board that the next FPPTA conference coming up will be held January 28-31, 2018 at the Hyatt Regency in Orlando and a couple of trustees expressed their desire to attend.

There being no further business to discuss a motion was made to adjourn the meeting at 10:16 a.m. motion seconded and passed unanimously.
Approved:  At Pension meeting 1/23/2018

 

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