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Clermont Fire 03-29-2019 Joint Meeting MinutesCity of Clermont Minutes FIREFIGHTERS PENSION BOARD OF TRUSTEES POLICE OFFICERS PENSION BOARD OF TRUSTEES JOINT PENSION BOARD MEETING MARCH 29, 2019 The Firefighters Retirement Plan Board of Trustees and the Police Officers Retirement Plan Board of Trustees met in a joint meeting on Friday, March 29, 2019 in the Clermont City Hall Council Chambers. Firefighters' Board members present: Judd Lent, Ryan Moore, and Jim Purvis. Attorney Bonni Jensen was present. Police Officers' Board Members present: Scott Tufts, Mark Vitek, and Jason Sayre. Attorney Scott Christensen was present. Burgess Chambers & Associates members present: Karla Engard and Mitchel Brennan. Staff member present: Finance Director Van Zile. The Resource Centers staff members present: Scott Baur and A.C. Lovingood. CALL TO ORDER Chairman Lent called the meeting to order at 10:02am. Trustee Tufts called the meeting to order at 10:02am. PUBLIC COMMENT There was no public comment. REPORTS Request for Proposal: Custodian Karla Engard reviewed the results from the custodian RFP starting with the vendor questionnaire that they had sent out to the prospective custodians. Karla noted that The Resource Centers has the ability to process disbursements if the Boards wanted to utilize that service. Ms. Engard stated that the search is for a custodian who is capable to transition the funds held at Florida League of Cities and whom have tracking abilities and excellent customer service. Ms. Engard informed the Board that her firm is very familiar working with Fiduciary Trust, Salem Trust, and US Bank. All three custodians offer quarterly reports and they have top notch technological platforms with the ability to backdate errors. Ms. Engard reviewed the fees and proposed services from the five custodian proposals along with their services. Salem Trust had fee proposals for all mutual fund investments and separate accounts for managers, with higher fees for separate accounts. Ms. Engard said that they expect to begin with mutual funds or ETF holdings then move to some separate accounts over time. Mitchel Brennan explained possible trading costs depending on the type of manager and frequency of trades. City of Clermont Minutes FIREFIGHTERS PENSION BOARD OF TRUSTEES POLICE OFFICERS PENSION BOARD OF TRUSTEES JOINT PENSION BOARD MEETING MARCH 29, 2019 Ms. Engard did informed the Boards that TMI will acquire Salem Trust on Monday and does not foresee any immediate real impact on the day to day operations. She continued to address trading charges in detail and noted that management at Salem Trust will not change as a result of the anticipated TMI transaction. Ms. Engard stated that Burgess Chambers & Associates recommends going with Salem Trust with negotiated fees. Mr. Brennan discussed possible manager choices as they relate to estimates of trading. The Firefighters' Board of Trustees prefers an all-inclusive fee. Salem did not provide a fee above $30M in assets, we also recommended Salem Trust as a preferred choice based on fees and services, Attorney Scott Christensen believes agreement on fees with transition from fixed preferred to asset based would require extra work with the agreement. Just leans to Salem Trust based on trading fee estimates. Firefighter Trustee Ryan Moore made a motion to select Salem Trust as custodian in Fixed Preferred, giving council authority to further negotiate fees in the agreement. Jim Purvis seconded the motion. The motion passed 3-0 Attorney Bonni Jensen informed the Board that they will need to have another special meeting. Police Trustee Jason Sayre made a motion to select Salem Trust as custodian in Fixed Preferred, giving council authority to further negotiate fees in the agreement. Mark Vitek seconded the motion. The motion passed 3-0. There was a further discussion regarding the all-inclusive fee or not exceed the fee with possible transaction to separate accounts. There was also a brief discussion on timing of transitions based on implications of signed agreements Index Fund Recommendations Mr. Mitchel Brannan reviewed the proposed initial manager and asset allocation. He suggested that all assets be placed into mutual funds noting that Fidelity currently offers index fund that produces returns with low cost fees which aligns with the investment policy of the Pension Plans. Mr. Brannan then reviewed the Real Estate fund recommendation noting that the management fee may look high, however independent Real Estate Manager fee rates are on average around 0.90%. There was a brief discussion regarding the suggested mutual fund picks and how they align with the Plans' investment policies. City of Clermont Minutes FIREFIGHTERS PENSION BOARD OF TRUSTEES POLICE OFFICERS PENSION BOARD OF TRUSTEES JOINT PENSION BOARD MEETING MARCH 29, 2019 Firefighter Trustee Jim Purvis made a motion to accept the suggested mutual fund picks by Burgess Chambers & Associates. Trustee Ryan Moore seconded the motion. The motion passed 3-0 Police Trustee Mark Vitek made a motion to accept the suggested mutual fund picks by Burgess Chambers & Associates. Trustee Jason Sayre seconded the motion. The motion passed 3-0. Request for Proposal: Actuary Mr. Scott Baur explained the omission from Southern Actuarial Services initially responding to the RFP due to the firm moving five years ago and the RFP request being mailed to the old address in error. He went on to explain that there was a rush to include SAS in the Actuary search. There was a discussion regarding SAS and both Pension Plans came to a consensus to include SAS in the Actuary RFP. Mr. Baur reviewed the three actuary firms that responded to the RFP, noting that they are all equal in their ability to perform the actuary needs of the Pension Plans. A discussion regarding the length of time the costs are guaranteed for and how some of the firms charge their fees. Finance Director Van Zile noted that the city has had some issues with SAS in the past. The Pension Plan trustees continued their discussion regarding the options for actuarial services along with possible issues, errors, and turnaround time. The boards noted that SAS is already familiar with them and that their fees are very reasonable. Firefighter Trustee Jim Purvis made a motion to hire Southern Actuarial Services giving council authority to further negotiate fees in the agreement. Trustee Ryan Moore seconded the motion. The motion passed 3-0 Police Trustee Mark Vitek made a motion to to hire Southern Actuarial Services giving council authority to further negotiate fees in the agreement. Trustee Jason Sayre seconded the motion. The motion passed 3-0. OTHER BUSINESS Bonni provided update on processing of the pending disability case for the Firefighters' Pension Plan noting that the Board needed to schedule a special meeting for the Informal Disability Hearing. NEXT QUARTERLY MEETING: Wednesdav, Mav 22, 2019 @ 9:00 AM ADJOURN: With no further comments, this meeting adjourned at 11:52am.