11-23-1981 Workshop Meeting
e
CITY OF CLERMONT
e
MINUTES
WORKSHOP MEETING
November 23, 1981
A Workshop Meeting of the City Council of the City of Clermont was held in the
City Manager's office on Nbvember 23, 1981 at 3:30 p.m. The workshop meeting
was called to order by Mayor Hoskinson with the following Councilmen in attend-
ance: Michael Conley and Dennis Thomas. Robert Pool and Lester Cole were absent.
Other City Officials present were City Manager Forbesand Finance Director Saunders.
"
PENSION PLAN INVESTMENTS
Terry Rogers and Jan Knowles were present from Sun Bank. They are the
Trust Fund Administrators for Clermont's Pension Plan with the Sun Bank.
Terry Rogers explained the City's Pension Plan Investments and stated that
the general governmental employees' plan is treated very differently from
the Police and Fire Employees' plan, since the Police and Fire investments
must be invested according to state law. The state law covering Police
and Fire investments states that at least ninety pecent of the investment
must be in government bonds. He also explained that the definition of
yield is very important. He stated that yield does not simply mean the
interest earned, but means the price change in stock or bond, plus interest
earned equals total yield or return. Mayor Hoskinson stated that both yield
figures are needed in the City's report. Councilman Conley discussed
the turnover of the City's stocks and bonds. Mr. Rogers explained that
there is a twenty percent limit on buy and sell turnover which he felt was
very restrictive with such a quickly fluctuating market. He also stated
that the City guidelines do not allow more than ten percent of our invest-
ments to be held in emerging growth stock, and this is also a very tight
restriction. Growth stocks are the type of stocks that have risen in
value very rapidly over the last three years. Mr. Rogers also believes
that policies regarding fixed income securities need some changes. The
fact that the City guidelines require our portfolio to be staggered and
that the City is to buy bonds which mature in 25 years is very risky in
such a fluctuating market.
After much discussion, the City Council consensus was to change the above
three restrictions discussed by Mr. Rogers at a Regular Council Meeting.
TRUST FUNDS
Mr. Rogers also stated that the City should consider entering into the com-
mon trust funds managed by Sun Bank. He stated that the return on the
Sun Bank's Common Trust has been very impressive over the past three years,
and out-performed the Standard and Poor 500 Index and Dow Jones Industrial
Average. The City reviewed three asset allocation plans recommended by
the Sun Bank and discussed the possibility of allowing a portion of the
City's pension monies to be invested in Sun Bank's common trust funds.
There was particular interest shown by some Council Members in the Real
Estate Trust.
PENSION PLANS
Terry Rogers explained that it would be much easier for the City if we
would pass an ordinance stating that the Police and Fire Pension investments
could be administered under the same guidelines as the General Employee
Pension Plans. He stated that unless the City passes such an ordinance,
he would have no choice but to invest the City's Police and Fire Plans
as outlined by the state law. City Manager Forbes stated that he would
check into the matter with the City Attorney.
The City Council Members requested that the City Manager prepare a new
"Statement of Investment Authorization" based on the recommendations
of Mr. Rogers. Mr. Forbes stated that a new statement of investment
authorization should be ready for the Council's review at a meeting in
December.
The meeting adjourned at 5:30 p.m.
_/rZ~0, ~)J~
George D. Fofbes, City ~anager
Mayor