Police Employees Pension Board Meeting Minutes - 12-11-14 (2) vCITY OF ATLANTIC BEACH
BOARD OF TRUSTEES OF THE ATLANTIC BEACH PENSION FUND
POLICE EMPLOYEES' PENSION BOARD MEETING
MEETING MINUTES
December 11, 2014
1. The City of Atlantic Beach Police Employees' Pension Board meeting was called to order at
6:32 P.M. The members in attendance were trustees: Vic Gualillo, Dav id Cameron, Bill Tomson ,
John Wolfel, and Tim Saggau. Pension Plan Administrator Nelson VanLiere, and Investment
Advisor Michael O 'Shields also attended.
2. Courtesy of the floor to visitors. Chris Jorgensen gave a brief overview of family history
mentioning his Uncle Jean Viborel, Magnum Cum Laude , fluent in seven languages and the work he
did at Johnson Wax. He spoke about how much he enjoys the Pension Board meetings. He was
extremely impressed after the October 91h and October 16 1h meetings when Michael 0 ' Shields
advised the Board of possible upcoming market fluctuations and facilitated the Boards plan of action
to handle these changes.
3. Approval of the Minutes for November 13, 2014, Police Employees' board meeting. Motion to
approve was mad e by Vic Gualillo and seconded by David Cameron. The vote to approve was
unammou s.
4. Michael O'Shields led the discussion on investment performance as of 11130/14 including year
to date information.
a. Michael presented a new format for the monthly portfolio review. This new report
consolidates the Police and General Pension Plans into one report. The Trustees
would like to include information comparing our plan to other similar plans to see
ho w we are doing. Michael wi ll add a benchmark page and scorecard. Members
also discussed doing an expanded quarterl y review like they did in the past. It was
agreed to do thi s and will include manager rankin gs and performance matrix. This
information will be based on month end results.
b. Di sc ussion related to current allocation and rate of return. The current plan has
67.8% in Eq uity, 5.5% in Fixed Income and 26.7% in Cash. The ending portfolio
value of $8 ,219 ,554 repre se nts an annualized return of 7.6% for the period
11 /30111 to 11 /30/14.
c. The Board discussed further changes to the allocation of cash and the performance
of the small-value account GW Capital. David Cameron made a motion to move
$408 ,813 from GW Capital into Columbia Management. Bill Tomson seconded
the motion and the vote to approve was unanimous .
d. It was agreed that for the January meeting Michael will provide information
including Target I Index I Return, Comp Analysis as of December 31st, and
alternative investment opportunities including REIT's.
5. RFP Consideration for the replacement of the current Financial Advisor.
a. Bill Tomson said he was not happy with the comments made durin g the last
meeting by Pension Board Attorney Scott Christiansen sayi n g thi s Pension
Board is "stock picking" and Bill does not agree with this. He said they meet
and do analysis and make decisions based on performance. Michael O'Shields
agreed and said they do "Risk Reward Analysis." Under value accounts need
change of action and returns are achieved because of low risk. John Wolfel
said he wants to see where this plan compares to other plans. John and Tim
Saggau want to have more input from Michael since lie is the expert. Vic
Gualillo asked Michael if the Board had made any wrong decisions and
Michael explained that it will take time to see the benefits ofthe changes made
over the last six months. Michael said that a 70% equity share will provide a
better return than a 60% share and so the changes made will do a better job.
We are making policy decisions not "stock picking." John Wolfel spoke about
his idea of preparing an RFP for a new Financial Advisor was not to
necessarily terminate our contract with Michael O 'Shields but to give other
advisors a shot. He said other cities rotate their financial planners and auditors
and they usually do three year stints. During the process we get new ideas.
Nelson gave an overview of the pros and cons with changing financial advisors
and said the main reason to continue with one would be the knowledge base.
Michael O'Shields excused himselffrom the meeting so the Board could
further discuss the desire to begin the RFP process. John Wolfel made a motion
to begin the RFP process and Tim Saggau seconded. John discussed the basic
process and Nelson reiterated the parts of the process as it occurred in the past.
There was more discussion regarding the Foster and Foster report previously
provided by Scott Christiansen and our ranking. Tim Saggau said this report
showed our low ranking and Bill Tomson said we don't know if the returns
from the report include expenses and fees. John said he wants to make sure he
is doing his due diligence and Nelson said yes that is each trustee 's
responsibility. Tim Saggau asked what other ways are there to measure
Michael's performance other than not hitting the 8% target. Nelson explained
the Board Review Committee made the effort to place Finance minded
members on the Pension Board and Michael is following the direction given by
those members . John would like more direction from Michael. Bill said each
Board Member can vote no to any of the items up for a vote but so far the
items have all been unanimously approved. Michael will do what the Board
instructs him to do. Tim Saggau would like more options from Michael. John
Wolfel withdrew his motion and Tim Saggau withdrew his second.
6. Acceptance of 2015 Quarterly Meeting Dates-2015. The agenda included the meeting dates
for the 20 15 Quarter! y meetings sent by Scott Christenson.
7. New business-No new business
8. Adjournment -David Cameron made a motion to adjourn the meeting at 8:07PM.
Vic Gualillo
Chair
David Cameron
Secretary
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