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POLICE & FIREFIGHTERS' PENSION BOARD REGULAR MEETING
Pursuant to authority of Ordinance C-00-34, Article II, this regular meeting of the Police & Firefighters' Pension Board convened at 12:35 P.M., Wednesday, May 10, 2006 in the Pension Board Conference Room, 888 S. Andrews Avenue, Suite 202, Ft. Lauderdale, Florida 33316.
PRESENT: Dee Seibert, Chairman
Allan Curry, Vice Chairman
Romney C. Rogers, Secretary
Ian Kemp, Trustee
Michael Dew, Trustee
Steve Cypen, Board Attorney
Lynn Wenguer, Administrator
Laurie DeZayas, Pension Aide
Renee Lipton, Recording Secretary
Betty Burrell, Ex-officio
ABSENT: Mark Burnam, Trustee
Tom Topor, Trustee
ALSO PRESENT: Nancy Cone, Treasurer, Retirees’ Assoc.
Linda Solomon Duffey, Secretary, Retirees’ Assoc.
Alan Summersgill, Director, Retirees’ Assoc.
Ann Lindie, Director, Retirees’ Assoc.
Jack Chew, Retirees’ Assoc.
Frank Colleran, Retirees’ Assoc.
Bill Sharp, Retirees’ Assoc.
Sharon Andersen, Asst. Chief, Police Dept.
Mike Hennessy, Police Dept.
Jason Pulos, Asset Consulting
Donald Bellantoni, Koch Reiss
Randall Stanley, Stanley Holcombe
Jonathan Craven, Stanley, Holcombe
James Wallerius, Systematic Financial
Kirk Girrbach, Esq., (re: Philip Girrbach).
Philip Girrbach
ASSET VALUE as of May 9, 2006: $450,529,886.
Chairman Seibert called the meeting to order at 12:35 P.M.
MINUTES: Regular Meeting, April 12, 2006. Mr. Curry made a motion to approve the minutes as submitted. Mr. Rogers seconded the motion. The motion was approved UNANIMOUSLY by the Board.
BENEFIT REVIEW: POLICE DEPARTMENT – New Retirees – Termination of DROP Retirement: Michael J. Moniz, Police Officer. Date of DROP retirement April 1, 2004 with 24.24 credited years of pension service and 26.33 total years of service. Termination date May 6, 2006. Monthly pension benefit $4,435.66. DROP account total $138,580.03.
Caryn Robitaille, Detective. Date of DROP retirement April 21,2002 with 20.03 credited years of pension service and 24.05 total years of service. Termination date April 28, 2006. Monthly pension benefit $3,221.69 (100% Joint & Survivor). DROP account total $181,021.24.
DROP Retirees: Rick Burn, Police Officer. Date of DROP retirement May 7, 2006 with 20.09 years of service. Monthly pension benefit $4,025.10 (Life Annuity).
Lee Spector, Captain. Date of DROP retirement May 27, 2006 with 23.96 years of service. Monthly pension benefit $6,987.01 (Standard).
Requests for Lump Sum Refund – Steven M. Bellerose, Police Officer. Date of Separation January 14, 2006 with 4.10 years of creditable service. Lump sum payment due $17,789.63.
Tracy H. Carson, Police Officer. Date of Separation April 8, 2006 with .65 years of creditable service. Lump sum payment due $2,347.12.
Beneficiary (Retiree Death) Carol Powell dependent upon Walter D. Powell, Police. Date of retirement November 29, 1986. Date of death April 17, 2006. Monthly pension benefit $2,224.96 for one year; reduced to $1,334.98 (60%).
FIRE DEPARTMENT - DROP Retirees: Juana M. Carreras, Driver/Engineer. Date of DROP retirement April 14, 2006 with 20 years of service. Monthly pension benefit $4,210.38 (Life Annuity).
William K. Earle, Lieutenant. Date of DROP retirement April 24,2006 with 20.02 years of service. Monthly pension benefit $4,415.72 (100% Joint & Survivor).
Ralph Madonia, Jr., Driver/Engineer. Date of DROP retirement April 14, 2006 with 20 years of service. Monthly pension benefit $3,770.29 (100% Joint & Survivor).
BENEFIT REVIEW (continuation): Steven C. Radice, Driver/Engineer. Date of DROP retirement April 14, 2006 with 20 years of service. Monthly pension benefit $4,227.16 (Life Annuity).
Jackie L. Ray, Driver/Engineer. Date of DROP retirement April 18, 2006 with 20 years of service. Monthly pension benefit $3,668.53 (100% Joint & Survivor).
Dale A. Zimmerman, Driver/Engineer. Date of DROP retirement April 14, 2006 with 20 years of service. Monthly pension benefit $3,851.11 (100% Joint & Survivor).
Vesting – Penelope Wright, Battalion Chief. Last day worked May 15, 2006 with 11.24 years of service. Monthly benefit of $2,909.59 to commence February 21, 2015.
Motion was made by Mr. Curry to approve the Benefit Review with Mr. Dew seconding the motion. The motion was approved UNANIMOUSLY by the Board.
POLICE DEPT. – Request for Disability: Philip Girrbach.
Mr. Cypen read the minutes of the informal hearing. He then asked Mr. Girrbach’s attorney, Kurt Girrbach to discuss the reasons they requested a second informal hearing. Mr. Girrbach reviewed several medical reports. He then noted that Philip Girrbach was appealing his termination from the Police Department.
Mr. Cypen replied that until this appeal was resolved, the Board could not make any decisions and the Board would have to defer any ruling at this informal level.
Mr. Rogers made a motion to table the request for an informal hearing until the time for an appeal runs out. Mr. Kemp seconded the motion. The motion was approved UNANIMOUSLY by the Board.
BILLS: Agincourt submitted a bill for investment services from 1/1/2006 – 3/31/2006 in the amount of $42,766.89.
The Boston Co. submitted an investment management bill for the period 3/1/06 – 3/31/06 in the amount of $11,290.01.
Essex Investment Mgmt. Co. submitted a bill for the quarterly fee ending 3/31/06 in the amount of $68,297.56.
BILLS (continuation): InTech submitted a bill for investment consulting services for 1/01/06 through 3/31/06 in the amount of $35,559.60.
RhumbLine submitted a bill for the first quarter of 2006 in the amount of $15,897.17.
A motion was made by Mr. Curry seconded by Mr. Kemp to approve payment of these bills as submitted. The motion was approved UNANIMOUSLY by the Board.
2005 ANNUAL AUDIT – Koch Reiss – Don Bellantoni reviewed their draft of the Combined Financial Statements. The Plan’s total assets are $445,834,533 with liabilities of $2,237,917 and net assets of $443,596,616. He reviewed the cash, receivables, investments, fixed assets and liabilities as well as the monies in the share plan. Mr. Bellantoni discussed the Description of the Plan which included the funding requirements.
After discussion of this report, Mr. Rogers asked Mr. Bellantoni for a rating on the commingled fund. Mr. Bellantoni agreed to furnish this information in the final report.
The trustees also reviewed the information on the Share Plan which is held in trust solely for the use of paying the benefits provided and the expenses of the Share Plan.
Mr. Romney then made a motion to add the rating of the commingled fund to the final report. Mr. Dew seconded the motion. The motion was approved UNANIMOUSLY by the Board.
Mr. Bellantoni then requested that the trustees consider changing to a fiscal year reporting rather than an annual year. The trustees noted that this change had been made several years ago and the trustees at that time rescinded their motion and went back to a fiscal year due to a funding loss. This issue will be researched and discussed at the next meeting.
Chairman Seibert thanked Mr. Bellantoni for his preliminary report. Mr. Bellantoni will make the requested change and will have the final report ready for the next meeting.
2006 ACTUARIAL REVIEW – Stanley, Holcombe & Assoc., Inc. - Randall Stanley and Jonathan Craven reviewed the Comparative Summary of Principal Valuation Results. The actuarial value of the fund is $436,905,402 and the total liabilities are $653,373,111. The actuarial accrued liability is $543,206,278 and the unfunded actuarial accrued liability is $129,375,084. The actuarial value of the plan is $413,831,194. The market rate of return was 6.4% and the actuarial rate of return was 3.5%. The trustees discussed the smoothing method and its impact on the Cost of Living Adjustment. Mr. Stanley noted that the method of determining the annual cost of living
2006 ACTUARIAL REVIEW (continuation): adjustment was not working and he encouraged the trustees to redesign the methodology. Mr. Cypen noted that this was not the board’s decision. There are no funds available for a cost of living adjustment. The System’s provisions do not permit a COLA on the July 1 following a year with an actuarial loss.
They reviewed the contributions for the 2006 fiscal year from the City and the State of Florida.
The investment return, (based on the actuarial value of assets) was less than expected and had a major impact on Plan costs. Higher turnover than expected was largely offset by the cost of new participants. Salary increases were less than expected and helped keep costs down.
Mr. Rogers made a motion to approve this report with Mr. Kemp seconding the motion. The motion was approved UNANIMOUSLY by the Board.
INPUT FROM ACTIVE & RETIRED POLICE OFFICERS & FIREFIGHTERS:
Mr. Chew discussed the fact that there would be no Cost of Living Adjustment this year for retirees.
ADMINISTRATOR’S REPORT – Academic Incentive Pay: Lynn Wenguer reviewed the prices for either setting up an in-house program or having Northern Trust make these payments. The trustees discussed both avenues as well as doing this quarterly, semi-annually or annually.
Mr. Romney stated that an annual check would be easier to prepare. In the event of a death, payment would be calculated from the first of the year until the month of death.
After discussion, Mr. Rogers made a motion to spend $12,000 to set up this program. Mr. Kemp seconded the motion. The motion was approved UNANIMOUSLY by the Board.
Administrator’s Performance Review: Mr. Romney made a motion to table this item with Mr. Curry seconding the motion. The motion was approved UNANIMOUSLY by the Board.
Me Too II Lawsuit: Mr. Cypen advised that this is still on going.
QUARTERLY PORTFOLIO REVIEW – Asset Consulting Group – Jason Pulos noted that all the domestic indices posted positive returns for the first quarter of 2006. The S&P Index returned 4.2%. The Russell 1000 Value Index outperformed its counterpart, the Russell 1000 Growth Index, by 282 basis points. International equities (MSCI EAFE) returned 9.5% in this quarter.
The total fund increased $9.2 million from the December 31, 2005 market value of $441.3
QUARTERLY PORTFOLIO REVIEW (continuation): million. For this quarter, the fund returned 3.3%. The asset allocation was as follows: domestic equity 59.9%, international equity 4.3%, fixed income 35.5%, cash 0.4%.
SYSTEMATIC slightly underperformed the Russell 1000 Value Index during the first quarter with returns of 5.6% versus 5.9%; ranking in the upper third of the large cap value manager index.
INTECH’s large cap core strategy returned 4.7% vs. the S&P Index at 4.2%; ranking in the 26th percentile among their large cap core peers.
RHUMBLINE’s large cap portfolio, which tracks the S&P 500, matched the performance of the index. Over the past ten years, this strategy has produced slightly less risk than the benchmark while replicating the S&P 500 Index.
Their mid cap portfolio returned 7.6% and matched the performance of the S&P Mid Cap 400 Index. Over time, the mid cap portfolio has produced returns consistent with the benchmark.
ESSEX large cap growth portfolio outperformed the Russell 1000 Growth Index with returns of 4.3% versus 3.1%. Over the past year, the portfolio outperformed the Russell 1000 Growth Index by 4% (39th percentile).
LAZARD & OECHSLE: Both companies were terminated at the end of February. The assets were liquidated and transferred to The Boston Co.
THE BOSTON CO. portfolio was funded on March 1, 2006. For the month of March this portfolio generated 4.3% vs. the MSCI EAFE Index of 3.4%.
AGINCOURT’S portfolio outperformed the Lehman Brothers Aggregate Index and the Citigroup Broad Investment Grade Index, -0.5% vs. –0.6% (61st percentile). For one year they outperformed these indexes but fell just shy of the return of the median core bond manager.
MELLON’S Aggregate Bond Index Fund declined 0.7% and was in-line with the return of the Index. Over one year, this fund gained 2.2%.
After discussion, Mr. Curry made a motion to rebalance the portfolio by taking $10,000,000 from RhumbLine’s Mid Cap portfolio and giving $5,000,000 to Agincourt and $5,000,000 to Mellon. Mr. Rogers seconded the motion. The motion was approved UNANIMOUSLY by the Board.
Chairman Seibert thanked Mr. Pulos for his report.
SYSTEMATIC – James V. Wallerius reviewed their performance as of March 31, 2006. For the first quarter of 2006, this fund returned 5.6% with the Russell 1000 Value returning 5.9% and the S&P 500 returning 4.2%. From inception, this fund earned 19.7% with the Russell 1000 Value earning 17.8% and the S&P 500 earning 15.3%. The funded amount on Dec. 9, 2002 was $40,849,791, withdrawals of ($6,840,000), contributions $3,433,777 with an adjusted value of $37,810,804. Market value (3/31/06) $70,810,804. Net gain $33,367,236.
Chairman Seibert thanked Mr. Wallerius for his report.
OLD BUSINESS: Mr. Curry was advised that Oeschle sent an interest check for $72,500.
Recapture – Merrill Lynch has paid the bills.
Bank of New York – We are waiting for a detailed bill on the $1,000 charge.
Share Plan – Quarterly numbers are in. Checks have been mailed. Interest will be sent shortly.
The Administrator is planning on sending annual statements. A second notice will be sent to retirees who have not sent back their paperwork that no further interest will accrue. The time frame of 60 days was discussed. This will be looked into.
A question was raised about the 2% Bonus for firefighters for members who do not complete 20 years of service. This will be reviewed and discussed at the next meeting.
FOR YOUR INFORMATION: No action.
There being no further business to be brought before the Board; Mr. Kemp made a motion to adjourn at 3:30 P.M. with Mr. Dew seconding the motion. The motion was UNANIMOUSLY approved.
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Meeting Minutes 
