MINUTE SUMMARY Board Meeting Thursday, January 8, 2015

Transcription

1 MINUTE SUMMARY Board Meeting The regular meeting of the Dallas Police and Fire Pension System Board of Trustees was held at 8:30 a.m. on, in the Second Floor Board Room at 4100 Harry Hines Blvd., Dallas, Texas. Items of the following agenda were presented to the Board: The meeting was called to order at 8:30 a.m. A. MOMENT OF SILENCE The Board observed a moment of silence in memory of pensioners who recently passed away. B. CONSENT AGENDA Approved, subject to the final review of the staff. C. DISCUSSION AND POSSIBLE ACTION REGARDING ITEMS FOR INDIVIDUAL CONSIDERATION 1a. Authorized the Interim Administrator to take necessary actions to pursue an appeal of the Court s decision regarding the 2014 Plan amendment election. 1b. Suspended new enrollment into DROP after March 31, 2015, providing that enrollment may proceed again upon receipt of a final non-appealable order by a Texas court of competent jurisdiction that the 2014 Plan amendment relating to DROP is constitutional. 2. Approved the technical changes to the Combined Plan and the staff 401(a) Money Purchase Plan as required by the IRS and authorized the Interim Administrator to prepare an Amended and Restated Combined Plan reflecting these changes. 3. Called for the election for the four expiring Trustee Places, approved the election schedule and approved the Application for Trustee Candidacy packet, all subject to final review by the Interim Administrator and General Counsel.

2 MINUTE SUMMARY Board Meeting 3. (continued) The terms of the following Trustees expire on May 31, 2015: Rick Salinas George Tomasovic Joe Schutz Dan Wojcik Fire Trustee (Place F-2) Fire Trustee (Place F-3) Police Trustee (Place P-2) Police Trustee (Place P-3) Active Members interested in running for one of the Trustee positions may pick up an application from the pension office from February 16 to March 2. The election will be held from March 27 to April Heard real estate manager search presentations from The McKinney Fund & Co., Hearthstone, and DPFP s real estate consultant, The Townsend Group. Selected Hearthstone to manage certain DPFP land investments. 5. Authorized staff and The Townsend Group to begin a Request for Proposal (RFP) process to find an investment manager to serve as a fiduciary to DPFP for the Northern California (Napa) properties. 6. Received and filed The Townsend Group s real estate strategy presentation and selected option #2 to implement the long-term strategic guidelines, policies, risk controls and objectives of the Real Estate portfolio. 7. Received and filed the presentation by Hillco Partners on pension-related legislative matters. 8. Received and filed reports by Board and staff members on due diligence meetings, seminars and/or conferences attended. 9. The Chairman presented a performance award for Employee of the Quarter, Fourth Quarter 2014, to Milissa Schmidt, Investment Analyst, and the William G. Baldree Employee of the Year Award for 2014, also to Milissa Schmidt. 10. Postponed discussion regarding the posting of Board agendas to the February regular meeting. 11. Provided guidance to the staff regarding the pension governance review of the services offered by several firms. 12. Approved the proposed 2015 Personalized Benefit Statement, subject to final review by the Administrator and legal counsel. 13. Approved the proposed 2015 Personalized DROP Statement, subject to final review by the Administrator and legal counsel.

3 MINUTE SUMMARY Board Meeting 14. Received and filed the 2014 Administrative Plan and the 2014 DPFP Accomplishments. Recommended initiatives to be added to the 2015 Administrative Plan and received and filed the 2015 Administrative Plan as revised. 15. No report was given on legal issues and no motion was made. 16. Terminated the contract of an individual who was involved in the Museum Tower operations and oversight. 17. Received and filed the Interim Administrator s further revision to the Performance and Retention Incentive Compensation Plan. D. BRIEFING ITEMS 1. Received and filed comments from active members during the open forum. 2. No motion was made regarding the Administrator s report. The meeting was adjourned at 4:00 p.m. SUPPLEMENTAL POLICE AND FIRE PENSION BOARD MEETING The meeting was called to order and recessed at 8:30 a.m. The meeting was reconvened at 4:00 p.m. A. CONSENT AGENDA Approved, subject to the final review of the staff. B. DISCUSSION AND POSSIBLE ACTION REGARDING ITEMS FOR INDIVIDUAL CONSIDERATION 1. Approved the proposed 2015 Personalized Benefit Statement, subject to final review by the Administrator and legal counsel. 2. Approved the proposed 2015 Personalized DROP Statement, subject to final review by the Administrator and legal counsel.

4 MINUTE SUMMARY Board Meeting The Supplemental Board meeting was adjourned at 4:01 p.m. In previous months, the Asset Distribution by Advisor Report was attached to the Minute Summary. DPFP has discontinued use of this report in its previous form and is therefore no longer including it as an attachment to the Minute Summary; however, the asset distribution by advisor information is presented to and discussed with the Board monthly. In addition, the Annual Report will continue to disclose net asset values by asset class in the footnotes to the audited financial statements. Published by: The Dallas Police and Fire Pension System, 4100 Harry Hines Blvd., Suite 100, Dallas, TX For additional copies, contact the Pension Office. Phone (214) 638-FUND (3863.) January 8, 2015

5 Dallas Police and Fire Pension System 8:30 a.m Harry Hines Blvd., Suite 100 Second Floor Board Room Dallas, TX Regular meeting, George Tomasovic, Chairman, presiding: ROLLCALL Board Members Present: Absent: Staff Others Tennell Atkins, Gerald D. Brown, Samuel L. Friar, Scott Griggs, Kenneth S. Haben, Philip T. Kingston, Lee M. Kleinman, John M. Mays, Richard A. Salinas, Joseph P. Schutz, George J. Tomasovic, Daniel W. Wojcik None Don Rohan, Summer Loveland, Joshua Mond, John Holt, Corina Terrazas, Carlos Ortiz, Pat McGennis, Ryan Wagner, Milissa Schmidt, Christina Wu, Greg Irlbeck, Linda Rickley, Kevin Killingsworth Gary Lawson, David Kent, Richard Brown, Martin Rosenberg, Jeff Leighton, Tim Moore, Kathy Russell, Mark Porath, Charles Schetter, Bryce Brunsting, Clint Smith, William Robison, Deborah Hughbanks, Harry Patterson, Tom Payne, Scott Towns, Tony Speck, Bronda Davis, Michael Flusche, Kenneth Douglas, Steve Teel, Byron Fassett, Ken Sprecher, Michael Buehler, Nathan Dower, Bill Ingram, George Florence, Brian Hass, Shedrah White, James Leaky, Diane Takats, Roman Kilgore, Ron Pinkston, Kevin B. King, David Durica, Harold Holland, M. Tran, Barbara Hobbs, Sharifa Williams, Steve Umlor, Mary Hershiser, Helena Davis, Margarita Argumedo, Perro Henson Jr., Richard Kresse, Raymond Milbern, Walter E. Wood Jr., Lloyd D. Brown, Harold R. Andrews, Jesus A. Trevino, Jerry Fuller, G. C. Willeford, Rector McCollum, Marcus Pierce, Julian Archie, Yvonne Abrom, Debra S. Thomas, Yancy Nelson, Bill Hornick, Alan Shelton, Ernest Sherman, B. V. Bailey, W. James Brown, Daniel Pecenka, Robert Crider, Kassandra Schiver, Jerry M. Rhodes, Jeffrey Wiginton, William A. Paris Jr., Orlando Robinson, Jim Aulbaugh, Carlton J. Kuhlman, C. B. Stringfellow, John Fairbairn, James Ingram III, George R. Scott, Michael Fairbairn, Doug Jones, James Florez, Michael Young, Tristan Hallman 1 of 12

6 Regular Board Meeting The meeting was called to order at 8:30 a.m. A. MOMENT OF SILENCE The Board observed a moment of silence in memory ofjack W. Clark, Melvin Felch, William N. Marshall and Loyd G. Richey, retired police officers, and Eugene E. Spillman, Roland Taylor and James L. Williams, retired firefighters, who recently passed away. * * * * "' * '" * B. CONSENT AGENDA 1. Approval of Minutes Regular meeting ofdecember 11, Approval of Refunds of Contributions for the Month of December Approval of Activity in the Deferred Retirement Option Plan (DROP) for January Approval of Estate Settlements 5. Approval of Survivor Benefits 6. Approval of Service Retirements 7. Approval of Alternate Payee Benefits 8. Approval of Payment of Military Leave Contributions After discussion, Mr. Brown made a motion to approve the items on the Consent Agenda, subject to final approval by the Interim Administrator. Mr. Atkins seconded the motion, which was unanimously approved by the Board. 2 of 12

7 Regular Board Meeting Thursday, January 8,2015 C. DISCUSSION AND POSSIBLE ACTION REGARDING ITEMS FOR INDIVIDUAL CONSIDERATION 1. Court decision regarding the 2014 Plan amendment election a. Discussion ofthe court decision and determination offuture action b. Continuation ofdrop The Board received comments from Members and Pensioners. The Board went into a closed executive session -legal at 8:34 a.m. The meeting was reopened at 9:30 a.m. The Board went into a closed executive session -legal at 11 :32 a.m. The meeting was reopened at 12:25 p.m. After discussion, Mr. Wojcik made a motion to authorize the Interim Administrator to take necessary actions to pursue an appeal ofthe Court's decision regarding the 2014 Plan amendment election. Mr. Salinas seconded the motion, which was unanimously approved. After discussion, Mr. Wojcik made a motion to authorize the Interim Administrator to engage counsel and authorize the expenditure of necessary funds to carry out the appellate process. Mr. Salinas seconded the motion, which was unanimously approved by the Board. After discussion, Mr. Wojcik made a motion to table discussion of DROP until the April 9, 2015 regular Board meeting. The motion died for lack of a second. After discussion, Mr. Kleinman made a motion to suspend, after March 31, 2015, new enrollment in DROP, providing that enrollment may proceed again upon receipt of a final non-appealable order by a Texas court of competent jurisdiction that the 2014 Plan amendment relating to DROP is constitutional. Mr. Griggs seconded the motion, which was approved by the following vote: For: Against: Atkins, Brown, Friar, Griggs, Haben, Kingston, Kleinman, Mays, Salinas, Schutz, Tomasovic Wojcik 3 of 12

8 Regular Board Meeting 1. Court decision regarding the 2014 Plan amendment election (continued) After discussion, Mr. Griggs made a motion to begin examining contingencies, including legislative options. Mr. Atkins seconded the motion, which was approved by the following vote: For: Against: Atkins, Brown, Friar, Griggs, Haben, Kingston, Kleinman, Mays, Salinas, Schutz, Tomasovic Wojcik 2. Adopt technical changes to the Combined Pension Plan and Staff 401(a) Money Purchase Plan as required by the Internal Revenue Service Mr. Rohan stated that in November 2014, DPFP received favorable determination letters from the Internal Revenue Service (IRS) for the Combined Plan and the Supplemental Plan. As a condition to the issuance of these letters, the IRS is requiring DPFP to adopt certain technical changes to the Combined Plan and the staff 401(a) Money Purchase Plan. Section 9.01(i) of the Combined Plan allows for the Board to adopt these changes to the Combined Plan without necessity for approval by the members in order to keep the Combined Plan in compliance with the Internal Revenue Code. After discussion, Mr. Brown made a motion to approve the technical changes to the Combined Plan and the staff 401(a) Money Purchase Plan as required by the IRS and authorize the Interim Administrator to prepare an Amended and Restated Combined Plan reflecting these changes. Mr. Haben seconded the motion, which was unanimously approved by the Board Trustee Election a. Call for an election b. Trustee Election schedule c. Application for Trustee packet ;;: * * * * * '" :;. The terms ofthe following Trustees expire on May 31, 2015: Rick Salinas George Tomasovic Joe Schutz Dan Wojcik Fire Trustee (Place F-2) Fire Trustee (Place F-3) Police Trustee (Place P-2) Police Trustee (Place P-3) 4 of 12

9 Regular Board Meeting Trustee Election (continued) Staff provided a proposed Trustee Election Schedule and a proposed Application for Trustee Candidacy packet for the Board's review. After discussion, Mr. Salinas made a motion to call for the election for the four expiring Trustee Places, and approve the election schedule and the Application for Trustee Candidacy packet, all subject to final review by the Interim Administrator and legal counsel. Mr. Haben seconded the motion, which was unanimously approved by the Board. 4. Real estate manager search >I< >I< * * '" * >I< >I< Mr. Rohan stated that at the November 13, 2014 meeting, the Board directed Staff and The Townsend Group to proceed with a plan to reallocate real estate assets which are currently managed by CDK Realty Advisors and internally by DPFP Staff. Representatives from The McKinney Fund & Co. and Hearthstone discussed their proposals to manage the land assets, which include residential land in Eagle, Idaho, Nampa, Idaho and Larkspur, Colorado. Representatives from The Townsend Group were present to answer any questions on the portfolio ofland assets. The Board went into a closed executive session - real estate at 2: 17 p.m. The meeting was reopened at 2:29 p.m. After discussion, Mr. Salinas made a motion to select Hearthstone to manage certain DPFP land investments and authorize the Interim Administrator to negotiate and execute an investment management agreement. Mr. Friar seconded the motion, which was unanimously approved by the Board. 5. Northern California Investments '" * * * * * * * Mr. Rohan stated that DPFP owns or has ownership interests in several properties in Northern California known as the Napa properties. These projects are currently internally managed with various operator or consultant arrangements. 5 of 12

10 - Regular Board Meeting 5. Northern California Investments (continued) After discussion, Mr. Salinas made a motion to authorize staff and The Townsend Group to begin a Request for Proposal process to find a manager to serve as a fiduciary to DPFP for the Napa properties. Mr. Schutz seconded the motion, which was unanimously approved by the Board. 6. The Townsend Group - Real Asset Strategy Discussion Richard Brown, Principal, Martin Rosenberg, Principal and Jeff Leighton, Analyst, of The Townsend Group, DPFP's Real Asset Consultant, presented a follow-up to the Real Asset Strategy Discussion which was discussed at the December 11, 2014, meeting. As part of the discussion, Townsend presented several options on how to implement the long-term strategic guidelines, policies, risk controls and objectives ofthe Real Estate portfolio. After discussion, Mr. Brown made a motion to receive and file The Townsend Group's real estate strategy presentation and select Option #2 to implement the long-term strategic guidelines, policies, risk controls and objectives of the Real Estate portfolio. Mr. Mays seconded the motion, which was approved by the following vote: For: Against: Brown, Friar, Haben, Mays, Salinas, Schutz, Tomasovic, Wojcik Kleinman The meeting was recessed at 2:56 p.m. The meeting was reconvened at 3:05 p.m. 7. Pension-related legislative issues The Board and staff discussed legislative issues and reports from legislative consultants. R. Clint Smith, DPFP client advisor on state and local legislative issues, of Hillco Partners, was present and briefed the Board regarding the 2015 legislative session. After discussion, Mr. Brown made a motion to receive and file the briefing. Salinas seconded the motion, which was unanimously approved by the Board. Mr. 6 of 12

11 Regular Board Meeting * * '" * * * * '" 8. Staff and Board Members' reports on due diligence meetings, seminars and/or conferences attended Reports were given on the following meetings. Those who attended are listed. a. Opal: Alternative Investment Conference Mr. Friar b. Society ofpension Professionals Messrs. Wojcik, Irlbeck Ms.Wu c. CORPaTH Summit Messrs. Brown, Schutz After discussion, Mr. Salinas made a motion to receive and file the reports. Mays seconded the motion, which was unanimously approved by the Board. Mr. 9. Employee recognition - Fourth Quarter 2014 a. Employee ofthe Quarter Award b. The William G. Baldree Employee ofthe Year Award Mr. Tomasovic and Mr. Rohan presented the performance award for Employee of the Quarter, Fourth Quarter 2014, and the William G. Baldree Employee of the Year Award for 2014 to Milissa Schmidt, Investment Analyst. The Employee of the Year is chosen from among the four Employee ofthe Quarter Award recipients for the year. No motion was made. 7 of 12

12 Regular Board Meeting C"BRTIF1CAT'1i OF APPRECIATION This certifies that.a!lifi,;,,,a ScIunidt In ReeocJtJtWl\ 01 Outsfutiling Ptlrlb'l'lnallCe BuBeOi. Du~ sekew to lucmve ThisJ Certifkaleas Employee of the Quarler- 4 th Quarter 2014 ChrDl"1I JIJ,"lU'TJ9','i1Jlil / / "William G. Baldree" Employee ofthe Year Award 1 Is Presented to Milissa Schmidt In Recognition OfYour Outstanding Service 2014 ~D ALL A S@ ~~~* POLICE &= FIRE V PENSION SYSTEM 8 of 12

13 Regular Board Meeting 10. Posting ofboard agendas The discussion regarding the posting of Board agendas was postponed to the February regular meeting. 11. Pension governance review update Based on the Board's request that Staff review various firms that provide governance consulting services, Staff updated the board on the findings of the review and discussed the varying levels ofservices offered by different vendors. After discussion, Mr. Brown made a motion to direct Staff to work with NEPC, DPFP's investment consultant, regarding revision of DPFP's investment policies. Mr. Baben seconded the motion, which was unanimously approved by the Board Personalized Benefit Statement for Members of the Dallas Police & Fire Pension System Staff presented for review and comment a proposed draft of the 2015 Personalized Benefit Statement for Members ofthe Dallas Police and Fire Pension System. After discussion, Mr. Brown made a motion to approve the proposed 2015 Personalized Benefit Statement, subject to final review by the Interim Administrator and legal counsel. Mr. Mays seconded the motion, which was unanimously approved by the Board Personalized Deferred Retirement Option Plan (DROP) Statement for Members of the Dallas Police & Fire Pension System Staff presented for review and comment a proposed draft of the 2015 Personalized DROP Statement for Members of the Dallas Police & Fire Pension System who have joined DROP. After discussion, Mr. Brown made a motion to approve the proposed 2015 Personalized DROP Statement, subject to final review by the Interim Administrator and legal counsel. Mr. Mays seconded the motion, which was unanimously approved by the Board. 9 of 12

14 Regular Board Meeting ******'1'* and 2015 Administrative Plans Mr. Rohan reviewed the status of the plan for 2014 and reviewed the proposed 2015 Plan. After discussion, Mr. Haben made a motion to receive and file the 2014 Administrative Plan and the 2014 DPFP Accomplishments and receive and file the 2015 Administrative Plan as revised. Mr. Friar seconded the motion, which was unanimously approved by the Board. 15. Legal issues Police Officer and Firefighter pay lawsuits No report was given. No motion was made. 16. Museum Tower Staff discussed with the Board an internal issue regarding Museum Tower operations and oversight. After discussion, Mr. Friar made a motion to terminate the contract of Criswell Radovan, LLC regarding Museum Tower operations and oversight. Mr. Salinas seconded the motion, which was unanimously approved by the Board. 17. Performance Incentive Compensation Plan The Board, at its December 13, 2007, meeting, authorized the Administrator to establish and implement a Performance and Retention Incentive Compensation Plan (the Plan) to reward current and future staff performance to ensure the continued excellence of staff support for its investment program. The Administrator revised the Plan in August The Interim Administrator presented a further revision to the Plan for the Board's review. 10 of 12

15 Regular Board Meeting 17. Performance Incentive Compensation Plan (continued) After discussion, Mr. Mays made a motion to receive and file the Interim Administrator's further revision to the Performance and Retention Incentive Compensation Plan. Mr. Friar seconded the motion, which was unanimously approved by the Board. D. BRIEFING ITEMS 1. Reports and concerns of active members and pensioners of the Dallas Police and Fire Pension System Two Pensioners and one Member addressed the Board with prepared comments. Mr. Wojcik made a motion to receive and file the comments. Mr. Mays seconded the motion, which was unanimously approved by the Board. *******~i 2. Administrator's report Associations' newsletters NCPERS Monitor (January 2015) TEXPERS Outlook (January 2015) Mr. Salinas made a motion to receive and file the Administrator's report. Haben seconded the motion, which was unanimously approved by the Board. Mr. 11 of 12

16 Regular Board Meeting Mr. Rohan stated that there was no further business to come before the Board. On a motion by Mr. Salinas and a ~econd by Mr. Haben, the meeting was adjourned at 4:00 p.m. [signature] George 1. Tomasovic Chairman ATTEST: [signature] Donald C. Rohan Secretary 12 of 12