HomeMy WebLinkAboutR-1988-054 RESOLUTION NO. 54-88
A RESOLUTION OF THE CITY OF DANIA,
FLORIDA, APPROVING THE STATEMENT OF
INVESTMENT GUIDELINES ADOPTED BY THE
BOARD OF TRUSTEES OF THE CITY OF DANIA
POLICE AND FIRE FIGHTERS RETIREMENT
SYSTEM; AND PROVIDING THAT ALL
RESOLUTIONS OR PARTS OF RESOLUTIONS IN
CONFLICT HEREWITH BE REPEALED TO THE
EXTENT OF SUCH CONFLICT; AND PROVIDING
FOR AN EFFECTIVE DATE.
WHEREAS, Section 18-47 ( 3 ) of the Code of Ordinances
of the City of Dania requires the Board of Trustees of
the City of Dania Police and Fire Fighters Retirement
System to adopt guidelines for the investment of all
pension fund assets and requires the City Commission to
approve said guidlines by resolution, and
_. WHEREAS , the Board of Trustees on the 15th day of
June, 1988, adopted the attached Statement of Investment
Guidelines based upon the advice and counsel of the
Retirement System's investment manager and investment
performance monitor, and
WHEREAS, the City Commission of the City of Dania is
^� in agreement with and approves said Staterrent of
Investment Guidelines .
NOW, THEREFORE, BE IT RESOLVED BY THE CITY
COMMISSION OF THE CITY OF DANIA, FLORIDA:
Section 1 . That the Statement of Investment
Guidelines of the City of Dania Police and Fire Fighters
Retirement System adopted by the Board of Trustees of
said Retirement System on June 15, 1988, is hereby
approved in accordance with Section 18-47 ( 3 ) of the Code
of Ordinances of the City of Dania, Florida.
Section 2 . That all resolutions or parts of
resolutions in conflict herewith be and the same are
hereby repealed to the extent of such conflict.
Resolution No. 54-88
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Section 3. That this resolution shall be in force
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and take effect immediately upon its passage and
adoption.
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PASSED and ADOPTED on this 11th day of October
1988.
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'MAYOR = COM S CI�QN ER
ATTES
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CITY CLERK/'AUDITOR
APPROVED AS TO FORM
AND CORRECTNESS
FRANK C. ADLER, City Attorney
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i -2- Resolution No. 54-88
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STATEMENT OF INVESTMENT GUIDELINES
OF THE
CITY OF DANIA POLICE AND
FIRE FIGHTERS RETIREMENT SYSTEM
WHEREAS, the Board of Trustees (the "Trustees" ) of the
City of Dania Police and Fire Fighters Retirement System are
authorized by Section 18- 47 ( 3 ) of the Dania Code to adopt
investment guidelines, subject to the approval of the Dania City
Commission; and
WHEREAS, after lengthy discussions and consultation with
their professional advisors, the Trustees desire to adopt such
Guidelines,
NOW, THEREFORE, in accordance with the authority granted
to them by Section 18-47 ( 3 ) of the Dania Code, the Trustees do
hereby adopt the Investment Guidelines of the City of Dania
Police and Fire Fighters Retirement System as follows .
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DEFINITION AND FUNCTION
The City of Dania Police and Fire Fiqhters Retirement
System is an employee pension benefit plan established by Article
IV of the Dania Code. The plan is administered and manaqed by a
Board of Trustees . The Plan is a defined benefit plan
established to provide retirement benefits or disability
benefits or death benefits , as the case may be, to vested
participants in the Plan or their beneficiaries in accordance
with the Plan established by Article IV of the Dania Code.
The Plan and the benefits provided thereunder are funded
by contributions by participatinq employees, the City of Dania
and the State of Florida in accordance with Article IV of the
Dania Code and Chapter 175 and 185 of the Florida Statutes. The
Plan is a defined benefit employee pension plan. Benefits are in
monthly payments as selected by the participant at the time of
retirement in accordance with the provisions of the Plan and the
law.
The Trustees are charged by law with the responsibility
for the investment of the assets of the Trust Fund. To assist
the Trustees in this function, they are authorized and required
by Article IV of the Dania Code to enqaqe the services of an
Investment Manager or. managers who possess the necessary
specialized research facilities and skill to assure its expertise
as to the current financial "prudent man rule" under such laws as
may now apply or in the future apply to investments of the
System.
Policy quidelines will be fixed from time to time by the
Trustees after consideration of the advice and recommendations of
,... the Investment Manager( s ) and others and are subject to City
Commission approval . Specific investment qoals stated herein
shall be reviewed at least annually and , when appropriate, new
qoals and standards shall be adopted by the Trustees and
submitted to the City Commission for approval . All modifications
of policy quidelines shall be in writinq and signed by the
Chairman and the Secretary of the Trustees before beinq submitted
to the City Commission for its approval .
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PURPOSES OF THIS STATEMENT OF GOALS AND OBJECTIVES
In keeping with the fiduciary requirements under
existing ordinance laws , these Investment Guidelines are set
forth. The purpose of these Guidelines are to:
(a) Conform to and
complywith the Plan ' s projected
financial needs and funding policy.
(b) Express the Trustees ' appropriate position with
respect to the Plan ' s risk-return posture.
( c) Formulate an appropriate set of goals and
objectives for this Plan ' s assets.
(d) Identify a set of guidelines which the Investment
Manager or Managers can use in formulating
corresponding investment decisions .
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INVESTMENT OBJECTIVES
1 . Assets of this Plan shall be invested in a manner
consistent with the fiduciary standards of the Florida Protection
of Public Employee Retirement Benefits Act , namely all
transactions undertaken on behalf of the Trust must be solely in
the interest of Plan participants and their beneficiaries for the
exclusive purpose of providing benefits to participants and their
beneficiaries and defraying reasonable expenses of defraying
reasonable expenses of administering the Plan . Also, the
diversity to which a prudent investor would adhere must be
present and all activity must be undertaken in accordance with
the Plan ' s documents.
2 . The Trust Fund shall be invested in a manner
consistent with the guidelines established by this Statement of
Investment Guidelines.
3 . Primary investment emphasis shall be placed upon
consistency of performance, i .e. , the achievement of investment
objectives in such a manner as to protect the Trust Fund ' s assets
balances from excessive volatility in market value from year to
year.
4 . Significant investment emphasis shall also be
placed upon the preservation of the purchasing power of the
principal amount of assets within the Plan , and enhancement of
the assets achieved through superior investment performance.
5. Sufficient liquidity shall be maintained to fund
benefit payment outflows .
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INVESTMENT ACCOUNTS
The Trust Fund consists of the sum of all monies within
the Trust . All assets of the Trust Fund shall be allocated and
invested in one of three basic forms of investments :
(a ) Equity issues, including common stocks,mutual fund
shares , units of beneficial interest , American
Depository Receipts , preferred stocks , and
convertible securities .
(b) Negotiable fixed income securities , including
corporate bonds, United States Government and
Agency issues , mutual funds comprised of such
securities; and money market and analogous cash
equivalent accounts .
(c) Non-negotiable securities , including insurance
company guaranteed investment contracts, mortgages,
financial institutions ' certificates of deposit ,
prof essionally-manaqed pooled or commingled funds
or accounts investing in real estate and mortgage
loans, and ownership of real estate.
The Trustees shall establish percentage allocation
ranges for each category, which shall be monitored on a regular,
periodic basis and which may be changed from time to time.
The Trustees shall appoint an Investment Manager or
Managers to invest in any one or more of these asset allocations .
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INVESTMENT POLICY GUIDELINES
Assets are to be managed with a view toward achieving
the specific investment objectives previously described .
Consistency of performance, protection of principal as well as
purchasing power and the maintenance of sufficient liquidity,
should be the overriding guidelines for the investment of the
Trust Fund .
To underscore these considerations , as well as to
recognize the fiduciary responsibilities associated with the
management of the P 1 a n ' s assets , there are certain
characteristics which are expected to be associated with the Fund
and which shall be viewed as guidelines in formulating investment
strategies.
To the extent that at any time and from time to time the
Trustees have designated two or more Investment Managers, each
Investment Manager shall be governed by these investment policy
guidelines . Provided , however, that each Investment Manager
shall be responsible for compliance with the guidelines and for
the attainment of the objectives only to the extent of the Trust
Fund which has been transferred to it and which is subject to its
management and control .
A. Equity Issues
1 . Allocation . The target range of investments in
equity issues is fifty percent ( 50% ) to sixty five percent (65% )
of the total market value of the Trust Fund or, .in the case of
multiple Investment Managers, of the amount of the Trust Fund
under the management and control of such Investment Manager ,
measured at cost .
2 . Types_of Securities . Equity securities shall mean
common stocks or equivalents (units of beneficial interest, etc.
Plus issues convertible into common stock) and preferred stock .
3 . Cash Equivalents . At the discretion of the
Investment Manager , short - term money market funds and/or
instruments may represent a material portion of the equity
issues . However, if commercial paper is used , it must be only of
the highest quality ( A- 1 or P- 1 as established by Moody ' s or
Standard & Poor ' s ) . In addition, bankers ' acceptances and
certificates of deposit must be issued by United States banks .
Savings accounts must be maintained, if used , in domestic banks
or other financial institutions incorporated in the United
States .
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j 4 . Diversification. No more than ten percent ( 10% ) of
the equity issues can be invested in any one company. No more
than twenty percent ( 20% ) of the equity issues can be invested in
any one industry. These measures shall be at the higher of cost
or market value . Other than these constraints , there are no
quantitative guidelines suggested as to issuer, industry or
individual security diversification . However , prudent
diversification standards should be developed and maintained by
the Investment Manager.
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B. Negotiable Fixed Income Securities
1 . Allocation . The target range of investments in
negotiable fixed income securities is forty percent ( 40% ) to
fifty percent ( 50% ) of the Trust Fund or, in the case of multiple
Investment Managers, of the amount of the Trust Fund under the
management and control of each Investment Manager, measured at
cost .
2. Types of Securities . Funds not invested in cash
equivalents shall be invested entirely in marketable debt
securities issued by either (a ) the United States Government or
agencies of the United States Government , ( b) domestic
corporations , including industrials and utilities , and ( c )
domestic banks and other United States financial institutions .
The average par-weighted quality shall be no less than 3 . 00 ,
determined as follows :
U. S. Government and
Agency Obligations 5. 0
Aaa Bonds 4 . 0
Aa Bonds 3. 0
A Bonds 2.0
No more than ten percent ( 10% ) of this portion of the
portfolio shall be invested in securities having a credit rating
of less than Aa. Ratings of less than A are prohibited. These
ratings shall be established by a recognized rating service
( i . e . , Moody ' s or Standard & Poor ' s ) and reinforced by
independent in-house credit analysis. An issue which is split-
rated will be governed by the lower quality desiqnation.
3 . Diversification . Except for Treasury and Agency
obligations, the debt portion of the negotiable fixed income
securities shall contain no more than fifteen percent ( 15% ) of a
given issuer ( irrespective of the number of differing issues)
measured at the higher of cost or market value . Other
diversification standards should be developed and applied by the
Investment Manager.
4 . Cash Equivalents . At the discretion of the
Investment Manager, short - term money market funds and/or
instruments may represent a material portion of the negotiable
fixed income securities . However, if commercial paper is used,
it must be only of the highest quality ( A-1 or P-1 as established
by Moody ' s or Standard & Poor ' s ) . In addition, bankers '
acceptances and certificates of deposit must be issued by United
States banks . Savings accounts must be maintained, if used, in
domestic banks or other financial institutions incorporated in
the United States .
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C. Non-Negotiable Securities
1 . Allocation . The target range of investments in
non-neqotiable securities is zero to twenty percent ( 20% ) of the
Trust Fund . Asset allocation in this sector is , in part , a
reaction to prospects in other markets and as an element of
diversification .
2 . Types of Securities. Investments in this sector of
the portfolio may include insurance company guaranteed investment
contracts , certificates of deposit of financial institutions,
mortgages, professional ly-manaqed pooled or commingled funds or
accounts invested in real estate , ownership of real estate ,
participations in mortgages and other analogous investment
vehicles .
3 . Diversification . In no event shall the Trustees
and/or the Investment Manager or Managers , directly or
indirectly, jointly or severally , invest in all forms of real
estate investments in an amount exceeding twenty percent ( 20% ) of
the total assets of the Trust Fund, at cost .
9. _Cash Equivalents . At any time and from time to
time the Investment Manager or Managers may deploy assets not
invested in long-term, permanent forms of securities in cash
equivalent forms of investment. At the discretion of the
Investment Manager or Managers , short- term money market
instruments may represent a material portion of the nonnegotiable
fixed income investments. However, if commercial paper is used,
it must be only of the highest quality (A-1 or P-1 as established
by Moody ' s or Standard & Poor ' s ) . In addition , bankers '
. .� acceptances and certificates of deposit must be issued by United
States banks. Savings accounts must be maintained, if used, in
domestic banks or other United States financial institutions.
D. General
1 . Turnover . If investment performance results meet
the Trustees ' objectives, the rite of turnover will not be an
evaluative factor.
2 . Investment Transactions. The following directions
should apply:
(a) All transactions are to be governed by negotiation
For execution on a "best realized price" (best net
price ) basis. The lowest commission rate need not
mean the best realized price.
(b) Firms which offer research services may be given
preference_ as long as the principle of " best
realized price" and the Investment Manager ' s option
to "pay up" for research are compatible.
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3 . Exclusions . The following categories of securities
are not permissible for investment in the Plan ' s portfolio
without the Trustees ' written approval :
(a) Unregistered or restricted stock.
(b) Foreign securities A & D A . D . R . I s - - of
corporations not headquartered in the United States
and not listed on a national ( U . S . ) securities
exchange .
(c ) Commodities, including gold or currency futures.
(d ) Tax-exempt securities , either state or federal .
(e) Conditional sales contracts .
( E ) Options , including the purchase , sale or writing of
options, except when used in connection with dynamic hedging.
(q) warrants .
(h) Margin buying.
( i ) Short selling.
( j ) Leasebacks .
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INVESTMENT MANAGERS GUIDELINES
The Trustees anticipate that , from time to time, more
than one Investment Manager may be retained . As Investment Manager will be responsible for adhering such , each
to all of the
guidelines as set forth herein as if such guidelines were
applicable to each Investment Manager separately,
The following additional guidelines shall apply to each
Investment Manager ( other than Investment Managers in non-
negotiable fixed income) :
assets1 . The under
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managed as a balanced account . Thoughthe actual massetentrmixomay
vary from time to time based upon market conditions, up to 60% of
the assets are to be invested in equities , measured at market
value the balance in negotiable fixed income .
2. Each Investment Manager ' s performance shall be
evaluated separately and not in a manner by which their
performance will be compared against each other, but , rather,
compared to an appropriate universe of similar balanced account
funds.
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� STANDARDS OF PERFORMANCE
In consideration of. the Trust Fund ' s goals and
objectives and in recognition of the investments held by the
Trust as of the time of this statement , several standards, as
opposed to a single measurement , will be utilized in evaluating
investment performance. Failure to meet the standards shall not,
by itself, be considered a breach of the investment management
agreement with any investment manager but may be grounds for
terminating said agreements . The standards look at several
aspects of investment performance, including the Plan ' s specific
objectives and several market indices. The target total rate of
return of the Trustees for the total portfolio is the aggregate
rate of return of the targeted total rates of return of the three
component asset allocations .
The performance of the Investment Manager or Managers
shall be reviewed and measured at least annually by the Following
individual component standards of performance :
A. Equity Issues
The equity portion of the general account shall be
expected to generate a total rate of return superior to the
Standard & Poor 's 500 Stock Composite Index on an average annual
basis .
B. Negotiable Fixed Income Securities
. ..,y It is anticipated that the negotiable fixed income
securities portion of the portfolio may consist primarily of
intermediate-term bonds and cash equivalents. The Trustees have
targeted total rates of return on each as follows :
(a) Intermediate-term bonds (maturities of one ( 1 ) to
ten ( 10) years] -- the rate of return of the
Shearson/Lehman Brothers Intermediate Corporate and
Government Bond Index for the period .
( b) Cash equivalents a yield equal to ninety-one ( 91 )
day Treasury Bills over the period .
C. Evaluation
An evaluation of the Trustees ' and an Investment
Manager ' s performance will be conducted no less than annually .
Total rate of return, as used herein , shall include
realized and unrealized capital gains and losses , dividend and
interest income, brokerage costs , administrative fees, and
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Investment Manaqer fees . Fixed income securities within the
Trust Fund shall be valued on a market value basis in accordance
with the election of the Trustees .
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COMMUNICATION AND REPORTING
The Investment Manager is responsible for frequent and
open communication with the Board of Trustees on all significant
matters pertaining to investment policies and the management of
the Plan ' s assets, including but not limited to:
(a ) Major changes in the Investment Manager ' s
investment outlook, investment strategy and
portfolio structure . This shall not require
advance approval or notice of specific portfolio
transactions.
(b) Any significant changes in ownership ,
organizational structure, financial conditions or
senior personnel staffing of each investment
management organization .
(c) Quarterly transaction , valuation and performance
reports to coincide with the Plan ' s fiscal
quarters.
All documents , exhibits, written materials, etc. which r will be used during conferences between the Board of Trustees and `
the Investment Manaqer(s ) should be submitted to the Trustees in
advance of these conferences .
In addition, the Investment Manager is expected :
(a) To acknowledge in writing its recognition and
acceptance of full responsibility as a fiduciary
under appropriate state legislation;
(b) To be bonded unless otherwise exempted by law or
governmental regulation.
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IMPLEMENTATION
All new monies invested for the Trustees by their
Investment Manager after the adoption of this Amended and
Restated Statement of Investment Objectives shall conform to this
Statement .
Adopted at Dania , Florida this day of
. 1988. ------------
BOARD OF TRUSTEES
CITY OF DANIA POLICE AND
FIRE FIGHTERS RETIREMENT SYSTEM
By
Chairman
And
Secretary
DANIA.STA
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