HomeMy WebLinkAboutR-1991-127 4:
RESOLUTION NO. 127-91
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 FIREFIGHTERS
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CONFLICT HEREWITH BE REPEALED TO THE EXTENT OF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 Firefighters Retirement System to adopt guidelines for
•;. . ,;, the investment of all pension fund assets and requires the city
commission to approve said guidelines by resolution; and
WHEREAS, the Board of Trustees on the 25th day of September,
. j 1991, adopted the attached Statement of Investment Guidelines
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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 Statetment 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 Firefighters Retirement System
adopted by the Board of Trustees of said Retirement System on
September 25, 1991, a copy of which is attached hereto as Exhibit
"A" is hereby approved in accordance with Section 18-47(3 ) of the
Code of Ordinances of the City of Dania, Florida.
Resolution No. 127-91
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conflict herewith be and the same are hereby repealed to the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.
Section 3. That this resolution shall be in force and take
effect immediately upon its passage and adoption.
PASSED and ADOPTED on this 22nd day of October 1991.
MAYOR - COMMMISSIONER
h^ ATTEST.
}i 'CITY CLERK - AUDITOR
1(, APPROVED AS TO FORM AND CORRECTNESS
FRANK C. ADLER, City Attorney
127-91
Resolution No.
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STATEMENT OF INVESTMENT GUIDELINES
THE
CITY OF DANIA POLICE AND
FIRE FIGHTERS RETIREMENT SYSTEM
d of Trustees (the "Trustees") of the
the Board Fighters Retirement System are
City of Dania Police and Fire of the Dania Code to adopt
authorized by Section 18-47 ( to the approval of the Dania City
investment guidelines, subject
ti. d consultation with
Commission; and
1� WHEREAS, after lengthy discussions an
the Trustees desire to adopt such
their professional advisors,
Guidelines,
y ranted
a NOW, THEREFORE, in accordance with the authority
Trustees do
4 to them by Section 18-47 (3) of the Dania Code, of Dania
hereby adopt the hterstment GuiRetirementeSystem lines o s followsty
police and Fire Fig
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XWBIT "Ay"
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DEFINITION AND FUNCTION
The City of Dania Police and Fire Fighters Retirement
System is an employee pension benefit plan established by Article
IV of the Dania Code. The plan is administered and managed 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 participating 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
j. Plan is a defined benefit employee pension plan. Benefits are in
h monthly payments as selected by the participant at the time of
retirement in accordance with the provisions of the Plan and the
law.
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y The Trustees are charged by law with the responsibility
a for the investment of the assets of the Trust Fund. To assist
the Trustees in this function, they are authorized and required
Eby Article. IV of the Dania Code to engage the services of an
V, 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 guidelines 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 goals stated herein
shall be reviewed at least annually and, when appropriate, new
goals and standards shall be adopted by the Trustees and
submitted to the City Commission for approval. All modifications
Of policy guidelines shall be in writing and signed by the
Chairman and the Secretary of the Trustees before being 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 comply with 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
h Manager • or Managers can use in formulating
corresponding investment decisions. a
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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 ametecton
of Public Employe
e Retirement Benefits Act , Y a
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tr
in
transactions undertaken
phalf of the ants and theirust must be ben fi iaries forythe
the interest of Plann p P
,' exclusive purpose of providing benefits to participants and their
beneficiaries and 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
-�1 consistent with the guidelines established by this Statement of
Investment Guidelines.
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3 , Primary investment emphasis shall be placed upon
i.e. , the achievement of investment
consistency of performance,
if objectives in such a manner as to protect the Trust Fund's assets
balances from excessive volatility in market value from year to
year.
be
4 : Significant investment emphasis shaol ra
lso ing p of the
- placed
principal amount of assets within the Plan,upon the preservation of the purchas
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 two basic forms of investments:
(a) Equity issues, including common stocks, .mutual fund
shares , units of beneficial interest , and
convertible securities.
(b) Negotiable fixed income securities, including
corporate bonds, United States Government and
Agency issues , preferred stocks , units of
beneficial interest, mutual funds comprised of such
securities.; and money market and analogous cash
equivalent accounts.
_ 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.
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The Trustees shall appoint an Investment Manager or
a 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 Plan ' 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.
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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
y 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 maximum percentage of investments
in equity issues is to sixty percent (60%) of the total cost 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.
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2. Toes of Securities. Equity securities shall mean
common stocks or equivalents (units of beneficial interest, etc.
! plus issues convertible into common 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 banks incorporated in
the United States. Savings accounts must be maintained, if used,
in domestic banks or other financial institutions incorporated in
the United States.
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q , Diversification. No more than five percent (5%) of
issues can be invested in any one company. No more
the equity of the equity issues can be invested in
than twenty percent (200) other than
any one industry. These measures shall iv a u guidelines suggested
these constraints, there are. no quantitative g
as to issuer, industry or ndividual 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. There is no maximum percentage of
investments in negotiable fixed income securities.
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 preferred
stocks issued by said corporation, 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
Preferred Stocks 2 . 0
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Ratings of less than A are prohibited. These ratings
shall be established by recognized rating services (i . e. ,
' Moody's, -Standard & Poor' s) and reinforced by independent
in-house credit analysis. An issue which is split-rated will be
governed by the lower quality designation.
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 banks
incorporated in the United States. Savings accounts must be
maintained, if used, in domestic banks or other financial
institutions incorporated in the United States.
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C. General
1'. Turnover. If investment performance results meet
the Trustees' objectives, the rate 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
i preference as long as the principle of "best
realized price and the Investment Manager's option
y a'
to "pay up" for research are compatible.
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 and A.D.R. 's.
(c) Commodities, including gold or currency futures.
(d) Tax-exempt securities, either state or federal.
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(e) Conditional sales contracts.
(f) Options, including the purchase, sale or writing of
options, except when used in connection with
dynamic hedging.
(g) 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
each
than one Investment Manager may be retained. As such,
Investment Manager will be responsible for adhering to
all s of the
guidelines as set forth herein as if such guidelines
applicable to each •Investment Manager separately.
The following additional
thanguidelines
Investmentshall
Manapply
agerrs each
in
Investment Manager ( other
non-negotiable fixed income) :
1W 1. The assets of the Plan under management are to be
managed as a balanced account. Though the actual asset mix may
1i vary from time to time based upon market conditions, up to 60% of
the assets may be invested in equities, measured at cost, the
balance in negotiable fixed income.
'y 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:
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M, A. Total Portfolio
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a The total portfolio goal shall be to achieve returns
over any rolling 3 year period in excess of a Target Index. The
Target Index for the Retirement System is defined as a 50%
investment in the Standard & Poor's 500 Stock Index and a 50%
µ, investment in the Merrill Lynch Intermediate Bond Index. A
d further goal of the total portfolio shall be to achieve returns
over the longer term (3 to 5 years) that rank in the TOP 33% of a
representative universe of similarly managed portfolios.
In addition to the above-mentioned relative criteria, a
further goal of the total portfolio shall be to provide an
absolute rate of return during any 12 month period equal to or
greater than the Consumer Price Index plus 3% and never less than
the actuarial assumption rate of 7%.
B. amity Portfolio
The equity portion of the portfolio shall achieve a
return over any rolling 3 year period in excess of the return of
the Standard & Poor's 500 Index. In addition, it shall be a goal
of the Investment Manager that the equity portfolio returns in
any rolling three year period rank in the Top 33% of a
representative universe of other equity portfolios.
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C. Fixed Income Portfolio
The overall objective of the fixed income portion of the
portfolio is to add stability, consistency, and safety to the
al of the
total fund portfolio. As a resulositivehrate of retould be a urn
rn during
Investment Manager to produce a p
any 12 month period while meeting or exceeding the return of the
Merrill Lynch 3 to 5 year Government Index. In addition, it
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shall be a qoal of the Investment Manager thatthe 'f'ix incthe
portfolio returns in any rolling three year period
Top 5o% of a representative universe of other fixed income
portfolios.
D. Evaluation
performance shall be evaluated
The Investment Manager's p a outlined
goals as
-� on a quarterly basis in terms of achieving the
in this statement. In addition, both the equity and fixed income
investments selected by the Investment Manager will be evaluated
for risk.
In the equity portfolio, risk evaluation will include
' variability and volatility of returns, security diversification,
portfolio price earnings ration, portfolio dividend yield,
average market capitalization and average debt to capital.
will
In the fixed income portfolio, consideration ualitbe
given to variability of returns, as well as average q y,
duration and maturity.
Total rate of return, as used herein, shall include
realized and unrealized capital gains and losses, dividend and
interest income and brokerage costs. Fixed income securities
st Fund shall be valued on a market value basis in
within the Tru
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
ly senior personnel staffing of each investment
management organization.
(c) Quarterly transaction, valuation and performance
reports to coincide with the Plan' s fiscal
1 quarters.
All documents, exhibits, written materials, etc. which
N, will be used during conferences between the Board of Trustees and
the Investment Manager(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.
1991. Adopted at Dania, Florida this 25th day of September,
BOARD OF TRUSTEES
1? CITY OF DANIA POLICE AND
I FIRE FIG RS RETIREMENT SYSTEM
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By
Vincent hompson, Chairman
And
eulah Lair, Secretary
INVESTGU. IDE
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