O00-74
ORDINANCE NO. cJOt:::)-7#c
AN ORDINANCE OF THE CITY OF BOYNTON BEACH,
FLORIDA AMENDING CHAPTER 18, ARTICLE 11, DIVISION
5 OF THE CODE OF ORDINANCES OF THE CITY OF
BOYNTON BEACH,. FLORIDA TO AMEND THE INVESTMENT
POLICY OF THE GENENRAL EMPLOYEES' PENSION PLAN;
SPECIFICALLY AMENDING SECTION 18-145, ENTITLED
"INVESTMENT OF FUNDS," BY REPEALING THE TERMS
THEREOF AND RATIFYING AND ADOPTING THE TERMS
OF THE INVESTMENT POLICY APPROVED BY THE
GENERAL EMPLOYEES' PENSION BOARD; PROVIDING
FOR CODIFICATION; PROVIDING FOR CONFLICTS;
PROVIDING FOR SEVERABILITY; AND PROVIDING FOR AN
EFFECTIVE DATE.
WHEREAS, the City Commission of the City of Boynton Beach adopted
Ordinance 95-40 creating an mvestment Policy for the General Employees' . Pension
Plan ("Plan"); and
WHEREAS, the General Employees' Pension Board of Trustees ("Board") has
determined the necessity to amend the terms of the mvestment Policy in order to meet
the investment needs of the Plan in an ever-changing investment market; and
WHEREAS, on September 15, 2000, the Board has approved and
recommended the adoption a new mvestment Policy, as more particularly set forth in
Exhibit "A"; and
WHEREAS, it is the desire of the City Commission to adopt the mvestment
Policy recommended by the Board;
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COMMISSION
OF THE CITY OF BOYNTON BEACH, FLORIDA, THAT:
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Section 1.
The foregoing "WHEREAS" clauses are hereby certified as
being true and correct and are incorporated herein by this reference. All exhibits
attached hereto are hereby incorporated herein.
Section 2.
The City Commission of the City of Boynton Beach hereby
ratifies the mvestment Policy approved and recommended by the General Employees'
Pension Board of Trustees on September 15, 2000, as more particularly set forth in
Exhibit "A."
Section 3.
Chapter 18, Article II, Division 5, Section 18-145 of the Code of
Ordinances of the City of Boynton Beach, Florida, entitled "mvestment of Funds," is
hereby repealed in its entirety and re-enacted as more particularly set forth in Exhibit
"A. "
Section 4.
It is the intention of the City Commission of the City of Boynton
Beach that the provisions of this Ordinance shall become and be made a part of the
Code of Ordinances of the City of Boynton Beach, Florida. The Sections of this
ordinance may be renumbered, re-lettered and the word "Ordinance" may be changed
to "Section", "Article" or such other word or phrase in order to accomplish such
intention.
Section 5.
All Ordinances or parts of Ordinances, Resolutions or parts of
Resolutions in conflict herewith be and the same are hereby repealed to the extent of
such conflict.
Section 6.
If any clause, section, or other part or application of this
Ordinance shall be held by any court of competent jurisdiction to be unconstitutional or
invalid, such unconstitutional or invalid part or application shall be considered as
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eliminated and so not effecting the validity of the remaining portions or applications
remaining in full force and effect.
Section 7.
This Ordinance shall become effective when the following have
occurred:
(a) the City Commission has received and has accepted a report establishing
the actuarial soundness ofthese amendments; and
(b) when a collective bargaining agreement ratifying the foregoing changes to
pension benefits has been ratified by the City Commission and the General
Employees' Pension Board of Trustees, or their successor organization.
Upon satisfaction of all of the above requirements, then in that event, the terms
and provisions ofthis Ordinance shall become effective.
FIRST READING this -..LL day of ~m~1f , 2000.
SECOND, FINAL READING and PASSAGE this c:< day of
J.ii/lla.l'9/'llJ , 200t .
CITY OF BOYNTON BEACH,
FLul ~
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ATTEST:
~.e e M MaaYY~OJr
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Mayor Pro Tern ~
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c:- IN E 10 ees Pension Plan Investment
Poli~1oc '
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Commissioner
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STATEMENT OF INVESTMENT POLICY
FOR THE
BOYNTON BEACH GENERAL EMPLOYEES'
PENSION FUND
Adopted: February 28, 1996
Revised: September 15, 2000
Introduction
The Board of Trustees of the Boynton Beach General Employees' Pension Fund has established
. this Statement of Investment Policy. This policy has been identified by the Board as having the
greatest expected investment return, and the resulting positive impact on asset values, funded
status, and benefits, without exceeding a prudent level of risk. The Board determined this policy
after evaluating the implications of increased investment return versus increased variability of
return for a number of potential investment policies with varying commitments to stocks and
bonds.
1) Provide the investment manager a more accurate understanding of the Trustees' investment
objectives and,
2) Indicate the criteria by which the investment manager's performance will be evaluated.
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INVESTMENT MANAGER RESPONSIBIUTIES
1) Within the guidelines and restrictions set forth herein, it is the intention of the Board to give
the investment manager full investment discretion, with respect to assets under its
manqgement. The investment manager shall discharge its responsibilities in the same
manner as itwould if the Fund were governed by the fiduciary responsibility provisions of the
Employee Retirement Income Security Act of 1974 (ERISA). Although the Fund Trustees
acknowledge that ERISA does not apply to a governmental fund, it hereby imposes the
fiduciary provisiOns of ERISA upon the investment manager whose performance shall conform
to the statutory provisions, rules, regulations, interpretations and case law of ERISA. The
investment manager shall acknowledge, in writing, that it is a named fiduciary of the Fund.
2) The investment manager is expected to provide any reasonable information requested by the
Board of Trustees. At a minimum, each manager shall provide a quarterly report detailing
their investment activity, the portfolio's current value, and any changes in investment
philosophy or strategy. The Firm's investment manager is expected to meet with the Board
of Trustees at least once per year. A de~ignated representative will meet with the Board of
Trustees, at le~stquarterly. A designated representative of a mutual fund company is not
required. to attend meetings with the Board of Trustees.
3) Unless otherwise provided by the Custodian, the investment manager will monitor portfolio
activity to minimize uninvested cash balances.
4) The investment manager shall be responsible only for those assets under its management.
5) It will be the responsibility of the investment manager to review the monthly valuations
provided by the Custodian and to note, in writing, any significant discrepancies from the
valuations provided in their own reports.
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INVESTMENT GUIDEUNES
The Board of Trustees has established the following target asset allocation for the entire Boynton
Beach General Employees' Pension Fund:
Target
Allocation
(at market)
Target
Range
(at market)
Equity securities
Fixed income securities
Cash
55%
45%
0%
30% - 70%
30% - 70%
0% - 10%
To implement this strategy, the Board has chosen to hire one or more professional investment
managers. Specific assignments and additional guidelines for each investment manager will be
outlined in addenda to this overall Statement of Investment Policy. The following guidelines and
restrictions apply to all Fund investments.
In accordance with the policies established by the Board of Trustees, the assets of the Boynton
Beach General Employees' Pension Fund shall be invested in a diversified portfolio of fully
negotiable, equity, fixed income, and money market securities, provided they meet the following
criteria:
Ie
EQUITY SECURITIES:
1) Investments in equity securities shall be limited to no more than 70% at market value nor
60% at cost valuation of the Fund's total asset value.
2) All equity investments shall be limited to fully and easily negotiable equity securities.
3) No more than 5% at cost value of an investment manager's equity portfolio may be invested
in the shares of a single corporate issuer.
4) Investments in stocks of foreign companies shall be limited to 20% (at cost) of the total
investment portfolio.
5) Investment in equity securities whose market capitalization is less than $3 billion dollars shall
be limited to 20% of the total equity portfolio.
6) Investment in those corporations whose stock has been publicly traded for less than one year
are limited to 15% of the equity portfolio.
7) Equities may be managed through the purchase of open-end, no-load mutual funds or
commingled funds as long as these funds in aggregate adhere to the equity guidelines
herein.
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FIXED INCOME SECURITIES:
I'
1) The fixed income portfolio shall comply with the following guidelines:
a) The average credit quality of the fixed income portfolio shall be rated "A" or higher.
b) The duration of the fixed income portfolio should be less than 150% of the duration of
the market index. The market index is defined as the Merrill Lynch Government
Corporate Bond Index.
2) Investments in all corporate fixed income securities shall be limited to:
a) those securities rated "BAA" or higher by Moody's or by Standard & Poor's rating
services. Fixed income securities, which are downgraded below the minimum rating,
shall be sold at the earliest beneficial opportunity.
b) securities issued by a corporation organized under the laws of the United States, any
state or organized territory of the United States, or the District of Columbia.
c) no more than 10% at cost of an investment manager's total fixed income portfolio
shall be irnvested in the securities of any single corporate issuer.
3) Investments in Collateralized Mortgage Obligations (CMOs) shall be limited to 15% of the
market value of the investment managers' total portfolio and shall be restricted to issues
which meet'all of the following criteria:
a) All issues must be backed by mortgage securities issued, guaranteed, or fully insured
by the Government National Mortgage Association (GNMA), the Federal Home Loan
Mortgage. Corporation (FHLMC), the Federal National Mortgage Association (FNMA) or
that are r~ted "Aaa" by Moody's or "AAA" by Standard & Poor's rating services.
b) All issues: must pass the FFIEC High Risk Security Test on an annual basis. Any CMO
issue helq in the investment managers' portfolio that fails the FFIEC test shall be sold
at the earliest beneficial opportunity
4) There is no .limit imposed on investments in fixed income securities issued directly by the
United States Government or any agency or instrumentality thereof.
5) Fixed income securities may be managed through the purchase of open-end, no-load
mutual funqs or commingled funds as long as these funds in aggregate adhere to the
fixed income guidelines herein.
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CASH EQUIVALENT SECURmES:
1) The investment manager may invest only in the following shorHerm investment vehicles:
a) The money market or STIF provided by the Plan's custodian.
b) Direct obligations of the United States Government with a maturity of one year or less.
c) Commercial Paper with a maturity of 270 days or less that is rated A-lor higher by
Standard & Poor's or P-l or higher by Moody's.
d) Bankers Acceptances issued by the largest 50 banks in the United States (in terms of
total assets).
PROHIBITED INVESTMENTS
Investments in interest only or principal only CMOs, precious metals, limited partnerships of any
kind, real estate, repurchase agreements, venture capital, futures contracts, options contracts,
municipal bonds, trading on margin and short selling are prohibited.
REVIEW OF POUCY
It is the intention of the Board of Trustees of the Boynton Beach General Employeesl Pension
Fund to review this Statement of Investment Policy and its addenda periodically to amend it to
reflect any changes in philosophy or objectives. However, if at any time the investment manager
believes that the specific objectives defined herein cannot be met or that these guidelines
unnecessarily constrict performance, the Board shall be so notified in writing.
Adopted this 24th day of February, 2000.
Revised this 15th day of Seotember, 2000.
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