546-Firefighters Investment Man CITY OF SANFORD
FIREFIGHTERS ~ RETIREMENT SYSTEM
STATEMENT OF INVESTMENT
POLICY GUIDELINES AND OBJECTIVES
The guidelines and objectives provided below are designed to
complement those provided by Chapter 175, Florida Statutes and
Ordinances of the City of Sanford. The objective of these guide-
lines is to 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 perform-
ance will be evaluated. No amendment to this document shall be
made except by the consent of the Board of Trustees.
The primary objective of the Investment Manager of the City of
Sanford Firefighters~ Retirement System shall be the protection
and preservation of the assets. In addition, the Investment
Manager shall seek the highest possible return while maintaining
a prudent regard for legal considerations, fiduciary responsibil-
ity, safety of capital and minimum volatility of returns.
GUIDELINES
Cash:
There is a positive cash flow from contributions into the Fund.
With respect to cash-equivalent short-term investments, over-all
quality and minimal risk guidelines apply. Instruments which may
be used are: U.S. Government Obligations, Certificates of Deposit
and Repurchase Agreements with major money center banks, Co~/ner-
cial Paper rated A-1 by Standard & Poor~s or Moodyes P-1 rating
of better.
Equity Portfolio (including preferred stocks and convertible
bonds):
The equity portion of the portfolio shall consist of stocks
issued by U.S. corporations and listed on any one of the recog-
nized national stock exchanges. Any stock purchased for the
portfolio must hold a rating in one of the three highest classi-
fications by a major rating service (i.e. Standard & Poor~s,
Value Line, or Moodyes). Investment in any single corporation's
stock shall not exceed 5% of the equity portfolio~s total value
nor shall the equity portfolio~s total value at cost exceed 50%
of the fund~s assets.
Fixed Income Portfolio:
The Fund~s fixed income portfolio shall consist of U.S.
Government and U.S. Government Agency bonds and/or bonds issued
by United States corporations that are rated "A" or better by
Moodyes or Standard & Poors~ rating services. The value of bonds
issued by any single corporation shall not exceed 10% of the
total bond portfolio.
Absolute Restrictions (Prohibited Investments):
There shall be no investment activity in the following:
1. Short sales, margin purchases, or borrowing.
2. Private placements or other restricted securities (not
freely marketable).
3. Commodities.
4. Puts, calls, straddles or hedging.
5. Foreign securities.
6. Warrants or other options, except as part of purchase of
another security.
7. Tax-exempt bonds.
8. Venture capital.
9. Real estate.
10. Any investment prohibited by State or Federal Law.
OBJECTIVES
Total Portfolio:
The total portfolio shall achieve returns over any rolling 3 year
period in excess of a custom index. The custom index is defined
as a 50% investment in the Standard & Poors' 500 Index and 45%
investment in the Lehman Brothers Government/Corporate Bond
Index, and a 5% investment in U.S. Treasury Bills.
Equity 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
& Poors 500 Index. In addition, it should be a goal of the
Investment Manager that the equity portfolio returns in any 12
month period rank in the Top 33% of a representative universe of
managers managing similar portfolios.
Fixed Income Portfolio:
The overall objective of the fixed income portion of the portfo-
lios is to add stability, consistency, and safety to the total
fund portfolios. As a result, the Investment Manager shall
produce a positive rate of return during any 12 month period
AGREE1VI~NT FOR INVESThtENT MANAGEMENT
AND CUSTODIAL SERVICES
/
THIS AGREEMENT, made this ../7 day of ,T',,~/vt/,,~t-f , 1~9/4, by and between
THE BOARD OF ~TRIISTEES OF THE CITY OF SAttFORD FIREFIGHTERSt
RETIREI4E}IT SYSTEIq , not individually,
but as Trustees of the Plan referred to below (hereinafter referred .to as the "Trustees"), and
SUNBANK, N. A., (hereinafter referred to as the "ManagerD.
WHEREAS, by the terms of the CITy OF SANFORD FIREFIGHTERS'
RETIRE14ENT SYSTEIt (hereinafter referred to as the Retirement Plan), the
Trustees are charged with the duty of receiving and investing funds under the Retirement
Plan; and
WHEREAS, the Trustees are authorized by the terms of the Retirement Plan to
appoint an investment manager and custodian to provide management investment and
custodiaI services for the Retirement Plan held by them thereunder.
NOW, THEREFORE, the Trustees and the Manager agree as follows:
1. Appointment of Investment Manager. The Trustees hereby appoint the
Manager as the Investment Manager and Custodian with respect to those assets of said
Retirement Plan transferred to it, together with the income therefrom (hereinafter referred
to as the "Investment Account"). The Manager shall be responsible only for those assets of
the Retirement Plan actually transferred to it. The Manager shall manage, invest and
reinvest the Investment Account pursuant to the provisions hereinafter set forth. At no time
shall any part of the corpus or income of the Investment Account be used or diverted for the
purposes other than for the exclusive benefit ofemployees and their beneficiaries as provided
in the Retirement Plan and for defraylug reasonable expenses of administering the Retirement
Plan, to the extent that such expenses am not borne by resources other than resources of the
Retirement Plan. By execution of this A~reement, the Manager acknowledges that it is a
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fiduciaxy of the Retirement Plan within the meaning of the Employee Retirement Income
Security Act of 1974 CERISA") and §112.656, Florida Statutes.
2. Powers and Duties of the Manager. The Manager will have the following
powers and duties with respect to any and all monies and securities at any time held by it and
constituting part or all Of the Investment Account, such powers to be exercised by it in its
sole discretion, except as otherwise provided herein.
a. With any cash at any time held by it, to purchase or subscribe for and
invest in any securities and to retain such securities in the Investment Account within the
restrictions set forth in the Retirement Plan and Investment Policy Statement as amended
frc;m time to time and in accordance with State and federal laws.
b. To sell, transfer, and convey, redeem, exchange for other securities,
or otherwise to dispose of any securities at any time held by it.
c. To exercise any conversion privilege and/or subscription right available
in connection with any securities at any time held by it; to oppose or to consent to the re-
organization, consolidation, merger, or readjustment of the finances of any corporation,
company or association or to the sale, mortgage, pledge or lease of the property of any
corporation, company or association, any of the securities of which may at any time be held
by it, and to do any act with reference thereto, including the exercise of options, the making ._
of agreement or subscriptions, which may be deemed necessary or advisable in connection
therewith, and to hold and retain any securities which it may so acquire.
d. To vote, personally or by general or limited proxy, any shares of stock
which may be held by it at any time and, simila~y, to exercise, personally or by general or
limited proxy, any right appurtenant to any security held by it at any ti~c in accordance with
the Proxy Policy Voting Statement promulgated by the Trustees.
e. To register any securities held by it hereunder in its own name or in the
name of a nominee, or any form permitting title to pass by delivery, provided the records
of the Manager shall clea~y indicate the ownership of any asset in the Investment Account.
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f. To make, execute and deliver any and all mortgages, contracts, waivers,
releases or other instruments in writing necessary or proper for the accomplishment of any
of the foregoing powers.
g. The term "securities" used in this Agreement shall be deemed to l~e
restricted to include only legal investments for the Trustees under the statutes or rules of law
applicable thereto.
h. To obtain payment due for or in relation to any asset held for Trustees'
account, to sell, transfer or take any other action with relation thereto, including delivering
for Trustees any assignments, stock or bond powers, proxies or other documents or
instruments which Manager deems necessary or prudent.
i. To monitor items requiring action by ~he Trustees with respect to the
assets, such as stock dividends, rights, offerings, calls or redemptions of bonds or other
items.
j. The Manager will provide safekeeping and accounting services for the
assets in the Investment Account.
k. The Trustees hereby authorize the Manager, if applicable, to maintain
the Retirement Plan assets in a correspondent bank or banks or with a depository bank, if
the Manager so desires. The Trustees also authorize the Manager to hold all eligible
eustodial property at a clearing house corporation under the rules and regulations of such
clearing house corporation if the Manager so desires.
1. The Manager will collect the income produced by the assets and retain
such income as part of the Investment Account.
m. The Manager will collect the proceeds of secut:itie~ which are sold, have
matured or have been called for prepayment or redemption and retain such proceeds as part
of the Investment Account. Receipts of securities or other property through exchange,
contribution, purchase, or otherwise shall also be held as part of the Investment Account.
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n. The Trustees may contribute property to, or purchase property for the
account governed by this Agreement, if such property is acceptable to the Manager.
o. The Trustees reserve the fight to withdraw any part of the Investment
:: Account at any time, and the Manager will deliver any part or all of the Investment Account
in accordance with the written instruction of the Trustees.
p. The Manager shall make such payments from the Investment Account
at such time or times to such person or persons and in such amounts as the Trustees shall
direct in writing. The Manager shall be fully protected in acting upon any such written
direction of the Trustees without inquiry or investigation and shall have no duty to determine
the fights or benefits of any person under the Retirement Plan or to inquire into the fight or
power of the Trustees to direct any such payment.
q. The Manager is authorized to invest and reinvest all or any portion of
the Investment Account collectively with funds or other trusts qualifying under Section 401
of the Internal Revenue Code or with other eligible investors, in units of participation or
~:i::~i: investment in any common, collective or cornmingled trust fund approved by the Trustees.
Manager shall invest assets in the Investment Account in any such common, collective or
cornmingled trust only if all investments made in such common, collective or tommingled
trust must meet all restrictions for investments set forth in the Retirement Plan and --
! Investment Policy Statement, as amended from time to time and in accordance with State and
federal laws. Assets may be held in time deposits in Manager's bank for short periods of
time.
r. The Manager shall maintain a financial institution bond
The Manager agrees to immediately notify the Trustees, in writing, in the event of any
change in its bond and to immediately notify the Trustees if said bond is terminated,
cancelled or discontinued, in whole or in part. The Manager agrees to provide the Trustees
with a copy of its annual renewal of its bond oil a yearly basis.
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s. The Manager shall maintain at least Twenty Five Million Dollars
($25,000,000.00) of errors and omissions (Trust E&O) insurance for the Retirement Plan.
The Manager agrees to immediately notify the Trustees, in writing~ in the
event of any change in its errors and omissions insurance and to immediately notify the
Trustees if said insurance is terminated, cancelled or discontinued, in whole or in part. The
Manager agrees to provide the Trustees with a copy of its renewal of its errors and omissions
insurance on a yearly basis.
3. Information tO Third Parties. SEC Rule 14b-1 provides that unless the
Trustees object, the Manager, as custodian, must furnish the Trustees' names, addresses and
the Trust share position to companies which issue securities held as custodial property. The
intent of the rule is to facilitate communications between issuers of securities 'and
shareholders. The Manager is not authorized to disclose Trustees' names, addresses and the
Trust share position.
4. Maintenance of Accounts. The Manager shah maintain accounts showing the
fiscal transactions of the Investment Account. The Manager shall prepare at least quarterly,
and more often as mutually agreed, a report showing in reasonable detail the assets and
· liabilities of the Investment Account and giving an account of the operation of the Investment
Account for the past quarter. The Manager shall also provide an annual transaction and
performance report. The Manager shall also provide a report showing how Manager has
voted proxies and a report of brok.erage commissions incurred '(if the assets are not in
common trust funds).
5. Discharge of Duties. The Manager shall discha?ge.its duties under this
Agreement solely in the interests of the participants in the Retirement Plan and their
beneficiaries and (i) with the care, skill, prudence, and diligence under the circumstances
then prevailing that a prudetit investor acting in a like capacity and familiar with such matters
would use in the conduct of an enterprise of like character and with like aims; and (ii) in
accordance with the provisions of this Agreement insofar as they are consistent with the
provisions of the Retirement Plan, Investment Policy Statement and applicable laws, as the
same may be amended from time to time. Trustee shall supply Manager with a copy of the
Retirement Plan and any amendments thereto within a reasonable time after adoption.
Manager shall execute trades on a "best execution" basis within the meaning of ERISA
Technical Release No. 86-1 (i.e. competitive commission cost as well as reliability and
quality of the execution).
6. Compensation of Manager. In consideration for the services rendered by
Manager, Trustees shall pay to Manager an annual fee ~'e ,- ~'x 1,; ~; ;r A ~n the market value
of the assets in the Investment Account. The amount to be paid shall be payable quarterly
in arrears based on the value of assets in the Investment Account on the last day of the
quarter. This shall be the total fee for all administrative custodial ~ervices including, but not
limited to, termination fees, transfer fees, fees for checks, statement preparation and other
services rendered. This fee is guaranteed not to increase for a period of~C~'~./years from ....
the contract date. The fee includes all expenses and costs incurred by Manager in the
performance of this Agreement. The Manager shall provide a quarterly statement of fees and
fees may be withdrawn directly from the Investment Account, unless paid airectly by the"
Trustees ~ ~ or unless Manager has received, within 30 aays after mailing
its quarterly statement of fees, a written objection to the statement from the Trustees.
7. Removal and Resignation. The Manager may resign from its duties hereunder
by filing with the Trustees a written resignation. Such resignation shali take effect within
forty-five (45) days after such notice to the Trustees. The Manager ~ay be removed by the'
Trustees at any time upon forty-five (45) days notice. Such removal shall be effected by
delivery of written notice of removal executed by the Trustees. Upon resignation Or
removal, the Manager shall transfer and deliver the Investment Account to the Trustees, and
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be paid only fees earned (including any minimum fee) prorated to the effective date of
resignation or removal or until the date that the Investment Account assets are actually
transferred from the Manager, whichever is later, but only if any delay in such transfer
beyond the effective date of removal is not attributable to the Manager. The minimum fee,
if any, shall not be promted if this contract is terminated by the Trustees during the furst
year. Such payment shah be the only payment of any kind or nature due to the Manager
from the Trustees.
8. Instructions. All instructions from the Trustees to the Manager shah be in
writing and shall be signed as designated by the Trustees. The Trustees agree to notify the
Manager promptly, in writing, of any change in the designation and until such notice is
received by the Manager, the Manager shall be fully protected in continuing to rely on the
authority of the designated Trustees.
9. Consultation. The Manager shall consult at least quarterly with the Trustees
regarding the investment performance of the Investment Account and the financial require-
ments of the Retirement Plan.
10. Construction of Aereement. This Agreement shall be construed in accordance
with the laws of the State of Florida to the extent not pre-empted by federal law and the
provisions hereof shall be governed by such law. All prior agreements between the parties
are hereby terminated and superseded by this Agreement.
1 I. VenUe. Any action under this Agreement shah be brought in Orange County,
Florida.
12. Aeknowledgement. TrusteesacknowledgereceiptofdocumentsfromManager
which comply with the Investment Advisers Act of 1940, Rule 204:g. Trustees have the
right to terminate this Agreement without penalty within five (5) business days after date of
this Agreement.
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13. Assignment. This Agreement may not be assigned by the Manager without the
consent of file Trustees.
14. Public Entity Crimes Bill. Pursuant to Section 287.133, Florida Statutes, the
Manager must disclose any past, present, or future litigation arising out of violation of this
statute by executing a sworn affidavit herein provided as Exhibit
15. Plan Amendments. The Trustees shall provide the Manager, by verbal notice
at a meeting of the Board or by copies, the amendments to the Retirement Plan that are
relevant to the Manager's duties hereunder and amendments to the Investment Policy
Statement on or before the effective date of the amendment.
IN WITNESS WHEREOF, the Board has signed duplicates hereof, and SunBank,
N.A. has caused its corporate name to be signed to said duplicates by its proper officers
thereunto duly authorized on the day and in the year first above Written.
SUNBANK, N.A.
· ~ As Ch
A ~f.,
ATTEST: .A'I'~ T:, ~ '~'fl~f'
Ai'Seeretary
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EXHIBIT A
SUNBE, N.A.
FEE SCHEDULE
FOR
CITY OF SA~FORD
POLICE & FIRE PENSION
I~FESTMENT MANAGEMENT SERVICES & CUSTODIAL SERVICES
ALL SERVICES INCLUSIVE 50 Basis Points first $10,000,000
40 Basis Points next $40,000,000
Per Section 6
FEE GUARANTEED FOR A PERIOD OFFIVE YEARS
!~ ~ " EXHIBIT C
CITY OF SANFORD
FIREFIGHTERS' RETIREMENT SYSTEM
STATEmeNT OF INVESTMENT POLICY GUIDELINES AND OBJECTIVES
The guidelines and objectives provided below are designed to
complement those provided by Chapter 175 of the Florida State' Statutes.
The objective of these guidelines is to 1) provide the Investment Manager
with a more accurate understanding of the Trustees' investment objectives
and 2)indicate the criteria by which the Investment Manager's performance
will be evaluated.
The primary objective of the Investment Manager of the City of
Sanford Firefighters' Retirement System shall be the protection and
preservation of the assets. In addition, the Investment Manager shall
seek the highest possible return while maintaining a prudent regard for
legal considerations, fiduciary responsibility, safety of capital and
minimum volatility of returns.
GUIDELINES
A. Cash. There is a positive cash flow from contributions into the
Fund. With respect to cash-equivalent short-term investments, over-all
quality and minimal risk guidelines apply. Instruments which may be used
are: U.S. Government Obligations, Certificates of Deposit and Repurchase
Agreements with major money center banks, Commercial Paper rated A-1 by
Standard & Poor's or Moody's P-1 rating or better, with the exception of
the custodian's money market account.
B. Equity Securities (including preferred stocks). The equity
portion of the portfolio shall consist of stocks issued by U.S. '
corporations and listed on any one of the recognized national stock
exchanges. Any stock purchased for the portfolio must hold a rating in
one of the three highest classifications by a major rating service (Value
Line). Investmen.t in any single corporation's stock shall not exceed 5%
of the equity portfolio's total value nor shall the equity portfolio's '-
total value at cost exceed 30% of the Fund's assets.
C. Fixed-Income Securities. The Fund's fixed-income portfolio shall
consist of U.S. Government and U.S. Government Agency bonds and/or bonds
issued by U.S. corporations that are rated "A" or better by Moody's or
Standard & Poor's rating services. The value of bonds issued by any
single corporation shall not exceed 10% of the total bond portfolio. A
minimum of 70% of the total assets at cost will be committed to
fixed-income securities.
D. Absolute Restrictions. The investment activity in the following
is prohibited:
1. Short sales, margin purchases, or borrowing.
2. Private placements or other restricted securities
( not freely marketable ).
3. Commodities.
4. Puts, calls, straddles or hedging.
5. Foreign securities.
6. Warrants or other options, except as part of
purchase of another security.
7. Tax-exempt bonds.
8. Venture capital.
9. Speculative investments.
STATEMENT OF INVESTMENT POLICY GUIDELINES AND OBJECTIVES (Cont.)
OBJECTIVES
A. Total Portfolio. The total portfolio shall achieve returns over
any rolling 3 year period in excess of a custom indexes. The custom index
is defined as a 30% investment in the Standard & Poor's 500 Index and 70%
investment in the Shearson Lehman Government/Corporate Bond Index.
B. Equity 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 should be a goal of the
Investment Manager that the equity portfolio returns in any 36-month
period rank in the top 50% of a representative universe of managers
managing similar portfolios.
C. Fixed-Income Portfolio. The overall objective.of the
fixed-income portion of the portfolio is to add stability, c~ms~tency,
and safety to the total fund portfolio. As a result, the Investment
Manager shall produce a positive rate of return during any 36-month period
while meeting or exceeding the return of the Shearson Lehman
Government/Corporate Bond Index.
COMMUNICATIONS
Valuations of current holdings at market value and a summary of trade
transactions shall be sent to the Trustees on a 'monthly basis.
The Investment Manager for the City of Sanford Firefighters'
Retirement System shall generate quarterly investment reports for
management purposes. The reports shall include data on investments held,
returns earned, and any other information necessary for clarification of
the results.
Upon reasonable notice, the investment Manager shall provide any
information relevant to the Fund as requested by the Board of Trustees.
PERFORMANCE MEASUREMENT
The Investment Manager's performance shall be evaluated on a
quarterly basis in terms of achieving the goals as outlined in this
statement. In addition, the equity 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
ratio, portfolio dividend yield, average market capitalization, and
average debt to capital.
In the fixed-income portfolio, consideration will be given to average
quality and maturity.
STATEMENT OF INVESTMENT POLICY GUIDELINES AND OBJECTIVES (Cont.)
POLICY REVIEW
It is the intention of this Board to review this Statement of
Investment Policy Guidelines and Objectives at least annually. As the
above are changed or expanded, thisdQcument will be amended. No
amendment to this document shall be made except by the consent of the
Board of Trustees.