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Permanent Fund Committee Meeting Minutes April 8, 2010
Session 10-03 a Regular Meeting of the Permanent Fund Committee was called to order at 6:02 p.m. on April 8, 2010 by Chair Barbara Howard at the Homer City Hall Cowles Council Chambers located at 491 E. Pioneer Avenue, Homer, Alaska.
PRESENT: COMMITTEE MEMBERS: REGINA HARVILLE, BARBARA HOWARD, JO JOHNSON, MATT NORTH, BETH WYTHE
APPROVAL OF AGENDA
WYTHE/JOHNSON – MOVED TO APPROVE THE AGENDA.
There was no discussion.
VOTE: YES. NON OBJECTION. UNANIMOUS CONSENT.
Motion carried.
PUBLIC COMMENTS REGARDING ITEMS ON THE AGENDA
There were no public comments.
APPROVAL OF MINUTES
A. Regular Meeting Minutes of January 14, 2010 and Special Meeting Minutes of January 28, 2010.
WYTHE/HARVILLE – MOVED TO APPROVE THE REGULAR MEETING MINUTES OF JANUARY 14, 2010.
There was no discussion.
VOTE: YES. NON OBJECTION. UNANIMOUS CONSENT.
Motion carried.
WYTHE/NORTH – MOVED TO APPROVE THE SPECIAL MEETING MINUTES OF JANUARY 28, 2010.
There was no discussion.
VOTE: YES. NON OBJECTION. UNANIMOUS CONSENT.
Motion carried.
VISITORS
STAFF & COUNCIL REPORT/COMMITTEE REPORTS/BOROUGH REPORTS
PUBLIC HEARING
PENDING BUSINESS
NEW BUSINESS
A. Review Request for Proposals for Permanent Fund Investment Services
Four proposals for investment services were received: Edward Jones, Raymond James Financial Services, Inc., U.S. Bank, and Verity Investments, Inc.
Matt North disclosed a possible conflict of interest. Mr. North is an employee of Edward Jones in Homer. His employment is completely separate from the Soldotna location and the earnings of proposer Ryan Kapp of Edward Jones in Soldotna do not affect Mr. North’s wages. He derives no benefit from a potential award to Edward Jones, Soldotna.
The Committee found no conflict of interest for Matt North.
Chair Howard asked Mr. North to provide a summary of the four proposals.
Matt North acknowledged the four good proposals, three presented in one investment style using wrap accounts, and one using a different style. Basis points are charged for the business they conduct, with individuals within the firm selecting the accounts. Edward Jones uses a different investment style by charging an annual operating expense (AOE) with each fund having a different operating expense ratio. They let American Funds determine the transactions. Although different, each investment style is appropriate for the City’s needs.
Committee members calculated scores on the four proposals with attention to communication, history in returns, and charges for services. Overall ratings by committee members resulted in the following order:
• U.S. Bank
• Edward Jones
• Verity Investments, Inc.
• Raymond James Financial Services, Inc.
JOHNSON/WYTHE – MOVED TO INVITE U.S. BANK AND EDWARD JONES FOR A TELEPHONIC INTERVIEW BEFORE THE COMMITTEE.
Discussion ensued on telephonic versus in-person interviews. It was suggested telephonic interviews for both firms would place them on a level playing ground.
VOTE: YES. NORTH, WYTHE, JOHNSON, HOWARD
VOTE: NO. HARVILLE
Motion carried.
The Committee scheduled a Special Meeting for interviews to be held in Executive Session for April 20, 2010 at 9:00 a.m. Jo Johnson is to notify U.S. Bank and Edward Jones of the interviews.
INFORMATIONAL MATERIALS
A. Appointment of Barbara Howard and reappointments of Matt North and Beth Wythe to the Permanent Fund Committee
B. Resolution 10-20, Rejecting All Proposals for Permanent Fund Investment Services, Modifying the Scope of Work, and a New Solicitation of Proposals for Permanent Fund Investment Services
C. Letters to Proposers re: Thank you for Submittals and Notice of Intent to Rebid
Investment Services.
COMMENTS OF THE AUDIENCE
There was no audience.
COMMENTS OF THE CITY STAFF
None.
COMMENTS OF THE COUNCILMEMBER
None.
COMMENTS OF THE CHAIR
Chair Howard thanked committee members for their attendance and Matt North for sorting out the important matters.
COMMENTS OF THE COMMISSION
There were no comments from the Commission.
ADJOURNMENT
There being no further business to come before the Committee, the meeting was adjourned at 6:48 p.m. The next Regular Meeting is scheduled for Thursday, July 8, 2010 at 6:00 p.m. in the Homer City Hall Cowles Council Chambers, 491 E. Pioneer Avenue, Homer, Alaska.
Submitted by Jo Johnson
