by David Chapman
Staff Writer
First discussed just more than a month ago, the City Council Finance Committee approved an amended ordinance Tuesday that, if approved by the full City Council, will allow the Pension board of trustees of the Jacksonville retirement system to further diversify its investments in potentially riskier but higher-yielding strategies.
The measure, 2011-108, will allow the expansion of investments of the General Employees and Correctional Officers Pension Plans to include additional alternative investments already allowed by Florida statute when locally authorized.
It would allow up to 10 percent of the fund to be invested in private equity, venture, hedge and distress funds or a direct investment in a portfolio company through an investment manager.
The state allows such investment up to 10 percent if authorized by local government. The board currently limits the maximum to 5 percent.
One amendment to the original ordinance approved Tuesday involved clarifying that short selling would be limited to 10 percent of alternative investments.
A short sale is the sale of securities not owned by the sellers at the time of the sale, but which they intend to buy or borrow in time to make the delivery. It’s a bet that the stock’s price will fall.
The ordinance was originally introduced by the council president at the request of the pension board. An auditor’s report said the ordinance would increase fund yields while reducing volatility and limit risk in declining markets.
The same auditor’s report highlighted several negative aspects of the measure in March, including transparency issues and liquidity limitations, among others.
The committee voted 4-1 in favor of the bill, with Council member John Crescimbeni casting the dissenting vote.
In other action by the committee:
• After additional time to have questions answered, the committee approved an ordinance to allow the sale of two surplus properties. The two parcels on McCoys Creek Boulevard, appraised at $32,000 and $30,000 respectively, will be directly sold to Minor Properties to allow for expansion. The properties originally were acquired by the Jacksonville Economic Development Commission with Community Development Block Grants for low-income housing.
• A wide-ranging ordinance was deferred regarding the elimination of elected City officials collecting both a salary and a pension simultaneously and establishing an increase in the minimum age for normal and early retirement. The measure is waiting on required reports. The Council Rules Committee also deferred the measure.
• Also deferred by the Rules Committee and again by the Finance Committee was an ordinance authorizing the City’s finance director to delete certain missing or stolen items from the City’s Tangible Personal Property Records. The bill would permit the write-off of 637 items determined to be lost or stolen from July 1, 2009-June 30, 2010. The Rules Committee created a subcommittee on the write-off process. Items include computers, printers, routers, copiers and other electronic equipment, according to the bill summary. The net book value of the property is $40,500 with an original cost of $1.7 million.
356-2466