Resolution 77-15428 RESOLUTION NO. 77-15428
A RESOLUTION APPROVING AN INCREASE IN CUSTODIAL
FEES CHARGED TO THE CITY RETIREMENT SYSTEMS
BY FLAGSHIP FIRST NATIONAL BANK OF MIAMI BEACH
WHEREAS, the City Council of the City of Miami Beach, Florida, on October 5,
1955, entered into an agreement with the Miami Beach First National Bank, now
known as the Flagship First National Bank of Miami Beach, to serve as the custodian
of bonds and securities representing invested funds of "The City Pension Fund
for Firemen and Policemen in the City of Miami Beach"; the "Miami Beach Firemen' s
Relief and Pension Fund", and the "City of Miami Beach Employees Retirement System"
and
WHEREAS, the Flagship First National Bank of Miami Beach has advised the
Finance Director of the City of Miami Beach of the necessity for revision of the
fees charged for trust services, in its letter of May 20, 1977, and
WHEREAS, the City Administration has analyzed the fees to be charged by the
Bank and has compared them to fees paid by other retirement systems for similar
services, and they compare favorably and recommend approval of the increases;
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF MIAMI
BEACH, FLORIDA, that the Mayor and the City Clerk be and they are hereby authorized
and directed to execute the letter proposal addressed to Mr. James Young, Finance
Director, under date of May 20, 1977, said letter to become a part of this
resolution, on behalf of the City of Miami Beach, and the disbursing officers of
the City be and they are hereby authorized and directed to pay out such sums of money
as the City is obligated to pay out under the terms of said agreements , from the
funds of said City available for such purpose.
PASSED AND ADOPTED this 7th day of September, 1977. ::-
ayor
ATTEST:
'Air:Ag4 4.1-jqe2,./W.--4,1/411)
City Clerk
TlegerSlefr
(113 %1„,7 . 11,
FLAGSHIP FIRST NATIONAL BANK 1111 Lincoln Road,Miami Beach.Florida 33139 NCE DISIEC10
OF MIAMI BEACH Post Office Drawer 39000H Trust Division
Direct Dial Number 305-674-5356 "
May 20, 1977
Mr. James Young
Finance Director
City of Miami Beach
City Hall
Miami Beach, Florida 33139
RE: ACCOUNT #00913004...MB EMP RET FD CUST THORNDIKE
ACCOUNT #01145002...MB EMP RET FD CUST BOSTON
ACCOUNT #00911008...MB FIRE & POL PEN FD CUST
ACCOUNT #00912006...MB FIRENENS REL & PEN CUST
Dear Mr. Young:
For the last few years our country has suffered the ravages of spiraling
inflation resulting in higher costs for almost all goods and services pur-
chased. Not unlike you, our trust division has also felt the effects of
these higher cost in almost every area of our operation with our general
operating costs increasing by 187.5% and our total departmental expenses
increasing by 163.0% over the last five years.
As a result of these substantial cost increases, we have been forced to
revise our fees, effective immediately, for trust services. A copy of
the new schedule of fees for the Employees, Fire and Police Retirement
Funds is enclosed. We are sure that the City is aware that our fees for
these Retirement Funds has not been increased since 1955.
It has been the continuing goal, as well as commitment, of our trust divi-
sion to staff our department with the finest corporate trust professionals
available to service your account. In addition, we have structured our-
selves operationally, through the implementation of our on-line system, to
improve the quality and timeliness of reports, distributions and informa-
tion to you.
With these customer service improvements, you can feel secure that we are
giving and will continue to give your account the very best professional
attention available.
There would be no other City accounts affected by this fee increase, other
than those referenced above. We have also enclosed a copy of our current
published schedule of fps; and I would ask that you compare our standard
charges (scc pages % ) against the schedule of fees proposed herein.
You will note a significant decrease between our regular schedule and the
proposed schedule of fees.
E:AGEHIP
FIRST NATIONAL BANK OF MIAMI BEACH
Mr. James Young
May 20, 1977
Page 2
We encourage you to call us about the enclosed material if you have any
questions.
With warmest regards, I am
V trul ,\yours,
John ghton,III .`
Vice P esident
Corpor to Trust Officer
JO,III/ml
enclosures
CC: Secretary, Board of Trustees, City of
Miami Beach Fire and Police Pension Fund
Secretary, Board of Trustees, City of
Miami Beach Employees Retirement Fund
APPROVED BY COUNCIL: September 7, 1977
CITY OF MIT•000-04001
Harold Rosen, Mayor
ATTEST:
Elaine Matthews, City Clerk
FLAGSHIP FIRST NATIONAL BANK 1111 Lincoln Road,Miami Beach.Florida 33139
OF MIAMI BEACH Post Office Drawer 39000H Trust Division
Direct Dial Number 305-674-5356
PROPOSED r'i J
We have carefully reviewed the potential work involved in fully servicing
the Funds and, in view of all of the circumstances, the nature of the
customer and the quasi-public service aspects of the situation, we have
designed the following fee schedule which covers our projected costs:
Minmum Annual Fee - $500.00
Annual Principal Fee $.50 per thousand dollars on the first $5,000,000.
.30 per thousand dollars on the next $10,000,000.
.15 per thousand dollars on the balance
The Bank's fee would be charged on the average fair market value as of the
end of April and October.
Out of pocket expenses such as postage, telephone and photo-copies would
also be billed at the same time. Any special request imposed upon the
Bank as Custodian would be billed separately and presented directly to the
authorized parties for their approval and payment.
r.
CUSTODIAL AGENT FOR EMPLOYEE BENEFIT AND SCHEDULE OF FEES :
CORPORATE ASSET ACCOUNTS j
SERVICES RENDERED: The following rates shall apply for our services as Agent for
1) Provide safekeeping for all assets. Most assets are Employee Benefit and Corporate Asset Accounts:
physically held in our Bank. Government or corporate MINIMUM ANNUAL FEE: $500.00 1
bonds, at times, would be held in our correspondent Based on Current Market Value of: I
account in New York for ease of transfer and delivery 2/10 of 1%on the first $ 500,000.00
and to ensure safe transport. 1/10 of 1%on the next 500,000.00 1
2) Process all security transactions, taking full responsi- 1/20 of 1%on excess of 1,000,000.00 1
bility for prompt and accurate receipt and delivery of 1
all assets purchased and sold. up to 5%of gross income
3) Process security exchanges and tenders.
for each check issued — $0.50
4) Collect, receive and deposit all income and receipts as Termination Fee based on the Market Value of the assets as
well as disbursements. of the date of termination if the account:
5) Provide periodic review of asset statements showing Terminates during its first year 1%
cost bases, current market value, dividend and/or Terminates during its second year 4/5 of 1%
interest yield to market. Terminates during its third year 3/5 of 1%
6) Provide periodic income and principal cash statements Terminates during its fourth year 2/5 of 1%
which will set forth all receipts and disbursements in Terminates during its fifth year 1/5 of 1%
the fund.
ADDITIONAL INFORMATION
7) Provide a Bank certified annual accounting setting i
forth all income and principal receipts and disburse- The above fees are subject to change if the Bank in its
rnents for the year in chronological order. This report determination performs any unusual or extraordinary
is also broken down into: administrative functions.The Bank also reserves the right to
Dividends received review the Schedule of Fees on an annual basis. The Bank
Interest received on mortgages further reserves the right to determine what services are
Interest received on corporate and government usual or unusual.
bonds The fees do not include services of counsel, and out-of-
Principal received on mortgage payments pocket expenses,which will be billed separately.
Principal received on sale of trust assets These fees are Tax Deductible in the usual manner.
8) Pay out to all retirees, their monthly checks, if We reserve the right to change this Fee Schedule and the
requested,and furnish their W2P's on or before January privilege of renouncing as Agent.
31 of each year.
9) Be available to your organization for broad consulta-
tion with regard to your plan, new or proposed
legislation, plan design, funding, other general areas of
concern. Attend committee meetings regularly, upon
request. ,
I
lal E.
Pi
ORIGINAL
RESOLUTION NO. 77-15428
(Approving an increase in custodial
fees charged to the City Retirement
Systems by Flagship First National Bank
of Miami Beach)
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