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HomeMy WebLinkAboutMinutes - 10/18/2011 - Police Pension BoardOctober 18, 2011 Police Pension Board Meeting The meeting of the City of McHenry Police Pension Board of Trustees was called to order at 3:30 PM in the City of McHenry Municipal Center, 333 South Green Street, McHenry, IL. Board members present: President Jeffery Foerster, Officer Robert Roske, John Meyer, and Ormel Prust. Absent: D.C. Daniel Kreassig. Others present: Jim Schmitt, LPL Financial, Gary Karshna, Capital Gains, Finance and Accounting Manager Carolyn Lynch, and recording secretary Joan Lunsmann. Special Election Results Foerster reminded everyone of the special election held to replace Brian Aalto on the board. Deputy Chief Daniel Kreassig was elected. Approve of Minutes Meeting minutes from July 19, 2011 were reviewed. No comments, additions, or corrections were made. Motion to approve the minutes of July 191" and to hold them for audit as presented was made by Roske, seconded by Meyer. All ayes, motion carried. Absent: Kreassig Treasurer Report \.- The Treasurer Report for the period ending September 30, 2011 was presented by Finance and Accounting Manager Lynch. Total cash and investments for the period totaled $1,234,086.95. Property tax levy provided approximately $1.2 million. Refund of pension money was made to former officer Ken Klean. Prust made a motion to accept the report as presented and to hold it for audit, seconded by Roske. All ayes, motion carried. Absent: Kreassig Lynch reported a $500,000 certificate of deposit will expire on December 14, 2011. A suggestion was made to table a decision on what to do with the funds until the January 2012 meeting. In January, the board will determine how much money will be needed to cover expenses for the remainder of the year. Motion by Roske, seconded by Meyer to not rollover the $500,000 certificate of deposit expiring on December 14, 2011, and to discuss investment options at the January 17, 2012 meeting. All ayes, motion carried. Absent: Kreassig. Old Business a) Capital Gains: Gary Karshna presented the fixed assets report for the period ending September 30, 2011. During the past six months, bond yields have moved lower across the board, with the yield on the ten year US Treasury note falling from 3.50% to 1.92%. Karshna noted the jump in junk bond yields, coupled with increased stock market volatility since summer, point to a weaker economic outlook that may not be evident until 2012. Recently, a more diversified basket of fixed income positions such as GNMA's and US Treasury notes in the six to 24 year range were added to the portfolio. In this manner, Karshna said the fund can enhance yields with short term muni's and add potential for price appreciation with longer term US Treasury notes, US Treasury �- STRIPS, investment grade corporate notes, and GNMA's. In September, one corporate bond matured and one agency note was called. In addition, one 10 year US Treasury note was sold capturing profits of $26,570 in the process. The proceeds were invested in one corporate note and a US Treasury STRIPS position. The police pension fund fixed assets portfolio is 68% invested in shorter term taxable muni positions, with the balance invested in diverse, high quality, fixed income securities. The portfolio market valuation as of September 30, 2011 was $8,772,439, with a book value of $8,556,565. b) LPL Financial: Jim Schmidt presented the equities report for the period ending October 17, 2011. The portfolio is down 5.45%, or approximately $6.7 million. Jim advised the market cannot stand uncertainty, and currently we are experiencing much uncertainty. c) Trustee Training: Information was distributed regarding IPPFA Certified Trustee Program. Two training sessions were offered: one session for four days and the other session is held once a month for four months. Kreassig and Meyer are required to perform 32 hours of training; Foerster and Prust, 16 hours; and Roske has eight hours remaining to complete. Karshna advised regular trustee meetings may be counted as an hour of training as the �. trustees are educated during the meeting on pension law. Foerster advised Marci keeps the training records and everyone should make sure she has updated information. Meyer and Kreassig should advise Marci or Foerster which session they will be attending. Prust will check with Marci on his hours. d) Update: Eschbach Application for Disability. Foerster reported a hearing was scheduled on this day for Eschbach's appeal of the court's decision to deny her application for a disability pension. It will most likely take 30 days to obtain a ruling. e) Confirmation of disability letters were received for former officers Dan King and Dave Porter. Motion by Meyer to accept the letters and continue disability pension payments for King and Porter, seconded by Roske. All ayes, motion carried. Absent: Kreassig New Business a) Application for participation in Police Pension Fund. Newly hired officer Jack Zumwalt is at the Police Academy and has filed an application to join the police pension. Zumwalt was hired on September 26, 2011. Motion made by Roske to accept his application to participate in the police pension fund, seconded by Meyer. All ayes, motion carried. Absent: Kreassig L b) Appointment of Board Secretary. The resignation of Brian Aalto created an opening for Board Secretary. Foerster executed a call for nominations. Foerster nominated Dan Kreassig. No other nominations received. Motion to closed nominations made by Roske, seconded by Meyer. Foerster called for a voice vote: Prust aye Meyer aye Roske aye Foerster aye Kreassig absent Motion approved to elect Dan Kreassig as secretary for the McHenry Police Pension Fund for the two year term expiring on April 30, 2013. Bills for Approval Motion by Roske, seconded by Prust to approve payment of $325 to Back to Health Ctr, LLC in Lake Zurich, IL for an IME conducted for disability pensioner Daniel King. All ayes, motion carried. Absent: Kreassig Next meeting is scheduled for January 17" at 3:30 PM. Adjournment Prust made a motion, seconded by Roske to adjourn the meeting. All ayes, motion carried. Absent: Kreassig. The meeting adjourned at 4:20 pm.