HomeMy WebLinkAboutMinutes - 07/19/2011 - Police Pension BoardJuly 19, 2011 Police Pension Board of Trustees Meeting
The meeting of the City of McHenry Police Pension Board of Trustees was called to order at
3:45 PM by President Jeffrey Foerster. Other board members present were Jon Meyer and
Robert Roske. Absent: Ormel Prust. Others present: Jim Schmidt, LPL Financial; Finance and
Accounting Manager Carolyn Lynch and recording secretary Marci Geraghty, City of McHenry.
Approval of Minutes
Minutes from the April 19 board meeting, May 17 special meeting, and June 7, 2011 special
meeting were present. Motion by Roske, seconded by Meyer to approve minutes as presented.
All ayes, motion carried.
Annual Election of Board Officers:
Nominations: Board President: Jeffrey Foerster
Vice -President: Robert Roske
Secretary: Brian Aalto
Motion by Prust, seconded by Foerster to appoint Jeffrey Foerster as Board President.
All ayes, motion carried.
Motion by Foerster, seconded by Meyer to appoint Robert Roske as Board Vice -
President. All ayes, motion carried.
Motion by Prust, seconded by Meyer to appoint Brian Aalto as Board Secretary. All
ayes, motion carried.
Newly appointed President Foerster chaired the meeting.
Treasurer Report
Lynch presented the Treasurer Report for the period ending June 30, 2011. The fund increased
approximately 1.3% over April 30, 2011. Total cash and investments for the period totaled
$16,953.262.52. The total reflects property taxes collected less payouts in May. One CD
remains at McHenry Bank & Trust for $500,000. The CD will expire in December.
Roske made a motion, seconded by Meyer to approve the Treasurer Report as presented. All
ayes, motion carried.
Lynch presented a model of an annual report required by state statute to be presented to the City
Council annually. The report will be prepared and presented to the City Council each year
subsequent to completion of the city's audit.
Old Business
LPL Financial: Jim Schmidt presented the equities report for July 18, 2011. Total assets were
$7,364,664. The funds continue to outperform the S&P500.
At the special meeting in June, the board agreed to take $1 M from an expired CD and split it
between the fixed asset and equities fund. Schmidt presented a proposal to the board to add IVY
Asset Strategy to the equities portfolio. IVY Asset Strategy is a mutual market fund that can
invest in gold and corporate stocks. Also, it can hedge a portfolio, which is beneficial during
downward swings. Of course their judgment must be trusted however they have an excellent
track record as indicated on the chart distributed to the board. Most mutual funds by prospectus
cannot buy puts. IVY Assets represents a newer way of investing that will add diversification to
the existing portfolio and help reduce risks in down markets.
A discussion ensued on the amount of money to be extracted from each fund and invested into
IVY Assets. Meyer suggested removing $400k from Capital World Growth & Income as it
tends to not perform well in down markets and $200k from the other funds.
Meyer made a motion, seconded by Roske to remove $400k from Capital World Growth &
Income; $200k from Small Cap World; and, $200k from Washington Mutual; for a total of $1 M
and reinvest the money in IVY Asset Strategy. All ayes, motion carried.
Capital Gains: Gary Karshna who was not at the meeting emailed to the board the fixed assets
report for the period ending June 30, 2011. As of June 301", two municipal bond positions
matured providing $800,000 to reinvest. On June 13t", a $500,000 was received for investment
in high yielding taxable Illinois municipal notes. The proceeds were invested in five taxable
Illinois muni's and two small corporate note positions in Macy's Department Store and Capitol
One were acquired.
The portfolio market valuation as of May 31, 2011 was $8,068,856 with a book value of
$7,993.607.
Meyer asked why the fund was invested in municipal bonds. Schmidt answered that they
currently have higher yields than Treasury securities. Foerster noted that Karshna is investing in
short term maturity bonds.
Trustee Training: A review of upcoming IPPFA pension trustee training courses was discussed.
President Forester will provide more information about remaining classes offered throughout the
area at the next meeting.
Eschbach Application for Disability: President Forester told the board former officer Merilee
Eschbach filed for an Administrative Review after the recent ruling to deny her request for an
on -duty disability pension. Board attorney Dick Puchalski will hand the case that will be heard
before a judge in the future.
New Business
a) 2011 Election Results. Forester announced the Brian Aalto was inadvertently omitted
from the April election ballot and consequently, is not an official member of the board.
A special election will be held next week to elect an active member to the board. Active
members of the pension fund will participate in the vote.
Bills for Approval
Roske made a motion, seconded by Meyer to authorize payment of an invoice from Capital
Gains for $4,400 for fixed income investment management services. All ayes, motion carried.
Other Business
Foerster told the board that Gary Karshna from Capital Gains is having difficulty making the
meetings because of a conflict he has with another pension fund he represents that meets on the
same day. The other fund is in a location south of the city and quite far from McHenry. Foerster
asked the board members to consider moving the meeting from the third Tuesday of the month to
the first or second Tuesday or Thursday of the month. Lynch replied the second Tuesday or
Thursday would be more beneficial as financial reports would not be available the first week of
the month.
Meyer made a motion, seconded by Roske to meet every quarter on the second Tuesday of the
month. The meeting time remains at 3:30 PM. All ayes, motion carried.
Meyer asked when the next actuarial report will be completed. Forester said it is typically
presented to the board in October or January.
Adjournment.
Meyer made a motion, seconded by Roske to adjourn the meeting. All ayes, motion carried.
The meeting adjourned at 4:25
Next meeting is scheduled for Tuesday, October 18, 2011.
Respectfully submitted,
Marci Geraghty
Recording Secretary