HomeMy WebLinkAboutMinutes - 01/19/2010 - Police Pension Board�-' POLICE PENSION BOARD
CITY OF MCHENRY
Tuesday, January 19, 2010
A meeting of the McHenry Police Pension Board was called to order on Tuesday, January 19,
2010, at 3:30 PM in the City of McHenry Municipal Center, 333 South Green Street.
At roll call, the following members were present: Sgt. Jeff Foerster, Ormel Prust, Daniel
Kinnerk, and Officer Robert Roske. Absent: Bob Hettermann.
Other present at the meeting: Gary Karshna, Capital Gains; Carolyn Lynch, and Marci
Geraghty, City of McHenry.
Reading and Approval of Minutes
Minutes from the October 20, 2009 meeting and December 11, 2009 special meeting were
presented.
Discussion: Foerster reported the Finance Director Black is recommending an amendment to
the October 20, 2009 minutes to strike the sentence in the fourth paragraph under Treasurer's
Report; "He informed the board to expect a lower contribution from the city to make up for the
shortfall," and replaced it with "He also told the board to expect a slight increase in the city's
L contribution."
Prust made a motion seconded by Kinnerk to approve the October 20, 2010 minutes as
amended and approve the December 11, 2009 special meeting minutes as presented and
to hold them for audit. All ayes, motion carried.
Treasurer's Report
Carolyn Lynch presented the Treasurer Report for the period ending, December 31, 2009. Full
market value of the fund for the period was $15,700,774.39, an increase of approximately 0.6%
($100,000) from last quarter (September 30, 2009) and 7.9% increase from June 30, 2009.
Prust made a motion, seconded by Kinnerk to approve the Treasurer's Report for the
period ending December 31, 2009 as presented and to hold it for audit. All ayes, motion
carried.
Old Business
LPL Financial. There was no report.
Capital Gains, Inc.
Gary Karshna reported on fixed assets as of December 31, 2009. Statistical data and rates of
L return for the past 12 months of 2009:
Returns Past 12 Months:
Lehman Intermediate Govt. Bond Index - (.32%)
McHenry Police Market Value - 6.87% - 3.66%
Police Pension Board
January 19, 2010
Page Two
Returns as of 12/31/2009
`- Lehman Intermediate Govt. Bond Index — 1.92%
McHenry Police Market Value — 2.33%
FY YTD 2009-10
Portfolio Market Valuation
Portfolio Book Valuation
Average Maturity 7.72 years
$7,822,297
$7,779,054
Effective Duration 4.33 years
The bond market appears to be sensing a gradual recovery in the economy even though bonds
tend to back -off when stocks are doing well. Longer -term bond yields appear to be stuck in a
50-basis point trading range, with the yield on a 10 year US Treasury note bouncing between
3.50% and 4.00%. Karshna said he will purchase longer term securities when the yields for 10-
year US Treasury notes approach 4.00% and in turn, will sell longer term bonds and capture the
profits when yields fall to the bottom of the trading range. US TIPS have rallied quite a bit lately
and are expensive. He favors US TIPS from a longer term viewpoint and will acquire additional
TIPS positions during price corrections. TIPS provide protection as they adjust with inflation.
One municipal note matured and three US Agency notes were called in December. Also, two
US Treasury positions were sold for a profit of $29,144. The proceeds were invested in three
callable US Agency notes and two USA Treasury STRIPS.
Karshna told the board that the Misery Index is back. He explained that the Misery Index is the
sum of the country's unemployment and inflations rates. The misery index now stands at
11.8%, the highest since 1991.
In closing, Karshna is of the opinion that at this point, a less aggressive strategy would be
beneficial for investing in the bond market.
Training Update. President Foerster noted upcoming Mandatory Public Pension training was
scheduled as follows: Foerster and Roske in Naperville on January 29th, and Prust, Kinnerk,
and Hettermann in Hoffman Estates on February 12tn
New Business
Pension Increases:
a) Kinnerk made a motion, seconded by Roske to approve pension increases for
Gregory Burg, Raymond Donahue, George Erkenswick, Wm. Fitzgerald, Ramon
Gregorio, Thomas Jenkins, Patrick Joyce, Daniel Kinnerk, Patricia Laycock,
Kathleen Leonard, Richard Meier, Anthony Militano, James Molnar, Edward
O'Donnell, Thomas O'Meara, Kenneth Prazak, Gary Wigman, and Roland Wood
effective January 1, 2010; and, Thomas Beyer effective March 1, 2010. All ayes,
motion carried.
Designation of FOIA Officer:
b) Prust made a motion, seconded by Kinnerk to approve the designation of board
attorney Richard J. Puchalski as McHenry Police Pension FOIA Officer effective
January 1, 2010, as required by the Illinois Freedom of Information Act. All ayes,
motion carried. A notice of this action will be posted in the Municipal Center.
Police Pension Board
January 19, 2010
Page Three
`- Bills for Approval
Roske made a motion, seconded by Prust to approve payment of invoice dated July 28,
2009, for $1,700 from Timothy W. Sharpe Actuary for services rendered in preparation of
the May 1, 2008 Actuarial Valuation for the City of McHenry Police Pension Fund. All
ayes, motion carried.
Adjournment
President Foerster announced that the next meeting of the Pension Board of Trustees is
scheduled for April 20, 2010.
Roske made a motion, seconded by Prust to adjourn the meeting. All ayes, motion
carried.
The meeting was adjourned at 4:05 PM.
Respectfully submitted,
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Marci Geraghty, R cordi g Secretary