HomeMy WebLinkAboutMinutes - 07/15/2008 - Police Pension BoardPOLICE PENSION BOARD
CITY OF MCHENRY
`- Tuesday, July 15, 2008
A meeting of the McHenry Police Pension Board was called to order on Tuesday, July 15, 2008,
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, Officer Robert Roske, Bob
Hettermann, Ormel Prust, and Daniel Kinnerk.
Other present at the meeting were Gary Karshna, Capital Gains; Jim Schmidt, LPL Financial;
Chris Black, Carolyn Lynch and Marci Geraghty, City of McHenry.
Meeting Minutes
Meeting minutes from April 15, 2008 regular meeting and May 30, 2008 special meeting were
presented for approval.
Hettermann noted an error in the April 15th minutes regarding the time the meeting was
adjourned. The meeting adjourned at 4:25 PM not 3:25 PM as reflected in the minutes.
Motion by Prust, seconded by Kinnerk to approve the April 15, 2008 minutes as
amended, the May 30, 2008 special meeting minutes, and to hold the minutes for audit.
All ayes, motion carried.
Treasurer's Report
City of McHenry Accountant Carolyn Lynch presented treasurer's reports for the periods ending
April 30, 2008 and June 30, 2008. FMV of the fund as of June 301h was $15,917,212.97, down
$232,341 from April 30th. Schmidt noted that there was no need to make adjustments to the
percentage of equity investments in the fund.
Kinnerk made a motion, seconded by Roske to approve the Treasurer's Reports as
presented and to hold it for audit. All ayes, motion carried.
Old Business
a. Capital Gains. Gary Karshna reported on the pension funds fixed assets as of
May 31, 2008.
Portfolio Market Valuation $7,139.435
Portfolio Book Valuation $7,162,103
Presently, yields for two-year Treasury notes are at 2.65% and 10-year notes are
at 4.06%. Interest rates backed up dramatically over the past 45 days based on
energy related inflationary fears. Karshna advised not locking -in yields if interest
rates continue to rise and instead recommended maintaining higher than normal
money market balances. After interest rates show signs of peaking, he
recommends purchasing high quality fixed income instruments. Karshna
assured the board that the fund has not invested in Fannie Mae or Freddie Mac
mortgages. A discussion ensued on the impact the mortgage crisis has had on
the pension fund and how the bond market feeds on bad news.
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Police Pension Board Meeting
July 15, 2008
Page Two
b. LPL Financial. Jim Schmidt presented the equities investment report. Total
value of investments as of July 141h was $6,159,811, down less than 1.00% from
last quarter and 15.35% for the year. However, that fund continues to outperform
the S&P, which is down approximately 18.00% for the year. The American
Funds is doing extremely well in this market. Schmidt recommended no changes
at this time. The percentage of equity vs. bonds invested by the fund is
40%/60% and in compliance with state statutes.
New Business
There was no new business to report.
Bills for Approval
Prust made a motion, seconded by Hettermann to approve the following bills as
presented: Wells Fargo Bank, NA, $449.42 for trust account quarterly fees; Illinois
Department of Financial and Professional Regulation Division of Insurance, $3,151.04;
and the Law Offices of Richard Puchalski, $3866.75.
Discussion: Kinnerk suggested that the board seek proposals from other companies for
pension trust account services. Finance Director Black stated that the Illinois Funds might
charge a lower holding fee. Black told the board that he will investigate the matter and Karshna
stated he would assist with the transfer. The matter will be discussed at the October meeting.
All ayes, motion carried.
Other Business
a. Foerster informed the board that the appeal filed by former police officer Mary Lee
Eschbach to the board's decision to deny her a duty -related pension is scheduled for
September 11, 2008. A decision should be reached by the next Pension Board meeting
in October.
Adiournment
Hettermann made a motion, seconded by Prust to adjourn the meeting. All ayes, motion
carried.
The meeting was adjourned at 4:05 PM.
Next meeting: Tuesday, October 21, 2008
Respectfully submitted,
Marci Geraghty, Recording Secretary