HomeMy WebLinkAboutMinutes - 01/16/2007 - Police Pension BoardMEETING OF THE POLICE PENSION BOARD
CITY OF McHENRY
Tuesday, January 16, 2007
A meeting of the McHenry Police Pension Board was called to order on Tuesday, January 16,
2007, at 3:36 PM in the City of McHenry Municipal Center, 333 S. Green Street.
At roll call, the following members were present, Sgt. Jeff Foerster, Officer Robert Roske, Ormel
Prust, and Dan Kinnerk. Others in attendance: Gary Karshna, Capital Gains, Inc.; Jim Schmidt,
LPL Financial; Chris Black, Director of Finance for the City of McHenry; Carolyn Lynch, City of
McHenry Accountant; and, Recording Secretary Marci Geraghty.
Introduction
President Foerster introduced Carolyn Lynch, Accountant for the City of McHenry.
Minutes
Prust made a motion, seconded by Kinnerk to accept the October 17, 2006, Special
Police Pension Board meeting minutes as presented and to hold them for audit. All ayes,
motion carried.
Prust made a motion, seconded by Kinnerk to accept the December 12, 2006, Regular
Police Pension Board meeting minutes as presented and to hold them for audit. All ayes,
motion carried.
Treasurer Report
There was no report presented at the meeting.
Old Business
a) LPL Financial. Jim Schmidt distributed a copy of the investment report for the period
ending December 29, 2006. The total value of equity investments for the period was
$6,505,376, up $19.05% for the year compared to the S&P 500 at 15.78%.
Schmidt distributed an American Funds' Asset Allocation as of November 30, 2006.
He reported that 38.5% of the fund's equity investments are comprised of non -US.
stocks and 53.7% is invested in U.S. stocks. Schmidt also stated that the economy
is strong and earnings are good, which is typical for the first quarter.
A discussion ensued on the State of Illinois embargo on Sudan. Schmidt stated that
as of January 20th, 60% of the funds assets cannot be invested in Sudan noting that
this is not a problem however, as of July 1, 2007 the board must certify that 100% of
its assets are Sudan free. Foerster noted that the Illinois Pension Board filed a suit in
Springfield stating that that State of Illinois cannot dictate foreign policy. Gary
Karshna noted that Sudan free investments are mostly small and mid cap funds and
out of 138, only eight are domestic.
Schmidt also distributed
b. Capital Gains, Inc. Fixed assets manager Gary Karshna presented a summary of
fixed asset investments for the period ending December 31, 2006. Karshna reported
L- that the lighter energy burden should bolster the economy in 2007. Signs of a pickup
in economic activity are emerging. Currently, real estate and mutual funds are top
performers.
Police Pension Board Meeting Minutes
January 16, 2007
Page Two
Transactions: One FNMA Note was called and one FHLB Note matured during the
month of December providing $750,000 in proceeds to re -invest. On December 11,
L— 2006, $500,000 was wire transferred to Amcore Bank for investment in a certificate
of deposit. Also in December, notes and Treasury Strips were purchased.
Market Value Returns Year —to -Date:
Lehman Intermediate Govt. bond Index 3.99%
Police Pension Fund 4.53%
Portfolio Market Valuation $6,695,652
Portfolio Book Valuation $6,758,186
Average Maturity 5.91
Effective Duration 5.20
Police Pension Fund (Book Value Return) 3.47%
c) Investment Strategies. President Foerster notified the board that a $1-million certificate
of deposit will mature in June 2007. He would like to call a special meeting of the board
in May to discuss reinvesting the proceeds from the CD. At that time, he will ask the
Finance Director to secure bids for certificates of deposit from local financial institutions
for 12, 18, and 24-month durations.
New Business
a) 2007 Police Pension Board Meeting Schedule.
Prust made a motion, seconded by Kinnerk to approve the 2007 Police Pension
Board meeting schedule. All ayes, motion carried.
b) Chris Black reported that he spoke with Tim Sharpe and that he would be ready to
present the May 1, 2006 actuarial report for the meeting in April.
Bills for Approval
Eder Casella & Co. $3,838.92
Wells Fargo $426.02
Kinnerk made a motion, seconded by Roske to approve the bills as presented. All ayes,
motion carried.
Adjournment
There being no further business to discuss before the board, Prust made a motion,
seconded by Roske to adjourn.
The meeting adjourned at 4:08 PM.
Respectfully submitted,
S
Marcia M. Geraghty, Reco ing ecretary