HomeMy WebLinkAboutMinutes - 01/14/2020 - Police Pension BoardPolice Pension Board of Trustees
Regular Meeting Minutes
January 14, 2020
Call to Order
The regular meeting of the City of McHenry Police Pension Board of Trustees was called to order at 2:30
p.m. in the City Council Chambers at 333 S. Green Street, McHenry, IL.
Roll call:
Members present: President Jeffery Foerster, Ann Buss, Cheryl Kranz, Marc Fisher, Sergeant Nick Clesen.
Others present: Monte Johnson, Carolyn Lynch, Gary Karshna, James Schmidt, Derik Morefield,
Stephan Roberts, Dalena Welkomer
Public Input•
No members of the public were present to offer comments.
Presentation about the possibility of issuing bonds to pay off the unfunded liability for the Police
Pension Fund.
Dalena Welkomer and Stephan Roberts were present from Robert W. Baird & Co. They explained that
they are a firm that has handled these types of bonds in the past. They recently handled Winnebago
County's bond issuance for $35 million. Ms. Welkomer walked through the handouts that were given to
all. The current debt to police pension sits at $22.5 million. Rates assumed investments earned interest
at 7%. The estimated bond rate is 3.54916, which could generate savings of $9 million over 20 years.
It was explained that depending on bonding options, and if assets earn the actuarial rate, $8.6 to $10.3
million could be saved over 22 years. Another benefit to bonds would be the ability to restructure a
payment pattern that meets the City's future financial objectives. This could lower the annual payment
up to $1.1 million. This would replace one legal obligation to another, and there would be no material
increase in our liability. As long was the investments made 3.5%, we are at appoint of indifference.
Bonds would immediately reduce the unfunded liability.
The biggest risk would be there is no idea what assets will earn over the next 20 years. There is no way
to tell what the pension fund will earn. Mari<et timing is another concern. There is a risk dumping $20
million into investments all at one point in time. This can be mitigated by doing a series of bond issues.
By having pension consolidation, the risk is somewhat mitigated. When you look at a 5-25 year period,
the average rate of return for IMRF was no lower than 7.5%.
Clerk's Note: Officer Marc Fisher left the meeting at 3:15 p.m.
City Treasurer Carolyn Lynch will review our figures and Baird will get us figures based on 4, 5, and 6%
returns. The issue will be revisited at the April Police Pension Board meeting.
Meeting Minutes
A motion was made by Sergeant Clesen and seconded by Cheryl Kranz to approve the minutes of the
meetings on October 8, 2019, and October 29, 2019, Vote: 4-ayes by unanimous voice vote. 0-nays, 0-
abstained.,1-absent. Motion carried.
Treasurer's Report
A motion was made by Sergeant Clesen and seconded by Ann Buss to approve the Treasurer's Report.
Vote: 5-ayes by unanimous voice vote. 0-nays, 0-abstained, 0-absent. Motion carried.
LPL Financial Eques Report
Investment Advisor James Schmidt reviewed the Portfolio Performance Summary, Investments were at
26.36% in the full calendar year for 2019. The May 1't fiscal report shows investments at 12.27%.
Capital Gains, Inc. Fixed Assets Report
Investment Manager Gary Karshna explained that bonds are still down. From a market prospective, the
stock market may hold on well. It is a good idea to be cautious pending the outcome of the presidential
election. There was a discussion regarding the bond with Ford. Mr. Karshna explained that if the rating
falls too low, we would have to sell and could take a hit. The pros and cons of holding on the bond were
discussed. A motion was made by Sergeant Clesen and seconded by Ann Buss to keep the Ford bond.
Vote: 4-ayes, 0-nays, 0-abstained., 1-absent. Motion carried.
Clerk's Note; Cheryl Kranz left the meeting at 3;41 p.m.
Department of Insurance Letter
Mr. Foerster explained that there were no fines or other issues coming out from the Department of
Insurance, Our reply letter was placed in our file with the Department of Insurance,
Consolidation of Funds
The topic of consolidation of funds has been discussed previously, There is still a big question about now
and when this will happen.
Accept Applications of 2 New Officers
A motion was made by Sergeant Clesen and seconded by Ann Buss to accept the pension applications of
Ashley O'Herron and Henri Krueger, Vote: 3-ayes, 0-nays, 0-abstained,, 2-absent, Motion carried.
Approve Pension Increases
A motion was made by Sergeant Clesen and seconded by Ann Buss to approve the pension increases as
presented. Vote: 3-ayes, 0-nays, 0-abstained., 2-absent. Motion carried.
Approve the purchase of service -time for unpaid leave for Jill Foley
A motion was made by Ann Buss and seconded by Sergeant Clesen to approve the purchase of service -
time for unpaid leave for Jill Foley as presented. Vote: 3-ayes, 0-nays, 0-abstained., 2-absent. Motion
carried.
Approve a request from Bryan Weiner for a refund of all pension fund
A motion was made by Sergeant Clesen and seconded by Ann Buss to approve a request from Bryan
Wegner for a refund of all pension fund contributions in the amount of $19,651.16 as presented. Vote:
3-ayes, 0-nays, 0-abstained., 2-absent. Motion carried,
Approve portability of time for Susan Ellis and Ashley O'Herron
Official paperwork has not yet been received for the portability of time for these officers. The issue will
be placed on the agenda for the next meeting.
Payment of Bills
The list of bills was read by Jeff Foerster. A motion was made by Sergeant Clesen and seconded by Ann
Buss to approve the payment of bills as presented, Vote: 3-ayes, 0-nays, 0-abstained., 2-absent, Motion
carried.
Public Pension Trustee Training Update
Or, Foerster reminded all members to give Monte Johnson a copy of all of their training certificates for
our records.
Semi -Annual Review of Executive Session Minutes
There is one set of executive minutes from May 10, 2019, that need approved and possibly released.
There has been no indication yet from Laura Goodloe that these are ready for release, to the issue will
be brought back for the next semi-annual review.
Semi -Annual Review of Police Pension Fund Investment Policy
The policy has recently been upgraded and everybody agreed that the policy looks fine. A motion was
made by Cheryl Kranz and seconded by Ann Buss to leave the current Investment Policy as is. Vote: 3-
ayes by unanimous voice vote. 0-nays, 0-abstained., 2-absent. Motion carried.
Motion to Approve a Request from Bryan Wegner for a refund of all pension fund contributions in the
amount of $19,651.16.
Mr. Foerster explained that an official letter has not yet been received, so this action will not take place
until the next meeting.
Motion to approve Office Sue Ellis Application
Mr. Foerster stated that she was hired on September 23�d, and all of her paperwork has been submitted.
A motion was made by Ann Buss and seconded by Cheryl Kranz to approve Officer Sue Ellis Application
for Participation in the Police Pension Fund. Roll Call: Vote: Ayes: Ann Buss, Cheryl Kranz, Jeff Foerster.
0-nays, o-abstained. 2-absent. Motion carried.
Approval of decision of Disability Pension for Sean Klechak
A motion was made by Cheryl Kranz and seconded by Ann Buss to approve the decision of Disability
Pension for Sean Klechak. Roll Call: Vote: Ayes: Ann Buss, Cheryl Kranz, Jeff Foerster. 0-nays, o-
abstained. 2-absent. Motion carried.
Approve the transfer of creditable service for Dinka Malilc to Arlington Heights Police Pension Fund
A motion was made by Ann Buss and seconded by Cheryl Kranz to approve the transfer of creditable
service for Dinka Malik to Arlington Heights Police Pension Fund. Roll Call: Vote: Ayes: Ann Buss, Cheryl
Kranz, Jeff Foerster. 0-nays, o-abstained. 2-absent. Motion carried.
Pass a Resolution Regarding Consolidation of Pension Funds
A motion was made by Cheryl Kranz and seconded by Ann Buss to pass a resolution regarding
consolidation of pension funds.. Vote: 3-ayes by unanimous voice vote. 0-nays, 0-abstained., 2-absent.
Motion carried.
Motion to approve the payment of bills
A motion was made by Ann Buss and seconded by Cheryl Kranz to approve the payment of bills. Vote:
3-ayes by unanimous voice vote. 0-nays, 0-abstained., 2-absent. Motion carried.
Motion to Adjourn
A motion was made by Sergeant Clesen and seconded by Ann Buss to adjourn the meeting at 3:58 p.m.
Vote: 3-ayes by unanimous voice vote, 0-nays, 0-abstained., 2-absent. Motion carried.
7q at re �_
Monte Johnson, Recording Secretary Jef oerste
resident