HomeMy WebLinkAboutMinutes - 05/12/2020 - Police Pension Board 5
Police Pension Board of Trustees
M e ' Regular Meeting Minutes
May 12, 2020
Call to Order
The regular meeting of the City of McHenry Police Pension Board of Trustees was called to order at 3:00
p.m. as an online Zoom meeting due to the COVID-19 pandemic.
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, Stephan Roberts, Dalena
Welkomer
Public Input:
No members of the public were present to offer comments.
Approve the January 14,2020, meeting minutes.
A motion was made by Sergeant Clesen and seconded by Ann Buss to approve the January 14, 2020,
meeting minutes as presented. Vote: 5-ayes, 0-nays,0-abstained. Motion carried.
Treasurer's Report
The treasurer's report was not available for the meeting and therefore not approved.
LPL Financial Equities Report
Investment Advisor James Schmidt reviewed the Portfolio Performance Summary.Things took a turn in
March as the pandemic hit.We started the year at about$19 million and are currently down to$17.2
million. The fiscal rate of return is-3.18%. Some larger companies will benefit from the market and
most small businesses will be losers. In our American Funds we don't hold much small capital, so the
large companies will likely drive through it.There was a panic in the bond market, but hopefully things
will get stable in all markets in the next couple of months.
Semi-annual review of the Police Pension Board Fund Investment Policy
There were no major changes to the policy with the exception of the first two paragraphs that were
added regarding Statutory Requirement 40 ILCS 5/1-113.6.A motion was made by Cheryl Kranz and
seconded by Sergeant Clesen to approve the City of McHenry Police Pension Fund Investment Policy as
presented, dated May 12, 2020. Roll Call Vote: 5-ayes, 0-nays, 0-abstained. Motion carried.
Approve portability of time for Ashley O'Herron
A motion was made by Sergeant Clesen and seconded by Officer Fisher to approve the portability of
time for Ashley O'Herron as submitted. Roll Call Vote: 5-ayes,0-nays,0-abstained. Motion carried.
Approve portability of time for Joseph Lazicki
No paperwork has been received at this time for Officer Lazicki. The issue will be placed as an agenda
item for the next regular meeting.
•
Annual independent Medical Examination for Police Disability Pensioner Justin DeBolt
A medical examination showed that Mr. DeBolt is officially disabled for another year. A motion was
made by Officer Fisher and seconded by Ann Buss to accept the annual independent Medical
Examination for Police Disability Pensioner Justin DeBolt. Roll Call Vote: 5-ayes, 0-nays,0-abstained.
Motion carried.
Annual independent Medical Examination for Police Disability Pensioner Sean Klechak
The medical report is not yet available.The item will be placed on the agenda at the next regular
meeting.
Appointment of Cheryl Kranz
It was reported that Cheryl Kranz has been appointed to the Police Pension Board of Trustees for two
additional years, ending April 30, 2022. This action took place at the regular City Council Meeting on
May 4, 2020.
Payment of Bills
A motion as made by Officer Fisher and seconded ty Cheryl Kranz to approve the payment of bills as
submitted. Roll Call Vote: 5-ayes, 0-nays,0-abstained. Motion carried.
Discussion of issuing bonds to pay off the unfunded liability for the Police Pension Fund
A discussion ensued regarding issuing bonds to pay off the unfunded liability for the Police Pension
Fund. Although the idea sounds promising, City Treasurer Lynch stated that it would be easier to
proceed if there were more success stories.
Dalena Welkomer of Baird Public Finance said that there are now success stories to share, such as in
Winnebago. Other municipalities are having discussions on the topic but haven't moved forward.There
are some unknowns due to consolidation and the actual rate of return is unknown.We would need to
look at the long term objective and be confident in the expectations for a rate of return throughout the
life of the bond. Even though the City's returns have been negative this year,the rate of return over the
next 20 years is expected to be at the 6% level.
Investment Manager Gary Karshna stated that this would be an ideal time to issue bonds with
historically low interest rates. He believes that the rates will stay low for a while, and if the economy
bounces back as expected, it makes sense to issue bonds.
Capital Gains, Inc. Fixed Assets Report
Investment Manager Gary Karshna explained that we are in the reverse of an equity market. We had
longer term that we were able to sell off and make a lot of money. With a liquidity squeeze in the bond
market, we were able to jump in and get bonds with yields with big percentages. This has been a great
opportunity to sell and reinvest. Our securities rolled off in March and we were cash rich for a while. We
sold bonds and captured profits.
Additional Items for Discussion
City Treasurer Lynch did a cash analysis to make sure there was enough money to pay bills and pensions.
There should be enough money even though taxes are coming in late. Most people have taxes that are
in escrow accounts. It is advisable to wait until the July meeting to see if we need to make a transfer to
cash.
It was agreed that the next meeting will be held July 21st. If the meeting takes place via Zoom,then the
• meeting will be at 3:00. If the meeting is in person at City Hall,the meeting will take place at 2:30 p.m.
It was also noted that securities are coming off in June if we want to purchase equities. We could have
about$1.5 million to invest in equities if we wanted. Depending on how things work out, a special
meeting may be called around June 10tn
Motion to Adjourn
A motion was made by Sergeant Clesen and seconded by Cheryl Kranzto adjourn the meeting at 3:40
p.m. Roll Call Vote: 5-ayes,0-nays, 0-abstained. Motion carried.
1444,A a•
Monte Johnson, ecording Secretary Jeff Feerster, P esident