Minutes - 02/09/2005 - Firefighter's Pension Fund BoardMINUTES OF THE FEBRUARY 9, 2005 REGULAR
MEETING OF THE BOARD OF TRUSTEES OF THE
OAK BROOK FIREFIGHTERS' PENSION FUND
APPROVED AS WRITTEN ON APRIL 28, 2005.
1. CALL TO ORDER:
The Meeting of the Board of Trustees of the Oak Brook Firefighters' Pension
Fund was called to order by President McEllin at 8:36 a.m. in the Upper Level
Conference Room of the Butler Government Center, 1200 Oak Brook Road,
Oak Brook, Illinois.
2. ROLL CALL:
Recording Secretary Gonnella called the roll with the following persons
PRESENT: President Thomas McEllin, Secretary Clifford Ekkert, Trustees
Linda K. Gonnella, Darrell J. Langlois and Thomas Stanfa.
ABSENT: Trustees Kevin Quinlan and Raymond Petter.
IN ATTENDANCE: Brian Speers and Jim Brolin, Merrill Lynch; Vice
Presidents Tom Sawyer and Terese Krafcheck Oak Brook Bank and Actuary
Timothy Sharpe.
3. APPROVAL OF MINUTES:
a. November 9, 2004
Trustee Cronholm asked that the Minutes of November 9, 2004 be amended
under Agenda Item 4. New business, b. Discussion of Creditable Service to
correct the spelling to Robert Robertson and that his five years of service is
from Franklin Park.
Motion by Trustee Cronholm, seconded by Secretary Ekkert, to approve the
November 9, 2004 Minutes of the Oak Brook Firefighters' Pension Fund
Board of Trustees Meeting as amended. VOICE VOTE: Motion carried.
b. October 20, 2004
Motion by Trustee Cronholm, seconded by Secretary Ekkert, to approve the
October 20, 2004 Minutes of the Oak Brook Firefighters' Pension Fund
Board of Trustees Meeting as presented. VOICE VOTE: Motion carried.
It is noted for the record that Recording Secretary Gonnella was requested
to copy all Minutes of the Board of Trustees from 2001 to present for the
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3. b.
audit of the Oak Brook Firefighters' Pension Fund by the Department of
Insurance. In the research of these minutes, she found official minutes that
had not been approved by the Board of Trustees and therefore were
presented for approval to the Board at this time. The agenda was revised to
include the following minutes for Board approval:
c. September 9, 2003 — 9:00 a.m.
Trustee Kubiesa asked that the September 9, 2003 Minutes be amended to
read under Agenda Item 4. To read: "Trustee Kubiesa recused himself due
to an appearance of a conflict of interest as Natalie Watkins is an employee
in his law firm."
Motion by Trustee Cronholm, seconded by Trustee Kubiesa, to approve the
September 9, 2003 Minutes of the Oak Brook Firefighters' Pension Fund
Board of Trustees Meeting as amended. VOICE VOTE: Motion carried.
d. September 9, 2003 — 1:00 p.m.
Motion by Trustee Langlois, seconded by Trustee Kubiesa, to approve the
September 9, 2003 Minutes of the Oak Brook Firefighters' Pension Fund
Board of Trustees Meeting as presented. VOICE VOTE: Motion carried.
e. September 24, 2003
Motion by Trustee Langlois, seconded by Trustee Kubiesa, to approve the
September 24, 2003 Minutes of the Oak Brook Firefighters' Pension Fund
Board of Trustees Meeting as presented. VOICE VOTE: Motion carried.
Recording Secretary Gonnella also noted that in preparing the Minutes of the
Oak Brook Firefighters' Pension Fund Board of Trustees for the audit of The
Fund by the Department of Insurance that there were two sets of minutes that
were signed as approved for the August 7, 2003 Board meeting. She asked the
Board for approval to destroy one set of minutes.
Motion by Trustee Kubiesa, seconded by Trustee Langlois, to approve the
destruction of a duplicate set of Minutes for the August 7, 2003 Oak Brook
Firefighters' Pension Fund Board of Trustees. VOICE VOTE: Motion carried.
Recording Secretary Gonnella further requested approval of a Bath & Tennis
Club invoice as presented. Trustee Kubiesa indicated that this item could be
presented for approval.
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3. Motion by Trustee Langlois, seconded by Secretary Ekkert, to approve the Oak
Brook Bath & Tennis Club invoice as presented. ROLL CALL VOTE:
Ayes: 7 — President McEllin, Secretary Ekkert, Trustees Cronholm, Gonnella,
Kubiesa, Langlois and Stanfa.
Nays: 0 — None.
Absent: 2 — Trustees Petter and Quinlan. Motion carried.
4. CONSENT AGENDA:
All items on the Consent Agenda are considered to be routine in nature and will
be enacted in one motion.
Motion by Trustee Cronholm, seconded by Secretary Ekkert, to approve the
Consent Agenda and authorize expenditures as presented. ROLL CALL
VOTE:
Ayes: 7 — President McEllin, Secretary Ekkert, Trustees Cronholm, Gonnella,
Kubiesa, Langlois and Stanfa.
Nays: 0 —None.
Absent: 2 — Trustees Petter and Quinlan. Motion carried.
a. Approval of October 1 -31, 2004 checks #3004 -3017 and #6094 -6112 in the
total amount of $89,568.87
b. Approval of November 1 -30, 2004 checks #3018 -3032 and #6113 -6131 in
the total amount of $89,100.77
c. Approval of December 1 -31, 2004 checks #3033 -3050 and #6132 -6150 in
the total amount of $91,289.71
5. ITEMS REMOVED FROM THE CONSENT AGENDA — None presented.
President McEllin requested that Agenda Item 6. a. & b. be addressed later in
the agenda so that Actuary Sharpe may present his actuarial report at this time.
The Board concurred with his recommendation.
7. NEW BUSINESS:
a. Actuarial Report Presentation — Timothy Sharpe
Actuary Sharpe reported to the Board that The Fund has earned almost
$4,000,000 in the last two years with a combined investment return of almost
8 %.
Trustee Kubiesa inquired as to why the percentage funded decreased from a
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7. a.
81.1% to 80.0% with such an investment return. Actuary Sharpe explained that
two disabilities occurred this year and there was a salary increase. Trustee
Kubiesa then asked how much of The Fund should be funded. Actuary Sharpe
indicated that 100% is the target goal. The annual pension payments are
$986,000 as there are many disability pensions and retirees from this Fund but
the Village always makes their contribution to The Fund.
Finance Director Langlois explained that there are two portability issues of
Robert Robertson and Robert Cronholm to be factored into The Fund. Actuary
Sharpe is waiting for Director Langlois' calculations in this regard.
Motion by Trustee Langlois, seconded by Trustee Cronholm, to direct Actuary
Sharpe to complete the actuarial study of the Oak Brook Firefighters' Pension
Fund with final investment numbers calculated with 7.50% interest rate and
5.25% salary. ROLL CALL VOTE:
Ayes: 7 — President McEllin, Secretary Ekkert, Trustees Cronholm, Gonnella,
Kubiesa, Langlois and Stanfa.
Nays: 0 —None.
Absent: 2 —. Trustees Petter and Quinlan. Motion carried.
Trustee Langlois reported that The Fund is over the statutory limit of 45% in
equities in the amount of $600,000 to $700,000. The Investment Policy calls
for re- balancing The Fund at the June meeting and he asked the Board what
they wished to do as there are no procedures for this. He suggested reviewing
the stock allocations, Illinois Fund, Oak Brook Bank, Northern Trust and
Merrill Lynch has $500,000 available in cash also. Trustee Kubiesa
recommended making a change as interest rates are increasing and balance The
Fund. The Board discussed this issue.
b. Oak Brook Bank Investment Presentation
Tom Sawyer, Oak Brook Bank, gave the investment management presentation.
The bank has managed The Fund for one full quarter of performance on
$9,666,265. Value added from the investments totaled $33,491, the money
market increase was 0.42% with a total account return of 0.35 %.
The fixed income section allocations were U. S. Treasury Securities 21%, US
Government Agency Notes/Bonds non - callable 39 %, US Government Agency
Notes /Bonds callable 22 %, Taxable Municipal Bonds 10% and US Government
Agency Mortgage backed securities 8 %. Mr. Sawyer indicated there is more
risk at short term interest rates rather than long term and the bank is moving out
the duration of the investments.
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7. b.
The portfolio was diversified somewhat without any more GNMA's. The bank
bought taxable municipal bonds, sold a 6.5% treasury note and reinvested in
U.S. Treasury Inflation Index Notes.
Mr. Sawyer introduced Vice President Terese Krafcheck also will be attending
the Board meetings in presenting their investment management strategies.
Motion by Trustee Langlois, seconded by Trustee Gonnella, to approve the
investment transactions presented in Tab 5 of Oak Brook Bank's Investment
Management Presentation. ROLL CALL VOTE:
Ayes: 7 — President McEllin, Secretary Ekkert, Trustees Cronholm, Gonnella,
Kubiesa, Langlois and Stanfa.
Nays: 0 — None.
Absent: 2 — Trustees Petter and Quinlan. Motion carried.
c. Merrill Lynch Investment Presentation
Jim Bolin, Merrill Lynch, gave an investment management presentation of The
Fund from August through the end of this year with a beginning balance of
$8,200,150. There was a 15.3% in the value of The Fund and as of January,
2005 the market value of The Fund is $9,155,292. He indicted that $72,000
from the money market funds was reinvested. They do not believe that
anything needs to be rebalanced as The Fund is growing to the Board's target
allocations.
Brian Speers, Merrill Lynch, commented that he has discussed with Oak Brook
Bank's Tom Sawyer and the Village's Finance Director Darrell Langlois a
change with State Street Emerging Growth Fund. Black Rock bought this fund
and Neil Wagner is the new manager of the fund. He has a good record in
small cap growth and they will wait to see how the fund performs. President
McEllin suggested that the Board wait and see what Mr. Wagner will do with
the fund.
Director Langlois noted that Scudder Drummond has trailed quite a bit and
what is the decision making point to move from one of these funds. Mr. Speers
stated that would make a recommendation if it consistently under performs for
three years and review David Drummond has done.
Mr. Speers explained that the majority of The Fund is in large cap funds. When
moving down in size there is an increase in risk as growth still is more risky
than value style. He asked the Board if they want to allocate now from stocks
to bonds. Trustee Cronholm recommended that the Board review Black Rock
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7. C.
as the movement should be small and get closer to the 45% rather than
$1,000,000 in July.
Trustee Langlois recommended transferring $71,000 from the money market,
$300,000 from Merrill Lynch and $200, 000 from IPTIP to Oak Brook Bank.
Motion by Trustee Kubiesa, seconded by Trustee Cronholm, to transfer $71,000
from the money market, $300,000 from Merrill Lynch and $200,000 from
IPTIP to Oak Brook Bank. ROLL CALL VOTE:
Ayes: 7 — President McEllin, Secretary Ekkert, Trustees Cronholm, Gonnella,
Kubiesa, Langlois and Stanfa.
Nays: 0 —None.
Absent: 2 — Trustees Petter and Quinlan. Motion carried.
The meeting recessed at 9:45 a.m. and reconvened at 9:52 a.m.
6. UNFINISHED BUSINESS:
b. Approval of Decision and Order - Scott Harris Disability Application
President McEllin explained that he had spoken with Board Attorney Richard
Reimer with the Findings of Fact and evidence presented with Scott Harris'
duty disability hearing.
The Board discussed the issue of the findings of fact and requested Attorney
Reimer to prepare the findings of fact based on the preponderance of the
evidence presented.
It was a consensus of the Board to direct Board Attorney Richard Reimer to
prepare the Findings of Fact based upon the preponderance of the evidence
presented in the Scott Harris duty disability hearing.
Trustee Cronholm noted that the transcript of the hearing will document the
decision that was made by the Board.
7. d. Approval of 2005 Firefighters Pension Increases
Motion by Trustee Langlois, seconded by Secretary Ekkert, to approve the 2005
Firefighters Pension Increases as presented. ROLL CALL VOTE:
Ayes: 6 — President McEllin, Secretary Ekkert, Trustees Cronholm, Gonnella,
Langlois, Petter and Stanfa.
Nays: 0 — None.
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7. Absent: 3 — Trustees Kubiesa, Petter and Quinlan. Motion carried.
e. Approval of Lauterbach & Amen Contract
Motion by Trustee Langlois, seconded by Trustee Cronholm, to approve the
Lauterbach & Amen Contract in the amount of a $650 monthly accounting fee,
$650 fee for payroll tax returns and a $650 fee for the year audit of The Fund.
ROLL CALL VOTE:
Ayes: 6 — President McEllin, Secretary Ekkert, Trustees Cronholm, Gonnella,
Langlois, Petter and Stanfa.
Nays: 0 — None.
Absent: 3 — Trustees Kubiesa, Petter and Quinlan. Motion carried.
6. a. Approval of Annual Disability Medical Examination — Sean Smyth
President McEllin explained that Sean Smyth will continue to have an annual
disability medical examination until the age of 50. He spoke with Dr. Moisan
in a search for a new physician to exam Sean Smyth. He recommended Dr.
Wendell Wolff who works at the Del Rey Beach Fire Rescue Clinical Services
in Florida.
Motion by Trustee Cronholm, seconded by Trustee Gonnella, to request Dr.
Wendell Wolff to perform a disability medical examination of Sean Smyth.
ROLL CALL VOTE:
Ayes: 6 — President McEllin, Secretary Ekkert, Trustees Cronholm, Gonnella,
Langlois, Petter and Stanfa.
Nays: 0 —None.
Absent: 3 — Trustees Kubiesa, Petter and Quinlan. Motion carried.
President McEllin will check to determine what medical records are required
according to HIPAA. Basic information of the Fire Department and job
description are required to be sent to the new doctor. A signed release of
medical records form is required by Sean Smyth. Secretary Ekkert requested
that Attorney Reimer be contacted to determine what the liability of the pension
fund is if Sean Smyth is found not to be disabled. The Board may exercise its
right if he is determined not to be disabled then he is to report to the Fire Chief.
8. INFORMATION AND UPDATES:
President McEllin commented that the stenographer reports on the findings of
fact will be in disk form and the transcripts of the Gary Naus and Scott Harris
duty disability hearings.
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The Board discussed dates for the next Board meeting to be April 27th at 8:30
a.m. in the Upper Level Conference Room.
9. ADJOURNMENT:
Motion by Trustee Cronholm, seconded by Trustee Stanfa, to adjourn the
regular meeting at 10:20 a.m. to the regular meeting. VOICE VOTE: Motion
carried.
ATTEST:
Clifford Ekkert
Secretary
Linda K. Gonnella
Recording Secretary
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