Minutes - 04/27/2009 - Firefighter's Pension Fund BoardMINUTES OF THE APRIL 27, 2009 MEETING OF THE
BOARD OF TRUSTEES OF THE OAK BROOK
FIREFIGHTERS PENSION FUND APPROVED AS
AMENDED ON JULY 295 2009
1. CALL TO ORDER
The Meeting of the Board of Trustees of the Oak Brook Firefighters Pension
Fund was called to order by President Erickson at 9:08 a.m. in the Upper Level
Conference Room of the Butler Government Center, 1200 Oak Brook Road,
Oak Brook, Illinois.
2. SWEARING IN CEREMONY
President Erickson announced that an election was held at 8:00 a.m. on April
27th for the expired term of John Fagan and Scott Harris. Firefighter Fagan
was re- elected to the Pension Board of Trustees with new Trustee Mark
Fleishman being elected. He further announced that Village President John
Craig re- appointed Timothy Schlindwein to the Board of Trustees.
The official oath of office was given by Village Clerk Charlotte Pruss to John
Eagan and Mark Fleishman as newly elected and Timothy Schlindwein as being
appointed to the Oak Brook Firefighters Pension Board of Trustees for a term
of three years.
3. ROLL CALL
Pension Clerk Gonnella called the roll with the following persons
PRESENT: President Michael Erickson, Trustees John Fagan, Mark Fleishman
and Timothy Schlindwein.
ABSENT: None.
IN ATTENDANCE: Acting Finance Director Sharon Dangles, Brian Speers
and Jim Brolin, Merrill Lynch; David Harrington, Therese Krafcheck and
Robert Thompson, MB Financial.
4. ELECTION OF OFFICERS
Trustee Erickson asked for a motion from the floor to nominate a candidate for
President of the Pension Board of Trustees. Election of officers of the Board of
Trustees must occur each year as described by the Illinois Pension Code.
Motion by Trustee Fagan, seconded by Trustee Fleishman, to nominate Michael
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Erickson as President of the Oak Brook Firefighters Pension Board of Trustees.
Being no further nominations, nominations were closed.
Motion by Trustee Fagan, seconded by Trustee Fleishman, to elect Michael
Erickson as President of the Oak Brook Firefighters Pension Fund Board of
Trustees. VOICE VOTE: Motion carried.
President Erickson asked for a motion from the floor to nominate a candidate
for Secretary of the Oak Brook Firefighters Pension Board of Trustees.
Motion by Trustee Schlindwein, seconded by Trustee Fleishman, to nominate
John Fagan as Secretary of the Oak Brook Firefighters Pension Board of
Trustees. Being no further nominations, nominations were closed.
Motion by Trustee Schlindwein, seconded by Trustee Fleishman, to elect John
Fagan as Secretary of the Oak Brook Firefighters Pension Board of Trustees.
VOICE VOTE: Motion carried.
APPROVAL OF MINUTES
a. Approval of Board of Trustees Meeting Minutes of January 28, 2009
Motion by Trustee Fleishman, seconded by Secretary Fagan, to approve the
Board of Trustees Meeting Minutes of January 28, 2009 as presented. VOICE
VOTE: Motion carried.
CONSENT AGENDA
All items on the Consent Agenda are considered to be routine in nature and will
be enacted in one motion. There will be no discussion of these items unless a
Board member so requests, in which event, the item will be removed from the
Consent Agenda and considered as the first item after approval of the Consent
Agenda.
a. Approval of December 1 -31, 2008 Net Payroll Payouts in the total amount
of $102,811.96
b. Approval of December 1 -31, 2008 Vendor Payouts in the total amount of
$24,408.06
c. Approval of January 1 -31, 2009 Net Payroll Payouts in the total amount of
$105,931.78
d. Approval of January 1 -31, 2009 Vendor Payouts in the total amount of
$18,262.29
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e. Approval of February 1 -28, 2009 Net Payroll Payouts in the total amount of
$122,634.10
f. Approval of February 1 -28, 2009 Vendor Payouts in the total amount of
$20,173.27
g. Approval of March 1 -31, 2009 Net Payroll Payouts in the total amount of
$117,042.68
h. Approval of March 1 -31, 2009 Vendor Payouts in the total amount of
$30,589.05
i. Approval of Richard J. Reimer's Invoice in the amount of $75.00
Secretary Fagan requested that Agenda Items 6.b., 6.d. and 6. i. be removed for
further discussion.
Motion by Secretary Fagan, seconded by Trustee Schlindwein, to approve the
Consent Agenda as amended. ROLL CALL VOTE:
Ayes: 4 — President Erickson, Secretary Fagan, Trustees Fleishman and
Schlindwein.
Nays: 0 —None.
Absent: 0 — None. Motion carried.
ITEMS REMOVED FROM THE CONSENT AGENDA
Secretary Fagan requested discussion of Agenda Item 6. b., Approval of
December 1 -31, 2008 Vendor Payouts in the total amount of $24,408.06. He
asked for an explanation of the reimbursement in the vendor payouts to the
Village for office supplies. Pension Clerk Gonnella explained that special
binders were ordered for the permanent Minute books of the Pension Board.
Secretary Fagan then discussed Agenda Item 6.d., Approval of January 1 -31,
2009 Vendor Payouts in the total amount of $18,262.29. He asked for an
explanation of funds paid out for federal taxes. Acting Finance Director
Dangles explained the process.
6. b. Approval of December 1 -31, 2008 Vendor Payouts in the total amount of
$245408.06 and 6. d. Approval of January 1 -31, 2009 Vendor Payouts in
- the total amount of $18,262.29
Motion by Secretary Fleishman, seconded by Secretary Fagan, to approve
Agenda Items 6. b. Approval of December 1 -31, 2008 Vendor Payouts in the
total amount of $24,408.06 and Agenda Item 6. d. Approval of January 1 -31,
2009 Vendor Payouts in the total amount of $18,262.29. ROLL CALL VOTE:
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Ayes: 4 — President Erickson, Secretary Fagan, Trustees Fleishman and
Schlindwein.
Nays: 0 —None.
Absent: 0 — None. Motion carried.
Secretary Fagan asked for an explanation of Agenda Item 6.i., Approval of
Richard J. Reimer's Invoice in the amount of $75.00. Pension Clerk indicated
that Seyfarth & Shaw law firm requested a Freedom of Information request for
the disability records of disabled firefighter Paul Jacobs. The Board requested a
copy of the letter that was sent to the law firm from Attorney Reimer.
6. i. Approval of Richard J. Reimer's Invoice in the amount of $75.00
Motion by Secretary Fagan, seconded by Trustee Fleishman, to withhold
payment of Agenda Item 6. i., Approval of Richard J. Reimer's Invoice in the
amount of $75.00. ROLL CALL VOTE:
Ayes: 3 - Secretary Fagan, Trustees Fleishman and Schlindwein.
Nays: 1 — President Erickson.
Absent: 0 — None. Motion carried.
8. UNFINISHED BUSINESS
a. Discussion and Consideration of Ratifying a one year contract with
Lauterbach & Amen, LLP's for Professional Services with an annual fee of
$12,785.00 or a three year contract with annual fees of $1 2,575, $12,950
and $13,325.
President Erickson explained the contracts presented to the Board. Trustee
Schlindwein indicated that he was not pleased with the cost of their
professional services due to the present economy and requested that the firm
present a new lower proposal to the Board of Trustees. Acting Finance
Director Dangles explained the costs of their services. Trustee Fleishman
suggested agreeing to a one year contract since it is already April and staff is
not able to handle the process. Acting Finance Director Dangles offered that
she could contact the firm to negotiate a lower cost for a one year contract.
Motion by Trustee Fleishman, seconded by Trustee Schlindwein, to ratify a one
year contract with Lauterbach & Amen, LLP for their accounting services not
to exceed $12,785 pending the Acting Finance Director Dangles contact the
firm for a lower fee. ROLL CALL VOTE:
Ayes: 4 — President Erickson, Secretary Fagan, Trustees Fleishman and
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Schlindwein.
Nays: 0 — None.
Absent: 0 — None. Motion carried.
9. NEW BUSINESS
a. Treasurer's Report of the Asset Summary of The Fund
Acting Finance Director Dangles gave the asset summary report and asked if
the Board wanted to re- allocate the fund at this time or wait until July.
Secretary Fagan noted that the Board typically re- allocates The Fund at their
July meeting which has been accepted by the Department of Insurance.
Trustee Schlindwein asked the Board to defer this until the Investment
Managers give their presentation to determine if this should change.
b. Merrill Lynch Investment Management Presentation
Brian Speers gave the investment management presentation indicating the
yearly performance of The Fund is down 10.7% but still out performing the S &
P 500. He explained there have been four transfers of $150,000 as one was late
for December.
c. Approval of Investment Transactions
Motion by Trustee Schlindwein, seconded by Secretary Fagan, to approve the
investment transactions as presented by Merrill Lynch. ROLL CALL VOTE:
Ayes: 3 — President Erickson, Secretary Fagan, Trustee Schlindwein.
Nays: 1 — Trustee Fleishman.
Absent: 0 — None. Motion carried.
Trustee Fleishman indicated that he voted no on the Merrill Lynch trade
transactions and will clarify this later.
d. MB Financial Investment Management Presentation
Trustee Schlindwein asked if MB Financial manages portfolios other than
government bonds. He also inquired if they use high yield funds or use funds as
supplements to other portfolio mandates. Mr. Harrington indicated they have
requested an opinion from the Department of Insurance (DOI) of the acceptance
of this type of investment as they have not used it at this time. Most boards do
not use this approach and they do not want to be the first at this time and choose
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9. to be more cautious. MB does manage corporate bonds and equities for
personal clients. He explained they would use the mutual fund approach and
would provide information to the Board of what they would recommend.
Ms. Krafcheck remarked that the beginning market value of The Fund for the
quarter was $12,203,960 with an ending market value of $11,495,569.
Disbursements were made to Merrill Lynch and also for pension payments of
$607,115. The decline in the market value was $(101,276). The money market
return was 0.22% for the quarter, fixed income return was (0.80) % with a total
account return of (0.78) %. Mr. Harrington noted in the fixed income section
allocations that US Treasury Securities was reduced from 22% to 19% as
requested. The primary change was due to funding the equity purchases. The
taxable municipal bonds have been the best performing.
e. Approval of Investment Transactions
Motion by Trustee Schlindwein, seconded by Secretary Fagan, to approve the
Investment ,Transactions as indicated in MB Financial's Investment
Management Report. ROLL CALL VOTE:
Ayes: 4 — President Erickson, Secretary Fagan, Trustees Fleishman and
Schlindwein.
Nays: 0 — None.
Absent: 0 — None.
f. Discussion and Consideration of Pension Clerk Salary Increase
President Erickson explained that Acting Finance Director Dangles has figures
for consideration of a salary increase according to the Village's Salary Pay Plan
of a 2% increase retroactive to January 1, 2009. She explained that the Pension
Clerk presently makes $28.88 per hour and with the increase her new salary
would be $29.46 per hour.
Motion by Trustee Schlindwein, seconded by Secretary Fagan, to increase the
Pension Clerk's salary from $28.88 to $29.46 per hour. ROLL CALL VOTE:
Ayes: 4 — President Erickson, Secretary Fagan, Trustees Fleishman and
Schlindwein.
Nays: 0 — None.
Absent: 0 — None.
10. INFORMATION & UPDATES
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10. President Erickson noted that the Board previously had mentioned hosting a
general membership meeting to discuss investments of The Fund. The Board,
felt at this time, to postpone a meeting due to a lack of interest.
Secretary Fagan suggested the Board should discuss the future allocations for
equities. He recommended that the funds should be indexed. This could be a
mutual fund that operates automatically within the market.
Trustee Fleishman explained that he had been a past President of the Board and
is familiar with general investing. He remarked that he is not comfortable with
the fund only 63% funded. He believes that it is a personal challenge to
improve the funding which may take some time.
The Board discussed whether a Trustee would be replaced by President Craig
since the vacancy of the former Treasurer. Acting Finance Director Dangles
indicated that a new Treasurer is planned to be hired in July. Trustee
Schlindwein suggested that the continuity of a Finance Director being
appointed as a member of the Board is important.
The Board then discussed the actuarial assumptions that were recommended to
the Village Board of Trustees. Acting Finance Director Dangles explained that
with the newly elected Village Board members, the present Village Board may
wait to vote until the new members are seated to determine the lower salary
increase assumption of 4.75% and an interest rate assumption of 7 %.
Secretary Fagan remarked that there are options to consider to improve The
Fund: don't invest in the stock market this quarter, continue to allocate funds as
has been done in the last three months into the index, the third option is to
dollar cost average across the board and invest according to our target
allocations in equities or the fourth option is to limit our dollar cost averaging
into large and mid cap stocks.
Trustee Fleishman indicated that he feels The Fund is over - weighted in equity
income. He realizes that it is allowable by State Statute but he does not believe
that it has to be done. Trustee Schlindwein inquired as to how the Board should
provide a continuity of thought, underpin it with the right procedures in place
and how is it done now with the current environment and recommended
addressing the guidelines. The Board discussed these issues further. The
Board requested directing MB Financial to retain funds in the money market
from the sale of Treasuries and wire those funds to Merrill Lynch for investing.
Motion by Trustee Schlindwein, seconded by Secretary Fagan, to invest
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10. $150,000 per month over the next three months in the S &P 500 Index Fund.
ROLL CALL VOTE:
Ayes: 3 — President Erickson, Secretary Fagan, Trustee Schlindwein.
Nays: 1 — Tru'stee Fleishman.
Absent: 0 — None.
President Erickson informed the Board of an IPPFA seminar being held this
Friday. None of the Board members were able to attend the seminar discussing
the disability process.
The Board discussed the next meeting date of July 29, 2009 at 9:00 a.m. The
Pension Clerk will verify with the Board members if the date is acceptable.
11. ADJOURNMENT
Motion by Trustee Schlindwein, seconded by Secretary Fagan, to adjourn the
regular meeting at 12:20 p.m. VOICE VOTE: Motion carried.
ATTEST:
John Fagan
Secretary
Linda K. Gonnella
Recording Secretary
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