Minutes - 07/26/2006 - Firefighter's Pension Fund BoardMINUTES OF THE JULY 26, 2006 REGULAR
MEETING OF THE BOARD OF TRUSTEES OF THE
OAK BROOK FIREFIGHTERS PENSION FUND
APPROVED AS WRITTEN ON OCTOBER 25, 2006.
1. CALL TO ORDER
The Regular Meeting of the Board of Trustees of the Oak Brook Firefighters
Pension Fund was called to order by President Erickson at 8:30 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 Michael Erickson, Secretary John Fagan, Trustees Scott
Harris, Darrell J. Langlois and Timothy Schlindwein.
ABSENT: None.
IN ATTENDANCE: Richard J. Reimer, Board Attorney; Jim Bolin and Brian
Speers, Merrill Lynch; Executive Vice President Tom Sawyer; Vice President
John Falduto, Oak Brook Bank; William Garrigan, Firefighter and his attorney
Anthony Argeros.
3. DISCUSSION OF DISABILITY APPLICATION PROCESS BY ATTORNEY
REIMER
Board Attorney Reimer explained that Firefighter William Garrigan has applied
for a duty disability application to the Pension Board. The applicant must
identify to the Board what is the nature of disability and is it duty related. He
recommends that as the Board's attorney he writes to Firefighter Garrigan to
complete a three page disability application. He must disclose all of the doctors
that have evaluated him for the disability, sickness or injury that he is claiming
for a disability to Attorney Reimer. Firefighter Garrigan is then asked to sign a
release that offers a HIPPA compliant authorization to receive those records.
Once the records are received by Attorney Reimer, three Board appointed
physicians must certify that the disability is permanent under State Statute
requirement. Previous Pension Boards have authorized Attorney Reimer to use
a service of doctors that review the data and select the medical specialists that
are necessary to do the evaluation and examination of the applicant.
Three doctors are chosen and all of the medical data is sent to each of them.
Clinical examination of the applicant is required and those doctors are required
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Firefighters' Pension Fund Minutes
3. to write a report indicating is there a disability, if so and what is the cause of the
disability. He explained that Firefighter Garrigan has disclosed two doctors and
Attorney Reimer has sent him a letter acknowledging receipt and asking him to
provide information. Firefighter Garrigan has signed the authorization form to
release medical records. He explained that the biggest delay is the doctor's
request of data as this process may take time. If there is a duty related disability
claim, he would subpoena the records at the Village of Oak Brook if there is
any workmen's compensation claims as the doctors will want to review these
documents also.
Once all three independent medical evaluations are received by Attorney
Reimer, the Board is ready for a hearing as he will notify the applicant of a
hearing date. Attorney Reimer explained that he would assemble a book of
exhibits for the Board to review in advance of the hearing, per approval by the
applicant's attorney, with a court reporter present at the hearing the applicant
and his attorney presents Garrigan's application. He then advises the Board on
the proper hearing process for the applicant. He indicated that the process may
take a minimum of one month to a year or more. If specialists are required, this
will take a longer process. He uses Inspe medical services to provide medical
specialists for disabilities of firefighters and police officers. He would then
write a letter to the three selected physicians requesting their medical evaluation
of the applicant if there is a disability. The disability means the inability to
perform full and unrestricted firefighter duties. If the applicant is found to be
disabled, the physician must determine if it is occupational or if is it line of duty
related. He will preside during the hearing process to make sure legal
requirements are upheld. Once the Board hears all of the evidence the Board
would adjourn into a closed session for purposes of deliberation. The closed
meeting must be audio or video taped. He recommends that a court reporter be
present in the closed session to provide a separate set of closed meeting
minutes.
He reminded the Board members that verbatim minutes are not required in an
open public session of a Board meeting. A summary of the action that occurred
by the Board is acceptable and once those minutes are approved by the Board,
the public may through the Freedom of Information Act obtain a copy of those
minutes. He explained that closed meeting minutes are confidential and not
subject to disclosure under the Open Meetings Act but the Board is required to
review these minutes every six months to determine if they should remain
confidential. At the next quarterly meeting, he recommended that Pension
Clerk Gonnella provide to the Board copies of closed meeting minutes from the
last few years of disability hearings and the Board determine if these minutes
should remain confidential.
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I
Once the Board has issued their written decision upon the applicant of a
disability pension and thirty five days have passed since that decision, it
becomes final and is not subject to appeal or challenge. If a line of duty
disability is denied and an applicant is given a non -duty disability, once that
thirty five day period is passed and the applicant does not request an
administrative review in court, then the decision stands. If a firefighter is given
a disability and is under the age of 50, the firefighter must be evaluated at least
once a year to determine that person is still entitled to benefits.
Trustee Schlindwein asked the cost for this process excluding doctor's bills.
Attorney Reimer indicated that it could cost between $5,000 and $15,000.
Doctor bills could be a few hundred dollars for Inspe and their chosen doctors
send their invoices to Inspe which invoices the Board including their fees.
Trustee Langlois remarked that generally the fee is less than $1,000 per doctor.
Attorney Reimer further explained that the doctors review the records and
clinical examination. The cost is the burden of the Board as there is no cost to
the applicant except for his attorney fees and the court reporter fee is paid by
the Board. If clarification is not available through a supplemental report, then
doctors may have to be brought into the hearing process or by teleconference.
Doctors may charge a fee of $750.00 per hour for their appearance or some
doctors will discuss their findings in their office which would include a court
reporter for the record, the attorneys, Board members that are available and
transcripts to those Board members that cannot attend and the Board then
makes a decision.
Secretary Fagan asked how often some of these doctors are used repeatedly for
disability applications. Attorney Reimer explained that it happens depending
upon the specialty of their practice. Trustee Langlois further commented that
the most difficult decision of the Board members is determining a duty related
disability.
Pension Clerk Gonnella asked if Attorney Reimer recommended doctors for the
annual medical examination of disabled firefighters. Attorney Reimer
recommended Dr. Moisan who is the doctor that is used by the Police Pension
Board. Dr. Moisan is not used for disability hearings but used to verify that a
disabled firefighter /police officer is disabled or fit for duty.
Attorney Reimer also noted that he is drafting a change to his rules and
regulations for Pension Boards. Trustee Langlois explained that he had
Attorney Reimer's rules and regulations and he made the necessary changes
according to the new State Statute regarding composition of a Firefighters
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3. Pension Board.
Trustee Langlois asked Attorney Reimer to give an update to the Sudan
investment issue. Attorney Reimer informed the Board that there is a meeting
next week with Senator Jacqueline Collins, sponsor of the bill, who has agreed
that if they propose language without attacking the entire bill, that relief could
be sought in the fall veto session in November. IPPFA will ask Senator Collins
to exempt mutual funds and annuity products for Article 3 and Article 4 Funds.
The National Foreign Trade Council will file a lawsuit on behalf of NFTC.
Trustee Harris asked if the Board must now determine what doctors should be
used for Garrigan's application. Attorney Argeros indicated that there is a time
consideration to keep an income stream for applicant Garrigan. One of the
doctors has indicated that Firefighter Garrigan is not to return to duty for at
least one year or permanently. Two doctors have treated the applicant and
Attorney Reimer ordered the records from those doctors on July 14, 2006. To
expedite the process, he recommended the applicant contact his physicians to
process Attorney Reimer's request quickly. Attorney Argeros explained that he
has received subpoenaed records from the University of Illinois and Dr. Safka
from the workmen's compensation. These records could be used to begin the
preliminary process. Attorney Reimer recommended that he ordered the
records directly rather than Attorney Argeros submitting to him the documents.
Trustee Schlindwein recommended retaining the expertise of Attorney Reimer
and following his recommendations of the hearing process according to the law.
Attorney Reimer recommended that the Board entertain a motion to authorize
him to represent the Oak Brook Firefighters Pension Board in this matter and
follow the procedures in the past.
Motion by Secretary Fagan, seconded by Trustee Schlindwein, to authorize
Attorney Reimer to represent the Oak Brook Firefighters Pension Board in the
disability application of William Garrigan. ROLL CALL VOTE:
Ayes: 5 - President Erickson, Secretary Fagan, Trustees Harris, Langlois and
Schlindwein.
Nays: 0 - None.
Absent: 0 - None. Motion carried.
Attorney Reimer suggested that Attorney Argeros could send him Garrigan's
medical records he has received from the doctors. They could be forwarded to
Inspe to expedite the process. He recommended that the Board authorize him
to have Inspe select three physicians.
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3. Motion by Secretary Fagan, seconded by Trustee Langlois, to authorize
Attorney Reimer to retain Inspe for purposes of selection of the three
physicians required under Section 4 -112 of the Pension Code. ROLL CALL
VOTE:
Ayes: 5 - President Erickson, Secretary Fagan, Trustees Harris, Langlois and
Schlindwein.
Nays: 0 - None.
Absent: 0 - None. Motion carried.
It is understood that the official records obtained by Attorney Reimer will be
used by the three selected physicians. Attorney Reimer's correspondence will
be directed to the Pension Clerk who keeps the official records and she will
forward copies of his correspondence to the Board except evidence of the
medical records until Attorney Reimer directs that to occur. Attorney Reimer
explained that he will subpoena records of Garrigan's workmen compensation
records. Attorney Argeros also noted that IRMA has a date of injury that is
earlier than how the applicant noted the date of injury.
4. APPROVAL OF MINUTES
a. May 8, 2006
Motion by Secretary Fagan, seconded by Trustee Langlois, to approve the
Minutes of the May 8, 2006 Regular Meeting as presented. VOICE VOTE:
Motion carried.
5. 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 Langlois, seconded by Trustee Harris, to approve the
Consent Agenda and authorize expenditures as presented. ROLL CALL
VOTE:
Ayes: 5 - President Erickson, Secretary Fagan, Trustees Harris, Langlois and
Schlindwein.
Nays: 0 - None.
Absent: 0 - None. Motion carried.
a. Approval of June 1 -30, 2006 checks 43269 -3277 and #6505 -6526 in the
total amount of $95,003.41
b. Approval of July 1 -31, 2006 checks #3280 -3288 and #6528 -6548 in the
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5. total amount of $95,900.24
c. Approval of August 1 -31, 2006 checks 43291 -3298 and #6550 -6571 in the
total amount of $95,734.44
d. Approval of the Pension Clerk hours in the total amount of $215.95
6. ITEMS REMOVED FROM THE CONSENT AGENDA — None presented.
7. UNFINISHED BUSINESS
a. Discussion and Approval of Revised Firefighters Pension Board Investment
Policy
Finance Director Langlois explained that at the last quarterly meeting
changes were requested to be made to the Board's Investment Policy
relative to re- balancing the allocations and signatures. A copy of the signed
revised Investment Policy will be distributed to all Board members.
Motion by Trustee Langlois, seconded by Trustee Schlindwein, to approve
the revised Firefighters Pension Board Investment Policy. ROLL CALL
VOTE:
Ayes: 5 - President Erickson, Secretary Fagan, Trustees Harris, Langlois
and Schlindwein.
Nays: 0 - None.
Absent: 0 - None. Motion carried.
8. NEW BUSINESS
a. Treasurer's Report of Asset Summary of The Fund
Finance Director Langlois explained at their last quarterly meeting the
Board discussed keeping track of allocations between stock and bond
investments to insure that the allocation is within the 45% statutory limit.
At the last meeting the target allocation was over the statutory limit and the
Board directed Merrill Lynch to sell $500,000 of stock investments in three
transactions which has been completed. This change has lowered that
allocation as of June 30, 2006 to 46.27 %. The revised Investment Policy
requires the Board to re- balance to 45% at the July Board meeting. He
believes that the market has solved the problem and the allocation is below
the 45% targeted allocation.
b. Oak Brook Bank Investment Management Presentation
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8. Tom Sawyer, Oak Brook Bank, gave the investment management
presentation. Value added from the investments for the quarter totaled
$7,097 and year to date $- 32,269. The portfolio performance review showed
that the money market return was 1.17 %; fixed income was 0.05% with a
total account return of 0.06 %. The long term portfolio performance for 2005
showed an annual performance of 2.47 %, stocks 4.91%, bonds 2.66% and T-
bills 3.07 %.
The fixed income section allocations were U. S. Treasury Securities 25 %, US
Government Agency Notes /Bonds non - callable 26 %, US Government
Agency Notes /Bonds callable 36 %, Taxable Municipal Bonds 8% and US
Government Agency Mortgage backed securities 5 %. He indicated that he
sent Finance Director Langlois their compliance letter regarding Sudan
Investments. He further noted that Oak Brook Bank will merge hopefully
with MB Financial in November. His asset management group will expand
from 17 to 44 persons in his department and Terese Krafcheck, John Falduto
and Douglas Madigan will remain on his team.
Secretary Fagan noted a $200,000 difference between Finance Director
Langlois' summary asset analysis and Oak Brook Bank's investment report.
Trustee Langlois explained that Oak Brook Bank's numbers included
accrued interest was the only difference. Secretary Fagan also remarked that
under taxable municipal bonds the bank invested in Cook County School
District 88 and 100. He asked how they choose which municipality to invest.
Mr. Sawyer explained that typically they are taxable municipal bonds
because the yield is excellent. He asked that the Board not invest in
municipalities that offer municipal bonds which are not friendly to
firefighters. Mr. Sawyer indicated the bank would comply with this request.
c. Approve Investment Transactions
Motion by Trustee Langlois, seconded by Trustee Harris, to approve the
investment transactions from April 1, 2006 through June 30, 2006 in Tab 5
of the Oak Brook Bank Performance Report. ROLL CALL VOTE:
Ayes: 5 - President Erickson, Secretary Fagan, Trustees Harris, Langlois
and Schlindwein.
Nays: 0 - None.
Absent: 0 - None. Motion carried.
d. Merrill Lynch Investment Presentation
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8. d.
Jim Bolin and Brian Speers gave their investment management presentation.
Mr. Speers indicated that the portfolio increased 3.62% for the year and they
now have included a cumulative report for the Board to review. The long
term return for equities increased 30.4% since they managed The Fund's
equities. Trustee Schlindwein requested Merrill Lynch using the S &P 500,
Russell 2000 and the International Index in their performance report for
comparison purposes of the equity investments.
Mr. Speers explained that the Allianz large cap equity had a manager change
but they recommend keeping the fund at this time as the manager has an
excellent record of managing funds. Trustee Schlindwein asked if Merrill
Lynch has considered index funds in the portfolio. Mr. Speers explained that
his firm recommends using managers that select individual securities will
give a better return on a risk adjusted basis rather than using an index type
fund.
Mr. Speers noted that Goldman Sachs small cap value fund has been watched
closely and once the Sudan issue is resolved, they will recommend making a
change as it has consistently under performed. They would like to set
another foreign fund along Templeton Foreign Fund to get growth in value
once the Sudan issue is settled to clarify how pension fund boards are the
proceed in this area.
Trustee Fagan inquired if Merrill Lynch has pledged funds toward the
National Foreign Trade Council lawsuit. Mr. Speers explained that Merrill
Lynch is going to be out of the institutional and mutual fund management
business. Mr. Speers will check on this and report to the Board.
Trustee Schlindwein asked if Merrill Lynch will give some preliminary
thoughts at the Board's next meeting so that they would be prepared at their
October meeting if there is a law change and what they recommend. Trustee
Langlois suggested that Merrill Lynch include this in their packet for their
next Board meeting. Mr. Speers will include a performance grid for the
funds they are looking to replace the Goldman Sachs Fund and some
suggestions for the addition of the foreign funds.
e. Approve Investment Transactions
Motion by Trustee Schlindwein, seconded by Trustee Harris, to approve the
investment transactions as noted in Merrill Lynch's Performance Report.
ROLL CALL VOTE:
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8. e.
Ayes: 5 - President Erickson, Secretary Fagan, Trustees Harris, Langlois
and Schlindwein.
Nays: 0 - None.
Absent: 0 - None. Motion carried.
f. Discussion and Approval of Revised Oak Brook Firefighters Pension Board
of Trustees Rules
Finance Director Langlois explained new State law requires a change in the
Firefighters Pension Board structure and this change was revised in the Oak
Brook Firefighters Pension Fund Board of Trustees Rules. Three minor
changes were recommended by Trustee Langlois.
Motion by Trustee Langlois, seconded by Secretary Fagan, to approve the
Revised Oak Brook Firefighters Pension Board of Trustees Rules, VOICE
VOTE: Motion carried.
9. INFORMATION & UPDATES
The Board discussed briefly the Sudan issue. Trustee Langlois recommended if
there isn't a change in this law or a lawsuit against this law, that when the
Board meets the Board issues a formal request for proposal (RFP) for a stock
manager of The Fund. There will be a fee issue but the Board cannot afford not
to be in the stock market.
President Erickson asked for consensus of a date for the next quarterly meeting.
The Board concurred for a date of October 25"' at 9:00 -a.m. Trustee Langlois
asked if the meeting could occur later in the morning and the Board concurred
to change from 8:30 a.m. to 9:00 a.m.
Trustee Harris noted that Attorney Argeros represented him in his disability
application and Attorney Ageros now represents him in an issue with the
Village of Oak Brook. Trustee Langlois explained that Mr. Argeros has
previously requested that Trustee Langlois not be allowed to serve on the Board
during a disability hearing process. He explained that Mr. Argeros previously
indicated that Finance Director Langlois serves as a Village official and may
have a bias against the applicant before the Board in a disability hearing
process. The Board recommended Board Attorney Reimer address in writing
his legal opinion of Trustee Harris being represented by Attorney Argeros in
litigation against the Village of Oak Brook while he now serves on the Board
addressing William Garrigan's disability application with Attorney Argeros
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9. representing Garrigan.
10. ADJOURNMENT
Motion by Secretary Fagan, seconded by Trustee Langlois, to adjourn the
special meeting at 10:50 a.m. VOICE VOTE: Motion carried.
ATTEST:
John Fagan
Secretary
Linda K. Gonnella
Recording Secretary
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Firefighters' Pension Fund Minutes