Minutes - 10/25/2006 - Firefighter's Pension Fund BoardMINUTES OF THE OCTOBER 25, 2006 REGULAR
MEETING OF THE BOARD OF TRUSTEES OF THE
OAK BROOK FIREFIGHTERS PENSION FUND
APPROVED AS AMENDED ON JANUARY 24, 2007.
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 9:07 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: Brian Speers, Merrill Lynch and Executive Vice President
Tom Sawyer and Vice President John Falduto, Oak Brook Bank.
3. ADJOURN TO A CLOSED MEETING to discuss minutes of meetings
lawfully closed under the Open Meetings Act, whether for the purpose of
approval by the body of the minutes, or for semi - annual review of the minutes
as required by the Open Meetings Act (2c21)
President Erickson stated that at the July 26, 2006 Board meeting, Board
appointed Attorney Reimer indicated that in previous years the Boards had
closed session meetings regarding disability applications. He recommended
that those closed meeting minutes should be reviewed every six months by the
Board according to State Statute. Upon review of the Oak Brook Firefighters
Pension files, Pension Clerk Gonnella found closed meeting minutes from 2002
through 2004 that have never been reviewed by the Board for approval. The
closed meeting must be audio taped or video taped as required by law.
Motion by Secretary Fagan, seconded by Trustee Schlindwein, to adjourn to a
closed meeting to discuss minutes of meetings lawfully closed under the Open
Meetings Act, whether for the purpose of approval by the body of the minutes,
or for semi - annual review of the minutes as required by the Open Meetings Act.
ROLL CALL VOTE:
Ayes: 5 - President Erickson, Secretary Fagan, Trustees Harris, Langlois and
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3. Schlindwein.
Nays: 0 - None.
Absent: 0 - None. Motion carried.
4. RECONVENE
Motion by Secretary Fagan, seconded by Trustee Schlindwein, to adjourn the
Closed Meeting to the regular Board meeting at 9:15 a.m. ROLL CALL
VOTE:
Ayes: 5 - President Erickson, Secretary Fagan, Trustees Harris, Langlois and
Schlindwein.
Nays: 0 - None.
Absent: 0 - None. Motion carried. President Erickson reconvened the regular
meeting.
5. APPROVAL OF MINUTES
a. Approval of Regular Meeting Minutes of July 26, 2006
Motion by Trustee Langlois, seconded by Secretary Fagan, to approve the
Minutes of the July 26, 2006 Regular Meeting as presented. VOICE VOTE:
Motion carried.
6. CONSENT AGENDA
All items on the Consent Agenda are considered to be routine in nature and will
be enacted in one motion.
Motion by Secretary Fagan, 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 #3269 -3277 and #6505 -6526 in the
total amount of $95,003.41
b. Approval of July 1 -31, 2006 checks 43280 -3288 and #6528 -6548 in the
total amount of $95,900.24
c. Approval of August 1 -31, 2006 checks #3291 -3298 and #6550 -6571 in the
total amount of $95,734.44
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6. d. Approval of the Pension Clerk hours in the total amount of $215.95
e. Approval of Attorney Richard J. Reimer's Invoice in the total amount of
$982.68
7. ITEMS REMOVED FROM THE CONSENT AGENDA — None presented.
8. UNFINISHED BUSINESS
a. Discussion and Approval of Certification with Predatory Lending Laws
Request
President Erickson explained that Speaker of the Illinois House of
Representatives Michael Madigan has requested a policy requiring certification
of compliance with Predatory Lending Laws. Tom Sawyer, Oak Brook Bank,
explained that Speaker Madigan has asked all public funds to certify or adopt a
resolution that they would not place public funds in companies that engage in
predatory lending practices and it is a voluntary request. They do have a letter
they could submit to the Board.
Trustee Langlois explained that it is the decision of the Board to proceed with
this matter. Secretary Fagan suggested that when this becomes law that the
Board should comply at that time. Trustee Langlois noted that Board Attorney
Richard Reimer has drafted a policy that indicates that the investment manager
follow the statute. He will give a sample policy to the Board to discuss at the
next Board meeting. Trustee Schlindwein suggested that the minutes indicate
that the Board discussed this matter and received something from the bank in
this regard. Trustee Langlois recommended that the record indicate that the
Board discussed the matter and did not adopt a policy at this time but requested
the bank to provide certification that they are in compliance of federal and state
law.
Motion by Trustee Langlois, seconded by Trustee Harris, that the Board of
Trustees requests Oak Brook Bank to provide certification that they are in
compliance of federal and state law regarding Predatory Lending Laws.
VOICE VOTE: Motion carried.
9. NEW BUSINESS
a. Treasurer's Report of Asset Summary of The Fund
Trustee Langlois explained that The Fund is approximately $300,000 over
the statutory limit on equity investments. The Fund needs to be in
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9. a.
compliance at the July Board meeting in 2007 and due to possible changes in
the fluctuating market he recommends nothing be done at this time.
b. Oak Brook Bank Investment Management Presentation
Tom Sawyer, Oak Brook Bank, gave the investment management
presentation. Value added to the investments for the third quarter of 2006
was $369,898. The portfolio performance review for the money market
return was 1.29 %, fixed income return was 3.51 % with a total account return
of 3.48 %. The fixed income sector allocations for U.S. Treasury securities
was 25 %, U.S. Government Agency notes /bonds non - callable 26 %, U.S.
Government Agency notes /bonds callable 36 %, taxable municipal bonds 8%
and U.S. Government Agency mortgage backed securities 5 %.
c. Approve Investment Transactions
Motion by Trustee Langlois, seconded by Trustee Schlindwein, to approve
the investment transactions from July 3, 2006 through September 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.
Mr. Sawyer indicated that Oak Brook Bank will merge with MB Financial
November 2, 2006. Their financial system has been upgraded with the new
merger and new reports will be generated by the bank. Their offices will be
moving to Rosemont and he and his entire staff with remain at their new
location.
d. Merrill Lynch Investment Presentation
Brian Speers, Merrill Lynch, gave their investment management
presentation. He indicated that The Fund had a 7.35% rate of return for this
year. $500,000 was transferred from the portfolio to The Fund and still The
Fund increased by $200,000. They are striving for great long term portfolio
performance and cumulatively The Fund is up 35.09% since they have taken
over The Fund in 2004.
He explained that the allocations need to be re- balanced but due to the Sudan
issue the Board is not able to change any of the allocations. The only choice
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is to liquidate at this time until the Sudan issue is adjudicated. They are
watching Alger MidCap Growth as they have under performed for the last
two quarters. Also they would like to replace Goldman Sachs but must wait
again also until the Sudan matter is resolved. This does not hurt The Fund
but they would like to make a change due for improved performance.
Secretary Fagan noted Mr. Speer's recommendation to bolster the Templeton
Foreign Fund at some point in time, has a concern that Merrill Lynch has
determined that the foreign funds are abiding by the same U.S. rules. He
asked when Merrill Lynch purchases these funds, that they research whether
they are operating properly. Mr. Speers indicated that they have an internal
compliance screening process to make sure the funds are complying with all
the regulatory rules that are necessary.
Trustee Langlois asked to give an update to the Board regarding Scott Harris
as he had to leave the meeting. President Erickson indicated that the Board
did receive a letter from the Village whether Trustee Scott Harris may attend
the disability hearings of William Garrigan. Board Attorney Richard Reimer
is drafting a response to this letter and recommends that the Board hold a
meeting to discuss the topic outside of the Garrigan hearing. A meeting will
be held in advance of his disability hearing.
Trustee Schlindwein asked if there should be more allocation to the
international funds. Mr. Speers stated his concern in changing out of large
cap funds at this time. He suggested over time to add to that position and
they will advise as things change.
Mr. Speers distributed information regarding small cap value funds for the
Board to review for replacement of the Goldman Sachs fund. They are
Columbia Small Cap, MainStay Small Cap and Franklin Small Cap Value.
For foreign equity they have three funds for the Board to review which are
Thornburg International Value, AIM International Growth and Columbia
Marsico International. He recommended in small caps Columbia Small Cap
when they complete their five years in operation or MainStay if the Sudan
Act is lifted next year. He further recommended Thornburg for international
funds. The Board will further review Merrill Lynch's recommendations for
discussion at their next meeting.
e. Approve Investment Transactions — None were presented.
INFORMATION & UPDATES
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10. President Erickson asked for a date for the Board's next quarterly meeting.
Secretary Fagan recommended Wednesday, January 24, 2007 at 9:00 a.m. The
Board concurred with this date and that Trustee Langlois be notified also.
Secretary Fagan noted that he is attending the Trustee certification program and
they discussed actuarial studies of pension funds. He inquired as to what are
the assumptions that The Fund's Actuary uses and he asked that he attend a
meeting to explain this process to the Board. Tom Sawyer noted that Tim
Sharpe is the Actuary for The Fund and he could provide this information to the
Board. Secretary Fagan requested that he attend the next Board meeting.
Trustee Harris asked if e -mails from the investment managers could be sent to
the entire Board rather than just the officers regarding investments. Both
managers agreed to this request.
Trustee Harris asked if the Actuary could come to the special meeting when the
Board Attorney Reimer meets to discuss his position sitting on the Board in the
Garrigan disability hearing. Secretary Fagan remarked that in reviewing State
Statue the Board may only ask if a pension board member may be objective in
an open session and if the member states yes, then the Board proceeds. Trustee
Harris confirmed that is what Attorney Reimer has indicated to him that this
should be the procedure.
11. ADJOURNMENT
Motion by Trustee Shlindwein, seconded by Secretary Fagan, to adjourn the
special meeting at 11:00 a.m. VOICE VOTE: Motion carried.
ATTEST:
John Fagan
John Fagan
Secretary
Linda K. Gonnella
Linda K. Gonnella
Recording Secretary
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