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Minutes - 01/30/2008 - Police Pension Fund BoardVILLAGE OF OAK BROOK BOARD OF TRUSTEES OF THE POLICE PENSION FUND - Minutes January 30 2008 UNOFFICIAL UNTIL APPROVED AS WRITTEN OR AS AMENDED BY BOARD OF TRUSTEES OF THE POLICE PENSION FUND ON April 30, 2008 1 CALL TO ORDER The Regular Meeting of the Board of Trustees of the Oak Brook Police Pension Fund was called to order by President Birdsall at 7 05 p m in the Upper Level Conference Room of the Butler Government Center, 1200 Oak Brook Road, Oak Brook, Illinois 2 ROLL CALL The roll was called with the following persons PRESENT Vice - President Michael Hall, Secretary Alan Feldman, Trustee Susan Templeton, Trustee Richard Badowski, President Robert Birdsall ABSENT None IN ATTENDANCE Darrell Langlois, Finance Director, Timothy W Sharpe, Actuary, MB Financial Bank Representatives Richard Block, Douglas G Madigan, Loren Miller 3 APPROVAL OF MINUTES a Approval of Board of Trustees Regular Meeting Minutes of October 24, 2007 Motion by Trustee Templeton, seconded by Trustee Badowski, to approve the Minutes of the October 24, 2007 Regular Board Meeting as presented VOICE VOTE 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 Secretary Feldman, seconded by Trustee Badowski, to approve the Consent Agenda ROLL CALL Ayes 5 — Secretary Feldman, Trustee Badowski, Trustee Templeton, President Birdsall, Vice President Hall Nays 0 — None Absent 0 — None Motion carried a Approval of October 1 -31, 2007 checks in the total amount of $128,039 46 b Approval of November 1 -30, 2007 checks in the total amount of $119,401 04 c Approval of Attorney Richard Reimer's invoices in the total amount of $2,698 80 d Approval of INSPE Associates, Ltd invoices in the total amount of $2,105 00 e Approval of Illinois Public Pension Fund Association (IPPFA) annual membership dues in the amount of $625 00 f Approval of Pension Clerk Gonnella's invoice in the amount of $102 48 for the months of September through October, 2007 5 ITEMS REMOVED FROM CONSENT AGENDA— None presented 6 UNFINISHED BUSINESS a Discussion of 2008 Actuarial Study BOARD OF TRUSTEES OF THE POLICE PENSION FUND Minutes Page 1 of 4 January 30, 2008 Mr Sharpe gave what he referred to as a "very textbook" presentation He explained by saying that if everything goes according to calculations, last year Village contribution requirements should go up at the same rate as salaries do This did occur in that payroll increased by 1%, Village contribution increased by 1% 7 '/2% was earned and there was one retirement and one disability The staff is down two people, but two new officers were hired He stated that everything almost went as planned, no surprises, so a good year Mr Sharpe passed out a hand -out he refers to as the 1 -88 Comparison" and it showed averages of other Police Pension Funds in this area and Oak Brook compares favorably Mr Sharpe felt that next year's meeting probably will not follow the "textbook" Secretary Feldman requested some sort of benchmark standing comparing Oak Brook to other municipalities and Trustee Badowski and President Birdsall suggested that the Minutes could simply state that Oak Brook's Police Pension Fund is funded at 86% and other municipalities in the area have an average funding of 70% Secretary Feldman requested a letter from Mr Sharpe to state this Mr Langlois stated that the Investment data in the actuarial study needs to be finalized after the audit Motion by Trustee Templeton, seconded by Vice President Hall, to give Mr Sharpe direction to complete the actuarial study using the same assumptions as last year ROLL CALL VOTE Ayes 5 - Trustee Badowski, Trustee Templeton, President Birdsall, Vice President Hail, Trustee Feldman Nays 0 - None Absent 0 - None Motion carried Mr Langlois asked about an Illinois Municipal Retirement Fund (IMRF) Service Credit about which a member has Inquired Mr Sharpe stated that a member would have had to make the application before the end of 2007 and has until the end of February, 2008 to finish up their payments to transfer IMRF Service Credits -- employer match and employee's contribution would be added to the Police Pension, and, for example, twenty years of Police Pension would increase to twenty -eight years of service 7 NEW BUSINESS a Legislative Update On Public Act 95 -0521 Mr Langlois referred to the Board being contacted by Speaker Madigan's office within the last two years regarding a certification request for people involved with the Pension Fund funds in relation to participation in high risk loans He stated that now there is a law requiring Illinois finance entities to provide certification annually MB Financial provided certification this week stating that they are not an Illinois Finance entity as defined in the Illinois State Statutes The Fund has one Certificate of Deposit (CD) with a bank which may fall under this category and that bank is working on obtaining certification MB Financial stated that this bank is an Illinois Charter Bank, not engaged in any predatory lending practices, rather, they make small business loans MB Financial provided this bank with a copy of the certification to complete If certification for the bank is not received in a timely manner, the CD will be sold, it is a four -month PAR Bond As of now, The Fund is 99 5% compliant with the law b MB Financial Presentation Mr Madigan stated that the Fund's portfolio performed well, beginning the year with twenty -six million, with two million added However, he stated that the fourth quarter did not perform as well as other quarters The value added from investments for the fourth quarter was $178,021 and year to date $2,038,915 The money market return for the fourth quarter was 1 03 %, fixed income return was 3 73 %, equity return was - 3 32% with a total account return of 0 60% BOARD OF TRUSTEES OF THE POLICE PENSION FUND Minutes Page 2 of 4 January 30, 2008 The current portfolio allocation of The Fund for money market was 1%, fixed Income securities were 57% and the equity securities was 42% The equity sector allocation for large capitalization US stocks was 62 %, small capitalization US stocks was 17 %, International stocks was 17% and REIT Fund was 4% Since Inception the annual long -term portfolio performance was 7 26 %, stocks 5 90 %, bonds 5 90% and T- bills 3 77% Mr Langlois brought up that there was a different kind of calculating from MB Financial figures and the actuarial study, which possibly explained why the numbers were different, but looking at them over time, there was not as much difference Mr Langlois further pointed out that the report passed out at this meeting shows a significantly higher market value and questioned whether accrued income is part of it MB Financial stated they use two different systems, but will look into it The report passed out at this meeting is called the Greenhill, performance based They stated that this report contains the more accurate figures Approval of Investment Transactions Motion by Secretary Feldman, seconded by Vice President Hall, to approve the investment transactions Indicated on Tab 5 of MB Financial's Investment Performance Report from October 1, 2007 to December 31, 2007, as presented ROLL CALL VOTE Ayes 5 — Trustee Templeton, President Birdsall, Vice President Hall, Secretary Feldman and Trustee Badowski Nays 0 -- None Absent 0 -- None Motion carried d Approval of 2008 Police Pension Increases Motion by Trustee Templeton, seconded by Trustee Badowski, to approve the 2008 Police Pension Increases ROLL CALL VOTE Ayes 5 — President Birdsall, Vice President Hall, Secretary Feldman, Trustee Badowski and Trustee Templeton Nays 0 -- None Absent 0 -- None Motion carried e Discussion and Approval of Lauterbach & Amen, LLP 2008 Contract for Services Motion Vice President Hall, seconded by Secretary Feldman, to approve the Lauterbach & Amen, LLP 2008 Contract for Services ROLL CALL VOTE Ayes 5 — Vice President Hall, Secretary Feldman, Trustee Badowski, Trustee Templeton and President Birdsall Nays 0 -- None Absent 0 -- None Motion carried Approval of Adrian Caldera's Application for Admission to the Oak Brook Pension Fund Motion by Trustee Templeton, seconded by Vice President Hall, to approve Adrian Caldera's admission to the Oak Brook Police Pension Fund ROLL CALL VOTE Ayes 5 — Secretary Feldman, Trustee Badowski, Trustee Templeton, President Birdsall, Vice President Hall Nays 0 -- None Absent 0 -- None Motion carried BOARD OF TRUSTEES OF THE POLICE PENSION FUND Minutes Page 3 of 4 January 30, 2008 g Discussion regarding Request for Proposal (RFP) for Investment Manager Mr Langlois stated that the RFP process Is almost complete and that Trustee Templeton made some changes to the original RFP to clear up redundancies He handed out copies of the RFP and the proposed vendor list President Birdsall stated he had reviewed it and affirmed that he had no changes to make to it It was stated that a meeting should be held with Mr Langlois, Secretary Feldman and Trustee Templeton when the proposals are received Discussion ensued regarding potential conflicts of interest with Investment managers 8 INFORMATION AND UPDATES A hand -out regarding the upcoming election process was distributed to all members The Board discussed the next meeting date of April 30, 2008 to be held at 7 00 p m in the Upper Level Conference Room Pension Clerk Kane will contact all the Board members to confirm the date 9 ADJOURNMENT Motion by Trustee Badowski, seconded by Vice President Hall, to adjourn the meeting at 9 05 p m VOICE VOTE Motion carried ATTEST /s/ Alan Feldman Alan Feldman, Secretary /s/ Rosemary A Kane Rosemary A Kane, Recording Secretary BOARD OF TRUSTEES OF THE POLICE PENSION FUND Minutes Page 4 of 4 January 30, 2008