Minutes - 02/04/2009 - Police Pension Fund BoardVILLAGE OF OAK BROOK
BOARD OF TRUSTEES OF THE POLICE PENSION FUND - Minutes
February 4, 2009
UNOFFICIAL UNTIL APPROVED AS WRITTEN
OR AS AMENDED BY BOARD OF TRUSTEES OF THE
POLICE PENSION FUND ON May 6, 2009
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 13 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 Vel Torlo, Secretary Alan Feldman, Trustee Susan Templeton, President
Robert Birdsall
ABSENT None
IN ATTENDANCE Darrell Langlois, Finance Director, Timothy Sharpe, Lowery Asset Consulting, LLC
Representatives Phillip Kosmala, Jeff Grenchik
3 PRESIDENT'S COMMENTS
President Birdsall announced that Trustee Richard Badowski had passed away the previous week and
also another retiree, John Teschke, passed away in December, 2008
4 APPROVAL OF MINUTES
a Approval of Board of Trustees Regular Meeting Minutes of October 22, 2008
Motion by Trustee Templeton, seconded by Secretary Feldman, to approve the Minutes of the October 22,
2008 Regular Board 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 Vice President Torlo, seconded by Trustee Templeton, to approve the Consent Agenda
ROLL CALL
Ayes 4 — Secretary Feldman, Trustee Templeton, President Birdsall, Vice President Torlo
Nays 0 — None
Absent 0 — None Motion carried
a Approval of October 1 -31, 2008 checks in the total amount of $136,964 00
b Approval of November 1 -30, 2008 checks in the total amount of $ 134,261 98
c Approval of December 1 -31, 2008 checks in the total amount of $ 133,740 73
d Approval of Lauterbach & Amen, LLP's invoices in the total amount of $ 4,325 00 for the months of July
through November, 2008
e Approval of Illinois Public Pension fund Association 2009 Membership Dues in the amount of $625 00
f Approval of Attorney Richard Reimer's invoices in the total amount of $175 00
g Approval of Pension Clerk Kane's invoice in the amount of $168 75 for the months of August through
November, 2008
6 ITEMS REMOVED FROM CONSENT AGENDA — None presented
BOARD OF TRUSTEES OF THE POLICE PENSION FUND
Minutes Page 1 of 3 February 4, 2009
7 NEW BUSINESS
Agenda Item 7 f was moved to the beginning of New Business
Discussion of 2009 Actuarial Study
Timothy Sharpe, Actuarial, stated The Fund was down 11 % for the year, coupled with the Investment return
assumption of 7 5 %, then looking at a miss of almost 20% Mr Sharpe's Actuarial Valuation Results, Page
2, at Item 3 Assets (Market) of $28 million a year ago, the 20% of $28 million Is about $5 6 million, which is
represented by Item #4 Unfunded Liability (Surplus) Percent Funded decreased from 86 3% to 71 0%
Discussion regarding changing the Interest Rate Assumption from 7 5% to 7 0% Other municipalities are
trying to Ignore the losses as long as they can —OR- extending the amortization period from 25 to 40 If it
was extended, It would drop the Tax Levy
Finance Director Darrell Langlois explained how the contribution from the Village works and other issues,
such as lowering the interest rate, based on the actuarial study Secretary Feldman stated historically that
the Pension Fund Board went to the Village Board to lower the Interest rate and suggests that the interest
rate be dropped to 7% President Birdsall stated that with other communities decreasing wages and
reducing force and recommends a drop in the Interest rate to 7% Finance Director Langlois suggested
that the Police Pension Board recommend to the Oak Brook Village Board that percentages be decreased
similarly to the Fire Pension Board In the light of the expired union contracts, which would be dropping the
Interest rate to 7% and the salary rate to 4 75% (Column 3 on Page 2 of the Actuarial Valuation Results)
Motion by Secretary Feldman, seconded by Vice President Torlo, to make the actuarial recommendation for the
numbers listed in Column 3 with an interest rate assumption of 7 00% and a salary assumption of 4 75%
VOICE VOTE Motion carried
a MB Financial Investment Management Performance Report as of December 31, 2008
Jeff Grenchik and Phillip Kosmala of Lowery Asset Consulting, LLC reviewed the report from MB Financial
The value added from Fixed Income investments for the fourth quarter was $624,554 and for the year to
date was a negative $1,379,376 The money market return for the fourth quarter was 21% and the fixed
income return was 8 16% Equity assets were not managed during the fourth quarter 2008 The Total
Fixed Income Account Return for the fourth quarter was 4.80%
The current Fixed Income portfolio allocation of The Fund for money market was 3% and for fixed income
securities was 97%
Since inception the annual long -term portfolio performance was 6 36% This breaks down to stocks 2 74 %,
bonds 6 90% and T -bills 3 71 %
b Lowery Asset Consulting, LLC Reports as of December 31, 2008
1 Market Outlook Presentation
2 Asset Allocation and Manager Returns
3 Economic Overview
Trustee Templeton exited the meeting at 8 29 p m
c Recommendation and discussion regarding Fixed Income Manager and Implementation of portfolio
changes
Discussion with Lowery Asset Consulting, LLC representatives regarding MB Financial's discretionary
authority, their fees, performance- related issues and recent Certificate of Deposit transactions The Board
BOARD OF TRUSTEES OF THE POLICE PENSION FUND
Minutes Page 2 of 3 February 4, 2009
agreed that it was not necessary to have MB Financial present at meetings because their performance will
be reviewed by Lowery The Board agreed to maintain status quo with the equity portions
d Approval Of Investment Transactions
The Board agreed to table Agenda Item #7 d , the Investment transactions from October 1, 2008 to December
31, 2008, as Indicated in the Account Summary of the MB Financial's Investment Performance Report, to the
next regular meeting
e Approval of 2009 Police Pension Increases
Motion by Vice President Torlo, seconded by Secretary Feldman, to approve the 2009 Police Pension
Increases
ROLL CALL VOTE
Ayes 3 — President Birdsall, Vice President Torlo, Secretary Feldman
Nays 0 -- None
Absent 0 — None Motion carried
g Special Election Process
Discussion regarding scheduling and procedure of the Special Election of Pension Recipients to finish the
remainder of Trustee Badowskl's term
h Discussion and Approval of Lauterbach & Amen, LLP 2009 Contract for Services
Finance Director Langlois stated that the Contract lists "Fire Pension" on one of the pages, so they will be
contacted to provide a corrected contract President Birdsall tabled Item #7 h to the next regular meeting
8 INFORMATION AND UPDATES
a The second quarterly meeting in 2009 will be held on May 6, 2009
The Board discussed not holding the Annual Members Meeting this year due to economic issues
9 ADJOURNMENT
Motion by Vice President Torlo, seconded by Secretary Feldman, to adjourn the Board of Trustees of the
Police Pension Fund meeting at 9 05 p m VOICE VOTE Motion carried
ATTEST
Alan Feldman /s/
Alan Feldman, Secretary
Board of Trustees of the Police Pension Fund
Rosemary A Kane /s/
Rosemary A Kane, Recording Clerk
BOARD OF TRUSTEES OF THE POLICE PENSION FUND
Minutes Page 3 of 3 February 4, 2009