Minutes - 10/22/2008 - Police Pension Fund BoardVILLAGE OF OAK BROOK
BOARD OF TRUSTEES OF THE POLICE PENSION FUND - Minutes
October 22 2008
UNOFFICIAL UNTIL APPROVED AS WRITTEN
OR AS AMENDED BY BOARD OF TRUSTEES OF THE
POLICE PENSION FUND ON
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 00 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 Trustee Vel Torlo, Trustee Alan Feldman, Trustee Richard Badowski, Trustee Susan
Templeton, President Robert Birdsall
ABSENT None
IN ATTENDANCE Darrell Langlois, Finance Director, MB Financial Bank Representatives Bob
Thompson, Rick Block, Lowery Asset Consulting, LLC Representatives Phil Kosmala, Jeff Grenchik
MB Financial Presentation moved to beginning of Agenda
3 APPROVAL OF MINUTES'
a Approval of Board of Trustees Regular Meeting Minutes of August 6, 2008
Motion by Secretary Feldman, seconded by Trustee Badowski, to approve the Minutes of the August 6,
2008 Regular Board Meeting as presented VOICE VOTE Motion carried
b Approval of Board of Trustees Special Meeting Minutes of September 17, 2008
Motion by Vice President Torlo, seconded by Trustee Badowski, to approve the Minutes of the September
17, 2008 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 Trustee Torlo, seconded by Secretary Feldman, to approve the Consent Agenda
ROLL CALL
Ayes 5 — President Birdsall, Vice President Torlo, Secretary Feldman, Trustee Badowski and Trustee
Templeton
Nays 0 — None
Absent 0 — None Motion carried
5 ITEMS REMOVED FROM CONSENT AGENDA— None
6 NEW BUSINESS
a MB Financial Presentation
Mr Thompson explained that MB Financial are submitting the reports in a more "green" format, stapled and
two -sided instead of the previous format He stated that the third quarter ended September 30, 2008 and
BOARD OF TRUSTEES OF THE POLICE PENSION FUND
Minutes Page 1 of 3 October 22, 2008
covered the Cash Flow Analysis, stating that year to date, the Ending Market Value for the third quarter is
$25,250,470
Finance Director Langlois inquired why the fixed Income Is so much different than the market, even with the
current market ups and downs, asking whether the underperformance is a big variance or a small variance
from the index Mr Block refers to Page 8 of the report and stated that it matches fairly well and that the
index is much more heavily treasury, 60%
The loss from investments for the third quarter was - $982,973 and year to date - $2,003,930 The money
market return for the third quarter was 62 %, fixed income return was 1 39 %, equity return was -11 50%
with a total account return of -3 74% (Page 3 of the Performance Report as of September 30, 2008)
The current portfolio allocation of The Fund for money market was 1%, fixed income securities were 63%
and the equity securities was 36% The equity sector allocation for large capitalization US stocks was
60 %, small capitalization US stocks was 19 %, international stocks was 16% and REIT Fund was 5%
(Page 5 of the Performance Report as of September 30, 2008 )
Since inception the annual long -term portfolio performance was 7 26 %, stocks 5 90 %, bonds 5 90% and T-
bills 3 77% (Page 4 of the Performance Report as of September 30, 2008)
b Approval Of Investment Transactions
Motion by Trustee Torlo, seconded by Trustee Badowski, to approve the investment transactions from July
1, 2008 to September 30, 2008, as indicated on Page 10 through 15 of the MB Financial's Investment
Performance Report
ROLL CALL VOTE
Ayes 5 — Secretary Feldman, Trustee Badowski, Trustee Templeton, President Birdsall, Vice President
Torlo
Nays 0 -- None
Absent 0 — None Motion carried
c Approval of Custody Agreement with MB Financial
It was stated that the Custody Agreement can be terminated at any time and Finance Director Langlois is
authorized to transact the business
Motion by Secretary Feldman, seconded by Trustee Badowski, to approve Custody Agreement with MB
Financial Bank as amended to revise Page B deleting Secretary Feldman's name
ROLL CALL VOTE
Ayes 5 — Trustee Badowski, Trustee Templeton, President Birdsall, Vice President Torlo and Secretary
Feldman
Nays 0 -- None
Absent 0 — None Motion carried
Lowery Asset Consulting, LLC Presentation (moved to follow approval of Minutes and prior to b
and c above)
Phil Kosmala gives a historical perspective, looking at the Great Depression, other recessions
Discussion regarding not trying to make banking decisions on what happened In 1929, but rather
looking at trends since then
e Discussion regarding Investment Policy
Discussion regarding keeping the exposure at status quo and not expanding, but moving to
BOARD OF TRUSTEES OF THE POLICE PENSION FUND
Minutes Page 2 of 3 October 22, 2008
alternatives, but not hedge funds Lowery's suggestion is to make the recommended moves in
their presentation and also stated that MB Financial is high on the custody side, but low cost on the
fixed Income side Finance Director Langlois stated that he wants a personal relationship with the
Custodian and recommended that at this point in time might be best to keep MB Financial as the
Custodian if the Board is comfortable with the fixed income side He reiterated that keeping the
changes to a minimum until 2009 Lowery stated that MB Financial is charging 10 basis points
(about $10,000 per year) for the custody It was requested that the Board would like to look at a
short list of Income managers from Lowery Finance Director Langlois would be in favor of
switching if the cost is cheaper, but still includes the personal representative with which to deal
Discussion regarding contravisory stocks and that this is pending attorney approval
It was decided that MB Financial Bank do not need to attend meetings and Lowery can work off of
their MB Financial's bank statements and MB Financial can keep Lowery informed of any changes
Approval of Marc DeLise's Application for Members Pension Benefits Retirement Pension
Motion by Vice President Torlo, seconded by Trustee Badowski, to approve Marc DeLise's Application for
Members Pension Benefits Retirement Pension
ROLL CALL VOTE
Ayes 5 — Trustee Templeton, President Birdsall, Vice President Torlo, Secretary Feldman and Trustee
Badowski
Nays 0 -- None
Absent 0 — None Motion carried
g Approval of Brian Molloy's Application for Members Pension Benefits Retirement Pension
Motion by Vice President Torlo, seconded by Trustee Badowski, to approve Brian Molloy's Application for
Members Pension Benefits Retirement Pension
ROLL CALL VOTE
Ayes 5 — President Birdsall, Vice President Torlo, Secretary Feldman, Trustee Badowski and Trustee
Templeton
Nays 0 -- None
Absent 0 — None Motion carried
7 INFORMATION AND UPDATES
The next regularly scheduled meeting will be February 4, 2009 and will include the Actuarial Report and
Timothy Sharpe will be retained for that purpose as of now
8 ADJOURNMENT
Motion by Trustee Templeton, seconded by Vice President Torlo, to adjourn the Board of Trustees of the
Police Pension Fund meeting at 9 05 p m VOICE VOTE Motion carried
ATTEST
/s/ Alan Feldman
Alan Feldman, Secretary
Board of Trustees of the Police Pension Fund
/s/ Rosemary A Kane
Rosemary A Kane, Recording Secretary
BOARD OF TRUSTEES OF THE POLICE PENSION FUND
Minutes Page 3 of 3 October 22, 2008