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Minutes - 10/26/2006 - Police Pension Fund BoardMINUTES OF THE OCTOBER 26, 2006 REGULAR MEETING OF THE BOARD OF TRUSTEES OF THE OAK BROOK POLICE PENSION FUND APPROVED AS WRITTEN ON FEBRUARY 6, 2007. 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, IL. 2. ROLL CALL Recording Secretary Gonnella called the roll with the following persons PRESENT: President Robert Birdsall, Vice President Michael Hall and Secretary Alan Feldman. ABSENT: None. IN ATTENDANCE: Darrell J. Langlois, Finance Director; Tom Sawyer and Douglas Madigan, Vice Presidents of Oak Brook Bank. Trustee Badowski arrived at 7:15 p.m. 3. APPROVAL OF MINUTES A. Special Board Meeting Minutes of August 15, 2006 Motion by Secretary Feldman, seconded by Vice President Hall, to approve the Minutes of the Special Meeting of August 15, 2006 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 Vice President Hall, seconded by Secretary Feldman, to approve the Consent Agenda and authorize expenditures as presented. ROLL CALL VOTE: Ayes: 3 — President Birdsall, Vice President Hall and Secretary Feldman. Nays: 0 — None. Absent: 1 — Trustee Badowski. a. Approval of July 1 -31, 2006 checks #3281 -3290 and #6345 -6361 in the total BOARD OF TRUSTEES OAK BROOK Page 1 of 4 October 26, 2006 POLICE PENSION FUND Minutes 4. a. amount of $107,639.11 b. Approval of August 1 -31, 2006 checks #3294 -3303 and 46364 -6382 in the total amount of $109,499.03 c. Approval of September 1 -31, 2006 checks #3307 -3316 and #6384 -6042 in the total amount of $111,676.24 d. Approval of Pension Clerk hours for the months of July through August, 2006 in the total amount of $154.25 5. ITEMS REMOVED FROM CONSENT AGENDA — None presented. 6. UNFINISHED BUSINESS a. Discussion of Certification of Compliance with Predatory Lending Laws Request Tom Sawyer, Oak Brook Bank, explained that the Speaker of the Illinois House, Michael Madigan, has asked that all public funds adopt a resolution that the fund will not place public funds with entities that engage in Predatory Lending Practices. He is asking that those entities certify that they don't engage in said predatory practices. He explained that it is not a legal requirement of The Fund but a voluntary compliance and there isn't any law that states to respond. It is the Board's decision to how to respond to this request and he indicated it is not enforceable. Finance Director Langlois explained that the bank is required to be in compliance with state and federal laws. The Speaker of the House is requesting that the Board adopt a policy that is more narrowly defined than the current state law and asking the Board to hold Oak Brook Bank to that standard that is not law. It is purely discretionary on the part of the Board of Trustees. Attorney Reimer has indicated to him that a third of his clients haven't done anything, a third has adopted the policy as presented and a third have adopted a shorter policy. He distributed a copy of what Attorney Reimer has written for Franklin Park. He explained that at the Firefighters Pension Board one of their members indicated that he did not like the constant State of Illinois intrusion making social policy mandates on pension funds similar to the Sudan issue. They decided not to adopt the narrow policy and did accept the letter from Oak Brook Bank that they were willing to provide. It basically states that they are in compliance with Predatory Lending laws as promulgated by the state and the federal government. Secretary Feldman noted that the Board is a responsible body and not to BOARD OF TRUSTEES OAK BROOK Page 2 of 4 October 26, 2006 POLICE PENSION FUND Minutes 6. a. respond to this. President Birdsall recommended accepting Oak Brook Bank's letter indicating they are in compliance with state and federal laws. Tom Sawyer suggested that this be acknowledged in the minutes that the Board did address this issue at the Board level and he will provide this letter to the Board. 7. INVESTMENT MANAGEMENT PRESENTATION a. Oak Brook Bank Investment Management Presentation Trustee Badowski arrived at 7:15 p.m. Tom Sawyer, Oak Brook Bank, gave the investment management presentation of The Fund. The value added from investments for the third quarter of 2006 was $845,638 with a year to date total added to The Fund of $1,321,466. The money market return for the third quarter was 1.29 %, fixed income return 3.53 %, equity return 3.29% with a total account return of 3.41% and year to date total account return of 5.40 %. Since inception the annual long term portfolio performance was 6.11%, stocks 4.79 %, bonds 5.85% and t -bills 3.49 %. He noted that the Investment Policy has equity investments targeted at 40% and presently The Fund is at 44 %. Legally The Fund may invest up to 45% and the Board is not compelled to sell any investments if the target allocation goes beyond 45 %. Most boards do re- balance their funds at least annually before filing their annual reports. Director Langlois noted that Merrill Lynch for the Firefighters Pension Board lists other benchmarks so one can more evaluate the funds versus their style. He asked if this could be incorporated into their reporting. Mr. Sawyer agreed that this could be included in their presentation. Secretary Feldman asked if the Board should re- balance The Fund. President Birdsall suggested that The Fund may need to be re- balanced at the January meeting. Mr. Sawyer indicated they will find the right time to re- balance but have The Fund remain as it is now. Mr. Sawyer explained that Oak Brook Bank will merge on November 2, 2006 with MB Financial. They will move their Trust Department to Rosemont and all of his employees will remain and will be expanded to forty -four. Mr. Sawyer gave an update on the Sudan issue. He explained that by year end some direction will be given on how funds are to proceed with this issue. The NFTC is moving forward on this lawsuit of the constitutionality of the law and BOARD OF TRUSTEES OAK BROOK Page 3 of 4 October 26, 2006 POLICE PENSION FUND Minutes 7. a. legislative negotiations are taking place. Oak Brook Bank has a plan in place if the Board has to move on this issue and it will be presented to the Board. b. Approval of Investment Transactions Motion by Secretary Feldman, seconded by Trustee Badowski, to approve the investment transactions indicated on Tab 5 of Oak Brook Bank's Investment Performance Report from July 1, 2006 through September 30, 2006 as presented. ROLL CALL VOTE: Ayes: 4— President Birdsall, Vice President Hall, Secretary Feldman and Trustee Badowski. Nays: 0 — None. Absent: 0 —None. 8. UPDATES AND INFORMATION President Birdsall announced that former officer Michael Ciolino needs to be sent for his annual disability medical examination and this will be scheduled now. He noted that Village President Quinlan requested copies of the disability hearings of Officer Donald Malec. He explained that Police Officer Malec and Officer Zelisko have filed a lawsuit against the Village of Oak Brook, Police Department and Sgt. Mucha. He explained that the disability hearing meetings that were held were open to the public and therefore available under the Freedom of Information Act and the documents were given to Lt. Jeff Weber. President Birdsall requested a date from the Board for their next quarterly meeting. The Board suggested Wednesday, January 31St and the Clerk will contact the Board members to verify the date. 9. ADJOURNMENT Motion by Vice President Hall, seconded by Trustee Badowski, to adjourn the meeting at 7:55 p.m. VOICE VOTE: Motion carried. ATTEST: Secretary Recording Secretary BOARD OF TRUSTEES OAK BROOK Page 4 of 4 October 26, 2006 POLICE PENSION FUND Minutes