Minutes - 04/27/2016 - Police Pension Fund BoardVILLAGE OF OAK BROOK
BOARD OF TRUSTEES OF THE POLICE PENSION FUND - Minutes
April 27, 2016
UNOFFICIAL UNTIL APPROVED AS WRITTEN √
OR AS AMENDED BY BOARD OF TRUSTEES OF THE
POLICE PENSION FUND ON July 28, 2016
1. CALL TO ORDER:
The Regular Meeting of April 27, 2016 of the Board of Trustees of the Oak Brook Police Pension Fund was
called to order by President Torlo at 7:19 p.m. in the Upper Level Conference Room of the Samuel E. Dean
Board 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: President Vel Torlo, Vice President Alan Feldman, Secretary Edward Caspers, Trustee
Hitesh Patel, Trustee Benjamin Kadolph-attending via teleconference
ABSENT: None
IN ATTENDANCE: Spencer Klein and Bob Thompson from MB Financial, Courtney Cervantes, Jeff
Kowalczyk and Dan Pazar of Lowery Asset Consulting, Finance Director/Treasurer Sharon Dangles,
Pension Clerk Rose Kane
3. PRESIDENT'S COMMENTS:
President Torlo stated that he was moving Agenda Item 7.b. to the end of the meeting.
4. APPROVAL OF MINUTES:
a. Approval of Special Meeting Minutes of March 9, 2016
Motion by Secretary Caspers, seconded by Vice President Feldman, to approve the Minutes of the
March 9, 2016 Special Board Meeting as written. 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.
a. Approval of December 1-31, 2015 expenditures in the total amount of $ 210,447.05
b. Approval of January 1-31, 2016 expenditures in the total amount of $ 207,095.33
c. Approval of February 1-29, 2016 expenditures in the total amount of $ 199,047.16
d. Approval of March 1-31, 2016 expenditures in the total amount of $ 208,353.44
e. Approval of Lowery Asset Consulting, LLC's invoices in the total amount of $14,000.00, dated October
21, 2015 and January 12, 2016
f. Approval of Lauterbach & Amen, LLP’s invoices in the total amount of $5,445.00, for services rendered
September, 2015 through February, 2016
g. Approval of The Mitchell Group’s invoice dated January 7, 2016, for Fourth Quarter fees in the amount
of $2,582.19
h. Approval of the Fund’s share of the Village auditor’s fees in the amount of $925.00
i. Approval of Pension Clerk Kane’s timesheet in the total amount of $487.50 for services rendered July
through December, 2015
j. Approval of Reimer, Dobrovolny & Karlson, LLC invoices for services rendered November, 2015
through January, 2016, in the total amount of $157.99
Motion by Vice President Feldman, seconded by Secretary Caspers, to approve the Consent
Agenda.
BOARD OF TRUSTEES OF THE POLICE PENSION FUND
Minutes Page 1 of 4 April 27, 2016
ROLL CALL:
Ayes: 5 -- Vice President Feldman, Secretary Caspers, Trustee Patel, Trustee Kadolph, President Torlo
Nays: 0 – None
Absent: 0 – Motion carried.
6. ITEMS REMOVED FROM CONSENT AGENDA – None presented.
7. UNFINISHED BUSINESS – These items were discussed after the New Business items.
a. Discussion/Action regarding Actuarial Assumptions
Discussion ensued regarding last year’s report which included historical information, and comparison with
this year’s report. It was stressed that the changes in assumptions, increased payments and benefits need
to be documented to explain the movement and liabilities, and not necessarily due to market return.
Finance Director/Village Treasurer Dangles explained that the Village’s actuary recommended, at the 100%
funding level, $1.8 million. Discussion ensued regarding including the historical data supporting the Board’s
actuary report. Pension Clerk Kane was directed to email the actuary to include updated data similar to
page 11 of last year’s report. Discussion continued and it was determined that the pertinent data was
probably omitted from this year’s report because some of it had to do with the prior actuary.
Motion by Secretary Caspers, seconded by Trustee Patel, to approve Lauterbach’s actuarial report,
pending the inclusion of historical data and footnotes going back to 2006.
ROLL CALL:
Ayes: 5--Vice President Feldman, Secretary Caspers, Trustee Patel, Trustee Kadolph, President
Torlo
Nays: 0 – None
Absent: 0 – Motion carried.
Vice President Feldman agreed to review the updated report.
Finance Director/Village Treasurer Dangles exited the meeting at approximately 8:49 p.m.
b. Discussion/Action regarding Request for Proposal responses
Trustee Patel remarked about the performance of the current firms, and that a performance strategy and
policy need to be communicated. The relative merits and disadvantages of the responsive firms were
discussed and each Board member provided a ranking of their top three choices.
It was agreed to meet to conduct interviews of Taiber Kosmala & Associates, LLC and Marquette
Associates from the RFP responses on June 10th at 11:00 a.m. and 1:00 p.m., respectively, with the
meeting beginning at 10:30 a.m.
8. NEW BUSINESS: These items were discussed prior to the Unfinished Business items.
a. Lowery Asset Consulting, LLC Report on First Quarter, 2016
Dan Pazar discussed the Economic Overview on page 4 and the Financial Markets Overview beginning on
page 5 of Lowery’s report. He referred to page 8 of the report to illustrate how strong the quarter
performed.
The following was included in Section II Executive Summary, Page 11 of Lowery’s Report:
The Fund’s investment assets at MB Financial had a value of approximately $31,709,471 as
of March 31, 2016. The current allocation is 63% Equity and 37% Fixed Income and Cash as
defined by Illinois State Statute.
BOARD OF TRUSTEES OF THE POLICE PENSION FUND
Minutes Page 2 of 4 April 27, 2016
The benchmark is currently set as: The current portfolio allocation:
55% Barclays Aggregate Bond 41% Fixed Income (includes PIMCO Mutual Fund)
25% S&P500 26% Domestic Large Cap Equity
7.5% Russell 2000 6.4% Domestic Small Cap Equity
7.5% MSCI EAFE Growth 17% International
2.5% S&P Nat Resources 3.5% Energy
5.6% Real Estate
Jeff Kowalczyk referred to the Portfolio Activity beginning on page 15 of the report and stated that the
Fund was up 1.06% for the quarter. He then discussed the Manager Performance on page 18 of the
report. He stated that the emerging market funds performed at benchmark, and remarked that Mitchell
Energy was up 5.86% for the quarter. Mr. Kowalczyk stated that the Total Portfolio is up 2.5% year-to-
date.
Courtney Cervantes brought forth recommendations to replace Schwab and distributed hand-outs
regarding Performance and Risk Analysis, Undiscovered Managers Behavioral Value Fund Class R6, and
Brown Advisory Small-Cap Growth Fund Institutional Shares. Dan Pazar discussed the performance of
Undiscovered Managers and Brown Advisory. Discussion ensued, including information from Spencer
Klein. Dan Pazar, in reply to an inquiry, stated that there is a lot of uncertainty in the market because of
the uncertainty in the upcoming presidential election. Discussion ensued regarding Lowery’s
recommendations to replace Schwab. Consensus to take the recommendations under advisement and
get back to Lowery.
b. MB Financial Investment Management Performance Report on First Quarter, 2016
Spencer Klein discussed the Economy, Markets and Outlook section of MB’s report and then referred to
page 7 of the report in regard to the Economic Indicator table. He discussed their bond strategy at length.
Per page 11 of MB’s report:
• Market Value of the Total Fund - $11,809,337
• Fixed Income - $11, 664,782
• Cash and Equivalents - $144,560
c. Approval of Investment Transactions for First Quarter, 2016
Motion by Secretary Caspers, seconded by Trustee Patel, to approve the Investment Transactions
for the First Quarter, 2016. VOICE VOTE: Motion carried.
Lowery Asset Consulting and MB Financial representatives exited the meeting at approximately 8:24 p.m.
d. Ratification of Election Results
Motion by Secretary Caspers, seconded by President Torlo, to ratify the Election Results.
VOICE VOTE: Motion carried.
9. INFORMATION & UPDATES
a. Scheduling of third quarterly meeting in 2016
Tentative Wednesday dates in July, 2016: July 13th, 20th and 27th
Consensus to meet on July 28th for the regular third quarterly meeting, but at 11:00 a.m.
BOARD OF TRUSTEES OF THE POLICE PENSION FUND
Minutes Page 3 of 4 April 27, 2016
10. ADJOURNMENT:
Motion by Trustee Patel, seconded by Secretary Caspers, to adjourn the Board of Trustees of the
Police Pension Fund meeting at 9:14 p.m. VOICE VOTE: Motion carried.
ATTEST:
Edward Caspers /s/
Edward Caspers, Secretary
Board of Trustees of the Police Pension Fund
BOARD OF TRUSTEES OF THE POLICE PENSION FUND
Minutes Page 4 of 4 April 27, 2016