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HomeMy WebLinkAboutCOMM - Meeting Minutes - 164 - 7-24-1997 - RETIREMENT1 L 1 Sold By IMR Limited Form 823 Less: Outstanding Checks 50,338.09 Less: Retirement Check run as of July 24 1997 78,049.84 Reconciled Balance as of June 26, 1997 $ 0.00 Moved by Mr. Burns, seconded by Mr. Belcastro, that the Treasurer's Report be approved as submitted. Roll call vote taken: Mr. King - Yes; Mr. Belcastro - Yes; Mr. Burns - Yes; Mrs. Irey - Yes. Motion carried unanimously. Requisitions Moved by Mr. Belcastro, seconded by Mr. King, that the following Requisitions be approved: Check No. Payee Amount 1725 Trustee of Principal Financial Group FBO Christopher J. Dicenzo $ 9,396.70 1726 Putman Fiduciary Trust Co. as Trustee of IRA of Megan L. Morrocco 6,719.30 1727 Debra L. Petras 10,064.94 1728 Sarah A. Terpin 2,351.57 Transfer: PNC Bank 7,578.98 Transfer: Washington County Cash Disbursement 10,724.02 Transfer: Washington County Retirement Allowance 110,505.38 TOTAL TO BE TRANSFERRED $157,340.89 Roll call vote taken: Mr. King - Yes; Mr. Belcastro - Yes; Mr. Burns - Yes; Mrs. Irey - Yes. Motion carried unanimously. New Business To Be Noted For The Record - CETA Employee Repurchases The following active County employee who was originally hired under the Comprehensive Employment Training Act (CETA) program will purchase her service credit for the period of time that she was employed under the CETA program. Mary Jo Closser service time repurchased: 11/15/76 to 5/23/80 $ 56.00 biweekly installments ($2,887.84 total) a 9® Retirement Service Credit for Absence Without Pay Moved by Mr. Burns, seconded by Mr. Belcastro, that Sally Schultz, an employee from the Health Center be permitted to purchase service credit for the periods that she was absent from work without pay, 2/4/80 to 8/11/80 at a cost of $458.28 and 8/9/93 to 10/7/83 at a cost $162.70. (This request was also approved at the Board of Commissioners Meeting, Per Minute #570, dated 7/8/97.) Mr. King - Yes; Mr. Belcastro - Yes; Mr. Burns; Mrs. Irey - Yes. Motion carried unanimously. INVESTMENT MANAGER 2ND QUARTER PORTFOLIO PRESENTATIONS RRZ Investment Management Frank Burnette presented to the Board Washington County's Retirement Plan Investment performance for the period ending June 30, 1997. RRZ's investment performance exceeded established indexes because of strong equity performance and an overweighing of equities versus fixed income securities. He noted that last week the County's exposure to equities was reduced from 60% to 54% in response to the recent run-up in equity prices. Mr. Burnette stated that we are experiencing a long extended positive economic cycle. He stated that he continues to anticipate that long term investment returns will be meaningful even though the rate of return may moderate to more normal historical levels. Mr. Burnette stated that our portfolios are weighted in favor of technology, financial, and drug stocks and underweighted in consumer cyclicals and utilities. Mr. Burnette gave an overall summary of the Retirement Fund Performance Review. He pointed out that the County is heavily overweighted in technology and financial in the portfolio distribution. C.S. MCKEE Norm Allen reported to the Board that the markets have been considerably stronger and certainly have benefited the fund in the first half of the year. He further explained there has been some improvement in the Fixed Income markets. He noted that if economic activity reaccelerates, it is possible that rates will rise temporarily in the fall. RM Sold 8y IMR Limited Form 825 E4117350 11 He also pointed out that the market capitalization continued to be the major defining characteristic of performance with large -capitalization stocks outperforming all other categories for the period. Mr. Allen also said that bond performance has improved, thus presenting an attractive value for the County's portfolio relative to what is occuring in the index. Commissioner Burns questioned the level of discretion the Board has in terms of directing money managers to invest in a particular company. Discussions followed as to the effects on the investments. Yannie Bilkey Investment Consulting 2nd Quarter Pension Plan Review Frank Domeisen presented a report to the Board which stated that the market conditions were led by ideal economic conditions with the second quarter equity markets on the upside. With large -capitalization growth stocks demonstrating continued improvement in earnings, the S&P 500 Index was up 17.5% for the quarter. He further stated that small -cap stocks were much improved due to the fact that the Russell 2000 Index rebounded with a quarterly return of 16.2%, while during the first quarter, these stocks were down 5.2%. Mr. Domeisen noted that his report also included a newsletter from Yanni- Bilkey with information detailing a Client Symposium that will be held in Pittsburgh on September 8, 1997. He invited the Retirement Board to attend. Mr. Domeisen added that the portfolio experiences a broder diversification because there are two money managers in place. Discussion was held regarding the proposal that was brought up at the last meeting for candidates to serve as managers to the small cap and international fund. Commissioner Irey stated that she does not support this proposal becauase she felt that this is the job of the consultant to provide the Board with this type of information. Also it was suggested that the Board send out RFP's for this service and then decide from the information that is received. Discussion arose as to whether or not the money managers should be directed not to invest in tobacco companies. Commissioner Burns explained that there is approximately $1 million invested in tobacco products and said that this is morally unacceptable. Mr. Burns noted that in America today, 2,000 teenagers begin to smoke everyday and statistics show that one third of this group will ultimately die from smoking. Mr. Burns noted that as elected officials, the Retirement Board has the leadership responsibility of not using companies that participate in an activity that is detrimental to society. Mr. Domiesen explained to the Board that this action can be done and noted that Phillip Morris is in the S&P 500. He stated, however, that when this stock is eliminated a portfolio, the S&P 500 as an index becomes a mismatch and noted that this benchmark might affect the end result of the account. More discussion was held on the effects on the County's portfolio if funds were withdrawn from tobacco companies. It was moved by Mr. Burns, seconded by Mr. Belcastro, that the money managers be directed not to invest in tobacco companies in the future and to withdraw funds from the tobacco companies currently in the portfolio. Mr. Belcastro - Yes; Mr. King - Yes; Mr. Burns - Yes; Mrs. Irey - Yes. Motion carried unanimously. Commissioner Irey suggested to Commissioner Burns that this may be a topic of discussion at the upcoming CCAP Conference. There being no further business, Chairman Irey declared the meeting adjourned at approximately 12:20 a.m. THE FOREGOING MINUTES SUBMITTED FOR APPROVAL: SECRETARY E