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Home My WebLink AboutCOMM - Meeting Minutes - 197 - 2-20-2003 - RETIREMENTForm 825 F0C102204 0 1 F1 Minute No. 197 Washington County Retirement Board Washington, PA, February 20, 2003 The quarterly meeting of the Washington County Retirement Board was held at approximately 11:10 a.m. Thursday, February 20, 2003, in the Public Meeting Room, Courthouse Square Office Building, Washington, Pennsylvania, with the following members being present: Commissioners John P. Bevec, Diana L. Irey, and J. Bracken Burns, Sr.; Treasurer Francis King; and Controller Michael Namie. Also present: Catherine E. Kresh, Administrator/Chief Clerk; Joyce Thornburg, Secretary; Frank Domeisen, Yanni Partners; Eugene Natali, C.S. McKee; John Thompson, Emerald Advisors; Tom Datillo, Garrison (RRZ); Linda Metz, Observer -Reporter; Jim Jefferson, WJPA; Stacey Wolford, Valley Independent; Chris Haines, Herald Standard. Approval of Minutes Chairman Bevec entertained a motion to approve Minute No. 195 dated February 20, 2003. It was moved by Mrs. Irey and seconded by Mr. Burns that Minute No. 195 be approved as written. Roll call vote taken: Mr. Namie — Yes; Mr. King — Yes; Mrs. Irey — Yes; Mr. Burns — Yes; Mr. Bevec — Yes. Motion carried unanimously. Treasurer's Report Retirement Allowance Report November 2002 Bank Balance as of November 1, 2002 $ 150,650.86 Add: Deposits to Checking Account 167,307.29 Add: Transfers from Investment Accounts 217,945.00 Less: Cancelled Checks (156,424.08) Less: Transfers to Investment Accounts (167,307.29) Less: ACH Debits (95,129.10) Bank Balance as of November 30, 2002 $ 117,042.68 Less: Outstanding Checks (38,969.52) Less: Retirement Check Run November 30, 2002 (78,073.16) Reconciled Bank Balance as of November 30, 2002 $ -0- December 2002 Bank Balance as of December 1, 2002 $ 117,042.68 Add: Deposits to Checking Account 265,635.51 Add: Transfers from Investment Accounts 199,260.79 Less: Cancelled Checks (134,423.68) Less: Transfers to Investments Accounts (265,635.51) Less: ACH Debits (98,367.33) Bank Balance as of December 31, 2002 $ 83,512.46 Less: Outstanding Checks (7,185.39) Less: Retirement Check Run December 31, 2002 (76,327.07) Reconciled Balance as of December 31, 2002 $ -0- There was no report available for January 2003 at the time of the meeting. It was moved by Mr. King and seconded by Mrs. Irey that the Treasurer's Report be approved. Roll call vote taken: Mr. Namie — Yes; Mr. King — Yes; Mrs. Irey — Yes; Mr. Burns — Yes; Mr. Bevec — Yes. 3 Motion carried unanimously. Requisitions It was moved by Mr. Namie and seconded by Mrs. Irey that the following s. requisitions be approved: November 2002 Distributions Check Number Payee Amount 2470 Phillip S. Boggio $ 11,273 21,1 j 2471 Kevin D. Davis 7,835.96< 2472 Carleen S. Fuller 12,449.07il 2473 Rebecca J. Garbart 622.89 ik Transfer PNC Bank 14,328.671, 2468 Void s' 0.0031 2469 Washington County Disbursement Account 9,449.45 Transfer Pennsylvania SCDU 75.00 : Transfer Washington County Retirement Account 161,910.75 Total $ 217,945.00 December 2002 Distributions 2474 Lois Jane Paris $ 259 27 Transfer PNC Bank 6,382 55 2475 Washington County Disbursement Account 't 30,258.66 t 2476 Washington County Payroll Escrow Account 258.36 Transfer Pennsylvania SCDU 75.00 4 Transfer Washington County Retirement Account 162,026 95 Total $ 199,260.79€_ January 2003 Distributions 2478 Estate of Joanne B. Jarosz $ 105.69 F 1 1 1 Farm 825 E00102204 I� 1 2479 Erin W. Dickerson 2,013.95 2480 Lorraine M. Ealy 204.13 2481 Steven M. Fries $ 183.76 2482 Carl T. Grinage 828.83 2483 The Hartford Mutual Funds as trustee of IRA of Anthony J. Hood 622.11 2484 Gerald E. Johnson 1,386.60 2485 Putnam Investor Service as trustee of IRA of Charles R. Rockwell 693.21 2486 Marian P. Ruscello 245.79 2487 Leslie L. Stone 14,957.28 Transfer PNC Bank 11,231.36 2488 Pennsylvania SCDU 75.00 Transfer Washington County Retirement Account 163,116.80 Total $ 236,157.60 Roll call vote taken: Mr. Namie — Yes; Mr. King — Yes; Mrs. Irey — Yes; Mr. Burns — Yes; Mr. Bevec — Yes. Motion carried. Old Business None. To Be Noted For The Record: J. Bracken Burns, Sr. agreement to purchase service credit dated 08/01/74 to 01/02/75 in the amount of $329.54. Moved by Mrs. Irey and seconded by Mr. King. Roll call voted taken for the above: Mr. Namie — Yes; Mr. King — Yes; Mrs. Irey — Yes; Mr. Burns — Abstained; Mr. Bevec — Yes. Motion carried. To Be Noted For The Record: Gary Megyesy agreement to purchase service credit dated 08/27/79 to 10/15/84 in the amount of $4,480.96. Geraldine Kelly agreement to purchase service credit dated 05/08/78 to 10/23/81 and CETA service credit dated 03/17/76 to 05/08/78 in the amount of $2,894.53. Disability pension request from Donald J. Bryner. It is to be noted that Mr. Bryner has been approved for a disability pension from the Social Security Administration. Moved by Mr. Namie and seconded by Mr. King. Roll call vote taken for the above: Mr. Namie — Yes; Mr. King — Yes; Mrs. Irey — Yes; Mr. Burns — Yes; Mr. Bevec — Yes. Motion carried unanimously. Yanni Partners 4th Quarter 2002 Portfolio Presentations Mr. Frank Domeisen stated that during the 4th quarter, October and Novemb were positive with performance for the quarter being up 8.4%. For the full year, the S&P 500 cap weighted was down 22%. Three sectors outperformed the S&P 500 Index: Telecommunication Services (36.4%), Information Technology (22.2%), anc, Materials (12.1%). Mr. Domeisen went on to state that fixed income markets posted modest gain in the fourth quarter after scoring a strong performance in the previous two quarters. Three month Treasury Bills returned 0.4%, while 1-3 year Treasury notes gained 0.9%. The volume of mortgage refinancing remained high, with 30-year fixed rate mortgages averaging 5.6%. The high yield corporate bond sector was the top performing domestic bond sector. The Lehman Brothers High Yield Bond Index returned 6.7%. Large Cap Manager — total large cap is up 3.8%. A year ago, due to C.S. F; McKee's strong performance, the combined portfolio was ahead of the benchmark. f, E Small Cap Manager — Emerald lagged for the quarter. Measuring Emerald r' versus the growth index for the year, the growth index was off 30.2%. Since its inception in August 1998, however, performance has been ahead of the broad small cap benchmark. Fixed Income — C.S. McKee was 2.4% ahead of the benchmark for the quart$1 RRZ was in line with the index for the quarter. For the one-year, C.S. McKee was up 11.6% and RRZ was up 9.3%. Asset Allocation — In the large cap equities, we are underweighted with 40%.' Target is 45%. Small cap needs to be increased and fixed income is right in line. C.S. McKee Investment Managers Eugene Natali stated that fixed income was quite strong in the 4th quarter. C.$. McKee is a top quartile manager across the board and is in the top 50% range on the'; fixed income side. He feels that Washington County needs to increase its equity position. Emerald Advisors John Thompson stated that this is our 3rd down year in a row but we managed} to hold our assets fairly steady. Emerald has outperformed the benchmark Russell 2000 Growth Index for 8 out of 10 years. Emerald Growth Funds ranks in the top 1I'ih 1 1 Sold 3v IMR Limited Form 825 E00102204 1 1 1 percentile for the year and in the 12th percentile over 3 years. Emerald is a fundamental, bottom -up research manager. Garrison Institutional Asset Management (formerly) Tom Datillo began by stating that his company is not a stable organization but a new organization made up of extremely stable people. He made a plea to Washington County to retain Garrison. He believes that steady progress has been made and promises there will be a turnaround because he has a much higher quality staff than ever before. New Business Hiring of Small Cap Manager Chairman Bevec entertained a motion to approve Evergreen as the Small Cap Value Manager. It was moved by Mr. Namie and seconded by Mr. King to hire Evergreen as the Small Cap Value Manager. Roll call vote taken: Mr. Namie — Yes; Mr. King — Yes; Mrs. Irey — Yes; Mr. Burns — Yes; Mr. Bevec — Yes. Motion carried unanimously. Large Cap Search Mr. Domeisen stated that we need to hire a Large Cap Growth Manager to compliment C.S. McKee. Assuming a $12 million allocation, an overview of Large Cap Growth Managers includes Ark Asset Management Co. with a fee of approximately $85,000.00, Ashfield & Co. with a fee of $90,000.00, Columbus Circle Investors Inc. with a fee of $87,000.00, Dresdner RCM Global Investors with a fee of $76,000.00, and Eagle Asset Management with a fee of $84,500.00. The number of times the following managers have beat the Russell 1000 is as follows: Ark, 17 out of 17, Ashfield, 14 out of 17, Columbus, 12 out of 17, Dresdner, 16 out of 17, and Eagle, 17 out of 17. Discussion was made about having a special Retirement Board Meeting on March 13, 2003 to interview the managers that will be decided upon today. Mrs. Irey asked Mr. Domeisen if he had any recommendations as to whom shall be interviewed as a contender to be our Large Cap Growth Manager. Mr. Domeisen recommended Ark, Dresdner, and Ashfield. Mr. Bevec asked for the Board's recommendation of their top 3 picks to be considered and interviewed. Mr. Namie chose Ark, Eagle, and Dresdner. Mr. King chose Ark, Eagle, and Ashfield. Mr. Burns chose Ark, Eagle, and Dresdner. Mrs. Irey chose Ark, Eagle, and Dresdner. Mr. Bevec chose Ark, Eagle, and Dresdner. Mr. Domeisen will contact Ark, Eagle, and Dresdner and invite them to the Special Retirement Board Meeting to be held at 10:00 a.m. on Thursday, March 13, 2003. 618 r Mrs. Irey excused herself to attend another meeting and also stated to be not for the record that she votes for Garrison to be considered as our Fixed Income Manager. Fixed Income Manager Assuming a $11 million allocation, the fees are as follows: BlackRock, $44,000.00, Federated Investors, $33,000.00, Lord Abbett, $43,000.00, Pacific Income Advisors, $5,500.00, and Richmond Capital, $38,500.00. The number of times the following managers have beat the Lehman Brothers Aggregate is as follows: BlackRock, 16 out of 17, Federated, 11 out of 17, Lord Abbett, 15 out of 17, Pacific, 13 out of 17, and Richmond, 15 out of 17. Mr. Namie chose BlackRock, Lord Abbett, and Richmond. Mr. King chose BlackRock, Federated, and Richmond. Mr. Burns chose BlackRock, Lord Abbett, apd t Federated. Mr. Bevec chose BlackRock, Lord Abbett, and Richmond. The chosen managers to be interviewed will be BlackRock, Lord Abbett, Federated, and Richmond. Mr. Bevec adjourned this meeting at 1:05 p.m. THE FOLLOWING MINUTES SUBMITTED FOR APPROVAL; mz� , 2001 ATTEST: SECRETARY 1