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Home My WebLink AboutCOMM - Meeting Minutes - 207 - 11-18-2004 - RETIREMENTSold 1 1 Minute No. 207 Washington County Retirement E Washington, PA November 18, The quarterly meeting of the Washington County Retirement Board was held at approximately 10:55 a.m. on Thursday, November 18, 2004 in the Public Meeting Room with the following members being present: Commissioners Larry Maggi, J. Bracken Burns, Sr., and Diana L. Irey; Treasurer Francis King; and Deputy Controller Randy Vankirk. Also present: Director of Administration Scott Fergus; Director of Finance Roger Metcalfe; Chief Clerk Mary Helicke; Administrative Assistant Linda Belcher; Audit Manager, Kathy Demarest. Approval of Minutes Mr. Burns entertained a motion to approve Minute No. 206 dated August 19, 2004. It was moved by Mrs. Irey and seconded by Mr. King that the above mentioned minutes be approved as written. Roll call vote taken: Mr. Vankirk — Yes; Mr. King — Yes; Mrs. Irey — Yes; Mr. Maggi — Yes; Mr. Burns — Yes. Motion carried unanimously. Treasurer's Report Mr. King stated that from August 2004 to September 2004 the bank balance was reconciled to zero. It was moved by Mr. King and seconded by Mrs. Irey that the report be approved. No discussion followed. Roll call vote taken: Mr. Vankirk — Yes; Mr. King — Yes; Mrs. Irey — Yes; Mr. Maggi — Yes; Mr. Burns — Yes. Motion carried unanimously. Retirement Allowance Report Bank Balance as of August 1, 2004 $151,846.11 Deposits to Checking Account 177,818.21 Transfers from Investment Accounts 248,779.77 Less: Cancelled Checks (177,786.92) Less: Transfers to Investment Accounts (160,183.01) Less ACH Debits ($123,275.90) Bank Balance as of August 31, 2004 $117,198.26 Deposit Error 1,194.19 Less: Deposit in Transit (2,448.48) Less: Outstanding Checks (36,042.18) Less: Retirement Check Run August 31, ($79,901.79) 2004 Reconciled Balance as of August 31, 2004 $Q Bank Balance as of September 1, 2004 $117,198.26 Deposits to Checking Account 181,084.57 Transfers from Investment Accounts 539,288.48 Less: Cancelled Checks (171,637.93) Less: Transfers to Investment Accounts (160,432.82) Less ACH Debits ($146,375.81) Bank Balance as of September 1, 2004 $359,124.75 Less: Outstanding Checks (280,822.04) Less: Retirement Check Run September 30, 2004 ($78,302.71) Reconciled Balance as of September 30, 2004 Requisitions Mr. Vankirk stated that requisitions for the months August, September, and October 2004 totaled '.. $1,105,909.82. It was moved by Mr. Vankirk and seconded by Mr. King that the requisitions be approved. No discussion followed. Roll call vote taken: Mr. Vankirk — Yes; Mr. King — Yes; Mrs. Irey — Yes; Mr. Maggi — Yes; Mr. Burns — Yes. Motion carried unanimously. August 2004 Distributions Check Payee Amount 2685 Cheryl L. Allen $12,970.83 2686 Melissa K. Chiedra 53.32 2687 James R. Crockett, Jr. 234.95 2688 Andrew P. Duli 179.09 2689 Daniel A. Dyson 43.22 2690 Dianne L. Eland 5,581.82 2691 Deyotta Lynn Healy 2,449.11 2692 Capital Bank & Trust Co. as trustee of IRA of 741.79 Margaret D. Johnson Acct. #73450971 2693 Lori Lynn Margarcelli 1,448.45 2694 Citizens Bank as trustee of IRA of Carolyn Jean Murphy 8,908.19 2695 Mary Jo R. Stewart 2,589.99 2696 Dawn L. Thompson 154.00 2697 Nicole L. Tyhonas 200.49 2698 Clyde R. Wilson 116.95 2699 Carol A. Wright 21.99 2700 Angela L. Yanniello-Mack 184.26 2701 Lynne A. Young 178.32 2702 Tammy A. Youngblood 103.15 2703 Estate of Pauline E. Herceg 191.94 2704 Estate of Mary R. Ruffalo 53.25 2705 Amy Martino 597.47 2706 Jacqueline Galiffa 597.46 2707 Washington County Cash Disbursement Account 12,151.65 2708 Joni Martino 663.46 2709 PA SCDU Arthur Couts 169-54-0923 75.00 Transfer: PNC Bank 14,443.94 183,845.68 Transfer: Washington County Retirement Account Total Monthly $248,779.77 September 2004 Distributions Check Payee Amount 2383 Lila R. Zelinsky 11,816.82 2684 Lila R. Zelinsky 7,012.57 2710 New England Financial as trustee of IRA of 15,000.00 Robert A. Loar Sr. 2711 Robert A. Loar Sr. 8,354.52 2713 Nita L. Bailey (Beneficiary: Rebecca L. Bailey) 175,304.74 2714 Capital Bank & Trust Co. as trustee of IRA of 32,807.43 Dawn E. Miller 2715 PNC Bank as trustee of IRA of Elaine Thomas 49,805.94 2716 Elaine Thomas 3,562.71 1 1 1 Sold By IMR 1017 1 1 1 2717 Linda J. Bercosky 117.55 2718 Lincoln Financial FBO Natalie Carlson 348.08 2719 Melissa L. Montani-Celani 1,353.55 2720 Jennifer A. Davis 2,617.68 2721 Angela L. Hoffman 368.73 2722 Casey J. Perrotta 1,213.83 2723 Therese Tuttle 9,053.48 2724 Hilliard Lyons as trustee of IRA of Brian H. Wittik 3,987.28 2725 PA SCDU Arthur Couts 169-54-0923 75.00 2726 Washington County Cash Disbursement Account 35,250.39 Transfer: PNC Bank 37,422.92 Transfer: Washington County Retirement Account $185,999.17 Total Monthly $581,472.39 October 2004 Distributions Check Payee Amount 2728 Estate of Donna J. Klinger $224.31 2729 Legg Mason as trustee of IRA of Philip A. Clutter Account #350- 1,021.83 70075-10 2730 Emmie Lou Lindholm 11,526.18 2731 Charie D. Livingood 24.74 2732 Roxanne McWreath 12,261.20 2733 Joshua J. Rush 2,713.08 2734 Tina C. Cox 1,989.33 2735 PA SCDU Arthur Couts 169-54-0923 75.00 2736 Washington County Cash Disbursement Account 45,105.07 Transfer: PNC Bank 15,160.70 Transfer: Washington County Retirement Account $185,556.22 Total Monthly $275 657.66 Old Business None. New Business Debra Strope has entered into an agreement to purchase service credit dated September 15, 1996 to March 26, 1997 and October 22, 1997 to January 4, 1998 in the amount of $1,602.36. It was moved by Mrs. Irey and seconded by Mr. Maggi. Roll call vote taken: Mr. Vankirk - Yes; Mr. King - Yes; Mrs. Irey - Yes; Mr. Maggi - Yes; Mr. Burns - Yes. Motion carried unanimously. Evergreen Investments — Joe Karoinski Evergreen has approximately $3.2 million in the fund. The net market declined from September through March from $3,297,141 to $3,247,184. Evergreen is a conservative/defensive value manager. When value is strong, Evergreen will generally under -perform, catching some of the up -side but the down -side has better protection. Evergreen is getting close to closing the fund. It is at approximately $2 billion. If the fund is kept open and continues to take money, the long-term effect would be that the fund would under -perform. There is only a small universe of stocks that can be bought in a small cap universe. Through the end of October 2004, Evergreen is at 8% year-to-date and the benchmark is 8.35%, about 35 basis points under the benchmark through October 2004. Evergreen uses a defensive strategy rather than an alpha strategy. If next year is another positive year and the benchmark is up 20, Evergreen will probably be underperforming by 2%-3%. C. S. McKee — Norm Allen The third quarter was a decent quarter. The fund is now up to $39,484,000. For the three } months ending September 30, 2004, the year-to-date ending September 30, 2004, and the one year ending September 30, 2004, the fixed income segment has positive returns in all three time frames. The benchmark has continually been beat. Year-to-date in the portfolio is showing that we were up 3.85% vs. the benchmark at 3.35%. Currently, we are now at 4.20% vs. the benchmark of approximately 3.75%. The equity segment is also ahead for the saute three time periods. Taking in the same example of year- to-date ending September 30, 2004, we are at 5.72% vs. 5.54%. We are now at approximately 11.56%. Most of the growth is on the equity side of the portfolio. Value is leading year-to-date. It is anticipated to it continue through year end. The market has settled down after the Presidential election. It is believed that what will be seen is a protracted period of 4-7 years where returns both in the equity and fixed income market are going to be a lot closer to the historical average than they have been in the last few ? decades where they were particularly strong. It is expected that the feds will bump rates up to 3 or 3- 1/2% by the end of 2005. This is not going to be good news for the fixed income market. There was a lot more performance out of fixed income this year than what was anticipated. Emerald Advisors. Inc. — John Thompson This has been a difficult year. Uncertainty has prevailed from the threat of terrorism, energy' crises, questionable economic strength, and the election outcome. Through October, the companies with the best earnings growth actually were the worst performers. This specifically pertains to Washington County. An over -optimistic viewpoint was taken on the economy moving into 2004 which led Emerald to overweighting technology. In addition, there was overweighting in the health care area, specifically in biotechnology. In 1998, Emerald was in this same position. Just as Emerald did then, Emerald will stay with the same discipline, following the same philosophy and staying this course. On a more positive note, since the outcome of the election, there has been an investment environment where fundamentals are beginning to be appreciated. After a rough October, the portfolio is up for the quarter at approximately 10%. Emerald is very close to breaking even for the year and right in line with the index in the fourth quarter. In closing, Emerald is very optimistic and has been fortunate in picking up new business. Yanni Partners - Frank Domeisen This was the first negative quarter we saw since the beginning of 2003. For the year-to-date, the S&P was up 6 Y2 % and small cap was off 2.9%. However, for the quarter through the month of October, small cap was up approximately 2%. International was flat this quarter but better than the domestic market. For the month of October, the international market was up 3.4%. Emerging markets were up 8.1 %. The best performing categories, energy and utilities, were up 11 % and 6.7% respectively. The bottom of the pact is health care, consumer staples, and information technology. In terms of weighting structure, C.S. McKee was over -weighted in energy. Contrast that to Ark, the growth manager, was over - weighted in health care, consumer staples, and information technology. Emerald was over -weighted in information technology and health care and under -weighted in energy and utilities. Evergreen was under - weighted in energy. In fixed income, we saw interest rates fall in the second quarter. When interest rates rise, bond prices fall. Last quarter saw the worst bond market in the last ten years. This quarter, Legman Brothers Aggregate was up 3.2%, making up more than what was lost. When bond prices rise and interest rates fall, it is better to have long maturity rather than short because you get more bang for your buck. BlackRock is a little bit short maturity and a little more defensive. For the quarter, Treasuries returned 3.3%. Corporate investment grade was up a little more at 4.2%. Strong bond markets usually favor the corporate vs. the higher quality treasury. Total portfolio was up 0.2% for the quarter, matching the target market index. Asset allocation was also in line with the target. Risk is also an important factor. We generated the 6.2% annualized three-year return with less risk than the market. Even though we are behind 40 basis points on an annualized return, we are more than being compensated for the lower risk. 1 In large cap, C.S. McKee's performance updated for October was up 1.3%. Ark pretty much Fom, 825 E^D0`022?4 n 1 11 matched the benchmark for the quarter. In small cap, Evergreen and Emerald both underperformed the benchmark. Joe Karpinsky of Evergreen mentioned closing the fund. The size of the fund is something that Yanni Partners has been watching very closely. Yanni Partners believes that this is a positive move and agree that it is time to close the fund. Looking at calendar years, small cap underperformed in 1998 and 2000. This is a high volatile fund. At the end of August, we moved out of the index fund into the Boston Company. We only have a one month performance with September showing 3.9% and the index up 2.6%. C.S. McKee came to Yanni Partners in September and requested clarification of one of our prohibited investments, structured notes. They had a specific investment strategy and specific securities in mind. These are AAA bonds (Yankee bonds) with a German bank that has a AAA rating. Yanni Partners does not believe that these bonds should be considered structured notes. After a review, however, we decided to limit this to 5%. These securities are short-term in nature, meaning up to 5 years. If we are precluded from owning these, the probability of C.S. McKee exceeding the benchmark is diminished. C.S. McKee wants to provide their clients with opportunities as long as the risk is not overwhelming. It is thought that this is an opportunity to add value to the portfolio that was overlooked in a couple of cases and C.S. McKee has made their case with Yanni Partners to allow C.S. McKee that flexibility to own something. Mr. Burns asked if this would require a change in our policy and Mr. Domeisen stated that this is what the policy is supposed to do. Clarification was also made regarding this with Allegheny County. Mr. King asked Mr. Domeisen if it would be wise to increase our risk to bring in a little more money in order to offset the County's contribution in 2005. Mr. Domeisen stated that the contribution is short-term in nature and increasing risk is a long-term perspective. Mr. Domeisen did not believe that this was the way to go. The meeting was adjourned at approximately 11:55. THE FOLLOWING MINUTES SUBMITTED FOR APPROVAL: ATTEST: 2005 '10 Minute No. 208 Washington County Retirement Board Washington, PA February 10, 2005 The quarterly meeting of the Washington County Retirement Board was held at approximately 10:55 a.m. on Thursday, February 10, 2005 in the Public Meeting Room with the following members being present: Commissioners Larry Maggi, J. Bracken Burns, Sr., and Diana L. Irey; Treasurer Francis King; and Controller Mike Namie. Also present: Director of Finance Roger Metcalfe; Chief Clerk Mary Helicke; Secretary Joyce Thornburg; Audit Manager Kathy Demarest; Solicitor J. Lynn DeHaven; Observer -Reporter representative Barbara Miller; WJPA representative Jim Jefferson. Approval of Minutes Mr. Burns entertained a motion to approve Minute No. 207 dated November 18, 2004. Motion was seconded by Mrs. Irey that the above mentioned minutes be approved as written. Roll call vote taken: Mr. Namie — Yes; Mr. King — Yes; Mrs. Irey — Yes; Mr. Maggi — Yes; Mr. Burns — Yes. Motion carried unanimously. Treasurer's Report Mr. King stated that from October 2004 through December 2004 the bank balance was reconciled to zero. It was moved by Mr. King and seconded by Mrs. Irey that the report be approved. No discussion followed. Roll call vote was taken: Mr. Namie — Yes; Mr. King — Yes; Mrs. Irey — Yes; Mr. Maggi — Yes; Mr. Burns — Yes. Motion carried unanimously. Retirement Allowance Report Bank Balance as of October 1, 2004 $359,124.75 Deposits 1,376,980.59 Transfers from Investment Accounts 275,657.66 Less: Cancelled Checks 401,961.73 Less: Transfers to Investment Accounts 1,376,708.01 Less ACH Debits $110,293.90 Bank Balance as of October 31, 2004 $122,799.36 Less: Outstanding Checks 45,202.41 Less: Retirement Check Run October 31, 2004 $77,596.95 ¢ Bank Balance as of October 31, 2004 Bank Balance as of November 1, 2004 $122,799.36 Deposits 183,525.57 Transfers from Investment Accounts 238,591.03 Less: Cancelled Checks 106,608.37 Less: Transfers to Investment Accounts 183,525.57 Less ACH Debits $140,840.57 Bank Balance as of November 30, 2004 $113,941.45 Less: Outstanding Checks 36,005.28 Less: Retirement Check Run November 30, 2004 $77,936.17 Reconciled Balance as of November 30, 2004 $Q 0 C]