Loading...
HomeMy WebLinkAboutCOMM - Meeting Minutes - 208 - 2-10-2005 - RETIREMENTW 0 ". 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 i fund. At the end of August, we moved out of the index fund into the Boston Company. We only have a I 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 I 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: 2005 ATTEST: 110 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 3 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_ H 11 Sold By IMR Limited Form 825 E00102204 n 1 Bank Balance as of December 1, 2004 $113,941.45 Deposits 183,858.91 Transfers from Investment Accounts 360,905.01 Less: Cancelled Checks 147,571.93 Less: Transfers to Investment Accounts 1,019,568.52 Less ACH Debits $131,938.61 Bank Balance as of December 31, 2004 $640,373.69- Deposit Lost in Transit 834,366.18 Less: Outstanding Checks 118,572.68 Less: Retirement Check Run December 31, 2004 $75,419.81 j Reconciled Balance as of December 31, 2004 $---0- Requisitions Mr. Namie stated that requisitions for the months of August, September, and October 2004 totaled $885,831.00. It was moved by Mr. Namie and seconded by Mrs. Irey that the requisitions 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. November 2004 Distributions Check Payee Amount 2737 Estate of Edward J. Duda, deceased $163.02 2738 Daniel R. Barnhart 4,305.07 2739 Kare S. Brezinski 135.78 2740 Ida M. Elway 383.07 2741 Bobbi J. Gregg 171.29 2742 Rachel Fields 281.97 2743 Capital Bank & Trust as trustee of IRA of Ryan L. Hood 2,052.66 2744 Toni A. Jemison 3,229.07 2745 Samuel D. Keturakis 1,485.46 2746 Barbara D. Linkish 5,834.94 2747 Merrill Lynch Pierce Fenner & Smith as trustee of IRA of 5,189.94 Gregory S. Parker 2748 Traci L. Scarfo 686.68 2749 Amanda M. Steinstraw 201.89 2750 Vickie L. Stone 8,240.36 2751 Dexter A. Thomas 168.51 2752 Christian L. Trich 220.51 2753 Nancy J. Vincent 286.42 2754 Mary Ellen Williams 284.76 2755 Jared C. Johnson 2,454.10 2756 PA SCDU Arthur Couts 169-54-0923 75.00 2757 Washington County Cash Disbursement Account 2,105.00 Transfer: PNC Bank 15,079.77 Transfer: Washington County Retirement Account 185,555.76 Total Monthly $238,591.03 December 2004 Distributions Check Payee Amount 2759 Primerica Shareholder Services as trustee of IRA of $60,696.55 F Janet M. Kalakewich 2760 Martha M. Hunnell (Beneficiary - Joseph M. Hunnell) 4,432.98 2761 i Sandra K. Cox (Beneficiary — John L. Cox) 35,889.33 2762 Patricia A. Derrow 1,174.71 2763 Ellen M. Dulaney 3,965.81 2764 Holly S. Gentry 1,121.69 2765 Barbara M. Kearns 312.51 2766 Von D. Lacock II 336.04 2767 Danielle D. Long 4,577.70 2768 Christin Loulli 4,389.90 2769 Laverne Rossi 175.14 2770 Jacob K. Welch 1,270.54 2771 PA SCDU Arthur Couts 169-54-0923 75.00 2772 Washington County Cash Disbursement Account 35,905.90 2773 Washington County Regular Payroll Escrow Account 258.36 a Transfer: PNC Bank 21,381.77 Transfer: Washington County Retirement Account 184,941.08 Total Monthly $360.905.01 January 2005 Distributions Check Payee Amount 2774 American Funds Service Co. as trustee of IRA of $26,463.64 - Harold Lee Gregory 2775 Sidney Blasiole 112.01 2776 PNC Bank, NA as the Successor Custodian of IRA of 3,909.83 Lorrie A. Bannon 2777 Deanna B. Cheberenchick 29.25 2778 Connie Lynn Dunn 66.48 2779 Ameritrade (Acct. #874453636) as trustee of IRA of 4,655.04 Deborah Ann Jones 2780 Vanguard Fiduciary Trust Co. as trustee of IRA of 3,062.12 Darlene A. Lignelli 2781 Lincoln Financial Advisors as trustee of IRA of Nicholas 3,640.47 Mandich 2782 Claudette M. Mangan 1,071.98 2783 Tonya Riggle 647.81 2784 Deborah Lynn Rockwell 258.92 2785 PNC Bank, NA FBO Katherine P. Simpson 24,489.02 2786 Peter B. Thomas 370.30 2787 Brenda Watkins 2,238.19 2788 PA SCDU Arthur Couts 169-54-0923 75.00 2789 Washington County Cash Disbursement Account 16,495.89 Transfer: PNC Bank 9,086.41 Transfer: Washington County Retirement Account $189,662.60 Total Monthly �286.334.96 wig Sold By IMR Limited Form 325 E00102204 11 1 fl Old Business None. New Business Mr. Burns entertained a motion to purchase Employee Benefit Statements from the Hay Group at f a cost of $1.75 per statement for a total approximate cost of $1,882.00. Motion moved by Mr. King and seconded by Mrs. Irey. Roll call vote was taken: Mr. Namie — Yes; Mr. King — Yes; Mrs. Irey — Yes; Mr. Maggi — Yes; Mr. Burns — Yes. Motion carried unanimously. C. S. McKee — Norm Allen The 41h quarter showed strong numbers on an absolute basis but was short on the benchmark on a relative basis. The fund was up approximately $1.8 million in the 4th quarter. During the one-year period, the fund was up approximately $3.6 million. For the year ending December 31, 2004, we were up 4.71 % versus the benchmark of 4.34%. If you look at the three and five year period, the benchmark is exceeded. In value equity, the quarter ending December 31, 2004 trailed in performance. We generated 8.36% during the quarter versus the Russell 1000 which was up 10.38%. This cost us in terms of the entire year. We were up 14.55% versus 16.49% for the Russell 1000 index for the year. What cost us was what we did not own in the portfolio and not what we did own. An example of this is Exxon. Exxon had a very big last quarter and is one of the stocks listed in the Russell 1000 value. Exxon out -performed the stocks that we owned. We owned Conico, Apache, Chevron, and Marathon. When the large mutual funds grow and buy, they generally will do better in the large mega -cap stocks. Exxon is a large mega - cap stock. Real Estate Investment Trusts (REITS) is another reason why we underperformed. We do not own any REITS because the feeling is that they are vastly over -valued. A third reason is GE. We own GE but not in the same concentration. On the 3-year basis, we are up 11.85% on an annualized basis versus 8.57% for the Russell 1000 index and for the 5-year period we were up 8.82% versus 5.27% for the annualized figures. We are still solidly ahead of the market. When we look at 2005 and where the market is today, there are hardly any equity indexes in a positive territory. All the equity markets are basically negative. We anticipate that the bond returns in 2005 are not going to be as strong. We will probably see one-half of the return because the Federal Reserve is raising interest rates. Looking at the bond segment of the fixed income segment of the portfolio for next year, we only see about 2-3% return as opposed to the almost 5% return that we got for 2004. Looking at stocks the entire year is probably in the area of 6-8%. Through February 20, 2005, the market is still negative. We are running ahead of the value index so far in 2005; about 135 or 140 basis points ahead of the index which puts us slightly in positive territory. Our guess is that we will earn 6-8% on the equity side of the portfolio. On the equity side, international will probably out -perform domestic but not to the degree that it has over the past two years. The international equity portfolio has earned over 60% in the last two years. With the dollar coming down, it will be tough to match that. The domestic side should have an average year of 6-8%. Yanni Partners - Frank Domeisen There was no representation from Yanni Partners. Mr. Burns stated that Emerald's underperformance was becoming a concern. Emerald's one j year was 1.6% vs. the benchmark of 14.3% and the five year was at -6% vs. -3.6%. Mr. Namie stated (� that this was officially on the watch list from a previous meeting. Mr. Burns stated, with the exception of E Emerald, we out -performed the market. Mr. Namie stated that based on a summary provided by Roger I Metcalfe, the 2004 year -ending market value was $78,246,274.00 and the 2003 year -ending market value was $71,726,396.00. Mr. King asked if a special meeting should be held with Frank Domeisen to discuss the Board's concerns. Mr. Namie stated that he will contact Mr. Domeisen to inform him of such. Mr. Burns also asked Mr. Namie to mention alternate investments that some of the Board members have discussed individually with Mr. Domeisen. The meeting was adjourned at approximately 11:25. THE FOLLOWING MINUTES SUBMITTED FOR APPROVAL: 2005 ATTEST: 11 1