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HomeMy WebLinkAboutCOMM - Meeting Minutes - 212 - 2-2-2006 - RETIREMENT31s. MR Lirpited �Qrq-.,�125 E00102204 1 Washington, PA February 2, 2006 The quarterly meeting of the Washington County Retirement Board was held at approximately 11:00 a.m. on Thursday, February 2, 2006 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 Finance Roger Metcalfe; Chief Clerk Mary Helicke; ' Secretary Joyce Thornburg; Audit Manager Kathy Demarest; Solicitor Lynn DeHaven; concerned citizens Harry Sabatasse and Phil Ames; and Observer -Reporter representative Barbara Miller. Approval of Minutes Mr. Burns entertained a motion to approve Minute No. 211 dated November 10, 2005. Motion was moved by Mrs. Irey and seconded by Mr. Maggi that the above mentioned minutes be approved as written. No discussion followed. Those in favor signified by saying aye. Motion carried unanimously. Treasurer's Report Mr. King stated that from October 2005 through December 2005 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. IRoll call vote was taken: Mr. Vankirk — Yes; Mr. King — Yes; Mrs. Irey — Yes; Mr. Maggi — Yes; Mr. Burns — I Yes. I Motion carried unanimously. I Retirement Allowance Report I Bank Balance as of October 1, 2005 Add: Deposits to Checking Account Add: Transfers from Investment Accounts Less: Cancelled Checks Less: Transfers to Investment Account Less: ACH Debits Bank Balance as of October 1, 2005 Less: Deposit In Transit Less: Outstanding Checks Less: Stale Dated Checks Less: Retirement Check Run October 31, 2005 Bank Balance as of October 31, 2005 $116,646.75 927,776.48 293,037.95 (134,332.61) (618,248.02) ($132,285.61) $452,594.94 (309,664.39) (62,061.15) (100.96) ($80,768.44) �0- Bank Balance as of November 1, 2005 Add: Deposits to Checking Account Add: Transfers from Investment Accounts Less: Cancelled Checks Less: Transfers to Investment Accounts Less: Other Debits Less: ACH Debits Bank Balance as of November 1, 2005 Less: Deposit In Transit Less: Outstanding Checks Less: Stale Dated Checks Less: Retirement Check Run Nov. 30, 2005 Reconciled Balance as of Nov. 30, 2005 Bank Balance as of December 1, 2005 Deposits to Checking Account Transfers from Investment Accounts Less: Cancelled Checks Less: Transfers from Investment Accounts Less: ACH Debits Bank Balance as of December 31, 2005 Deposit Error Less: Outstanding Checks F Less: Retirement Check Run Dec. 31., 2005 Reconciled Balance as of Dec. 31, 2005 $452,594.94 507,891.82 261,851.86 (119,081.26) (817,420.28) (0.90) ($134,571.89) $151,264.29 (135.93) (64,188.06) (100.96) ($86 839.34 $ 151,264.29 671,856.62 308,544.89 (156,816.88) (671,856.85) (160,727.85) 142,264.22 166.81 (59,370.27) (83,060.76) Requisitions Mr. Vankirk stated that requisitions for the months of November and December 2005 and January 2006 totaled $874,437.29. It was moved by Mr. Vankirk and seconded by Mrs. Irey that the requisitions be approved. No discussion followed. Roll call vote was taken: Mr. Vankirk — Yes; Mr. King — Yes; Mrs. Irey — Yes; Mr. Maggi — Yes; Mr. Burns — Yes. Motion carried unanimously. November 2005 Distributions Check Payee Amount 2898 Lisa A. Montville $ 14,041.98 2899 Cynthia M. Wright 10,591.61= i 2900 Terry Havelka (Bene. Stacy A. Havelka) 563.19 2901 Teri Lyn Havelka 563.19! 1 1 I B i ited Form 825 E001,1,2204 If- 2903 PA SCDU (Arthur Couts) 75.00 2904 Washington County Cash Disbursement Account 10,768.44 2905 Ramay A. Horner 4,928.21 Transfer PNC Bank 15,786.62 Transfer Washington County Retirement Account 203,970.43 Total November 2005 Distributions $261,851.86 December 2005 Distributions Check Payee Amount 2906 Patti J. Berty $ 8,171.16 2907 Denise M. McMasters 5,166.01 2908 Francesca Silver 21,423.34 2909 Amanda Lee Van Hooser 2,189.85 2910 Joyce Ann Wyland 5,325.67 2911 PA SCDU (Arthur Couts) 75.00 2913 Washington County Cash Disbursement Account 39,323.31 2914 Washington County Regular Payroll Escrow Acct. 258.13 Transfer PNC Bank 18,657.84 Transfer Washington Co. Retirement Account 207,954.35 Total December 2005 Distributions 308,544.66 January 2006 Distributions Check Payee Amount 2916 Louis J. Bailey $ 12,128.84 2917 Estate of Gildo J. Patrina 138.10 2918 Martha H. Paci 1,658.59 2919 Angela R. Doran 3,313.84 2920 Debra A. Gilbert 595.43 2921 Jamie S. Killen 6,467.20 2922 Vanguard Group of Investment Co. FBO Jamie L. Mesar 13,832.58 2923 Robert J. Paletta 7,666.16 2924 Carrie E. Settar 3,077.65 2925 Robert A. Stewart 12,941.92 2926 PA SCDU (Arthur Couts) 75.00 2927 Washington County Cash Disbursement Account 17,841.32 Transfer PNC Bank 17,049.70 Transfer Washington Co. Retirement Account 207,254.44 Total January 2006 Distributions $ 304,040.77 Old Business None. New Business Mr. Burns entertained a motion to ratify an MOU to solicit requests for proposals for investment consultant services. Motion was moved by Mrs. Irey and seconded by Mr. Maggi. Those in favor signified by saying aye. Motion carried unanimously. Mr. Burns entertained a motion to ratify an MOU to solicit requests for proposals for actuarial services. Motion was moved by Mr. Maggi and seconded by Mrs. Irey. Those in favor signified by saying aye. Motion carried unanimously. Mr. Burns entertained a motion to ratify an MOU to increase Yanni Partners' annual fee for consulting services from $17,000.00 per year to $21,000.00 per year. Motion was moved by Mr. Maggi and seconded by Mrs. Irey. Those in favor signified by saying aye. Motion carried unanimously. Mr. Burns entertained a motion to ratify an MOU to increase the Hay Group's 2005 fee for actuarial services from $2,105.00 per month to $2,178.00 per month. Motion was moved by Mrs. Irey and seconded by Mr. Maggi. Those in favor signified by saying aye. Motion carried unanimously. Mr. Burns entertained a motion to ratify an MOU dated November 29, 2005 for approval of a disability pension request from Louis J. Bailey. Mr. Bailey was approved by the Social Security Administration for a disability pension on September 11, 2005. Motion was moved by Mrs. Irey and seconded by Mr. Maggi. Those in favor signified by saying aye. Motion carried unanimously. Mr. Burns entertained a motion to ratify an MOU dated November 29, 2005 to refund the buy back of military time paid by Louis J. Bailey in the amount of $12,128.84. This amount was refunded to Mr. Bailey on January 13, 2006. Motion was moved by Mrs. Irey and seconded by Mr. Maggi. Those in favor signified by saying aye. Motion carried unanimously. Mr. Burns entertained a motion to approve a 3-year agreement with the Hay Group to provide actuarial services at a base cost of $34,500.00 for 2006 with an annual CPI increase for subsequent years. Motion was moved by Mrs. Irey and seconded by Mr. Maggi. Those in favor signified by saying aye. Motion carried unanimously. Mr. Burns entertained a motion to approve the purchase of Employee Benefit Statements from the Hay Group at a cost of $1.75 per statement for a total approximate cost of $1,820.00. Motion was moved by Mr. King and seconded by Mrs. Irey. Those in favor signified by saying aye. Motion carried unanimously. u F 1 131 S010 By AG4 Lr 'Cid :­. ,_._1 back unpaid leave of absence time from 07/20/1989 to 08/15/1989 in the amount of $155.77. Ms. Anderson was on Workers' Compensation during this time. Motion was moved by Mrs. Irey and seconded by Mr. Maggi. Those in favor signified by saying aye. Motion carried unanimously. To Be Noted For The Record Kenneth Krupa agreement to purchase service credit dated 07/09/1973 to 01/11/1974 in the amount of $363.46. C. S. McKee — Norm Allan 2005 was not a very good year in the financial markets. Bonds were up a meager 2.43% and equity performance was up 4.91 % as measured by the S&P 500. However, the good news is that your portfolio exceeded those results. For our portion that we manage, the portfolio was up $476,000 for the fourth quarter and $3.1 million dollars for the year. We exceeded the benchmark in the fixed income segment for the quarter, the one year, the three year, and the five year periods ending December 31. We also exceeded the benchmark in the equity segment for the same period. It should be noted that the value index, which we use as the benchmark, was up 7.05%. We were up 11.32% for the same period. For 2006, however, we expect that the growth index will exceed the S&P 500. The bond side of the portfolio, with only an anticipated 2-3% return, will probably still not pull its weight in 2006. We hope that stocks will produce in the neighborhood of 8%, with international out -producing domestic. Oil is the big unknown at the moment. We're not overly optimistic about returns in 2006, but your fund is probably one of the top producing funds in the State at the moment. Evergreen Investments — Paul French and Christopher Corish For the year, we were positive in the equity markets, internationally more so than domestically. The GDP for the fourth quarter came in at 1.1, significantly lower than what the market was forecasting at 2.8. Both consumer spending and capital spending are slowing down. Employment numbers are good, but real wages aren't really growing. We really don't anticipate any robust numbers in the equity market in 2006, but we are hopeful that we will come out in the positive with an average 6-8% return. We are seeing a trend that small cap valuation is getting fairly rich versus large cap stock, and we expect that small caps will pull back and we will not see as much return as we will in the large cap market. Returns for your portfolio did very, very well. For the one year, we beat the Russell 2000 Value by 600 basis points and the Lipper by approximately 400 basis points. Most of the out -performance for the year was attributable to stock selection, especially in finance. For 2006, we obviously hope to out -perform the benchmark and continue to add value to the portfolio. Yanni Partners — Jim Gnecco and Frank Domeisen Growth is starting to edge out the value benchmark. There were really only three and industrials. One of the things that helped your portfolio over the year was balanced structure in terms of diversification across the sectors. For the quarter, the portfolio was up 1.3, which lagged slightly the target market index of 1.5. For the year, the portfolio was up 7.4 and the benchmark was up 4.5. Your portfolio is 35% bonds and 65% equity, which we feel helped your portfolio versus the benchmark. We feel that we should continue on this course for 2006. The valuation of the portfolio at year- end was $84.5 million. Mr. King brought up Mr. Allan's expectations that growth stocks will out -perform value in 2006 and wanted to know if Mr. Domeisen felt that this was something that should be addressed. Mr. Domeisen stated that although the portfolio is within the balanced ranges for all sectors, rebalancing would be a viable option to shift from small f, cap to large cap and from value to growth. Mr. Domeisen stated that since the year- end numbers are in, he could now make a formal recommendation for rebalancing in dollar amounts. Mr. Burns stated that if the Board was going to do this, then the Board should be proactive and do it now instead of waiting. Mr. Domeisen said that he would recommend a 2% move to bring the small cap back in line with the large cap. Mr. Burns inquired as to whether this would require a motion and Mr. Domeisen replied that this is within the policy although they could not execute it without direction letters to implement any changes. Mr. Burns requested that Mr. Domeisen give the required information to Mr. Namie so that they could proceed. Mr. King also inquired as to whether there was a compilation available comparing the performance of Counties' retirement funds. Mr. Allan stated that CCAP does this infrequently but the best source of this information would probably be the Hay Group. Mr. Burns requested that Mr. Vankirk have Mr. Namie contact Hank Stiehl of the Hay Group on the Board's behalf for this information. The meeting was adjourned at approximately 11:45 a.m. THE FOLLOWING MINUTES SUBMITTED FOR APPROVAL: ATTEST E 1