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Home My WebLink AboutCOMM - Meeting Minutes - 273 - 2-21-2019 - RETIREMENTLOW MINUTE BOOK RETIREMENT BOARD WASHINGTON COUNTY, PENNSYLANIA IMR I IMITFn PR(1Nm n Minute No. 273 February 21, 2019 The quarterly meeting of the Washington County Retirement Board was held at approximately 10:37 a.m. on Thursday, February 21, 2019, in the Public Meeting Room with the following members being present: Commissioners Larry Maggi, Harlan Shober, and Diana Vaughan, Controller Michael Namie, and Treasurer Francis L. King. Also present: Secretary Paula Jansante, Solicitor Lynn DeHaven, Chief Clerk Cindy Griffin, Director of Administration Scott Fergus, Director of Finance Joshua Hatfield, and Lee Martin, Ph.D. representing Marquette Associates. Approval of Minutes Mr. Maggi entertained a motion to approve Minute No. 272 dated December 6, 2018. The motion was moved by Mrs. Vaughan and seconded by Mr. Shober that the above -mentioned minutes be approved as written. No discussion followed. Roll call vote taken: Mr. Namie — yes; Mr. King — yes; Mr. Shober — yes; Mrs. Vaughan — yes; Mr. Maggi — yes. Motion passed unanimously. Public Comment None. Treasurer's Report Mr. King stated that for November 2018, December 2018, and January 2019, the bank balance was reconciled to zero. It was moved by Mr. King and seconded by Mrs. Vaughan that the report be approved. No discussion followed. Roll call vote taken: Mr. Namie — yes; Mr. King — yes; Mr. Shober — yes; Mrs. Vaughan — yes; Mr. Maggi — yes. Motion passed unanimously. Retirement Allowance Report Bank Balance as of November 1, 2018 $ 261,018.11 Add: Deposits to Checking Account 111,164.64 Add: Transfers In 531,630.56 Add: ACH Credit 247,586.76 Less: Cancelled Checks (291,212.92) Less: ACH Debits (758,778.20) Bank Balance as of November 30, 2018 $ 101,408.95 Add: Transfers to Bank 204.08 Less: Outstanding Checks (74,078.23) Less: Retirement Check Run (27,534.80) N RETIREMENT BOARD IMR I IMITFn FiRn7Q9Qi n MINUTE BOOK WASHINGTON COUNTY, PENNSYLANIA Reconciled Balance as of November 30, 2018 Bank Balance as of December 1, 2018 Add: Transfers In Add: ACH Credit Add: Other Credits Less: Cancelled Checks Less: Other Debits Less: ACH Debits Bank Balance as of December 31, 2018 Add: Transfers to Bank Less: Outstanding Checks Less: Retirement Check Run Reconciled Balance as of December 31, 2018 Bank Balance as of January 1, 2019 Add: ACH Credit Add: Other Credits Less: Cancelled Checks Less: ACH Debits Bank Balance as of January 31, 2019 Add: Transfers to Bank Less: Outstanding Checks Less: Retirement Check Run Reconciled Balance as of January 31, 2019 $ Q $ 101,408.95 12,500.01 591,327.74 248,880.06 (66,956.31) (12,500.00) (759,362.56) $ 115,297.89 408.16 (88,246,20) (27,459.85) $ -0- $ 115,297.89 224,409.58 646,754.07 (167,199.61) (757,138.86) $ 62,123.07 296.11 (32,575.94) (29, 843.24) $ -0- Requisitions Mr. Namie stated that requisitions for the months of December 2018 and January 2019 totaled $1,708,044.93. It was moved by Mr. Namie and seconded by Mr. King that the requisitions be approved. No discussion followed. Roll call vote taken: Mr. Namie — yes; Mr. King - yes; Mr. Shober — yes; Mrs. Vaughan — yes; Mr. Maggi — yes. Motion passed unanimously. Distributions December 2018 Check Payee Amount 1794 Mon Valley CU as trustee of IRA of Sandra Adkins $ 16,213.48 1795 Devin Davis 4,501.08 1 1 1 61 MINUTE BOOK RETIREMENT BOARD WASHINGTON COUNTY, PENNSYLANIA IMR I IMITFn F1Rn7Q9pI n 1796 Brian Dunseath 46.56 1797 Davy Oliverio 86.95 1798 Taylor Patton 11,227.60 1799 Penny Sweigart 144.16 1800 Washington County Regular Payroll Escrow Account 22,884.55 1801 Washington County Cash Disbursement Account 83.30 Transfer PNC Bank 50,496.65 Transfer Washington County Retirement Account 733,009.66 Total December 2018 Distributions S 838.693.99 January 2019 Check Payee Amount 1802 Cory Billings $ 138.56 1803 Blake J. Birchmeier 3,026.10 1804 PNC Bank as trustee of IRA of Haley Renee Conn 2,745.89 1805 Andy Dorsey 2,127.22 1806 Andrew Haburjak 2,919.99 1807 Tiffany Pitts 1,954.49 1808 Jamie Pomaibo 341.36 1809 Washington County Regular Payroll Escrow Account 21,279.32 1810 Washington County Cash Disbursement Account 55,918.34 Transfer PNC Bank 48,875.85 Transfer Washington County Retirement Account 730,023.82 Total January 2019 Distributions $ 869.350.94 Old Business None. New Business Mr. Maggi noted for the record an agreement with Daniel Svidro to purchase prior service time credit dated from October 6, 1980 to September 16, 1982, in the amount of $1,721.40. Mr. Maggi entertained a motion for the approval of the 2019 Washington County Retirement Fund Budget. The motion to approve was made by Mr. Namie and seconded by Mr. Shober. No discussion followed. Roll call vote taken: Mr. Namie — yes; Mr. King — yes; Mr. Shober — yes; Mrs. Vaughan — yes; Mr. Maggi — yes. Motion passed unanimously. Mr. Maggi entertained a motion for the purchase of Employee Benefit Statements from Korn Ferry Hay Group at a cost of $1.85 per statement for a total approximate cost of $1,605.80. The cost per 62 MINUTE BOOK RETIREMENT BOARD IMR I IMITFII FlAWQ90I n WASHINGTON COUNTY, PENNSYLANIA statement remains unchanged from 2018. The motion to approve was made by Mr. Namie and seconded by Mrs. Vaughan. No discussion followed. Roll call vote taken: Mr. Namie — yes; Mr. King — yes; Mr. Shober — yes; Mrs. Vaughan — yes; Mr. Maggi — yes. Motion passed unanimously. Mr. Maggi entertained a motion to discuss a cost of living adjustment for retirees. No motion was made. Presentations Portfolio Presentation — Lee Martin, Ph.D. — Marauette Associates Mr. Martin began with an update on Marquette Associates stating that the ownership remains stable with no plans to buy, sell, or merge with other firms. Since the firm started in 1986, no consultants have left the company. Of the 19 owners, Mr. Martin himself included, all have similar allocations of stock ownership in the company so that no one group or individual has control. Discussing market environment, GDP fell to 2.5% in the 4th quarter of 2018. The economy was still fairly strong however, with low unemployment and upward wage growth. The Fed raised interest rates in December, but futures indicate that the next move will more than likely be downward. Most of the indices were down with the exception of private real estate. Equities were down about 14%, bonds were at 0%, but private real estate was up about 7.5%. Commodities were down, mostly due to energy and a 26% sell-off in the 4th quarter. The one positive with the market sell-off was that stocks became cheaper. Because of rebalancing though, the County's portfolio gained back in the Pt quarter of 2019 most of what it lost in the 4th quarter of 2018. The County's portfolio finished the 4th quarter at $156 million, down $13 million but still ahead of benchmark by 25 basis points. In the Pt quarter of 2019 so far, the portfolio has gained back $10 million. The value tilt worked well as did the portfolio's more defensive positioned equities. What didn't work as well were the more aggressive holdings and fixed income. For the year, the portfolio was down 4.3% and like most pension plans, averaged below the assumed rate of return. Because the market value is higher than the actuarial value however, the County has some cushion. Over the past 7 years, return has averaged 8.2%, well above the assumed rate of return. Highlighting performance for the 4th quarter, Twin Capital came in 300 basis points ahead, Wellington came in slightly behind benchmark, GWK outperformed by 1.5%, Acadian was ahead 300 basis points, American Funds was on benchmark, Dodge & Cox was behind benchmark, Parametric was down 8.1 % but 500 basis points ahead of benchmark, and both fixed income managers lagged. The more defensive -type managers performed well in the 4th quarter; the opposite has been true so far in the Pt quarter of 2019. Mr. Namie asked Mr. Martin to spend a few minutes discussing cash management. There are times during the year that employee and County contributions do not cover what is paid out of the fund. 63 1 1 1 RETIREMENT BOARD IMR LINAITFn RR079991 n MINUTE BOOK WASHINGTON COUNTY, PENNSYLANIA In order to meet obligations and not have to sell at a less than ideal time, a cash management strategy is beneficial. Mr. Martin suggested adding bond ladders to the portfolio, timing the maturity of the bonds to coincide with the timing of the larger expected payouts. These payouts typically occur in the 41h quarter of each year and into the l st quarter of the following year. Mr. Martin concluded his presentation with a brief discussion of the OPEB portfolio stating that the fund finished the year at $16.5 million, down about 8.1 % with a loss of about $1.5 million, but still about 70 basis points ahead for the year. Approximately $1 million has been gained back so far in the 1 st quarter of 2019. By motion of Mr. Namie and seconded by Mr. Shober, the meeting was adjourned at 11:21 a.m. THE FOREGOING MINUTES SUBMITTED FOR APPROVAL: 1,411% < 4;, ATTEST: { . L. ,2019