Owosso Employee's Retirement System Minutes

September 16, 2004 - 8:00am

PRESENT:       TRUSTEES WILLIAM BLANCHETT, JOHN C.M. DAVIS, FRANCES KUKULIS, MARK MITCHELL, LINDA ROBERTSON, AND JAMES TREADWAY.

ABSENT:         NONE.

Also in attendance:        Paul K. Hood; City Attorney William C. Brown; City Manager Gregg G. Guetschow; Ronald Tobey, City Treasurer; Marie Vanerian, Merrill Lynch representative; William Horton; Stanley Jelinek; and Jacqueline Newell.

CALL MEETING TO ORDER

Paul K. Hood called the meeting to order at 8:07 a.m.

RESIGNATION – PAUL K. HOOD

There was discussion regarding the vacancy created by the resignation of Mr. Hood.  Mayor Davis commented that he anticipates making an appointment to fill the vacancy at the October 4, 2004 council meeting.

Motion by Trustee Davis set an organizational meeting for Thursday, October 14, 2004 at 8 a.m.

Motion supported by Trustee Treadway and concurred in by unanimous vote.

APPROVE MINUTES OF JUNE 17, 2004 REGULAR MEETING

Motion by Trustee Kukulis to approve the minutes of the June 17, 2004 Employees Retirement System Board meeting as presented.

Motion supported by Trustee Blanchett and concurred in by unanimous vote.

APPROVE PENSION CHECK REPORTS

Motion by Trustee Treadway to approve the following Pension Check Reports:

·        June, 2004                                      $84,520.78

·        July, 2004                                       $92,927.09

·        August, 2004                                   $88,248.23

Motion supported by Trustee Mitchell and concurred in by unanimous vote.

APPROVE STATEMENTS

Motion by Trustee Kukulis to approve the following statements:

·        Chemical Bank and Trust Company

          June-August, 2004

·        Fifth Third Bank

                   June-August, 2004

·        Tom Johnson Investment Management, Inc.

           Period ending 06/30/04

·        City of Owosso Employees Retirement Fund

      June-August, 2004

Motion supported by Trustee Mitchell and concurred in by unanimous vote.

PAYMENT AUTHORIZATIONS

Motion by Trustee Robertson to authorize the following payments:

·        Merrill Lynch

      2003 Consulting Services                                               $1,501.85

·        Chemical Bank and Trust Company

      Administrative Fees

      For Period 06/01/04 through 08/31/04                             $7,762.54

·        Fifth Third Bank

Administrative Fees

For Period 04/01/04 through 06/30/04                             $6,551.22

·        Tom Johnson Investment Management, Inc.

            Management Fee

            For Period 04/01/04 through 06/30/04                             $9,085.60

Motion supported by Trustee Blanchett and concurred in by unanimous vote.

COMMUNICATIONS

The following communications were received for file:

·        Ronald J. Tobey, City Treasurer – Report of Checks Written

·        Ronald J. Tobey, City Treasurer – Arbogast/Cecil Transfer to MERS – Update

·        Gail L. Schultz, City Clerk – New Member Term Update

·        Merrill Lynch – Transfer of Cash/Security Notification

·        Merrill Lynch - Trade Confirmation

·        The Bank of New York Trust Company, N.A. – Fifth Third Bank as provider of Trustee Services

The following publications and conference announcements are on file with the City Clerk – if you would like to read them, please contact her:

·        Gabriel, Roeder, Smith & Company- June 2004 News Scan

·        Lerach Coughlin Stoia & Robbins, LLP – Corporate Governance Bulletin

·        MAPERS Fall Conference Announcement

·        Merrill Lynch, Investment Managers – July 27, 2004 Prospectus

·        Miscellaneous Conference Announcements

·        MAPERS Pension Scope – Summer 2004

NEW BUSINESS

Motion by Trustee Kukulis to add discussion related to the retirement system ordinance amendment and rules of procedure for the municipal employees retirement system board.  Trustee Kukulis outlined the proposed changes to the ordinance and for rules of procedure.

Motion failed for lack of support.

Trustee Davis left the meeting at 8:26 a.m.

Motion by Trustee Robertson to tabled consideration of proposed ordinance amendments to the October 14, 2004 Organizational Meeting.

Motion supported by Trustee Blanchett and concurred in by unanimous vote.

Trustee Kukulis outlined proposed rules of procedures.  She asked the Trustees to review her proposal and bring suggestions to the Organizational Meeting.  She also asked for consideration of the board meeting dates.  She commented that she had received numerous comments regarding that the board meetings are not held often enough.  She proposed meeting every other month.

Former Trustee Jelinek commented regarding his attendance at a treasurer’s meeting and his realization of the responsibility of the Pension Board.  He commented that he supported Ms. Kukulis’ proposals.

Marie Vanerian commented regarding the training and education opportunities through the MAPERS conferences.

City Manager Gregg Guetschow commented regarding activities of the Board and the processes that are in place to make sure that things are getting done.  He commented that he is concerned to hear that employees have concerns about Pension Board activities.  He doesn’t feel that adding two meetings will benefit the board.

City Attorney William Brown suggests the Board adopt Robert’s Rules of Order when not in conflict with rules adopted by the Board.

APPLICATION FOR RETIREMENT:  RICHARD L. GRANGER

Motion by Trustee Robertson to approve the Application for Retirement submitted by Richard L. Granger for an effective date of January 5, 2005.

Motion supported by Trustee Blanchett and concurred in by unanimous vote.

APPLICATION FOR RETIREMENT:  KENNETH V. NIXON (disability to regular – same straight-life option)

Motion by Trustee Kukulis to confirm the continuation of the straight life option retirement of Kenneth V. Nixon (disability retirement to regular retirement at age 65).

Motion supported by Trustee Mitchell and concurred in by unanimous vote.

CONSULTING FEE QUOTE FOR EXPERIENCE STUDY FOR EMPLOYEES RETIREMENT SYSTEM

Motion by Trustee Kukulis to authorize Gabriel, Roeder, Smith & Company to perform an Experience Study for the Employees Retirement System for an amount not to exceed $8,000.00.

Motion supported by Trustee Robertson and concurred in by unanimous vote.

SYSTEM COMPLIANCE WITH IRS REGULATIONS

City Manager Gregg Guetschow commented regarding the reason for having a review and then having legal counsel advise on the necessary changes.

Motion by Trustee Kukulis to authorize up to $1,000.00 to secure a determination of areas in City of Owosso Employees Retirement System that are questionable in meeting compliance with the IRS regulations and to review in future if additional funding is needed.

Motion supported by Trustee Robertson and concurred in by unanimous vote.

AUTHORIZED SIGNATORIES

Motion by Trustee Robertson to approve the following signatories for persons authorized to act on behalf of the City of Owosso Employees Retirement System for the purpose of executing agreements and further require that each document have two signatures:  Board Chairperson, City Manager, City Treasurer, and Finance Director.

Motion supported by Trustee Kukulis and concurred in by unanimous vote.

INVESTMENT MANAGERS REPORT

Merrill-Lynch:  Second Quarter 2004 Executive Summary Report

Marie Vanerian, representative from Merrill-Lynch, addressed the Board regarding the second quarter summary.

Ms. Vanerian suggested adopting a “domestic master intermediate” benchmark that would allow managers to have a more diverse ability to decide which market/funds to get into.  She distributed proposed policy changes and suggested spending time at the next regular meeting to review investment policy and proposed changes.

She reported the following:

Total Portfolio Performance Summary for Period Ending 06/30/2004

City Attorney William Brown asked Ms. Vanerian to explain to the new members the way that the different managers operate their part of our funds.

There was discussion regarding exploring different ways of handling the monies.  Trustee Robertson questioned why the money is split with Fifth Third Bank having 50%.  She asked if it shouldn’t it be more equitable with 1/3 for each manager.

Trustee Kukulis questioned Ms. Vanerian on the status of the done-away fees.  Ms. Vanerian commented that it will be on statement when done-away fees were done.  Ms. Vanerian commented regarding recent communication with Kristi Tice.  She commented that she felt that Ms. Vice is acting in violation of the Public Act. 

There was Board discussion regarding the activities of Ms. Tice.  City Manager Guetschow and City Finance Director Richard Williams will meet with Brian Lee, Fifth Third Bank representative, regarding the issue as to why they are not doing what the Board directed to them to do.  Trustee Robertson asked for feedback at the October 14^th meeting and for discussion at the December 16^th meeting. 

Ms. Vanerian will redo the international and adjust small cap amount.

SET NEXT BOARD MEETING:  December 16, 2004

Motion by Trustee Kukulis to set the next regular board meeting for Thursday, December 16, 2004 at 8 a.m.

Motion supported by Trustee Blanchett and concurred in by unanimous vote.

ADJOURNMENT

Motion by Trustee Robertson to adjourn the meeting at 10:24 a.m.  Motion supported by Paul K. Hood and concurred in by unanimous vote.

                                                                                                                                                                                                                        __________________________________________________                                                            Gail L. Schultz, Owosso City Clerk