Owosso Employee's Retirement System Minutes
April 21, 2005 - 8:00am
City Council Chambers
PRESENT: CHAIRPERSON LINDA ROBERTSON, TRUSTEES
WILLIAM BLANCHETT, JOHN C.M. DAVIS, WILFRED A. FARRELL, FRANCES KUKULIS,
MARK MITCHELL, AND JAMES TREADWAY.
ABSENT:
NONE.
ALSO PRESENT: Marie
Vanerian, Merrill-Lynch; Jim Koss, Gabriel, Roeder and Smith; City
Attorney William C. Brown, and City Treasurer Ronald Tobey.
CALL TO ORDER
Chairperson Robertson called the meeting to order
at 8:00 a.m.
APPROVE AGENDA
Motion by Trustee Kukulis to approve the agenda as
presented.
Motion supported by Trustee Blanchett and concurred
in by unanimous vote.
APPROVE MINUTES OF FEBRUARY 17, 2005 REGULAR
MEETING
Motion by Trustee Farrell to approve the February
17, 2005 Regular Meeting minutes as presented with the following
correction: Discussion: Consideration of time limit on
presentations. Motion by Trustee Farrell to limit regular
presentations to the Board to fifteen (15) minutes but under
special circumstances additional time can be allowed by the Board.
Motion supported by Trustee Treadway and concurred
in by unanimous vote.
APPROVE PENSION CHECK REPORTS
Motion by Trustee Davis to approve the Pension
Check Reports as follows:
1.
February, 2005 $97,096.42
2.
March, 2005
$92,740.68
Motion supported by Trustee Kukulis and concurred
in by unanimous vote.
APPROVE STATEMENTS:
Motion by Trustee Treadway to approve the
Statements as follows;
- Chemical Bank and Trust Company
February and March, 2005
- Fifth Third Bank
February and March, 2005
- City of Owosso Employees Retirement Fund
February and March, 2005
Motion supported by Trustee Blanchett and concurred
in by unanimous vote.
PAYMENT AUTHORIZATIONS:
Motion by Trustee Farrell to authorize the
following payments:
- Chemical Bank and Trust Company
Administrative Fees
For Period 12/01/04 through 02/28/05
$7,967.54
- City of Owosso
2003-2004 Audit
Costs $4,640.00
Motion supported by Trustee Kukulis and concurred
in by unanimous vote.
COMMUNICATIONS:
The following communications were received and
placed on file:
Ronald J. Tobey, City
Treasurer: Report of Checks Written – February
and March, 2005
Calamos Investments:
Resume of services.
Interfaith Center on
Corporate Responsibility: 2005 Pharmaceutical Industry Shareholder
Resolutions.
PlanSponsor: February
and March, 2005.
Miscellaneous Conference
Announcements
OLD BUSINESS:
Expense Account Detail Report. Ronald J.
Tobey, City Treasurer
There was Board discussion related to the reasoning
as to why the City has not been reimbursing the Pension Fund for
expenses. Discussion included comments on loss of interest on funds.
Trustee Davis recommended meeting with Finance Director Richard
Williams. Trustee Kukulis suggested that Richard Williams attend the
next meeting to explain why the reimbursements had not been made. City
Clerk Gail Schultz will contact Mr. Williams to have him attend the next
meeting.
Done Away Fees Resolution Report: – Marie
Vanerian, Merrill Lynch, and Brian Lee, Fifth third Bank
Ms. Vanerian reported that she had contacted Fifth
Third Bank for information. After repeated attempts, Fifth Third has
not responded with an answer. She reported that it has to go to their
compliance division. Ms. Vanerian stated that “it will be resolved by
the June meeting”.
Discussion: Benefits Statement Form
There was Board discussion regarding the Benefit
Statement Form examples submitted by Gabriel, Roeder, Smith and
Company. There was discussion regarding costs and whether they are
annual costs or a one time costs. Trustee Kukulis commented that she
felt that if it was affordable that it was a good thing. Jim Koss,
representative from Gabriel, Roeder, Smith and Company, will check on
costs. Trustee Kukulis asked if this was a city reimbursable expense.
City Treasurer Ronald Tobey commented that he felt that this would
qualify for reimbursement.
Trustee Mitchell commented that City Treasurer
Ronald Tobey is always available for information and it is not an
additional cost to the system or the city. Discussion continued
regarding benefit and related costs.
Motion by Trustee Mitchell to take no action at
this time.
Motion supported by Trustee Blanchett and concurred
in by unanimous vote.
NEW BUSINESS:
Gabriel, Roeder, Smith & Company –
Presentation of 2004 Annual Report
Jim Koss, representative from Gabriel, Roeder,
Smith and Company, asked for a time extension if needed. The Board
granted a time extension if needed. Mr. Koss explained what the
actuarial service is.
He reported that in the long-term, the city may
have to make contributions. There was Board discussion regarding at
what point we consider looking at funding above contributions; the pros
and cons of defined contribution plans, and the Board still having
fiduciary liability.
Motion by Trustee Kukulis to accept the 2004
Actuarial Report as submitted by Gabriel, Roeder, Smith and Company.
Motion supported by Trustee Treadway and concurred
in by unanimous vote.
Discussion: Investment Policy Update Proposal
Ms. Vanerian addressed the Board regarding proposed
changes to the investment policy. City Attorney William Brown commented
on need for outlining responsibility for class action suits (proxy
voting) and rebalancing concerns.
Trustee Kukulis asked that City Treasurer Tobey and
Finance Director Williams review the proposed policy. Ms. Vanerian is
to create a chronological index of changes to policy. Trustee Kukulis
asked City Attorney Brown for his input on his concerns and recommended
discussing this matter at the June meeting. Trustee Farrell commented
that he feels rebalancing is necessary. City Attorney Brown commented
about reticent managers putting the responsibility back on the Board.
Trustee Davis left the meeting at 9:37 a.m.
Ms. Vanerian will ask the Investment Managers to
review the proposed policy. City Clerk Schultz will provide copies to
City Treasurer Tobey and Finance Director Williams for their review and
response.
City Attorney Brown will review his concerns and
make comments/changes if necessary.
Merrill-Lynch: Alternatives to small cap and
international investments proposal.
This matter will be delayed until after review from
all investment managers.
INVESTMENT MANAGER REPORT:
Investment Manager Report – Kirk Fisher,
Chemical Bank and Trust Company
Kirk W. Fisher, Chemical Bank and Trust Company
Vice President and Trust Investment Officer, addressed the Board. He
commented on the Investment Objective. He said they use the top down
investment approach and our investment policy as their roadmap.
Mr. Fisher commented regarding the highlights of
economic and financial markets; equities are at the place to overweight;
rising interest rates make bonds look good; earnings growth is slowing
to 7%; and overall US economy is at a plateau, not seeing growth. Mr.
Fisher will send a report on a monthly basis.
He commented further regarding the listing of
investments. Trustee Farrell asked what “REC” means. Mr. Fisher said
that it is their recommended weighting.
He stated that he is glad that they have stuck to
their bond strategy.
Mr. Fisher expressed his concerns about General
Motors and Ford companies stock dropping to “junk” status. He said he
will notify us if that happens.
City Attorney Brown left the meeting at 9:55 a.m.
Ms. Vanerian commented regarding managers not
having to sell bonds if they fall below certain status.
Merrill-Lynch: First Quarter 2005 Executive
Summary Report – Preliminary
Ms. Vanerian provided a preliminary report. The
full report will be available for the June meeting. She reported that
we held our own during the first quarter.
Ms. Vanerian invited trustees and their guests to
the dinner at the MAPERS Conference.
Ms. Vanerian gave City Clerk Schultz a faxed copy
of the Tom Johnson Investment Management, Inc. report for the period
ending March 31, 2005. This report will be included on the agenda for
the June 16th meeting.
Ms. Vanerian reported that she will get the
Trustees information about trustee workshops at the upcoming MAPERS
conference.
NEXT BOARD MEETING: The next Board
Meeting is scheduled for Thursday, June 16, 2005 at 8 a.m.
ADJOURNMENT
Motion by Trustee Kukulis for adjournment at 10:01
a.m. Motion supported by Trustee Farrell and concurred in by unanimous
vote.
_____________________________________________
Gail L. Schultz, Owosso City Clerk
