Firefighters' Pension Board

Edwardsville Firefighters Pension Board 410 North Main Street Edwardsville, Illinois 62025 618-692-7541 618-692-7567 Fax Regular Pension Board Meeting – January 26, 2016 Attendance Board members: James Whiteford, Dennis McCracken, Cole Schrage, Rich Hampton, and James Anderson Guests: Jeremy Paschall, Craig Larsen Meeting Called to Order Whiteford called the meeting to order at 0905 Approval of Minutes Motion to approve the minutes by Anderson, Schrage provided the 2nd. Whiteford called for a vote. All members voted “aye”. The motion passed. Public Comment None Communications and Bills IDOI Final report was received and presented to the board. The board has already replied and made most of the corrections indicated in the report. Treasurer’s report Hampton presented that 95% of real estate taxes have been received. The tax sale is in May, therefore not be much income will be received until then. The city council approved a levy of $711,244 (a 5% increase over the previous year), which is above the statutory minimum but below the recommended. The tax rate is expected to stay steady. The finance committee and the mayor were very firm in making sure not the pension funds were paid. Anderson made a motion to accept the treasurer’s report. Schrage provided the 2nd. Whiteford called for a vote. All members voted “aye”. McCracken presented that the Gateway Commerce tax pass through is expect at the end of January. The North Main pass through is expected after May. Old business Signature card updates – BMO Harris, PNC signature cards were updated. New Business Updated investment policy – Larsen presented that his company made some grammatical changes and added some explanatory sections specifically Investment Philosophy and Rebalancing Policy. No fundamental changes were suggested. Copies were then sent to PNC and AHC Advisors for their signature. A copy is sent to the IDOI as well. Appendix A is also to be attached. Anderson found additional grammatical errors. Larsen stated he would make the corrections. Motion to accept the policy with Larsen’s personal assurance that the corrections will be made and returned to the board by Hampton. Second provided by Anderson. Whiteford called for a roll call vote: Whiteford – aye; Anderson – aye; Shrage – aye; Hampton – aye; McCracken – aye. The motion passed. Application for membership for two new hires – In an effort streamline accounting for the city Whiteford made a motion to accept the applications for pension membership from Chad Lankford and Justin Siekmann before their start date. Hampton provided the second. Whiteford presented that the first new hire, Chad Lankford, is a current paramedic and volunteer fire fighter for Bethalto. Whiteford then presented that Justin Siekmann is a paramedic and volunteer fire fighter in the Peoria area. Whiteford then called for a roll call vote: Whiteford – aye; Anderson – aye; Shrage – aye; Hampton – aye; McCracken – aye. The motion passed. Fund Investment Report and Actions Larsen presented that he has no recommended investment actions. The fund should have enough cash to function through May. The fund balance was $11,816,100 at the end of December 2015. Bonds were down and stocks were up for the quarter. However bonds were slightly up for the year and stocks were down 4.05%. Looking at the 5-year bond they have been holding low because interest rates have been so low. Mutual fund performance for the year has been poor with the index fund, International small and real estate being the only positive returns. The Fed raised rates in December Larsen believes to save credibility. The Fed has been saying they are going to raise rates for so long they had to. The Fed raised the overnight rate, the shortest of rates. Longer-term rates are now lower than before the Fed raised the rate. Mortgage rates are more closely related to the 10-year rate than the rate that the Fed raised. Larsen mentioned that the news services have been making a big deal out of The Fed raising rates and linking them to rates that the ordinary consumer is affected by like mortgage rates. The lesson is to research the actual information rather than rely on sensational advertising and news sources. Hampton left at 1005 The news concentrates on the unemployment rate but a more accurate measure of the job sector is the Civilian Labor Force Participation Rate. This number is the actual number of people working. The most recent number is 81% meaning there are 19% of Americans not working even though the unemployment rate has gone down or stayed steady. Normally a decrease in the number of working people would cause the Fed to lower rates, but the rates were already so low there was no way to go lower. The Fed needed to normalize and get off of zero, so they raised rates to get to a place they would work from. Larsen says the Fed raising rates also caused the China market to sell off. We also started selling off with China. China sold off due to concerns about global currency rates. Currency is the global market product. The US is the only country raising rates while everyone else is lowering rates. This makes it difficult to sell US products over seas. Energy prices are going down due to the global growth slow down causing less of a demand. Going forward about oil, no one knows. The top predictors did not even come close to predicting the lowering of prices. Oil production is the perfect example of supply and demand. Adjournment Motion to adjourn made by Shrage. Second made by Whiteford. Whiteford called for a vote. All members voted “aye”. The motion passed. The meeting ended at 1055 _________________________________________ Respectfully submitted by Jeremy Paschall Assistant to the Secretary