Retirement Board

MINUTES OF INFORMAL GATHERING RETIREMENT BOARD MEETING Thursday, February 16, 2017 Dogwood Conference Room City Hall 6:00 p.m. 1. Call to Order: The meeting was called to order by Chair Connie Rydberg at 6:07 p.m. 2. Roll Call: Present: Connie Rydberg, Richard Campbell, Larry Little, Ryan Davis and Jason Widstrom Staff Present: Melissa Ryman and Meaghan DeCelle Also Present: Howard Pohl and Mary Nye, AndCo Consulting Brian Kahley and Andy Burkly, Franklin Templeton Institutional, LLC In the course of the meeting it was realized that this meeting had not been properly posted, so no action was taken and the meeting was adjourned. Only presentations were then made by Franklin Templeton Institutional, LLC and &Co Consulting. 3. Review and approval: November 17, 2016 draft minutes. Minutes were reviewed and an edit was proposed to remove Larry Little from the present list. Due to lack of quorum, the vote for approval was null. Minutes approval vote will take place at May 18, 2017 meeting. 4. Receipt of Petitions: None 5. Presentation: by Brian Kahley-Relationship Manager and Andy Burkly -Portfolio Manager for Franklin Templeton Institutional, LLC Brian began with an overview of the Franklin Templeton Institutional organization: FTI is an Investment manager and their global equity group manages the Basic’s and Police’s portfolio. The FTI philosophy is to take a consistent approach based on three principles of investing: value, patience, and bottom-up stock picking. They look for opportunities in “underdog stocks” and take a long-term focus on performance. Andy spoke of opportunities in different regions: Europe is a good place to be invested, those markets are underappreciated and strong; US is expensive for investing, could be overvalued. Financial sectors and banks are promising for investments since interest rates are rising. Energy stocks are attractively valued. Global equity valuations are reasonable; Europe and EM remain cheap and ripe with opportunity. 6. Fourth Quarter, 2016 Investment Performance for the Falls Church’s Basic and Police Pension Plans and OPEB by Howard Pohl and Mary Nye of AndCo. Bogdahn Group has been rebranded to AndCo. Market Commentary: Value stocks did well this quarter, growth did not; quality stocks did not do well and worst quality stocks did very well. Strengthening dollar was represented in the bond market. Return on bonds was about 2%. Domestic equities did well; small cap value index was up 20%, very good overall results for the year. Fund Commentary: Mary summarized the Fund specific cash flows, allocation and performance. From an allocation point of view, the Basic Plan is within target ranges. Individual managers are within range. The Police Plan showed fixed income being slightly out of range for last 3 quarters, Northern Trust in particular. Next quarter the board may want to look closely at Northern Trust intermediate fixed income. For the 4th quarter: the plans are ranking 60th in the universe. Long term performances look very good and competitive. Domestic equity and International equity managers dragged down performance a bit. Howard and Mary shared some concern about Summit Creek; next quarter, AndCo will officially suggest putting Summit Creek on the watch list as their last three quarters in 2016 have shown poor performance, mostly due to poor stock picking. AndCo will ask the Board to potentially discuss replacing them. Real estate: We will table discussion for next quarter when the meeting will be in quorum. We will be looking at potential candidates for a core and non-core or value-add real estate strategy. 7. Tabled for next meeting: Plan Administrator’s Report on the matter of consolidation of investments of funds held at the custodian, US Bank.—Melissa Ryman THIS LOCATION IS FULLY ACCESSIBLE TO PERSONS WITH PHYSICAL DISABILITIES. TRANSLATION SERVICES OR ASSISTANCE TO PERSONS WITH DISABILITIES MAY BE REQUESTED IN ADVANCE OF THE MEETING. CALL 703-248-5127 (711 TTY) FOR THE HEARING IMPAIRED.