Volunteer Firefighter Relief Fund Committee

City of Norwich Volunteer Firefighters’ Relief Fund Committee Minutes Special Investment Meeting On Tuesday, April 4, 2006, the Volunteer Firefighters’ Relief Fund Committee held a special investment meeting to discuss Fund investment options. 1. Attendees: Members present were: Richard Benoit, Taftville Thomas Quinley, Yantic Thomas Dawkins, Personnel Manager Joseph Kochanski, Laurel Hill Karen Mankowski, Occum Joshua Pothier, Deputy Comptroller Joseph Ruffo, Comptroller/Treasurer Donald Leary, East Great Plain Councilman John Crooks, guest Members absent were: Robert Zarnestke, City Manager Dennis Davis, City Pension Board Member Red McKeon, Occum/Past Chairman Meeting called to order by Richard Benoit at 1708. 2. Councilman Crooks introduced the invited investment firms’ representatives: a. Bruce Sabourin, a local advisor, from North Pointe Investment Partners b. Manly K. Church and James A. Noonan from Merrill Lynch. c. Mr. Crooks noted the purpose for hiring an investment consultant/advisor is for him/her to gather information, evaluate risks and options and make specific recommendations to meet the needs of the client. 3. Bruce Sabourin of North Pointe presented first: a. Question Period: i. Investment Policy Statement should be drafted, defining the goals and parameters of the investment plan. ii. Looking for investments to outpace inflation, which Certificates of Deposit (CDs) are not currently doing. iii. Options: (a) Mutual Funds, stocks, bonds, ETF’s (Electronic Trading Funds) (b) U.S. Treasury Agent/U.S. Labor Representative, employed by North Pointe to make investment recommendations  (c) Professional money managers used to tailor the investment portfolio. (d) Returns are second to managing investment risk. iv. Monthly meetings are suggested to monitor progress. v. Currently, no other Connecticut Municipality Pensions are being managed by North Pointe. However, North Pointe manages some Pension Plans in Massachusetts Hospitals. vi. Management fees are based on performance, stability, and money manager fees. vii. How many accounts of the Relief Fund’s size do you (Mr. Sabourin) currently manage? Approximately 20 accounts. (a) Corporate: 3-10% (b) Individual: 7-11% (c) Conservative to more aggressive viii. Office staff: 4; Mr. Sabourin lives in Griswold and has been in the business for 12 years. Asked to submit resume and background/training information. ix. Recommended investment mix to achieve a 7.5% investment return rate: 65% equity and 35-40% bonds and CDs Mr. Sabourin’s presentation ended at 1740 hours. 4. Mr. Church and Mr. Noonan of Merrill Lynch’s New London, Connecticut office presented next. a. Currently handle $225 million asset accounts. i. most are private/personal accounts ii. Some are pension accounts. b. Handling of the Relief Fund account cannot be “cookie cutter”/generalized in manner. i. Merrill Lynch does not use favorites, all institutions are available to the client. ii. Provide quarterly and semi-annual updates c. Local client: North Stonington Fire and Town. d. Merrill Lynch – big students of the market, provides more hands on management of funds/investments. e. What stage are we (the Committee) in the process? CDs terms are currently less than 3 years. f. The Relief Fund’s current actuarial needs: 4.5%. Looking for an investment plan to meet/exceed current needs with the least amount of risk. i. Need to determine the least risk combination for “whatever the case may be”. ii. Portfolio allocation should be adjustable to match market swings and adjustments.  iii. Better return with risk minimization, investment strategies blending. g. Need a defined Policy Statement to guide investment management. i. Back-up investment plan needs to address Policy Statement. h. Mr. Church and Mr. Noonan have not had any recent account terminations. i. Account fees range from flat low fee of $300.00 for annual CDs, to 0.5 – 1% for $1million accounts. j. Target return of 7.5% with 30 year horizon: i. 1/3 from assets performed at 7.5% historically. ii. 2/3 from income: 40% from equities and 20% from corporate bonds. 5. Questions: 1. On scale of 1-10, rate the following: a. What is your interest level for working with us? 10 b. Why? The opportunity provides Merrill Lynch with establishing a strong working relationship with the Relief Fund to meet its actuarial needs. (Mr. Church feels that this account size is perfect for their expertise.) 2. What was your best and worst performance for 2005? Best performer had a 55% return rate and the worst had a -3% return rate. Presentation completed at 1838 hours. 6. Recommendation made to set up the next special investment meeting based on Councilman Crook’s input. Motion made to adjourn by Thomas Quinley, seconded by Donald Leary. Approved. Meeting adjourned at 1855 hours. Respectfully Submitted, Thomas Quinley May 8, 2006