Volunteer Firefighter Relief Fund Committee

City of Norwich Volunteer Firefighters’ Relief Fund Committee Minutes Meeting 119 December 13, 2010 The Volunteer Firefighters’ Relief Fund Committee held its 119th meeting on Monday, December 13, 2010, at 5:00 p.m. in room 209, City Hall, Norwich, Connecticut. 1. Roll Call Members present were: Richard Benoit, Taftville Karen Mankowski, Occum Joshua Pothier, Assistant Comptroller Red McKeon, Occum/Past Chairman Joseph Kochanski, Laurel Hill Brian Curtin, City Treasurer Frank Davis, Citizen Appointee Donald Leary, East Great Plain Members absent were: Joseph Ruffo, Comptroller Brigid Marks, City of Norwich Personnel Manager Thomas Quinley, Yantic Richard Benoit called the meeting to order at 5 p.m. 2. Minutes: Meeting minutes from the last meeting - review tabled to next meeting. Richard Benoit stated that Art Meizner from Hooker & Holcombe was here to update the Committee on the status of the Relief Fund. No objections noted, floor given to Mr. Meizner. 1. Over all Relief Fund is doing well. 2. Third quarter report 2010. (1) Page 3: shows where the market ended. We are pretty much where we thought the market would be. Should be hitting our mark. Large cap stocks did well. (2) Page 4: snapshot as of September 30. Red line shows a comparison between S&P and Bonds. Stocks are doing better than bonds. (3) Page 5: When the government is split between Democrats and Republicans, we have a better market situation. (4) Page 6: After midterm election, the market is doing better. Average return 15%. Historically, never have had a bad 200 days after midterm elections since 1942. (5) Page 7: show that there is a lot of corporate cash available. Indicates that corporations will be hiring and expanding. Federal Government keeping money available to banks to loan. (6) Page 8: outflows and inflows – money going into stock funds and going out of bond funds. Pension plans are doing ok – holding steady and getting money back.  (7) Page 9: slanted demographics. Older populations, not buying and consuming as the same as younger populations. (8) Page 11: snapshot of where things are. As of last Friday, S&P up 13.4%, higher than what was estimated. Hoping not to see tax loss harvesting – short term selling. Not likely to happen because more stocks in the black and not the red. (9) Page 14: still at 50/50 split, with approximately 2% in commodities. Commodities are good inflation hedge – need for natural resources for infrastructures always in demand. (10) Page 15: performance – doesn’t consider timing of money coming in/out of plan. Gives a better idea of how the plan is doing. (a) For the quarter, the portfolio was up 8%. YTD 5.95%; 1Y 9.46%; since inception -1.27%. The portfolio for the year, as of 12-10-10, is up 10.5%. (11) Page 20: the Blend – based on the winnings and returns; shows how the funds did collectively. Small blend – 21st percentile at 12.34. FARD – 45 percentile at 16.42 for three (3) months. Emerging Markets was the clear winner at 24th percentile. PIMCO – 14.39 (absolute return number). So far, so good. (12) Page 21: bond funds – collectively one was in the 56th percentile and the other in the 18th percentile. The strategic bond fund has more corporate than government bonds, taking advantage of the better return. Short duration (term) – 1.81%. We have 8% in World Bonds take advantage or suffer based on the US dollar. (13) Page 22: quarter to date (as of 12-10-10). (a) Large Cap Funds went from 6th to 21st percentile. In last 2.5 months, those funds did approximately 10%. Do not expect these to be sustained. (b) The Russell was in the 23rd percentile with a 15.49 for same period and YTD up 25%. The Russell fund has about 10 managers, always in the middle of the road. (c) International Equity, strong performer up almost 6%. (d) Emerging Markets up almost 4% (e) Commodity Fund, suffered a little due to the bonds it holds as collateral, but still up 7.78%. (f) Bonds – in the negative. (i) Intermediate down 1.31% (ii) Short Term down - 0.47% (iii)Going to see less good and less bad. (g) Thinking of moving bonds around – projecting a rough year ahead for the current bond funds. Looking at floating rate bond fund and treasurer inflation protected bonds. (h) World bonds went down more as a direct result of the dollar strength. If the dollar strengthens on its own and not due to a hiccup in Europe – may need to move some money out of World bonds to another fund. (14) QTD overall the Funds are up 3.71%; YTD 10.4% - similar to what the Relief Fund Portfolio experienced. (15) Not recommending any changes currently. Need to look at the bonds, reducing exposure and risk. There is absolutely nothing wrong with the portfolio. Next meeting February 14, 2011; Mr. Meizner will come to report on the portfolio. Meeting returned to the regular business. 3. Treasurer Report: Josh Pothier reported on the Treasurer’s Report. The annual transfer of the City allocation of $250,000.00 was deposited to the Fund and the transfer of $68,000 to Hooker & Holcombe that was approved at the August 2, 2010 meeting. Also, the pensions paid and the actuarial bills that were paid. Motion made to accept the Treasurer’s report as presented by Donald Leary, seconded by Frank Davis. Approved. 4. Old Business: a. Review of the Relief Fund Plan: Final copy sent to City Council for review. 1. Page 11, Section 6.2 – one of the Council members had a question relating to the language in that section. One Council member thought that there could be a problem with the wording relating to the death benefits. Replaced the listing of heirs with the “member’s estate”. (1) The Council member worried that the benefit would not go to the designated beneficiary but to the estate, where the creditors are paid first. (2) Mr. Benoit explained to the Council member that this only comes into play when the primary beneficiary is not available for payment. The benefits would continue to be paid to the spouse as directed by the Plan. (3) The clause only comes into play when a member dies before collecting any benefits, when a member starts to collect but does die before collecting what he/she has put in with interest or when a member does not leave a spouse/designated beneficiary who is living. Does not affect those members who have collected beyond what they have contributed. (4) This language is same as other plans. It is the member’s responsibility to change beneficiary, not the Plan’s to decide who the beneficiary is. (5) The Council member thought that the money came from the City. Now understands that the money comes from the Relief Fund. (6) Question as to when the Revision will be voted on – whether it will be done in December due to when the public hearing is completed. Mr. Benoit will check on when that will be done and let the Relief Fund Committee members know. 5. New Business: a. New Forms: Josh Pothier reviewed the new forms for tax abatement. Fill in yellow areas. Calls and drills – automatically computes the percentages. (1) First page needs to be signed by the Company Chief, notarized and turned into the Assessor’s Office. (2) The second page is for the Finance and Treasurer’s Office. Replaces the Certification of Service form for the Relief Fund. (3) Please review and use for this 2010. Any comments let Josh know, so it can be revised. This will not be sent electronically, has to be delivered manually. Do not need SSN only dates of birth.  (4) Josh Pothier will adjust the formulas in the spreadsheet to be in accordance with the Relief Fund Ordinance changes. b. City Clerk needs the schedule for 2011 meetings. c. Tax Abatement Ordinance 1437 – the call and drill requirements will be different from the Relief Fund when the changes are adopted. This may be for a year until the Tax Abatement Ordinance can be reviewed and updated. Should be done for 2012. (1) May need to reword the ordinance so that it evolves in accordance with the Relief Fund. d. Question regarding drills – number of drills versus hours of drills? How to determine hours versus actual drill numbers. e. Mr. Benoit suggested that the Committee table the review of the other new forms Mr. Pothier sent out to Committee members until January. A motion was made by Donald Leary, seconded by Karen Mankowski. Approved. f. Karen Mankowski brought before the Committee a question regarding Rudy Beauregard of Occum. 1. He has made all his percentages, participates in the tax abatement, but has not contributed due to financial difficulty. Should he have gotten a raise back in 2005? He has been an active member and has been receiving benefits since 2003 at age 55. He has not contributed to the Fund since 2003 due to the loss of employment. There was a raise in 2005 – did he have to be an active and contributing member to the Fund or just an active member to receive the raise? Confusion on what is classified an “active member” – active as far as the Fire Department (meeting calls and drills) or active (contributing) to the Fund? (1) Mr. Benoit states that he would have had to been a contributing member in the Plan. If he could buy-back those years, then he would get the raise. Josh would have to figure out what that would cost. Would he have to buy back the missing years if he bought back this year? Consensus is that he would have to buy-back the missing year to receive the raise. (2) Mr. Leary pointed out that Section 5.2 talks about continued service of retired members – “any changes to the benefits available under this plan will become available to such member who provides volunteer service as defined in section 1.21 subsequent to his/her benefit date.” Section 1.21 defines “active member” as one who makes 20% emergency calls and 20% or a minimum of 20 hours of drills. It does not state anything of making contributions to meet the active member requirement. Mr. Kochanski feels that he is qualified to the raise, even if he is not buying into the Plan. (a) Mr. Benoit feels that Section 2.2 covers the argument that the member should be actively contributing to the Plan to receive any increase in benefits.  (b) Mr. Benoit states that this discussion should be continued at the next meeting. Motion made to table this discussion until the next meeting by Donald Leary, seconded by Frank Davis. Approved. Motion made to adjourn by Frank Davis and seconded by Donald Leary. Approved. Meeting adjourned. Respectfully Submitted, Thomas G Quinley, Secretary