Volunteer Firefighter Relief Fund Committee

City of Norwich Volunteer Firefighters’ Relief Fund Committee Minutes 122nd Meeting September 12, 2011 The Volunteer Firefighters’ Relief Fund Committee held its 122nd meeting on Monday, September 12, 2011 at 5:00 p.m. in room 209, City Hall, Norwich, Connecticut 1. Roll Call a. Members Present: Richard Benoit, Taftville Joshua Pothier, Assistant Comptroller Red McKeon, Occum/Past Chairman Joseph Kochanski, Laurel Hill Donald Leary, East Great Plain Frank Davis, Citizen Appointee Art Meizner, Hooker & Holcombe (guest) b. Members Absent: Joseph Ruffo, Comptroller Brian Curtin, City Treasurer Brigid Marks, City of Norwich Personnel Manager Thomas Quinley, Yantic Karen Mankowski, Occum Richard Benoit called the meeting to order at 5:05 p.m. Mr. Benoit called on Mr. Art Meizner to report on the Volunteer Firefighters’ Relief Fund Status. Art Meizner reported on the Funds 2nd Quarter status: • The market has been volatile this quarter, lots of changes. • The job market is depressed, doubtful that a job package will be passed in the current political climate. • The Federal Reserve Chairman stated this past Thursday that the government will not be intervening with inflation being in check – not looking at any stimulus package. The government will be spending over 450 billion dollars and that will be its stimulus to the economy. Very uncertain whether this package will be voted on and passed. • Stock market has fallen at least 6 times; we are seeing a steady downturn. • The S&P is frozen at approximately 2%. • NASDEC, smaller growth oriented stocks, had more of a downturn than in the previous weeks. • As of Friday, the market is thriving. o Large Growth outperformed Large Cap Value – a reverse of what was happening over the summer. o Financials continue to be the worst performing sector. o Staple (companies that make items that are used “everyday”) stocks continue to be solid performers. o There is some activity with bonds – rates at their level.  City of Norwich Volunteer Firefighters’ Relief Fund Committee Minutes 122nd Meeting September 12, 2011 o Mortgage rates at their lowest points last week. If the housing market was to turn around, that would help increase the mortgage rates. However, the job market needs to improve. o Consumer confidence is low. Mr. Meizner feels that Consumer Confidence will improve over the next few months. • Page 8 gives a recap of where the markets have been. o Dow Jones is still positive – 3% for the year. o The S&P and NASDEC are down 7% for the year. International is in the down double digits for returns for the year. o Fixed Income is still positive; the Fund has a large portion in Fixed Income so that kept the quarter from being a total bust. • Page 10: Portfolio Balances • Page 12: during the second quarter there was a large withdrawal, $92,000, and that had a timing impact on the portfolio. The timing was such that it helped the portfolio, it was up 1.44%, better than most other portfolios. o YTD June the portfolio is up 7.44%; one year ago up 17.88%; 3 year ago up 4.58%. • Fund Review: page 15. By-in-large the funds did as expected, when compared to the Morning Star category, the funds were pretty much up to the average, maybe even a little better. • Qualitative versus Quantitative Funds, our portfolio has both. One will always do better than the other and this time around the Quantitative Funds helped the portfolio. • US Russell Small Cap – the keep all money active, in a volatile market not a good time. In this case, the Small Cap did not give the Fund value. • International – we have the Foreign and the Global in the 59% - kept us in the middle, stable and that is what we wanted. • Emerging Markets off 0.85%, we did better than the averages and indexes. • Last quarter Commodities dropped 5%, with a 2% holding down; it still did better than its competitors. • Russell Investment Grade was in the 49% then it was up 2%. Because we have a large portion fixed, that kept the Fund from tanking. • The Short Duration front, smack in the middle of its peers. • The World Bond – the uncertainty in Europe could hurt but the dollar moved around 3% that is going to all over the place going forward, especially with the currency translation happening in Europe. If you look at the one year and three year returns, it has had better than typical returns. It has helped the Fund, up 6%. • The software takes a static look at all funds that we have allocated to it; this showed a return of 0.64%. The VFF Fund did over 1% for the same time period. • Been a rough summer, but the Funds’ returns are around the 50th percentile. o Large Cap down 13% o Large Blend down 13.4% o Small Cap in the 61% rank, down 17.33% – hurt more than Large Cap o Global down 17% o Emerging Markets down 13%  City of Norwich Volunteer Firefighters’ Relief Fund Committee Minutes 122nd Meeting September 12, 2011 o Commodities up almost 4% o Bonds up 2.33% for regular bond portfolio. Down -1.3% on the short duration bonds. Short term not yielding any return, people are avoiding. Our return was basically flat. o Global – split experience between the American Funds and Global – up almost 1 point. o The portfolio Funds overall down 7%. • From July 1 to September 9, the portfolio is down 6.7%. Not down as quite as much as we would have been with a static portfolio. We rebalance the portfolio at the end of each quarter. The portfolio will be rebalanced between September 21 and September 30. o We did not keep buying stocks as they went down, so the percentage of equities is lower than the target because the market has come down. • YTD show that the portfolio is down 2.79%. Look at the portfolio at one year showed real returns of 5.5% versus 4.86% for the static tracking portfolio. • If the market doesn’t recover, Mr. Meizner believes the Fund will end flat to positive • Mr. Benoit asked Mr. Meizner to clarify his recommendations. Mr. Meizner is not recommending any changes at this time. Once the market stabilize, may look at “Go anywhere and Do Anything Funds”. Mr. Meizner will be back in December (12/12/11) for the 3rd quarter review and then in February (2/13/12) for the year/4th quarter review. 1. Minutes: Meeting minutes from the previous meeting May 9, 2011. The meeting number is incorrect; it should be 121, not 122. Motion made to accept the meeting minutes with corrections by Joe Kochanski, seconded by Donald Leary. Approved. 2. Treasurer’s Report – Treasurer’s report reviewed. First one 6/30/2011 is the Year End Report. The seconded page is the quarter ending 6/30/2011. Motion made to accept the Treasurer’s Report as presented made by Donald Leary and seconded by Frank Davis. Approved. 3. New Business a. Consideration of transferring $40,000 to Hooker & Holcombe from the City’s Annual Allocation. 1. Mr. Pothier discussed the City’s contribution of $281,000 to the VFRF. If they go at the level they are currently, there will be $252,000 in pension payments that leaves $40,000 to invest into the Fund. If we transfer that now, we will not have to pull it out later, want to keep the transfers to a minimum. He is recommending transferring the $40,000 to Hooker & Holcombe to invest. 2. Question of whether this is the time to transfer the monies into the Investment Fund. Mr. Pothier believes it to be the right time due to the Fund rebalancing at the end of the quarter. 3. Are the investment fees included in the $250,000 that is being held back? Mr. Pothier stated that the investment fees are built into the investment bundle.  City of Norwich Volunteer Firefighters’ Relief Fund Committee Minutes 122nd Meeting September 12, 2011 4. Motion made by Frank Davis to transfer $40,000 to Hooker & Holcombe for investment, seconded by Joe Kochanski. Approved. b. If the Departments have any retirements coming up, the paperwork needs to be complete and turned in as soon as possible to avoid retro-payments. If you need anything from Mr. Pothier, let him know. c. The spreadsheet that was used last year – is it being used this year? Has it been updated? There were changes that were suggested by Committee members, are they being implemented? The sheet has been updated and once it is agreeable to everyone then it can just be rolled over each year with updates. 1. If there are any problems with the spreadsheet, they will be addressed at the December meeting so that the final product can be in place for year-end use. d. Mr. Leary asked the question with regard to the Occum Fire Department, “Will the Company be appointing a replacement? e. Red McKeon questioned if his military time could be applied to his Years-Of-Service to reach a maximum of 35 years. Mr. Benoit took the action to look into this once again. A motion was made by Frank Davis to adjourn the meeting, seconded by Donald Leary. Approved. Meeting adjourned at 1745 hrs. Respectfully submitted, Thomas G. Quinley Secretary