Police & Fire Retirement Board

REGULAR MEETING MINUTES OF THE STERLING HEIGHTS POLICE AND FIRE RETIREMENT SYSTEM, ACT 345 MAY 17, 2012 FIRE DEPARTMENT CONFERENCE ROOM 41625 RYAN ROAD STERLING HEIGHTS, MI 48313 1. The regular meeting of the Police and Fire Retirement System was called to order by President Solak at 4:03 p.m. 2. Board Members present: Solak, Wellhausen, Padovini, Nash, Varney. Also present: Tim Brice, representing Merrill Lynch Private Client Group; Tom Michaud, Legal Counsel; and Nancy Duyck, Pension Technician. 3. APPROVAL OF CONSENT AND REGULAR AGENDAS Motion by Wellhausen, supported by Varney, to approve the consent agenda as presented. Ayes: All. The motion carried. The following items were added to the regular agenda: 10 a 25 Kevin Wardrop – DROP resolution - discussion 26 Michael Schrettner – DROP resolution – discussion 27 Gary Choate – EDRO resolution - discussion Motion by Padovini, supported by Solak, to approve the regular agenda as amended. Ayes: All. The motion carried. 4. APPROVAL OF MINUTES No corrections were made to the draft minutes of the regular meeting of April 19, 2012. Motion by Varney, supported by Padovini, to approve the minutes as presented.  Ayes: Varney, Padovini, Solak, Wellhausen. Abstain: Nash. The motion carried; the minutes of the regular meeting of April 19, 2012 are hereby approved as presented. 5. CITIZEN PARTICIPATION There was no Citizen participation 6. REPORT FROM LEGAL COUNSEL No formal legal report was presented. Mr. Michaud discussed the legislative update with the Board. CONSENT AGENDA 7. CORRESPONDENCE a. Correspondence from Budget dated April 20, 2012 re: 2012/13 budget. b. Intercontinental first quarter report for US REIF Fund. c. Other correspondence received from: 1. Association of Benefit Administrators newsletter 2. Bernstein Litowitz Berger & Grossman LLP 3. Horizon Asset Management – Form ADV, Part 2A 4. McDonnell Investment Management – Form ADV, Part 2A 5. Merrill Lynch – market value updates 6. Robbins Geller Rudman & Dowd LLP d. Magazines received: 1. Pensions & Investments for April 30 and May 14, 2012. 2. Institutional Investor for May 2012 3. Plan Sponsor for May 2012 8. BILLS AND EXPENDITURES b. Disbursements to retirees/members other than monthly benefit payments There were no disbursements to retirees/members other than monthly benefit payments this month. c. Checking Account Summary  Beginning Balance $6,041.17 4/01/12 Subtractions (5) $2,439.04 1. 4/23 Check 1878 36.13 AT & T phone bill – 4/16/12 2. 4/13 Check 5202 1094.46 Contract Payment Nancy Duyck 3. 4/13 Check 5203 114.93 Contract fee – Gurin & Gurin 4. 4/13 Check 5204 99.05 St. of MI UIA 5. 4/27 Check 5205 1094.47 Contract Payment Nancy Duyck Electronic withdrawals (4) $1,696.90 1. 4/04 408.47 IRS Fed. tax w/h 2. 4/13 187.65 Michigan St. tax w/h 3. 4/16 692.31 IRA contribution 4. 4/18 408.47 IRS Fed. tax w/h Ending Balance $1,905.23 4/30/12 d. Transmittal of Checks 1. $29,825.32 received from James Andonoff for the purchase of 1 year and 4 days of eligible EMS service credit. 2. $18,558.17 received from Tim Bade for the purchase of 4 years and 5 months of eligible military service credit. 3. $19,736.79 received from James Little for the purchase of 4 months and 24 days of eligible military service credit; and 7 months and 10 days of eligible municipal service credit. 9. FUNDS MANAGEMENT The current value of funds as of April 30, 2012 is detailed below:  Clearing account $ 1,206,279.83 Intercontinental $ 7,938,523.95 McDonnell $ 16,192,981.32 Pimco $ 15,967,857.37 Wamco $ 15,899,927.84 MD Sass $ 18,975,117.74 Horizon $ 18,782,766.86 Earnest Partners $ 10,619,823.65 NFJ/Allianz $ 14,154,655.06 AIM/Invesco $ 13,971,633.24 Janus $ 18,951,636.30 Winslow $ 18,542,203.25 Checking account $ 1,905.23 TOTAL FUNDS $ 171,205,311.64 b. The System received the entire 2011/12 budget of $7,368,876.00 as of April 12, 2012. c. A Securities Loan Statement Recap sheet as of 3/31/12 is enclosed showing the amounts received each month in the Securities Loan Program. Our earnings for the 2011/12 fiscal year through 3/31/12 are $1,239.66. d. Benefit Register Listing as of May 1, 2012 from Comerica Bank showing 285 retirees/beneficiaries with a payout for May of $1,117,764.56 and a year-to-date of $6,056,091.66. e. The current Merrill Lynch Bond index for April 2012 is 1.87%. 10. BENEFITS & PLAN ADMINISTRATION a. Old Business 1. Abel/Noser Reports for March 2012 Abel/Noser has supplied the March 2012 report. 2. Joseph Tharrett – Application for DROP retirement  Police Sgt. Joseph Tharrett has submitted an application for DROP retirement effective June 18, 2012. All required paperwork is on file in the Pension Office. 3. Jimmy Fawaz – Application for DROP retirement Police Sgt. Jimmy Fawaz has submitted an application for DROP retirement effective June 18, 2012. All required paperwork is on file in the Pension Office. 4. Jeffrey Cline – Application for DROP retirement Fire FEO Jeffrey Cline has submitted an application for DROP retirement effective June 19, 2012. All required paperwork is on file in the Pension Office. 5. Richard Tomaszewski – Application for DROP retirement Fire FEO Richard Tomaszewski has submitted an application for DROP retirement effective June 12, 2012. All required paperwork is on file in the Pension Office. 6. Christopher Parmentier – Application for DROP retirement Fire Sgt. Christopher Parmentier has submitted an application for DROP retirement effective June 19, 2012. All required paperwork is on file in the Pension Office. 7. James Little – Application for DROP retirement Fire Lt. James Little has submitted an application for DROP retirement effective June 11, 2012. All required paperwork is on file in the Pension Office. 8. David Sharnas – Application for DROP retirement Police Lt. David Sharnas has submitted an application for DROP retirement effective June 18, 2012. All required paperwork is on file in the Pension Office. 9. Richard Boughton – Application for DROP retirement Fire Capt. Richard Boughton has submitted an application for DROP retirement effective June 19, 2012. All required paperwork is on file in the Pension Office. 10. Thomas McMullen – Application for DROP retirement Police Sergeant Thomas McMullen has submitted an application for DROP retirement effective June 18, 2012. All required paperwork is on file in the Pension Office. 11. Daryl Brown – Application for DROP retirement Police Sergeant Daryl Brown has submitted an application for DROP retirement effective June 18, 2012. All required paperwork is on file in the Pension Office. 12. Scott Troszak – Application for DROP retirement Police Officer Scott Troszak has submitted an application for DROP retirement effective June 18, 2012. All required paperwork is on file in the Pension Office. 13. Mark Schmidt – Application for DROP retirement Police Sergeant Mark Schmidt has submitted an application for DROP retirement effective June 18, 2012. All required paperwork is on file in the Pension Office. 14. Gary Choate – Application for DROP retirement Fire Lt. Gary Choate has submitted an application for DROP retirement effective June 12, 2012. All required paperwork is on file in the Pension Office. 15. James Andonoff – Application for DROP retirement Fire Lt. James Andonoff has submitted an application for DROP retirement effective June 11, 2012. All required paperwork is on file in the Pension Office. 16. John Rogers – Application for DROP retirement Police Lt. John Rogers has submitted an application for DROP retirement effective June 18, 2012. All required paperwork is on file in the Pension Office. 17. Gary Choate – buyback application – municipal – 3 days  The above named individual has submitted an application for buyback of municipal time as noted. All required paperwork is on file in the Pension Office. 18. James Andonoff – adjusted hire (retirement) date The adjusted hire (retirement) date for James Andonoff is June 11, 1988 after the purchase of 1 year and 4 days of eligible EMS service credit. 19. Tim Bade – adjusted hire (retirement) date The adjusted hire (retirement) date for Tim Bade is August 4, 1990 after the purchase of 4 years and 5 months of eligible military service credit. 20. James Little – adjusted hire (retirement) date The adjusted hire (retirement) date for James Little is June 11,1989 after the purchase of 4 months and 24 days of eligible military service credit; and 7 months and 10 days of eligible municipal service credit. REGULAR AGENDA 8. BILLS AND EXPENDITURES a. Disbursements other than retiree benefit payments (bills) 1. Disbursement to the City of Sterling Heights in the total amount of $2,594.61 for accounting services rendered for the quarter ended 3/31/12. Motion by Padovini, supported by Nash, to approve the bill as presented. Ayes: All. The motion carried. The following items were taken out of order of the published agenda. REGULAR AGENDA 10. BENEFITS & PLAN ADMINISTRATION a. Old Business  21. John Jacob – Domestic Relations Order (DRO) - discussion a. DRO resolution The Board is in receipt of a DRO for retired Police Officer John Jacob. Legal Counsel has approved the DRO. The following DRO resolution was considered: L 12-5-17-1 Re: DEBRA L JACOB v. JOHN J. JACOB macomb County circuit Court Case No. 11-000668-DM WHEREAS, the Board of Trustees is in receipt of a Domestic Relations Order (DRO), dated April 13, 2012, wherein Debra L. Jacob, the Alternate Payee, is awarded certain rights to the retirement benefits of John J. Jacob, the Participant, and WHEREAS, the Alternate Payee is entitled to 50% of the Participant’s monthly retirement benefit from the Retirement System that accrued as of August 2, 2011, and WHEREAS, the Alternate Payee is entitled to 100% of the Participant’s DROP Account that had accrued as of August 2, 2011, and WHEREAS, said matter had been discussed with Legal Counsel who has opined that the applicable terms of said court order are consistent with the provisions of the Retirement System and applicable law, therefore be it RESOLVED, that the Board of Trustees acknowledges receipt of said court order and will administer benefits consistent with said court order as soon as administratively feasible, and further RESOLVED, that a copy of this resolution be immediately attached as the top sheet of the Participant’s pension file and other appropriate records be retained by the Retirement System relative to this matter, and further RESOLVED, that copies of this resolution be sent to John Jacob and Debra Jacob, Alternate Payee. Motion by Solak, supported by Wellhausen, to adopt the resolution as presented. Ayes: All. Motion carried.  b. Debra Jacob – DRO benefit resolution - discussion Debra Jacob, Alternate Payee of retired Police Officer John Jacob, has supplied the necessary paperwork to start receiving her monthly benefit as stipulated in the DRO. All required paperwork is on file in the Pension Office. After discussion, the following resolution was considered: L 12-5-17-2 Re: DEBRA L. JACOB v. JOHN J. JACOB MACOMB County CIRCUIT Court Case No. 11-000668-DM WHEREAS, the Board of Trustees is in receipt of a Domestic Relations Order (DRO) dated April 13, 2012, which purports to grant Debra L. Jacob, the Alternate Payee, with certain rights and claims regarding Retirement System benefits normally payable to John J. Jacob, the Participant, who is currently a retired member of the Retirement System, and WHEREAS, said matter has been discussed with Legal Counsel who has opined that the applicable terms of said court order are consistent with the provisions of the Retirement System and applicable law, therefore be it RESOLVED, that the Board of Trustees hereby acknowledges receipt of said court order and shall pay pension benefits consistent with said court order, specifically, payment to Debra L. Jacob, the Alternate Payee, shall be in the amount of $2,258.06 per month with corresponding reduction in the Participant’s retirement benefit, effective with the June 1, 2012 payment, and further RESOLVED, that the Board of Trustees shall pay Debra L. Jacob, the Alternate Payee, 100% of the DROP account of John J. Jacob, consistent with said court order, and further RESOLVED, that a copy of this resolution be immediately attached as the top sheet of the pension file and other appropriate records be kept for the Retirement System relative to this matter, and further RESOLVED, that copies of this resolution be sent to the parties. Motion by Solak, supported by Wellhausen, to adopt the resolution as presented. Ayes: All. The motion carried, the resolution is hereby adopted. 22. David Vinson – partial DROP distribution – discussion Chief David Vinson of the Police Department terminated his DROP retirement as of June 18, 2008. He is requesting a partial DROP distribution from his DROP account. Motion by Solak, supported by Varney, to approve the partial DROP distribution as presented. Ayes: All. Motion carried. 23. SH POA letter – discussion The President presented the Board with a letter from the Sterling Heights Police Officers Association requesting information needed for ongoing negotiations. Motion by Solak, supported by Nash, to forward the correspondence to the actuary and bill the Police Officer’s Association for the report. Ayes: All. Motion carried. 24. Account transfer for June 2012 benefit payments – discussion As of May 14, 2012, the Clearing Account had a balance of $182,942.26. An additional $1,205,000.00 is needed for the June 1, 2012 pension benefit payments and bills from the Clearing Account. Merrill Lynch has forwarded an e-mail that the additional amount needed should be taken from the Earnest Partners, Janus, Winslow, MD Sass, and Horizon accounts, based on the asset allocation targets. Motion by Solak, supported by Wellhausen, to approve the transfer of the appropriate amount of funds from the Earnest Partners, Winslow, Janus, MD Sass and Horizon accounts, based on the asset allocation targets, to provide for pension benefit payments and other disbursements on June 1, 2012. Ayes: All. The motion carried. 25. Kevin Wardrop – DROP resolution – discussion Fire Lieutenant Kevin Wardrop applied for the DROP from the Fire Department effective March 19, 2012. All required paperwork is on file in the Pension Office. The following DROP resolution was considered: R 12-5-17-1 WHEREAS, Lieutenant KEVIN WARDROP of the Fire Department has voluntarily elected to participate in the DROP per application dated February 22, 2012, as submitted to the Police and Fire Retirement Board, and WHEREAS, Lieutenant KEVIN WARDROP has elected to DROP, effective March 19, 2012, per Appendix G of the applicable collective bargaining agreement, and WHEREAS, Lieutenant KEVIN WARDROP has served the City of Sterling Heights Fire Department for 24 years 1 month and 16 days, which includes 3 years, 6 months and 14 days of municipal service credit and 1 year, 2 months and 2 days of EMS service credit, as of the date of the DROP election, and WHEREAS, the Trustees of the Police and Fire Retirement Board, Act 345 have verified that Lieutenant KEVIN WARDROP meets all those requirements for participation in the DROP as established in both Act 345 and the applicable collective bargaining agreement, and WHEREAS, the Trustees have provided all the necessary personal and financial data to the Board’s Actuary as it relates to Lieutenant KEVIN WARDROP and his spouse, KIMBERLY WARDROP, and the necessary reports have been reviewed and completed by the Actuary, which includes a copy of his marriage license and his spouse’s full name, documentation re: date of birth, and social security number, and WHEREAS, Lieutenant KEVIN WARDROP has reviewed this data and has elected to receive his DROP participation benefit in the form of a regular retirement pension with a potential benefit of sixty (60%) percent of the regular retirement pension being paid to his surviving spouse, who must also be his spouse on the effective date of retirement and death, and WHEREAS, the forenamed member has not requested an annuity withdrawal (total lump sum distribution from the defined contribution plan) under the provisions of the Retirement System and collective bargaining agreement, and WHEREAS, the Police and Fire Retirement Board is now in receipt of the necessary final average compensation amount. The Board of Trustees on receipt of this data forwarded it to the Board Actuary for the updated retirement data. The actuary has indicated to the Board, in writing, the retirement benefits due Lieutenant KEVIN WARDROP, as a result of this data, therefore be it RESOLVED, that Lieutenant KEVIN WARDROP after having been credited with 24 years, 1 month and 16 days as of the date of the DROP election, is hereby granted DROP participation in accordance with Act 345 and the collective bargaining agreement, effective March 19, 2012, and further RESOLVED, that Lieutenant KEVIN WARDROP shall be paid a yearly regular retirement pay in the amount of $88,201.56 or monthly benefits of $7,350.13, during DROP participation and after termination of employment because distribution of the annuity withdrawal was not requested, and further RESOLVED, that the Treasurer shall immediately calculate and pay Lieutenant KEVIN WARDROP the appropriate amounts. All amounts shall be paid into the DROP account until the date of termination, after which time distribution shall be made in accordance with the collective bargaining agreement. Motion by Wellhausen, supported by Solak, to adopt the resolution as presented. Ayes: All. The motion carried; the resolution is hereby adopted. 26. Michael Schrettner – DROP resolution - discussion Fire Captain Michael Schrettner applied for the DROP from the Fire Department effective March 31, 2012. All required paperwork is on file in the Pension Office. The following DROP resolution was considered: WHEREAS, CAPTAIN MICHAEL SCHRETTNER of the Fire Department has voluntarily elected to participate in the DROP per application dated February 29, 2012, as submitted to the Police and Fire Retirement Board, and WHEREAS, CAPTAIN MICHAEL SCHRETTNER has elected to DROP, effective March 31, 2012, per Appendix G of the applicable collective bargaining agreement, and WHEREAS, CAPTAIN MICHAEL SCHRETTNER has served the City of Sterling Heights Fire Department for 22 years and 12 days which includes 2 years, 1 month and 8 days of municipal service credit, as of the date of the DROP ELECTION, and WHEREAS, the Trustees of the Police and Fire Retirement Board, Act 345 have verified that CAPTAIN MICHAEL SCHRETTNER meets all those requirements for participation in the DROP as established in both Act 345 and the applicable collective bargaining agreement, and WHEREAS, the Trustees have provided all the necessary personal and financial data to the Board’s Actuary as it relates to CAPTAIN MICHAEL SCHRETTNER and his spouse, JANIE SCHRETTNER, and the necessary reports have been reviewed and completed by the Actuary, which includes a copy of his marriage license and his spouse’s full name, documentation re: date of birth, and social security number, and WHEREAS, CAPTAIN MICHAEL SCHRETTNER has reviewed this data and has elected to receive his DROP participation benefit in the form of a regular retirement pension with a potential benefit of sixty (60%) percent of the regular retirement pension being paid to his surviving spouse, who must also be his spouse on the effective date of retirement and death, and WHEREAS, the forenamed member has requested an annuity withdrawal (total lump sum distribution from the defined contribution plan) under the provisions of the Retirement System and collective bargaining agreement, and WHEREAS, the Police and Fire Retirement Board is now in receipt of the necessary final average compensation amount. The Board of Trustees on receipt of this data forwarded it to the Board Actuary for the updated retirement data. The actuary has indicated to the Board, in writing, the retirement benefits due CAPTAIN MICHAEL SCHRETTNER, as a result of this data, therefore be it RESOLVED, that CAPTAIN MICHAEL SCHRETTNER, after having been credited with 22 years and 12 days as of the date of the DROP ELECTION, and is hereby granted DROP participation in accordance with Act 345 and the collective bargaining agreement, effective March 31, 2012. RESOLVED, that CAPTAIN MICHAEL SCHRETTNER’s request for annuity withdrawal, authorizing a payment representing the total amount of his contribution plus interest to the date of his participation in the DROP, be granted, and further RESOLVED, that CAPTAIN MICHAEL SCHRETTNER shall be paid an annuity withdrawal (total lump sum distribution from the defined contribution plan) of $102,678.63, and a yearly regular retirement pay in the amount of $81,463.92 or monthly benefits of $6,788.66, after DROP participation and termination of employment, and further RESOLVED, that CAPTAIN MICHAEL SCHRETTNER shall be credited $7,378.98 monthly during the period of DROP participation because distribution of the annuity withdrawal was deferred until termination of employment, and further RESOLVED, that the Treasurer shall immediately calculate and pay CAPTAIN MICHAEL SCHRETTNER the appropriate amounts. All amounts shall be paid into the DROP account until the date of termination, after which time distribution shall be made in accordance with the collective bargaining agreement. Motion by Wellhausen, supported by Solak, to adopt the resolution as presented Ayes: All. The motion carried; the resolution is hereby adopted. 27. Gary Choate – EDRO resolution – discussion The Board is in receipt of an Eligible Domestic Relation Order for active Fire Lt. Gary Choate. Legal Counsel has approved the EDRO. The following EDRO resolution was considered: L 12-5-17-3 Re: Gary E. Choate v. Karyn A. Choate Macomb County Circuit Court Case No. 11-4575-DO WHEREAS, the Board of Trustees is in receipt of an Eligible Domestic Relations Order (EDRO) dated April 27, 2012, wherein Karyn A. Choate, the Alternate Payee, is awarded certain rights to the retirement benefits of Gary E. Choate, the Participant, and WHEREAS, the Alternate Payee is entitled to claim a portion of the Participant’s retirement benefit from the Defined Benefit Plan, and WHEREAS, the Alternate Payee is not entitled to claim a portion of the Participant’s retirement benefit from the Defined Contribution Plan, and WHEREAS, the payments from the plan to the Alternate Payee shall begin when the Participant commences benefits from the Retirement System, unless the Alternate Payee elects to receive benefits at any time after the Participant reaches his earliest retirement date, and WHEREAS, the Board’s policy is to require that the cost for the actuary’s calculations are to be borne by the parties to the domestic relations proceedings, and the order provides that the Participant shall be responsible for any and all additional costs for actuarial services, and WHEREAS, said matter had been discussed with Legal Counsel who has opined that the applicable terms of said court order are consistent with the provisions of the Retirement System and applicable law including Public Act 46 of 1991 (MCLA 38.1701) as amended, therefore be it RESOLVED, that the Board of Trustees acknowledges receipt of said court order, will pay pension benefits consistent with said order subject to an application being filed by the Participant and/or the Alternate Payee seeking payment, and further RESOLVED, that upon application of either the Alternate Payee or the Participant, this file be forwarded to the Board’s actuary for calculation of the benefits, and further RESOLVED, that a copy of this resolution be immediately attached as the top sheet of the Participant’s pension file and other appropriate records be kept for the Retirement System relative to this matter, and RESOLVED, that copies of this resolution be sent to James T. Miller, Esq., Attorney for the Participant; Vincenzo Manzella, Esq., Attorney for the Alternate Payee; and the Board’s actuary. Motion by Wellhausen, supported by Solak, to adopt the resolution as presented. Ayes: All. The motion carried; the resolution is hereby adopted. The Board returned to the published agenda. REGULAR AGENDA 9. FUNDS MANAGEMENT f. Quarterly Performance Report 1. Merrill Lynch Tim Brice reviewed the summary report of manager performance. Enclosed in this report was the Board’s summary of investment policies and objectives, first quarter 2012 AIM Market Focus report. Also included was an executive summary of the Composite, Allianz, Invesco, Janus, Earnest, Intercontinental, Horizon, MD Sass, McDonnell, Pimco, and Wamco reports. The following manager specific comments were discussed: McDonnell Investments a. The total portfolio return in the first quarter was 0.6%, ranking in the 70th percentile of the BofAML Domestic Fixed Income Sample. It exceeded the Custom Index (0.3%), and the Barclays Capital Aggregate Bond Index (0.3%). b. Their total portfolio return was 6.3% since inception (12/31/08). This exceeded the Custom (6.0%), and equaled the Barclays Capital Aggregate Bond Index (6.3%). c. Cash on hand at first quarter ending was within guidelines. Pimco a. The total portfolio return in the first quarter was 2.0%, ranking in the 33rd percentile of the BofAML Domestic Fixed Income Sample. It exceeded the Custom Index (0.3%), and the BofAML Broad Market Bond index (0.3%). b. Their total portfolio return was 3.7% since inception (6/30/11). This trailed the Custom (5.0%), and the BofAML Broad Market Bond index (5.3%). c. Cash on hand at first quarter ending was above guidelines. Wamco a. The total portfolio return in the first quarter was 1.8%, ranking in the 36th percentile of the BofAML Domestic Fixed Income Sample. It exceeded the Custom Index (0.3%), and the BofAML Broad Market Bond index (0.3%). b. Their total portfolio return was 4.6% since inception (6/30/11). This exceeded the Custom (4.4%), and trailed the BofAML Broad Market Bond index (5.3%). c. Cash on hand at first quarter ending was within guidelines. Horizon Asset Management a. The total portfolio return in the first quarter was 15.9%, ranking in the 3rd percentile of the BofAML Domestic Large Cap Value Equity Sample. It exceeded the Custom Index (10.7%), and the Russell 1000 Value Index (11.1%). b. Their total portfolio return was 18.8% since inception (12/31/08). This trailed the Custom (21.4%), and exceeded the Russell 1000 Value Index (14.3%). c. Cash on hand at first quarter ending was within guidelines. MD Sass a. The total portfolio return in the first quarter was 12.0%, ranking in the 49th percentile of the BofAML Domestic Large Cap Value Equity Sample. It exceeded the Custom Index (11.1%), and the Russell 1000 Value Index (11.1%). b. Their total portfolio return was 20.4% since inception (3/31/09). This trailed the Custom (21.5%), and the Russell 1000 Value Index (22.8%). c. Cash on hand at first quarter ending was within guidelines. Janus Investment Counsel a. The total portfolio return in the first quarter was 19.4%, ranking in the 9th percentile of the BofAML Domestic Large Cap Growth Equity Sample. It exceeded the Custom Index (13.8%), and the Russell 1000 Growth Index (14.7%). b. Their total portfolio return was 12.4% since inception (12/31/09). This trailed the Custom (14.6%), and the Russell 1000 Growth Index (15.2%). c. Cash on hand at first quarter ending was within guidelines. Earnest Partners a. The total portfolio return in the first quarter was 13.73%, ranking in the 39th percentile of the BofAML Domestic Small Cap Equity Sample. It exceeded the Custom Index (12.7%), and the Russell 2000 Index (12.4%). b. Their total portfolio return was 6.1% since inception (9/30/06). This exceeded the Custom (4.9%), and the Russell 2000 Index (3.9%). c. Cash on hand at first quarter ending was within guidelines. AIM/INVESCO Capital Management a. The total portfolio return in the first quarter was 10.4%, ranking in the 83rd percentile of the BofAML International Equity Sample. It trailed the Custom Index (11.5%), and the MSCI EAFE Growth Index (12.1%). b. Their total portfolio return was 2.2% since inception (12/31/10). This exceeded the Custom (- 0.9%), and the MSCI EAFE Growth Index (-0.9%). c. Cash on hand at first quarter ending was above guidelines. NFJ/Allianz Global Investors a. The total portfolio return in the first quarter was 12.5%, ranking in the 52nd percentile of the BofAML International Equity Sample. It exceeded the Custom Index (10.7%), and the MSCI All Country World ex US-net (11.2%). b. Their total portfolio return was 1.4% since inception (12/31/10). This exceeded the Custom (- 3.1%), and the MSCI All Country World ex US-net (-3.2%). c. Cash on hand at first quarter ending was within guidelines. The following table details the Investment Performance Review for the quarter ending March 31, 2012. Market value of the funds under management as of March 31, 2012 was $171,569,918. The total fund return for the first quarter was 9.8%, ranking in the 7th percentile, as summarized below:  12/11 3/11 3/09 3/07 3/02 to to to to to 3/12 3/12 3/12 3/12 3/12 Total 9.8/7 2.8/81 13.7/64 2.0/98 4.8/86 fund* *Ranked against the BofAML Domestic Balanced Sample - Total Total Portfolio Returns - Equity Sample Domestic# 14.9/24 1.2/66 19.2/81 1.3/67 4.7/65 #Ranked against the BofAML Domestic Equity Sample - Common Stock Total Portfolio Returns - Fixed Income Sample F.I.# 1.4/41 7.7/39 7.2/54 1.5/99 3.7/99 #Ranked against the BofAML Domestic Fixed Income Sample - Fixed Income Real Estate 2.6 4.2 9.7 2.9 N/A The following manager specific return information is detailed separately from the other long- term data: 12/11 3/11 3/09 12/08 McDonnell to 3/12 to 3/12 to 3/12 to 3/12 Total Fund* 0.6/70 8.3/19 6.8/57 6.3/59 *Ranked against the BofAML Domestic Fixed Income Sample - Total 12/11 6/11 Pimco to 3/12 to 3/12 Total Fund* 2.0/33 3.7/70 *Ranked against the BofAML Domestic Fixed Income Sample - Total 12/11 6/11 Wamco to 3/12 to 3/12  Total Fund* 1.8/36 4.6/49 *Ranked against the BofAML Domestic Fixed Income Sample - Total 12/11 3/11 3/09 12/08 Horizon to 3/12 to 3/12 to 3/12 to 3/12 Total Fund* 15.9/3 -3.1/96 19.4/89 18.8/9 *Ranked against the BofAML Domestic Large Cap Value Equity Sample – Total 12/11 3/11 3/09 MD Sass to 3/12 to 3/12 to 3/12 Total Fund* 12.0/49 -0.7/91 20.4/81 *Ranked against the BofAML Domestic Large Cap Value Equity Sample - Total 12/11 3/11 12/09 Janus to 3/12 to 3/12 to 3/12 Total Fund* 19.4/9 11.4/25 12.4/67 *Ranked against the BofAML Domestic Large Cap Growth Equity Sample - Total 12/11 3/11 3/09 3/07 9/06 to to to to to Earnest 3/12 3/12 3/12 3/12 3/12 Total 13.7/39 1.8/50 29.3/43 5.1/33 6.1/46 fund* *Ranked against the BofAML Domestic Small Cap Equity Sample – Total 12/11 3/11 12/10 Invesco to 3/12 to 3/12 to 3/12 Total Fund* 10.4/83 -0.4/20 2.2/19 *Ranked against the BofAML International Equity Sample - Total 12/11 3/11 12/10 Allianz to 3/12 to 3/12 to 3/12 Total Fund* 12.5/52 -3.1/36 1.4/25 *Ranked against the BofAML International Equity Sample - Total Tim Brice discussed with the Board doing a search for an additional large cap value equity manager. The Board will hold a special meeting on June 7, 2012 to review candidates. 11. Trustee Comments: None. 12. ADJOURNMENT Motion by Padovini, supported by Solak, to adjourn at 5:09 p.m. Ayes: All. The motion carried; the meeting is hereby adjourned. Mark Wellhausen Secretary