McHenry Times

City of Woodstock Police Pension Board met Jan. 6.

Here are the minutes provided by the board:

The Quarterly Meeting of the Woodstock Police Pension Board was called to order by President Dennis Leard at 6:06 PM on Tuesday, January 6, 2022 via video conference in accordance with Section 7(e) of the Open Meetings Act (5 ILCS 120/7(e)), as the result of Governor Pritzker’s disaster declaration involving the ongoing COVID-19 pandemic and the Board’s President’s determination that a meeting in person is not practical or prudent, for the purposes set forth in the posted agenda.

Notice of this meeting was posted forty-eight hours in advance on the City of Woodstock’s website and at the Woodstock Police Department. All Board members were notified of this meeting.

Roll Call:

Board Members Present: Joshua Fourdyce, Gordon Knapp, Dennis Leard, Terri Abrams

Board Members Absent: Jeremy Mortimer

Others Present: Dave Wall, Financial Consultant and Carolyn Clifford, Attorney.

Staff Present: Deputy City Manager/Treasurer Paul Christensen, Administrative Assistant Paola Ramirez

Public Comment: None

Acceptance of Minutes: T. Abrams made a motion to approve the minutes from the October 6, 2021 regular meeting as presented. Seconded by G. Knapp. A roll call was taken.

Ayes: Joshua Fourdyce, Gordon Knapp, President Dennis Leard

Nays: None.

Abstentions: Terri Abrams

Absentees: Jeremy Mortimer.

Motion carried.

Accountant/Treasurer’s Report:

A. Review of Financial Statements

P. Christensen displayed and shared the financial statements. P. Christensen stated that there are approximately $31.09 million in total assets. He also indicated that the City is holding $363,000, which is higher than usual, but with the consolidation it was decided that the money should remain in the City’s Police Pension account during the transition period, when the Fund’s assets will be frozen.

B. Payment of Bills

P. Christensen explained the payments on the warrant list. P. Christensen explained that from October 1, 2021 through December 31, 2021, $5,864.57 in bills were paid.

Motion by J. Fourdyce for payment of bills and acceptance of the financial statements, second by T. Abrams. A roll call was taken.

Ayes: Joshua Fourdyce, Gordon Knapp, President Dennis Leard, Terri Abrams

Nays: None

Abstentions: None

Absentees: Jeremy Mortimer.

Motion carried.

Investment Report – Wall Capital Group:

D. Wall reviewed the investment report for the period ending December 31, 2021. As of the end of the calendar year, the Fund’s current value was $31,561,687. The return net of fees for the calendar year of 2021 was 14.03%.

Review and Possible Action on Asset Allocation and/or Investment Policy:

D. Wall indicated he is watching the Fund’s investments, pending a direction from the Illinois Police Officers’ Pension Investment Fund (IPOPIF) on next steps for the transition of assets. D. Leard asked if there was anything to discuss related to issues on the Fund’s current investments or if it should be pushed to the next meeting. D. Wall suggested it be discussed in the next meeting. D. Wall advised that everything is currently in compliance with State statutes.

Communications and Reports:

P. Christensen stated that the affidavits of continued eligibility were sent out the week of December 27, 2021, to all retirees and beneficiaries. He mentioned that the affidavits are to be returned by the middle of February 2022. This year, the affidavits are required to be notarized. C. Clifford added that the timing was perfect to have fresh data for the annual statement for spouses.

Applications for Membership/Withdrawals from Fund:

Charles T. Levy has applied for membership into the Fund. His date of entry into service with the Woodstock Police Department is 11/29/2021. Motion to approve the application for membership of Charles T. Levy as presented by J. Fourdyce, second by T. Abrams. A roll call was taken.

Ayes: J. Fourdyce, G. Knapp, T. Abrams and President D. Leard.

Nays: None.

Abstentions: None

Absentees: J. Mortimer

Motion carried.

Old Business: None

New Business:

A. Call for Election

C. Clifford advised that all Board members except Gordon Knapp were up for re-election or re-appointment. D. Leard will submit his interest for his name to be on the ballot for the retired trustee position. D. Leard asked if election ballots had to be mailed or if the election ballots could be emailed. C. Clifford indicated she is aware of one board that uses Survey Monkey as a secure way of holding an election, as well as internal processes used to hold an election. Discussion ensued about the election. C. Clifford will send P. Christensen a template for the election notice to be sent out to the members. The Board decided to send the notice from the Police Pension Board email. T. Abrams’s name will be on the email to help with participation. P. Christensen will send T. Abrams a draft of the notice for approval.

Illinois Police Officer Pension Investment Fund (IPOPIF)

Notice of Asset Transfer Date --C. Clifford indicated that on December 20, 2021, the IPOPIF Board sent notice of asset transfer dates to all Article 3 funds. C. Clifford opined that the first tranche was not likely to happen because of the compressed timeline and due to the pending lawsuit challenging the constitutionality of the consolidation law. C. Clifford advised that each Article 3 funds have been sorted into three tranches; First Tranche (March 1st), Second Tranche (April 2nd) and Third Tranche (May 2nd). Woodstock Police Pension has been assigned the first tranche, which will transfer funds to the IPOPIF on March 1, 2022.

IPOPIF Resolution Appointing Authorized Agents – C. Clifford explained IPOPIF has requested that each Article 3 board to adopt a Resolution Appointing Authorized Agents and send a certified copy of the resolution to IPOPIF no later than February 28, 2022. This resolution is different from the previously required appointment of Authorized Representatives. C. Clifford recommended keeping the Authorized Agents the same as the Authorized Representatives.

IPOPIF Transfer Notice Letter to Investment Advisor and Custodian – IPOPIF is also requesting a Transfer Notice Letter to the custodial bank, Charles Schwab, as well as the investment advisor, Wall Capital Group, advising them of the transfer date and to cooperate with State Street and IPOPIF.

IPOPIF Checklist – C. Clifford stated that there are a lot of logistical issues that need to be addressed prior to the transfer of funds, which include identifying Cash Flow Projections and Transition Cash Retention. C. Clifford estimated that 10 business days prior to the transfer, the Board will receive a certified asset list of the assets that it will be required to transfer to IPOPIF. This list is compiled by auditors that are hired by IPOPIF. The auditors are not yet ready to conduct the audits, and the Fund has not yet been assigned an auditor. C. Clifford indicated that once the assets are frozen for the transfer, there needs to be enough cash in the Fund’s local accounts to pay February, March and April benefits, as there will be no access to the investments for 60 to 90 days after transition. C. Clifford stated once the transfer process is complete, the Board can then address closing the Schwab account and terminating the relationship with the Wall Capital Group.

D. Wall advised that there are a couple of bond maturities in the amount of $100,000 that can be used for the transition cash for the transfer. P. Christensen shared the cash flow analysis chart. D. Wall advised that he will hold on to maturities. C. Clifford advised that the $27,500 monthly contributions will cover any expenses before the freeze. Discussion ensued about how much cash to set aside to cover transition cash retention. The Board tentatively agreed that $560,000 will be held aside ahead of the freeze date. C. Clifford will send P. Christensen a draft letter form for a cash management policy. The letter authorizes movement of funds once it exceeds the allotted amount to the consolidated funds. A letter will be modified and presented at the next meeting. P. Christensen will work with D. Wall to see how many funds will be maturing to reinvest if there is excess.

Status of Arlington Heights PPF v. Pritzker lawsuit -- Attorney Clifford stated that the Kane County Circuit Court heard two hours of arguments from both the Plaintiff and the Defendant in November 2021. Additional information was requested by the court and submitted. No decision has been made as of the first week of January 2022. A hearing for a Temporary Restraining Order (TRO) had been scheduled for January 18, 2022. The Plaintiff has refreshed a TRO request based on the activities of the IPOPIF issuing asset transfer date notices. C. Clifford indicated that there are no Plaintiff Pension Funds in the case. The only Plaintiffs on the lawsuit are the 18 individually named retired and active members who were affiliated with the pension funds. Discussion ensued about how transfer accounts are vetted.

C. Clifford reviewed the IPOPIF checklist and indicated that 30 days after transfer, IPOPIF is required to provide a receipt of transfer. Wall Capital Group will review it as well. C. Clifford shared a copy of the model letter for the Transfer of Investment Assets and the Resolution Appointing Authorized Agents. The Board discussed possible approval of these documents at this meeting or whether to continue to table the matter until the April 2022 meeting. The Board decided to vote on it at this meeting.

Motion to approve Resolution 2022-01 appointing Paul Christensen and Dennis Leard as Authorized Agents, and to send the Notice of Transfer of Investment Assets Letter to Schwab and Wall Capital, as presented by T. Abrams, second by J. Fourdyce. A roll call was taken.

Ayes: J. Fourdyce, G. Knapp, T. Abrams and President D. Leard.

Nays: None.

Abstentions: None.

Absentees: J. Mortimer

Motion carried.

J. Mortimer entered the meeting at 7:17 pm

Attorney report: C. Clifford went over the Legal Insights for Pension Funds for the First Quarter of 2022. She noted that after the Fund’s assets are transferred and the Board loses its investment authority, it will need to turn its attention to three major areas: benefit oversight, cyber security and funding. C. Clifford stated that the price of cyber security insurance has increased tremendously. P. Christensen said the City has very strong cyber security. P. Christensen will talk to the broker to break down what is covered in policy in regard to the pension. C. Clifford reviewed that once the transition period ends on June 30, 2022, IPOPIF will produce actuarial valuations for all Article 3 and 4 pension funds. P. Christensen indicated that the City intends to fund the pension at 100%, using entry-age, normal costing, as it has done in the past.

D. Wall left the meeting at 7:27 p.m.

Closed Session: None

Adjournment:

T. Abrams made a motion to adjourn. Seconded by G. Knapp. A roll call was taken.

Ayes: J. Fourdyce, G. Knapp, T. Abrams, J. Mortimer. and President D. Leard.

Nays: None.

Abstentions: None.

Absentees: None

Motion carried. Meeting adjourned at 7:33 p.m.