Approved Minutes 10-09-08 Meeting.txt -...

Approved Minutes 10-09-08 Meeting.txt

1

CITY OF WATERBURY

MONTHLY MEETING

MINUTES

OCTOBER 9, 2008

Stenographic Recording of Retirement

Board Meeting Minutes, City of Waterbury, 236 Grand

Street, Waterbury, Connecticut, before Sara Devino

Posta, LSR, a Notary Public and Court Reporter in and

for the State of Connecticut, License No. 00267, on

Thursday, October 9, 2008, at 4:30 p.m.

A+ REPORTING SERVICES

P.O. Box 831

Wallingford, CT 06492

(203) 269-9976

Approved Minutes 10-09-08 Meeting.txt�

2

A P P E A R A N C E S:

Lisa Martin, Acting Chair

Paul Ciochetti

John Jedrzejcsyk

Laurence DePillo

Karen Lang

Heather Cianciolo

Cindy VanDeursen

Joseph Bivona


�

3

1

2

3 (Proceeding Commenced: 4:30 p.m.)

4

5 MS. MARTIN: Well, good afternoon,

6 everyone. We'll start with our Pledge of

7 Allegiance and moment of silence. If we

8 could have Commissioner DePillo lead us in

9 the Pledge of Allegiance?

10 (Whereupon the Pledge of Allegiance

11 was said and there was a moment of

12 silence.)

13 MS. MARTIN: Thank you. The first

14 thing I would like to do is if we could

15 just ask the commissioners to state their

16 names for the record. I'll begin. Lisa

17 Martin.

18 MR. JEDRZEJCSYK: John Jedrzejcsyk.

19 MR. DePILLO: Laurence DePillo.

20 MR. CIOCHETTI: Paul Ciochetti.

21 MS. MARTIN: Thank you. We good

22 afternoon everyone. At this time, we

23 would open up the floor for public

24 speaking. Any member of the public

25 wishing to address the board?


�

4

1 (Whereupon there was a pause in the

2 proceeding.)

3 MS. MARTIN: Seeing no members of the

4 public present, we'll move on.

5 We do not have executive session this

6 afternoon, so the first item on our agenda

7 this afternoon is a service based pension

8 and that is for Diane LaCroix with an

9 annual pension in the amount of

10 $14,381.35, monthly amount of $1,198.45,

11 proposed effective date is October 1,

12 2008, and this is on our Blue Labor Collar

13 Labor contract. And I would entertain a

14 motion --

15 MR. CIOCHETTI: Motion to approve.

16 MR. JEDRZEJCSYK: Second.

17 MS. MARTIN: Any discussion?

18 (No response.)

19 MS. MARTIN: All those in favor?

20 (Whereupon Aye was expressed by all

21 present.)

22 MS. MARTIN: Any opposed?

23 (No response.)

24 MS. MARTIN: Motion carries. Next on

25 our agenda is our pension contribution


�

5

1 refunds and we have five of those. I

2 would entertain a motion to approve the

3 following, Rena Cherry, White Collar,

4 pretax amount of $352.19, amount payable

5 to the individual $281.75, federal income

6 tax withheld $70.44; Jolee Dinho, White

7 Collar, pretax amount of $352.19, interest

8 amount of $1.63, for a total of $353.82,

9 amount payable to the individual, which

10 represents 80 percent, $283.06; Dawn

11 Harper, $2,867.76, interest of $34.75, for

12 a total of $2,902.51 with an amount

13 payable to the individual of $2,322.01;

14 Wilson Ramos, Blue Collar, pretax amount,

15 $3,940.28, interest of $163.11, for a

16 total of $4,103.39, amount payable to the

17 individual is $3,282.71; Sandra Thomas,

18 White Collar, pretax amount of $434.31, no

19 interest, amount payable to the individual

20 is $347.45. Is there a motion to approve?




24 (No response.)



�

6


2 present.)


4 (No response.)

5 MS. MARTIN: Motion carries. Our

6 secretary's report, the first item under

7 secretary's report is the approval of our

8 minutes from our September 11th meeting.

9 Is there a motion to approve the minutes?

10 MR. JEDRZEJCSYK: Motion to approve.

11 MR. CIOCHETTI: Second.


13 (No response.)

14 MS. MARTIN: Under discussion, the

15 only question I would ask is is it working

16 out okay, that people are receiving those

17 via e-mail?

18 MS. LANG: Yes.

19 MR. DePILLO: Yes.

20 MS. MARTIN: Any other discussion on

21 the minutes?

22 (No response.)

23 MS. MARTIN: All those in favor of

24 approval?

Approved Minutes 10-09-08 Meeting.txt 25 (Whereupon Aye was expressed by all

�

7

1 present.)


3 (No response.)

4 MS. MARTIN: Motion carries. We have

5 an invoice from A Plus Reporting. This is

6 with regard to our retirement board on

7 September 11th and we have an invoice in

8 the amount of $3306. Is there a motion to

9 approve that?




13 (No response.)



16 present.)


18 (No response.)

19 MS. MARTIN: Motion carries. And we

20 have one other invoice to approve and that

21 is from Wiggin & Dana and this is in

22 regards to quatro work that was done for

23 the pension office and that is an invoice

24 in the amount of $201. Is there a motion


25 to approve?

�

8

1 MR. JEDRZEJCSYK: Motion to approve.

2 MR. CIOCHETTI: Second.


4 (No response.)

5 MS. MARTIN: I just have one question.

6 I know that they bill us, Karen, this

7 would probably be directed to your office,

8 they bill us for the time that they are

9 speaking with us and/or whatever they need

10 to do in the way of correspondence or

11 research. Do we keep any kind of track on

12 our end of that time period and what it

13 should approximately be?

14 MS. LANG: Yes.

15 MS. MARTIN: Okay. That's good.

16 MR. JEDRZEJCSYK: And we have accrued

17 the dollars of what we believe their

18 engagement may be for the entire year

19 based on what Karen assumes would be the

20 type of work or the scope of work for that

21 month; and if we fall below that amount,

22 by and large it just gets returned to

23 surplus.

Approved Minutes 10-09-08 Meeting.txt 24 MS. MARTIN: Okay. I think my

25 question more, though, John, was directed

�

9

1 to if Karen is on the phone with one of

2 the attorneys for half an hour and they

3 bill for half an hour, are we keeping some

4 sort of record to --

5 MS. LANG: Yes. Cindy does that, all

6 that work.

7 MS. MARTIN: Okay. Great. Thank you.

8 All those in favor to approve?


10 present.)


12 (No response.)

13 MS. MARTIN: Motion carries. Okay.

14 Anything else under secretary's report,

15 John? Is there anything that you had?

16 MR. JEDRZEJCSYK: Nope.

17 MS. MARTIN: Moving along to old

18 business. The old business and the new

19 business with regards to the disability

20 vendor kind of all roll in together, so I

21 am.

22 MS. LANG: We're inching towards

23 fixing it, getting the old into the new.


24 MS. MARTIN: We are.

25 MS. LANG: We're crawling, crawling,

�

10

1 crawling.

2 MS. MARTIN: Just to give a little

3 update and then Karen certainly can add to

4 it. Karen and I attended a Board of

5 Aldermen meeting on Monday night of this

6 week and our request to approve the

7 contract with our disability vendor, DMS,

8 was approved (inaudible) for the general

9 board for approval, so that process is

10 moving forward and that is going to give

11 us the opportunity to really bring some

12 professionalism to the way we do the

13 disability exams.

14 It's also going to give us the

15 opportunity move forward in conjunction

16 with a couple of other things that we have

17 been working on to try to get the

18 disability audits in place and have a

19 process to have those be done in a

20 consistent manner.

21 So with that said, Karen, I would just

22 ask if there is anything you want to add

Approved Minutes 10-09-08 Meeting.txt 23 or update or anything else that has taken

24 place since Monday night with regards to

25 DMS?

�

11

1 MS. LANG: I sent four contracts,

2 there's so much paperwork, four contract

3 copies packages off to DMS to get them

4 signed, to do that rather quickly, because

5 we have disability applications that we

6 need to get examined.

7 MS. MARTIN: Okay.

8 MS. LANG: I'm trying to do that prior

9 to the next meeting.

10 MS. MARTIN: Okay. Do any of the

11 commissioners have any questions for Karen

12 or myself with regards to that process or

13 anything else with DMS?

14 (No response.)

15 MS. MARTIN: Possibly what we might

16 want to entertain is once we are up and

17 running with them, Karen, maybe when we

18 look to do some workshops, perhaps we can

19 have some representatives from DMS to talk

20 to the other commissioners that haven't

21 had the opportunity to have any

22 interaction with them and maybe give us


23 some background. It's always nice to hear

24 it firsthand.

25 MR. DePILLO: Is this the company that

�

12

1 is actually going to be doing the --

2 review some of the previous claims that

3 have been given by the --

4 MS. LANG: Yes. When we move into the

5 audit process, yes.

6 MR. DePILLO: Okay.

7 MS. MARTIN: Okay. Moving into our

8 financial update, a few things. Guest of

9 Honor?

10 MR. BIVONA: Let me pass this out

11 first. I guess there was a question

12 concerning the multiple billing

13 management. This chart will show -- one

14 of the things that we were transitioned

15 from our headquarters in Virginia to St.

16 Lewis, so we have a new analyst. And so,

17 as you can see here, Victory Capital, the

18 outflow, all this, what he apparently saw,

19 was a check to Victory Capital so he put

20 it in withdrawals. So we have instructed

21 him, when we send a check, we will notify

Approved Minutes 10-09-08 Meeting.txt 22 him whether it's going to go into

23 management fees or not. So he will get a

24 copy of it.

25 But this is our way of showing the

�

13

1 flows of Capital. And now that he is on

2 board, he will know that that is an

3 expense, not a check, not a distribution,

4 because as we go forward to the Pension

5 Obligation Bond, we need to show

6 distributions.

7 MR. JEDRZEJCSYK: Although with

8 Victory Capital, that's the only one that

9 bills in arrears.

10 MR. BIVONA: No. Actually, NWQ does

11 as well. If you look at NWQ, you will see

12 that number is pretty low. What happened

13 there is the billing didn't go out in

14 time. So you're going to see it in the

15 next quarterly bill, two bills. Okay?

16 Now this is not an audited report.

17 This is the way that we show any

18 contributions and distributions, inflow

19 capital, but --

20 MR. JEDRZEJCSYK: On a cash basis?

21 MR. BIVONA: On a cash basis. So we


22 just want to make a better understanding

23 and our analyst is now understanding that

24 that has to be redistributed to management

25 fees.

�

14

1 The other thing I thought we should

2 talk about is a while ago we talked about

3 the policy statement and how it relates to

4 the asset allocation model, the vendor

5 that we added to it. I think this is my

6 -- I put a whole policy statement together

7 to answer your question.

8 MR. CIOCHETTI: I have two.

9 MR. BIVONA: Give one to Karen.

10 That's the entire policy statement. Is it

11 Larry or Laurence?

12 MR. DePILLO: Larry is fine:

13 MR. BIVONA: What we need to talk

14 about, at one of the meetings a while ago,

15 March of '08, was two things we should

16 look at in the policy statement. One was

17 your current allocation on Page 4. It

18 should be reflected in the next page to

19 reflect different asset classes that we

20 have added to the portfolio and then we

Approved Minutes 10-09-08 Meeting.txt 21 did have one issue that we talked about

22 because when we did the asset allocation

23 study using alternatives, that came into

24 question, whether or not you wanted to use

25 alternatives. But this shows your new

�

15

1 asset classes, Small Cap International, so

2 we never adopted that new allocation nor,

3 to go to the next page, we added this

4 addendum.

5 It's really -- the State of

6 Connecticut thought it was a good idea

7 because, as you know, most boards do

8 change, and so this addendum basically

9 outlines the responsibility of the

10 retirement board. Not that I am asking

11 you to approve it tonight, but we really

12 should address this very quickly before we

13 move forward with the POB.

14 MR. DePILLO: Well, a question I have,

15 isn't the retirement board currently

16 covered order the ordinance of the city,

17 that basically anything that is the

18 responsibility of the retirement board,

19 should actually be in the ordinance that

20 governs the retirement board?


21 MR. CIOCHETTI: I would think so.

22 MR. BIVONA: That could be.

23 MS. LANG: Well, the ordinance, if I

24 may, the ordinance is the document that

25 empowers the board to do certain things,

�

16

1 but what this is, is this is an ERISA like

2 statement. The addendum that was created

3 to outline and be specific to fiduciary

4 liability, basically that is not outlined

5 in the pension ordinance. Part one of the

6 pension ordinance contains kind of the

7 specific, you know, here is what the board

8 can do. The second part of it really has

9 to do with the pension plan itself. It's

10 more of a pension plan, absent a document.

11 It's the closest thing we have.

12 So this is sort of on top of that and

13 as a group, as the retirement board, what

14 Joe is suggesting is that we have the --

15 that the board have a set of rules, if you

16 are going to manage these investments,

17 that they go specifically to that and

18 cover the obligations and the liability

19 and put a record out there so that the

Approved Minutes 10-09-08 Meeting.txt 20 public or anyone can see by what rules

21 you're playing with when you do invest

22 these dollars.

23 MR. JEDRZEJCSYK: Really, the

24 ordinance doesn't incorporate the

25 investment policy that the retirement

�

17

1 board adopts.

2 MS. LANG: Exactly.

3 MR. JEDRZEJCSYK: And from time to

4 time it changes. Now, this pretty much

5 would be as a part of your investment

6 policy.

7 MR. BIVONA: It is.

8 MR. JEDRZEJCSYK: So that would never

9 be found in the Code of Ordinances because

10 of the amount of detail that you would

11 typically find there. So you would go to

12 this particular document --

13 MS. LANG: Right. And the reason is,

14 the private sector, pension plans, are

15 obligated under ERISA to certain standards

16 of behavior and compliance. And what Joe

17 is saying is that because we are not

18 subject to ERISA as a municipality, it's

19 not a bad idea to have an extra set of


20 rules in place that govern how the money

21 is managed.

22 MR. BIVONA: It's really defined --

23 these are not rules. It's an outline, a

24 pretty open-ended statement. It's really

25 for the benefit of new members because one

�

18

1 of the big issues we have had in our

2 history of doing this, when a new member

3 comes in, like a kid out of water, it's an

4 outline of what his or her

5 responsibilities are to the committee.

6 And you know what? Let's just look at it

7 real quick.

8 MR. DePILLO: The reason I bring it up

9 is because, you know, when a new member

10 comes to the board, literally you have the

11 charter and you have the ordinance. And

12 the first thing that I would look up is

13 the ordinance charter for the duties and

14 responsibility of the board. Now, I have

15 no problem, you know, making these

16 documents outside, if you want to limit

17 the ordinance, but at the very least, the

18 ordinance should reference the fact that

Approved Minutes 10-09-08 Meeting.txt 19 there is a policy to look at or whatever

20 as part of that. Because if you -- if you

21 came to the board and you didn't have

22 this, how would you know what the

23 responsibilities of the board are if it's

24 not referenced somewhere that there is a

25 document that outlines what the duties and

�

19

1 responsibilities are.

2 The document doesn't have -- you have

3 to include it. But I think whatever is

4 necessary for a person to really bring

5 themselves up to speed as to what their

6 duties and responsibilities are as being a

7 member of the board, they should be part

8 of the statement, that it is available and

9 what it is.

10 MS. LANG: Well, I think there are

11 references. I don't have the document in

12 front of me, but it's in a broader scope.

13 This is more detailed. And what this

14 Board, I think, has been trying to do and

15 what my office has been doing in

16 partnership is, if you look at some of the

17 old business, it's bylaws and regulations.

18 And we have a draft set of bylaws that are


19 being worked on as we speak with corp

20 counsel.

21 So there are a lot of different

22 pieces. The substance of the benefit plan

23 itself is the ordinance and then there are

24 a couple of other sets of rules around

25 that that needed to be established, firmed

�

20

1 up and defined, I think, to make it

2 easier. So that when -- and that's why we

3 put together books for you, you're going

4 to have more stuff that goes into them and

5 then you get it A to Z, top to bottom.

6 MR. BIVONA: And one of the things you

7 want to do to the policy statement, it's

8 your guideline. It's about asset

9 allocation money. We put in place the

10 risk return objectives in place. It's the

11 do's and don'ts. This has been there

12 basically to show our guidelines.

13 So that if you go to the second

14 section, it says, "Investment Manager

15 Selection." They should be in business

16 for at least five years, have three

17 hundred million dollars in assets. So

Approved Minutes 10-09-08 Meeting.txt 18 those are guidelines. When we have to put

19 out our RFP again, they're going to look

20 at this and say, "I'm not qualified",

21 right off the bat.

22 MS. MARTIN: Right.

23 MR. BIVONA: So it's really an

24 opened-ended statement. The only

25 statement that's kind of a little tighter

�

21

1 is No. 2, "Take the appropriate action to

2 replace investment managers for failure to

3 perform." Now, this is the most difficult

4 thing. It's the most difficult thing to

5 replace someone. "For each separate

6 account or sub account, manager will be

7 placed on probation for falling below the

8 median (inaudible) or peer group for a

9 24-month period. The manager must then

10 perform at or above the median for 12

11 months or will be subject to automatic

12 dismissal."

13 And the reason we put that in is that

14 not every manager will be in the top

15 decile system. We know that. But what we

16 want to have in place is some mechanism to

17 recognize the managers who are not


18 performing consistently, what guidelines

19 do we have to release them.

20 So when a manager doesn't perform

21 consistently for three solid years, now we

22 have to come to the board and say, "We are

23 not compliance with our own policy. What

24 would you like to do?" So it's a way to

25 -- it's a guideline for the board to

�

22

1 oversee.

2 MR. JEDRZEJCSYK: You know, the

3 document is also subject to some of the

4 financial management assessments performed

5 by the auditors. And, actually, this

6 document is going to be part of the

7 financial procedures manual. So, you

8 know, it's not like it's something that is

9 only distributed internally. It does make

10 the rounds.

11 MR. DePILLO: Right.

12 MR. BIVONA: And it does need to be

13 upgraded or updated. This was written in

14 '03. There is nothing wrong with it

15 except, as you recall, you came in with a

16 complaint with your own policy statement,

Approved Minutes 10-09-08 Meeting.txt 17 so we got compliance with it, the current

18 policy statement, and then we added some

19 different assets classes.

20 So when we provide you with a

21 quarterly report card, these are our

22 targets for minimums and maximums. So,

23 again, everything flows off of the

24 document.

25 MS. MARTIN: Okay.

�

23

1 MR. BIVONA: So we should do that.

2 MS. MARTIN: Okay.

3 MR. BIVONA: By the way, this whole

4 assets allocation model goes into play

5 when we did the asset allocation study. I

6 don't know if you remember that. At the

7 time, the board members selected Portfolio

8 C and then the risk return basis, so those

9 allocation models were inputted into the

10 allocation for your policy statement.

11 It's been updated, but it has not been

12 officially approved.

13 MS. MARTIN: Joe, you will be with us

14 next month at our meeting; correct?

15 MR. BIVONA: Yes.

16 MS. MARTIN: What I propose is that we


17 take the time to really read through it.

18 I would like to give the commissioner that

19 are not here with us today an opportunity

20 to review it and then at our meeting in

21 November, we can address any concerns and

22 any questions and then we can officially

23 adopt it.

24 MR. BIVONA: Perfect. One of the

25 things for the members that are here this

�

24

1 evening is that this is your policy

2 statement, so we can make changes.

3 MS. MARTIN: Right.

4 MR. JEDRZEJCSYK: We could always --

5 MS. LANG: Give them to us.

6 MS. MARTIN: Just with one note, we

7 will adopt it at the November meeting.

8 Karen, if you can make a note also to

9 provide a copy when the packet goes out

10 for November, just in case people don't

11 have them handy, just as a reminder.

12 MS. LANG: Okay.

13 MR. BIVONA: That's all I have for

14 housekeeping. Any other questions that

15 you might have for me? Does anybody want

Approved Minutes 10-09-08 Meeting.txt 16 me to comment on how great things are

17 right now?

18 MR. JEDRZEJCSYK: You know, if I can,

19 you know, there's always some talk about,

20 you know, how people tend to react to what

21 is going on in the market and maybe if you

22 could just touch upon really the value of

23 staying with the policy and not just

24 rewriting things basically because of, you

25 know, current economic conditions.

�

25

1 MR. BIVONA: Yeah. That's a good

2 point, John. The part of the workshop

3 that we're trying to develop was in that

4 policy statement was the strategic asset

5 allocation, basically that's the time

6 frame, when we did the asset allocation

7 model, we were looking at the forward

8 looking projections for each asset class

9 and the expected return.

10 So when you put the strategic

11 portfolio together, what happens is to

12 give you an example, you'll notice in the

13 policy statement that we have a target of,

14 let's say, 15 percent of large cap with a

15 maximum of 22. We want that asset class


16 to flow. And so, in essence, what we're

17 doing is, if we can go back a step, at any

18 given period, large cap value will out

19 perform large cap growth.

20 So when you are in that period, you're

21 selling high and giving to the under

22 performer, and for most of us, we buy high

23 and sell low, but this kind of makes you

24 kind of sell high when the asset classes

25 are low. There's -- over a three-year

�

26

1 time frame, that will change eventually.

2 So take small cap. Small cap

3 outperformed for the last prior four years

4 and so we would naturally have to be

5 taking money away from them as they hit

6 that maximum objective and put it into

7 money managers that were below the target.

8 So that's strategic overlay.

9 When we send you e-mails and say:

10 "Based on the current economic conditions,

11 as an example, we believe that large cap

12 growth will significantly outperform

13 value." Now, we can sit down with you and

14 say, "Why don't we reallocate and say 2

Approved Minutes 10-09-08 Meeting.txt 15 percent while we're waiting for the asset

16 class to get to our target, not to our

17 maximum.

18 So those are the tactical overlays

19 that we can input. But you want to stay

20 within that tactical overlay. I mean,

21 that's the strategic phase. Is that a

22 good explanation?

23 MS. MARTIN: Yes.

24 MR. BIVONA: One of the things that we

25 will do in the future, I think, portfolio,

�

27

1 I think what's happening right now is

2 there's a major correction; and when you

3 look at the portfolio, you are going to

4 see fixed income kind of pick up a little

5 bit. And the history shows that

6 eventually -- the fed just lowered rates

7 again and that's hopefully, hopefully,

8 like that word? Hopefully? -- will cause

9 inflation somewhere down the road. That's

10 the issue we have on the markets. When

11 that occurs, the interest rates start to

12 move up, we want to reliquify our fixed

13 income portfolio. Because as interest

14 rates go out, the bond values go down. So


15 at that point, tactically, we will move

16 money into cash because the money market

17 yields will go up faster. Bond portfolios

18 will come down.

19 Those are the kind of tactical plans

20 that we have, but that's -- we are far

21 away from that.

22 MR. JEDRZEJCSYK: But that's all

23 staying with the investment policy?

24 MR. BIVONA: Always in the investment

25 policy.

�

28

1 MR. JEDRZEJCSYK: You know, people

2 tend to buy out of all the risky classes.

3 You know, it effectively turns an

4 investment policy inside out, thinking

5 that, you know, looking for safety; but

6 that's really the wrong strategy to do.

7 So, by and large, whatever we decide here,

8 ultimately, that's a long-term horizon

9 just because times are bad.

10 MR. BIVONA: That's right, John. It's

11 been a year.

12 MR. JEDRZEJCSYK: You know, it doesn't

13 mean that you kind of rewrite everything

Approved Minutes 10-09-08 Meeting.txt 14 just for the moment.

15 MR. BIVONA: No. The only thing we

16 will do, though, and I will give you a

17 little history lesson. It was 1998, '99,

18 the City hired a value international

19 manager and a value growth manager. I

20 don't have to tell you, the value

21 internation manager outperformed

22 significantly. In '98, '99 the growth

23 manager outperformed.

24 Now, we gave each one of these five

25 million dollars. International value

�

29

1 manager outperformed growth and I kept

2 saying, "Take the money away now from the

3 growth manager." But the inclination is,

4 Let's ride the winter. So we took money

5 from the growth manager, based on our

6 maximum policy statement, and moved it.

7 The portfolio went down, but not as

8 significantly as it would have. And

9 that's the whole basis of this tactical

10 maximum and minimum targets. So it does

11 work, as long as we stay with our policy.

12 Now, the other thing that's important

13 is as we go forward, once a year we want


14 to do two things, review your policy

15 statement, make sure that there are no --

16 should we make any changes? And, No. 2,

17 we want to do an assets allocation study

18 based on current economic conditions.

19 As we do the asset allocation study,

20 that may make some changes in the tactical

21 for us. So those are the things we are

22 doing either way.

23 MR. JEDRZEJCSYK: Okay.

24 MR. BIVONA: So sometime in April we

25 need to do another asset allocation.

�

30

1 MS. MARTIN: Any other questions for

2 Joe?

3 (No response.)

4 MR. BIVONA: Well, here is a question,

5 Lisa, are we scheduling any workshops? I

6 mean, I know we talked about it.

7 MS. LANG: No, we haven't yet because

8 Paula Anthony needed to finish a trial

9 case that she was in and there's some

10 other things that are going on that have

11 to do with that. We'll talk about that in

12 a minute. So there's no point in having a

Approved Minutes 10-09-08 Meeting.txt 13 workshop until we have all of the fine

14 points from our point of view and we still

15 have some work to do. Things take time.

16 We will get there.

17 MR. CIOCHETTI: How are you doing

18 with the mayor as far as appointing

19 another board member here? Before we

20 start scheduling workshops and doing DMS,

21 having representatives come here to speak

22 with the board?

23 MS. LANG: Lisa and I have tried. We

24 both talked to Joe.

25 MR. CIOCHETTI: We are missing -- I

�

31

1 mean, it's kind of out of whack anyway

2 because I'm a Republican.

3 MS. MARTIN: We are missing a

4 Democratic member.

5 MR. DePILLO: So let's appoint a

6 Democratic member.

7 MR. CIOCHETTI: I mean, to me, I don't

8 think it has to be so political. I mean,

9 whoever is out there should be -- if they

10 are willing to serve is the person I would

11 be happy with. I don't care what party

12 they are from.


13 MR. DePILLO: I will have a

14 conversation with the mayor and we will

15 ask --

16 MS. LANG: Okay.

17 MR. CIOCHETTI: Well, I don't know.

18 Does he still have names on his list?


20 MR. CIOCHETTI: Can you look into that

21 then?


23 MR. CIOCHETTI: I don't know. I mean,

24 if it means the difference between a

25 Democrat and an Independent and we have an

�

32

1 Independent who is willing to serve, let's

2 just go with the Independent and fill the

3 board.

4 MR. DePILLO: All right. I will talk

5 to the mayor about it.

6 MS. MARTIN: We made some progress.

7 We have Larry now.

8 MS. LANG: Again, and that was after

9 multiple calls.

10 MR. BIVONA: Who else has changed?

11 MS. MARTIN: They're just not here

Approved Minutes 10-09-08 Meeting.txt 12 today.

13 MR. CIOCHETTI: They are just not here

14 today.

15 MR. BIVONA: Oh, okay. Because if

16 there is a change in the board, so I can

17 move them from my e-mail list.

18 MS. LANG: Oh, yeah, we would do that.

19 MR. BIVONA: And then add a new

20 person.

21 MS. LANG: No, there's nobody new.

22 MR. CIOCHETTI: We're just trying to

23 bring it up to a full board because if

24 somebody doesn't show up, then, you know

25 --

�

33

1 MS. MARTIN: We're in better shape now

2 than we were. At least we have five now

3 that we can count on to be here because

4 sometimes with Chris Corbett, he may have

5 all the good intentions of being here, but

6 at the last minute he --

7 MR. CIOCHETTI: He did this morning.

8 He just --

9 MS. MARTIN: It's no fault of his own

10 so. We are better than we were. We are

11 in better shape than we were at the start


12 of the year, but we need one more person.

13 MR. CIOCHETTI: Okay.

14 MS. MARTIN: Other -- Karen, did you

15 have anything on the asset allocation?

16 MS. LANG: Yes, just very briefly.

17 Paul Bailing was our tax attorney. We had

18 a rather large meeting with a lot of the

19 lawyers and what we are going to do is

20 submit the retirement plan to the Internal

21 Revenue Service for plan qualification,

22 which means that they write a letter back

23 to say it's in compliance with all of the

24 technical things that a panel must be in

25 compliance with and that puts the emphasis

�

34

1 on Paula Anthony to finish her redraft of

2 our original draft.

3 And so this is actually happening

4 because I got a letter from Paul Bailing

5 and he explained that there is a window

6 that the Internal Revenue Service opened

7 for us. And if you submit this, if they

8 find, for example, that you are in

9 violation of a technical correction as of

10 last July, they waive all the penalties.

Approved Minutes 10-09-08 Meeting.txt 11 So they periodically open windows like

12 this for certain events and we are in a

13 situation where we have to submit this to

14 the services because we are what you call

15 a pick-up plan, meaning that we are in

16 place of Social Security and we are taking

17 the pretax contribution and we have to get

18 the IRS to okay that.

19 MS. MARTIN: How long is the window,

20 Karen?

21 MS. LANG: It's a process. It doesn't

22 seem to be closing at any point in time,

23 but I don't know. We to decide in a few

24 months to get this worked on, so really

25 Paula has to put her time in on that

�

35

1 ordinance and get it, you know, dressed up

2 and then get it to Paul and he puts all of

3 the technical stuff, you know, the 415

4 limits and things like that. So it

5 becomes more of a retirement plan.

6 MS. MARTIN: Okay.

7 MR. DePILLO: Two questions, if you

8 don't mind. You know, I brought up a good

9 point earlier about the Wiggin & Dana

10 billing. Is it possible or is it too much


11 for somebody -- I mean, obviously they

12 reduced these, but could they initial them

13 before they send them to us.

14 MS. LANG: It's only one person who

15 works on them.

16 MR. CIOCHETTI: These bills have gone

17 down quite a bit. You should have seen

18 them before we worked on them.

19 MS. MARTIN: Yeah.

20 MS. LANG: No. We watch the nickels

21 and the dimes here.

22 MR. DePILLO: The other question I had

23 was with the POB's and I am not so sure if

24 there is, you know, a good time or a bad

25 time or any such thing.

�

36

1 MR. JEDRZEJCSYK: We have a meeting

2 tomorrow with the mayor on that, a number

3 of us, and we have -- we're trying to

4 position the City to issue the bonds once

5 the dollars loosen up. The question, I

6 think, is that it's certainly different

7 from what was originally proposed because

8 it works better. That's going to be a

9 combination of the fixed rate bonds of 20

Approved Minutes 10-09-08 Meeting.txt 10 million and 100 million invariability,

11 swap to fix.

12 And the reason that works is that we

13 are able to secure a letter of credit from

14 BankNorth and that's really the key

15 element of. If you are going to do a

16 variable rate bond, swap to fix, you need

17 to liquidate. And BankNorth came through.

18 It's a triple rated bank.

19 So, you know, we have a model in terms

20 of what the projected savings are, offer

21 the benchmark of the tenure, which if we

22 can do it like, you know, two and a half

23 percent over target for the fixed rate

24 bond of around 675, then we have a really

25 good deal going on. The trouble is, we

�

37

1 have to be in the position to sell.

2 MR. DePILLO: Hmm-hmm.

3 MR. JEDRZEJCSYK: And that's where

4 it's tight. You know, folks are saying,

5 Okay. The flood gates are going to go up

6 because there is so much demand out there

7 and the inability, especially with the

8 government, to sell bonds. I mean, the

9 State of Connecticut tried to sell -- it


10 was 400 million and they only sold about

11 88 mill and they had to pull back. Thank

12 God we just got under for ourselves. Two

13 weeks made a difference. We did a note

14 sale in September of 30 million at 1.8.

15 good figure. Now I think we would have a

16 problem.

17 MR. BIVONA: Yeah.

18 MR. JEDRZEJCSYK: And I don't know

19 what the hell is going to happen come

20 December if we do the note sale, which the

21 water department does need cash. They

22 need liquidity. And if they go ahead with

23 Wachovia, hopefully things will loosen up.

24 Otherwise, if that happens, the dollars

25 will -- if they can proceed with that,

�

38

1 then the dollars would have to come out of

2 our coffers.

3 I mean, there is always a cost with

4 it. If you are fronting dollars, you're

5 going to pay for it with a reduce

6 investment income on the general

7 government side. So, I mean, it's

8 inescapable. Hopefully that shows up

Approved Minutes 10-09-08 Meeting.txt 9 somewhere. So, you know, hopefully that

10 will loosen up. But right now, I have to

11 tell you, that all systems, hopefully

12 tomorrow, we will get the go-ahead to do

13 what we need to do and position the City.

14 And if it doesn't happen, it doesn't

15 happen. It's not on the part of

16 unwillingness. It's just a matter of

17 everything is messed up and complicating

18 things.

19 Our state deadline is November 15th,

20 which is a Saturday, which effectively

21 makes it the 14th. Issuing that, we're

22 really working up against that wall and

23 we're also looking into what happens if we

24 can't make that by the 14th. And bond

25 counsel is looking into that. There may

�

39

1 be some steps we need to take, short of

2 going through that whole painful ordeal

3 with them again.

4 MR. DePILLO: I thought there was a

5 November dead line?

6 MR. JEDRZEJCSYK: Yeah. It's the 14,

7 but really it's the 15th. But that is a

8 Saturday. So, I mean, that's where we are


9 at. I mean, you know, hopefully tomorrow

10 the mayor likes the proposal and we are

11 able to move forward and that there is a

12 market for it. And besides the savings, I

13 think, this may be something you can kind

14 of offer some comments on it.

15 I think if the savings, once we do the

16 issue between the actuarial table and the

17 bond costs, those are -- those budget

18 savings, but ultimately that type of pool

19 of cash, I mean, a guy like you at the

20 point of -- at this point in time, when

21 you see that flow of monies coming in, I

22 would have to believe that you would be

23 buying seriously low.

24 MR. BIVONA: Well, that was the point

25 at that last meeting. You said that

�

40

1 things were on sale, if you recall $14,000

2 and now $11,000. You know, it was --

3 MS. MARTIN: Now we're on clearance.

4 MR. BIVONA: But what we said was, we

5 have to tighten the market, put it to work

6 over a six-month time frame. And, I mean,

7 one of the things I can say is that

Approved Minutes 10-09-08 Meeting.txt 8 everybody is -- I mean, all of the tough

9 battles we fought, in 1984, the 1981 high

10 interest rates, the '84 crisis, 1987, the

11 1990 crash.

12 I mean, all of these situations looked

13 terrible. I feel today like I did in

14 1987. And you know what? Somehow we

15 always come out of it. Now the good news

16 to all of this, that was all the bad,

17 you're hearing all of the bad stuff.

18 The good news is that the government

19 finally did react and put 750 billion into

20 the system. The fed lowered rates.

21 They're throwing money into the system.

22 The world is throwing money at the system.

23 I have to believe that that's going to

24 work. I mean, otherwise, every other

25 situation we have ever been in, we came

�

41

1 out of it. And we came out better than

2 when we started. You know?

3 MS. MARTIN: Anything else?

4 (No response.)

5 MR. CIOCHETTI: Motion to adjourn.




8 present.)


10 (No response.)

11 MS. MARTIN: Meeting adjourned.

12

13 (Whereupon the meeting adjourned at

14 5:15 p.m.)

15

16

17

18

19

20

21

22

23

24

25

�

42

1

2

3 C E R T I F I C A T E

4

5 I, Sara Devino Posta, LSR 00267, hereby

6 certify that I am a Licensed Shorthand Reporter and

Approved Minutes 10-09-08 Meeting.txt 7 Notary Public in and for the State of Connecticut.

8 I further certify that the proceeding held on

9 October 9, 2008 was taken by me stenographically and

10 reduced to writing under my direction by

11 Computer-Aided Transcription; that the foregoing is a

12 true and accurate record of the testimony given.

13 I further certify that I am neither of counsel

14 nor attorney to any of the parties involved to said

15 proceeding, nor related to or employed by any party or

16 counsel in said proceeding, nor am I financially

17 interested in the outcome of said cause.

18

19 ___________________________ SARA DEVINO POSTA, LSR 20 Notary Public/Court Reporter CT Shorthand License No. 00267 21 Witness my hand and Notarial Seal this 15th day of 22 July, 2008. 23

24

25

Approved Minutes 10-09-08 Meeting.txt -...

Documents

Transcript of Approved Minutes 10-09-08 Meeting.txt -...