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NORWALK MUNICIPAL
EMPLOYEES' PENSION BOARD MINUTES
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MARCH 14, 2007
ATTENDANCE: James Murphy, Chairman; Gerry Moran,
Michael Sweeney, Francis Nash
STAFF: Frederic Gilden, Comptroller
OTHERS: Etta Lewis- Jones, Local 1042 Observer; Christopher C. Bendlak,
Evaluation Association; Effy Klopfer, EAI Researcher, Teri
Frisch, Pimco
CALL TO ORDER
Mr. Murphy called the meeting to order at 6:00 p.m.
APPROVAL OF MINUTES FOR DECEMBER 13, 2006; JANUARY 10TH, 2007 AND FEBRUARY 13TH 2007
Mr. Moran noted that the quality of the minutes was excellent.
The following changes were noted on the December 13, 2006 minutes:
Page 1, under ATTENDANCE: please change “Gerald J. Moore” to “Gerald Moran”
Page 1, under ATTENDANCE: please remove “Ellen H. Petrino, Consultant; Victor
S. George”.
Page 1, under STAFF: please add “Victor S. George” following “Director of Personnel
and Labor Relations”
Page 1, following STAFF heading: Please add the heading of “OTHER: Ellen H.
Petrino,
Consultant”
Page 1, paragraph 2, line 2 and throughout the document: please change “Mr.
Moore” to
“Mr. Moran”
Page 1, paragraph 3, line 7: please change “they are not inclusive in the”
to “they are not
included in”
Page 1, paragraph 4, line 4: please change “ net return to date.” To “net return
year to
date through November.”
Page 1, paragraph 4, line 5: please change “Overall there are” to “Overall these
are”
Page 1, paragraph 4, line 8: please change “ been taken out of positions.”
To “been taken
out of positions through buyouts.”
Page 2, paragraph 1, line 2: please change the following from: “The Global
Equity
Opportunity Fund was reported at 21.26% for the year.” To “The Global Equity
Opportunity Fund returned 8.35% year to date through September, but 21.26%
in 2005 whereas Rising Stars returned 7.80% in 2006 in 2006.
Page 2, paragraph 2, line 2: please change the following from: Park Avenue
investment.”
to “Park Avenue fund”
Page 2, paragraph 2, line 2: please change the following from: “The representative
said
that he is very happy with the group of managers. The two largest allocations
are
Park and 5th Avenue funds.” to “The representative said that in the firm’s view,
Park Avenue is the most stable fund with great managers. The two largest funds
are Park Avenue and Fifth Avenue funds.”
Page 2, paragraph 3, line 1: please change: “Alinda and Infrastructure and
the” to
“Alinda and Macquarie and the”
Page 2, paragraph 3, line 3: please change “a representative from both groups
to come” to
“a representative from either groups to come”.
Page 2, paragraph 3, line 4: please change: “Phil Dyke from Alinda was selected.”
To
“Phil Dyke from Alinda was selected since he lives nearby.”
Page 2, paragraph 3, line 5: please change: Ms. Petrino said she put together
an outline
and updated it with regard to fees and leverage.” to “Ms. Petrino said she put
together an outline and updated it with regard to fees and leverage, per the
committee’s request, and passed it out.”
Page 2, paragraph 3, line 8: please change: “Alinda is targeting 20% by selling
down to
investors who accept lower yields.” To “Alinda is targeting 20% by exiting
investments via selling to investors who accept lower yields.”
Page 2, paragraph 3, line 12: please change: “to take over an asset they are
not going to
pay very much.” To “to take over an asset they will pay fair value.”
Page 2, paragraph 4, line 2: please change: “He said it is a partnership that
has worked
together for many years.” To “He said the partners have worked together for
many years.”
Page 2, paragraph 4, line 4: please change: “investors with completed fund
by the” to
“inventors and will complete fundraising by the”
Page 2, paragraph 4, line 5: please change: “between 2 and 3 billion dollars.”
To
“between $2 and $3 billion.”
Page 3, paragraph 1, line 1: please change “McQuarry” to “Macquarie”.
Page 3, Motion: please change “McQuarry” to “Macquarie”.
The following changes were noted on the January 10th minutes:
Page 2, paragraph 1, line 4: please change “ The Non-U.S. REITs are developing.”
To
“The non-U.S. REITs markets are developing.”
Page 2, paragraph 8, line 1: please change: “the Pinco commodity is strong
this year.” to
“the Pimco commodity fund is strong this year.”
Page 2, paragraph 9, line 1: please change: “Ms. Petrino asked, re index funds,
if
they are so large” to “Ms. Petrino was asked, re index funds, if the pension
fund
are so large.”
Page 2, paragraph 11, line 2: please change: “better about taking a shot.”
to “better about
investing with a concentrated or more risky manager.”
Page 3, paragraph 1, line 1: please change: “this sized fund. ” to “this size fund.”
Page 3, paragraph 1, line 2: please change: “of companies since” to “of managers since”.
Page 3, paragraph 1, line 3: please change: “some money” to “some more money”.
Page 3, paragraph 4, line 1: please change: “Street is at first” to “Street is the first”
Page 3, paragraph 7, line 1: please change: “managerial” to “manager”
Page 3, Heading: Please change “MANGER – LSW –“ to ““MANGER – LSV –“
Page 3, paragraph 9, line 3: please change: “They have re-examined and hope
to improve
Telecommunications have also hurt them.” To “They have re-examined and hope
to improve by segmenting the various REIT sectors as separate industries – they
owned REITs, but were in the segments with better valuations, which didn’t rise
as much as the REITs they felt were overvalued. Telecommunications have also
hurt them, but it is a small segment of the market.”
Page 3, paragraph 10, line 2: please change: “It is a very low” to “It is a relatively low”
The following changes were noted on the February 13, 2007 minutes:
Page 1, under ATTENDANCE: please change: “Francis Nest” to “Francis Nash”
Page 1, under OTHERS: please change: “Ellen Petrino, Evaluation Association;”
to
“Ellen Petrino, and Chris Bendlak, Evaluation Association;”
Page 1, paragraph 3, line 2: please change: “gained 31% over the Standards
& Poor’s
Index.” to “gained 31.1% compared to 15.8% for the Standards & Poor’s
Index.”
Page 1, paragraph 3, line 4: please change: “At 13.6%, which is what Norwalk
has chosen,
the result should be doubling every five to six years.” To “At 13.9%, which
is
what Norwalk has earned, the result should be doubling assets every five to
six years.”
Page 1, paragraph 3, line 6: please change: “Mr. Zesiger stated that the portfolio
states
that the retirement fund is almost up to 34 million dollars in securities. There
was
also a brief discussion about the management of the percentage of cash.” To
“Mr. Zesiger stated that the portfolio is up to almost $34 million in securities.
There was also a brief discussion about the management of the percentage of
cash, which is a residual to sales, not a market timing call, and rarely exceeds
7%.”
Page 1, paragraph 4, line 3: please change: “rather than the one that may be
household
names” to “rather than household names.”
Page 1, paragraph 4, line 4: please change: “look than the standard” to “look
than a
standard”
Page 2, paragraph 1, line 1: please change the following: “an example of the
shift in
securities in the energy field, which had previously been more directly associated
with the provision of oil and gas. Now the energy portfolio reflects the energy
infrastructure rather than the direct supply. The nature of the investment has
changed over the time period.” To “an example of the shift in securities in
the energy sector, which had previously been more directly associated with the
producing oil and gas. Now the energy portfolio reflects energy infrastructure
rather than direct suppliers. The nature of the investment has changed over
the time period.
Page 2, paragraph 3, line 1: please change: “about the “Prospectus Plus” to
“about the
notation “Prospectus Plus”
Page 2, paragraph 3, line 6: please change: “that were over 10%: Libby, Uranium
Resources, and Heskcott.” To “that were over 10% of outstanding shares: Libby,
Uranium Resources, and Heskcott.”
Page 2, paragraph 3, line 8: please change: “International Cover Portfolio”
to
“International portfolio”.
Page 2, paragraph 5, line 1: please change: “Mr. Patni then reviewed” to “Mr.
Patni
reviewed”
Page 2, paragraph 5 line 4: please change: “very strong growth, which indicates
growth
of 50 to 100%” to “very strong growth of 50 to 100%.”
Page 3, paragraph 3, line 3: please change: “Mr., Zesiger had been” to “Mr.
Zesiger has
been”
Page 3, paragraph 4, line 3: please change” “in the investment policy statement.”
To “
in the investment policy statement and whether this was a best practice to have
a
limit.”
Page 3, paragraph 4, line 6: please change: “many fixed income managers.” To
“many
fixed income managers, for example.”
Page 3, paragraph 5, line 5: please change: “ related items.” to “related bonds.”
Page 3, paragraph 5, line 12: please change: “a call to Fred about” to “a call
to the
manager about”
Page 4, paragraph 1, line 3: please change: “This means that they beat the
benchmark or
the median manager.” To “Regarding managers, Armstrong Shaw beat the
benchmark or the median manager in the fourth quarter.”
Page 4, paragraph 1, line 5: please change: “twenty basis points. She reminded
the Board
that they had seen a chart in which the investment company had always
outperformed either the S&P or the Russell 1000.” to “twenty basis points
for the
year. She reminded the Board that they had seen a chart in which the firm
had always outperformed either the S&P or the Russell 1000 Value.”
Page 4, paragraph 1, line 10: please change: “group had done” to “group (Capstone)
had
done”
Page 4, paragraph 3, line 1: please change: “Artisan’s had been put” to “Artisan’s
returns
had been put”
Page 4, paragraph 3, line 2: please change: “because Chris has been specifically
working
on the investment. During the past three years, the Artisan’s growth has been
fine,
but prior to that, there were some insurance stock issues. There has been some
loss
in Japanese financials.” to “because Chris Bendlak has been specifically working
on the report. During the past three years, Artisan’s growth returns have been
fine,
but prior to that, there were some insurance stock issues. There has been some
underperformance in Japanese financials.”
Page 4, paragraph 4, line 1: please change: “ a third manager” to “a third
international
manager”
Page 4, paragraph 4, line 5: please change: “markets that were moving” to “markets
that were speculative.”
Page 4, paragraph 4, line 2: please change the following: “It ranked slightly
below
median for the fourth quartile. By indexing the returns, the returns from Capstone
have been slightly better than the benchmark. These are equivalent results but
with
much less volatility.” to “It ranked slightly below median for the fourth quarter.
By
indexing the portfolio, the returns would have been slightly better than they
have
been. Capstone has earned equivalent results but with much less volatility than
the
index.
Page 4, paragraph 7, line 1: please change; “members attention” to “members’ attention”
Page 5, paragraph 1, line 1: please change: “there were four” to “she is proposing four”
Page 5, paragraph 2, line 3: please change the following: “She also pointed
out that the
high yields and emerging markets debts with the spread being so narrow. It was
asked if moving” to “She also pointed out that high yields and emerging markets
debts bonds are trading with the spread being very narrow. She was asked if
moving”
Page 5, paragraph 3, line 6: please change: Both attempts resulted in a loss
over the past
six or seven years, with underperformance of 50 basis points over two to three
years.” To “The attempt resulted in a loss over six or seven years, with
underperformance of 50 basis points over two to three years.”
Page 5, paragraph 3, line 8: please change: “Ms. Petrino said that Frank Russell
should
always have high yield and should be a permanent investment because it has a
steady yield.” to “Ms. Petrino said that one consultant, Frank Russell,
recommends always having high yield as a permanent investment because it has
a
steady yield.”
Page 4, paragraph 4, line 4: please change: “hedge fund approach and that she
felt it
would be best to keep that fund for doing other things in the portfolio.” to
“hedge fund approach to portable alpha and that she felt it would be best to
keep hedge funds for doing other things in the portfolio.”
There was a brief discussion regarding an email from Patricia McCormick regarding a statement on page 6 of the minutes. Mr. Murphy asked that the email be read aloud for the record.
“Under EMPLOYEE INFORMATIONAL MEETINGS, it was mentioned that most unions had not responded to the Board’s invitation in 2006 to schedule informational meetings with the membership. Further it was stated that pension statements would be going out to individuals in the next eight weeks and an informational meeting will be scheduled after that, most likely in April of 2007.”
Mr. Murphy then asked that the statement from the minutes be read aloud for the record.
“It was mentioned that Ms. McCormick had some difficulties scheduling these meetings. It was also stated that the Board should be sending out pension statements to the individual employees. This should be done within the next eight weeks. It was suggested to have an employee meeting shortly after the pension statements are sent out. This will most likely happen in April.”
After a brief discussion it was decided to make the following change.
Pg. 6, paragraph 4, line 1: please change the following from: “It was mentioned
that Ms.
McCormick had some difficulties scheduling these meetings.” To “It was
mentioned that most unions had not responded to the Board’s invitation in 2006
to
schedule informational meetings with the membership.”
** MR. MORAN MOVED TO APPROVE THE MINUTES FOR DECEMBER 13,2006; JANUARY 10TH,
2007 AND FEBRUARY 13TH 2007 AS CORRECTED.
** THE MOTION PASSED UNANIMOUSLY.
PIMCO – ALL ASSET AND REAL RETURN – TERI FRISCH
Ms. Frisch stated that she would be reviewing the two investments with Pimco, one being the Commody Real Return fund and the second the All Asset Fund. Ms. Frisch explained that Norwalk’s investments in the Real Return Fund returned 5.7% annualized net of fees versus the pure index, which did much better over the time period thru December 31st, which netted 10.1%. Ms. Frisch said that she would review the reasons why Pimco’s performance was below that of the index. She commented that earlier in the day, she had checked the commodities market and noticed that the market had picked up significantly. Year to date, Ms. Frisch pointed out that the Pimco funds (through February 28th) had a return of 4.7% versus the Dow Jones AIG Total Return Index of 3.6%.
Ms. Frisch was asked if this was because Pimco was selecting its own commodities contracts. She explained that Pimco was not actually selecting their own commodities, but uses an index that is based on approximately 21 different commodities. This allows investors to have the same exposure as the unmanaged index. Pimco manages the collateral in the portfolio. Exposure to the commodity index is purchased through structured notes, and then the assets in the portfolio are used to purchase bonds. The intention is to give the investor a fair return of the commodity index plus the return of the underlying bonds portfolio. Over the last few years, the Federal Reserve has continued to increase short term interest rates, investments in cash has provided a better return than investing in almost any other bond, including the bonds that were purchased for this portfolio. The reason for the underperformance is related to the underlying bond portfolio and not the return of the commodities. Pimco believes that the market is poised at this time to change, and has structured the underlying portfolio to take advantage of what is believe to be some major changes in the economy over the next 12 to 18 months. There was a discussion about taking risk in the bond market and the effect of Treasury bills on the returns.
Ms. Frisch stated that when the interest rates decline, which has already started, the collateral portfolio should begin to show improvement. She was asked what percentage of the portfolio was invested in TIPS. Ms. Frisch directed the Board members’ attention to page six of the report and reviewed the numbers with them. She also mentioned that Pimco does invest in other sectors of the fixed income market, which is not shown in the report. Pimco does utilize every part of the fixed income market to diversify the risk. A discussion about the fact that both Municipal Bonds and the long Treasure bonds are both yielding 5%, which should not historically be possible followed. When the interest rates begin to decline, the relationship between the Municipal Bonds and the long Treasure bonds will normalize.
Ms. Frisch then directed the members’ attention to the All Asset Fund information as listed on page 8 of the report. Since the inception of the investment, net of fees, there has been a return of 6.5%. This is compared against three different benchmarks: the Lehman Brothers U.S. TIPS Index; CPI + 5%, and Lehman Brothers Aggregate Index/ S&P 500. The Lehman Brothers TIPS yielded only 1.6% since inception, which results in Pimco outperforming Lehman Brothers TIPS by almost 500 basis points during that same time period. CPI+5% focuses on inflation and an increase of 5%, which is a longer-term benchmark. Ms. Frisch commented that would require a return of at least 8% to beat that benchmark. The S&P 500 did well last year, and moved from about 7.8% to 10.4%. The fund has continued to grow.
Ms. Frisch then gave an overview of the product as outlined on page 12 of the report. She stated that the purpose was to have three different sources of returns in the portfolio. The first one is by having another outside manager, Robert Arnott from Research Affiliates, perform tactical asset allocation. Mr. Arnott decides which Pimco funds to include in the portfolio.
The second way to add income to the portfolio is through all of Pimco’s investment management ideas in play, outperforming their benchmarks. The third source is pure diversification effect by having exposure to all of the different asset classes.
The All Asset Fund is often viewed as an alternative asset class, similar to a hedge fund, but much more transparent. Ms. Frisch then reviewed each of the short term strategies listed on the chart with the Board. The changes in the short term strategies will change based on Mr. Arnott’s models. A Board member asked whether this practice was new to Pimco. Ms. Frisch explained that Mr. Arnott has been responsible for tactical allocation since the beginning of the fund. She was then asked to indicate where the effects of Mr. Arnott’s strategies would be located in the report. It was commented that his decision could wipe out everything else. Ms. Frisch confirmed this and directed the Board to page 11 of the report. This chart shows the various allocations and indicated that Pimco’s alpha was negative, by having more funds underperform than overperform. The negative listings do not indicate negative absolute returns, they are returns relative to the benchmark. In some cases it was a few basis points. The short-term bond was paying well last year when the rest of the market was not. Mr. Arnott’s model tends to be more heavily weighted to inflation related strategies rather than equities or traditional fixed income. Mr. Arnott’s model is a very value orientated model, therefore equities, non-dollar equities and commodities appeared overvalued. Because of this, Mr. Arnott did not pick up exposure to these sectors, which later turned out to be the highest performing sectors. This was a major reason for the underperformance. A discussion about this practice ensued.
Ms. Frisch was asked about Pimco’s view of high yield bonds and emerging markets. She said that Pimco’s outlook on emerging markets is that there is still a high yield on some of them, primarily Brazil, Russia, Mexico and China, which is most of the exposure for the emerging markets.
Pimco’s GDP Outlook was reviewed next. Ms. Frisch explained that there had been a recent quarterly meeting of the firm’s strategy group to look at the growth of GDP globally. After a day of discussion, the strategy group votes and these votes are later tabulated to produce “Pimco’s outlook”. The current forecast is to map the probability of an upsurge in growth versus a growth slowdown. This chart is on page 14 of the report. Pimco still believes that the economy is going to slow. This is because of the weakness in the housing markets. Pimco has been following the housing market for the last two years. It has been surprising to see how well consumers have continued to spend and that the housing market prices have been flat. However, affordability started to drop off well over a year ago, which is reflected in the problem in sub-prime lending.
Pimco believed that a recession in the housing market would occur much sooner. The housing market feeds directly into employment. When the new housing market stalls, the various individuals involved complete a project but do not have a new project waiting. Also there has been a lot of equity in the housing market and individuals have been taking equity out of their homes in the form of refinancing with low rates. However, there has not been an increase in savings. On a spending basis, the consumer growth is about 3/4th of a percent. If consumers are no longer able to take equity out of their homes, their wages are not going up and their confidence in their ability to remain employed decreases, then spending will drop. When spending drops, it pushes growth down. This usually coincides with an increase in unemployment. When this happens, it is good news for the bond market. All of those events will push down interest rates and bond prices will rise. Ms. Frisch then gave an overview of the effect of a U.S. economic slowdown on the rest of the world’s economies. A discussion of this followed.
When asked if Pimco was expecting a recession in the U.S. economy, Ms. Frisch explained that there had been quite a bit of discussion regarding whether the economy would have a “hard” landing or a “soft” landing. Currently, there is a split in opinion on this, but a recession is not expected. The forecasted outlook has been more toward “stagflation” rather than recession. Currently, the economy is growing at approximately 2-3% with inflation just below that number.
Some concerns were expressed about Mr. Arnott’s ability to choose the appropriate bond and what the effect on the portfolio would be if Mr. Arnott chose unwisely. Ms. Frisch replied that Mr. Arnott has no influence on the individual portfolios. She said that she believes that there is a lot of value in the way that Mr. Arnott looks at the market going forward. Ms. Frisch’s expectation is that the tactical allocation will add value over time rather than detract. She added that there have been periods when tactical allocation has been very successful. Mr. Arnott has been very transparent about the situation. One question that was raised by another client was what happens if Mr. Arnott continues to be wrong and what would Pimco do about it. The bottom line, Ms. Frisch said, was that this was their franchise and that Pimco has invested a lot of the firm’s capital in the product and the strategy in which Pimco believes. In a worst case scenario, Pimco would then take over the management of the fund because Pimco would not want to risk their clients’ ability to outperform.
Following Ms. Frisch’s departure, the Board discussed the impact of Mr. Arnott’s decision making on the overall portfolio.
GMO EMERGING MARKETS (VIA CONFERNCE CALL)
CAROLYN NELSON AND MARCO VENGELISTI
Ms. Nelson introduced herself and Mr. Vengelisti and greeted the Board. She gave a quick update on the firm to the Board, along with the state of the emerging market equity asset class, including a review on how the money is managed in the emerging market equities fund. Ms. Nelson commented that the firm prides itself on a low turn over of investment professionals. She then reviewed the information on pages 3 and 4 with the Board. Ms. Nelson commented that it has been almost four years since Norwalk invested with GMO. She indicated, on page 5 of the report, that GMO has delivered a 41.52% annualized net-of-fee return since inception, which is 0.92% over the S&P/IFC benchmark. Ms. Nelson then quickly reviewed the organizational chart on page 6 with the Board before turning the call over to Mr. Vengelisti.
Mr. Vengelisti said that there have been a number of issues that have cause the emerging markets to be very volatile. He then reviewed the information on page 8 of the report. Mr. Vengelisti explained that currently, the emerging markets are not vulnerable to shock because they are inexpensive or they have substantial current account balances. He said that he believes that the lessons learned from the Asian crisis leads corporations to deploy assets in a more profitable way.
On page 20, there was a discussion on the return on equity and whether the inclusion of Japan into the MSCI EAFE indicator would cause the MSCI EAFE to underperform the S&P/IFC Investable Index. Mr. Vengelisti said that the chart actually indicates the profitability of the average company in the market. Profitability is poor in Japan, Mr. Vengelisti said, so adding Japan to MSCI EAFE would cause the MSCI EAFE to be lower than it is on the chart.
For the first time in its history, emerging markets have created economic value; therefore paying a slight premium is not unreasonable. There are risks in the market because of imbalances. Mr. Vengelisti then reviewed some of the reasons for the recent turbulence in the emerging markets due to long/short money.
There were some questions about the asset class and how GMO adds value through active management over the emerging markets index. Mr. Vengelisti directed the Board’s attention to page 56 of the report, which he then reviewed with them. In answer to the second question, Mr. Vengelisti said that GMO has added 3.8% per year and that GMO’s goal is to deliver 4% per year, but GMO is facing a difficult situation because of the compression of valuations. He then went on to give a brief overview of this situation. Historically, cheap countries are rated at a 22% discount. That is the average valuation spread between cheap and expensive countries. Currently, the difference in valuation is much narrower, which is a problem for GMO since GMO looks for truly cheap countries. This will have an impact on GMO’s ability to deliver a 4% return in excess of the IFCI. It is a difficult time for value, but GMO will continue to follow its plan. GMO has reduced the level of aggressiveness in terms of selecting countries and invested quality, which has been cheap in emerging markets.
Mr. Vengelisti then reviewed the portfolio’s current position as shown on pages 35 through 37 of the report. As cheap countries have become more expensive, they outperform expensive countries. GMO has benefited tremendously from this.
Mr. Vengelisti was asked if emerging markets are expensive as a whole, whether the portfolio would be limited in its exposure for the next few years. Mr. Vengelisti replied that although emerging markets are expensive; many of the other countries are more expensive than emerging markets. This makes it a difficult call since GMO likes to reduce risk as much as possible, and holds as much cash as is allowed. The quality drop in the U.S. results in an overweight in emerging markets because they are the least expensive among the asset classes. This makes emerging markets the most attractive to GMO at this time. If a major correction were to occur in the asset class or the global market, then GMO’s value and quality-based approach might soften the blow.
Mr. Vengelisti was then asked about some of the figures on page 52. He stated
that he had the year to date figures on his computer and would be happy to send
the updated figures to the Board.
PENSION INFORMATION
There were no pension applications to review.
OTHER BUSINESS
Mr. Bendlak said that Ms. Petrino was waiting for the dates for the subcommittee meetings. He also reported that next month there was no one scheduled to present their reports to the Board. There was a brief discussion about the dates for the subcommittee meetings and who was responsible for setting them.
Mr. Murphy then asked if the Board would be willing to hear an unusual request. He stated that he is the treasurer of the Human Services Council in Norwalk. The Council owns a building on 1 Park Street and the Council is looking to refinance a half a million dollars of secondary debt on the building. The building was appraised four years ago for $2.2 million and has an $800,000 mortgage on it currently. As an agency, the Human Services Council attempted to build some local moderate-income housing. This project was held up by a lawsuit by the neighboring property owners. The Redevelopment Agency then reclaimed the property and the Human Services Council ended up with a sizable debt. This is why they would like to refinance the building. He proposed that the Board look at providing a second mortgage for the building. He stated that there is abundant debt coverage and that he would recuse himself from this issue. Mr. Murphy commented that while the Board has never done anything direct and always involved managers, the City of Hartford had done this. There is income there and the building is fully occupied. He then reviewed the reasons why the Human Services Council was reluctant to approach a bank for refinancing. A discussion about the details of this proposal followed.
Mr. Gilden commented that he was working on submitting pension management magazine subscriptions for the Board members.
There was also a brief discussion about the Board members attending workshop meetings and how this would be financed. Mr. Gilden said that he would bring copies of the brochures for the Board members.
ADJOURNMENT
** MR. MORAN MOVED TO ADJOURN.
** THE MOTION PASSED UNANIMOUSLY.
The meeting adjourned at 7:50 p.m.
Respectfully submitted,
Sharon L. Soltes
Telesco Secretarial Services
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