Board of Trustees of the Police Pension Fund

Regular Meeting

Arlington Heights, IL · January 22, 2025

Minutes

MINUTES OF THE REGULAR MEETING OF THE ARLINGTON HEIGHTS POLICE PENSION FUND BOARD OF TRUSTEES MULDER COMMUNITY ROOM, POLICE DEPARTMENT 200 E. SIGWALT STREET WEDNESDAY, JANUARY 22, 2025 President Petar Milutinovic called the meeting to order at 5:30 PM. Roll call was taken with: Board Members Present: Petar Milutinovic, President Steven Klopack, Vice President Tom Henderson, Secretary Bill Falk, Assistant Secretary Harry Malone, Trustee Board Members Absent: None Also Present: Jeff Goodloe, Pension Board Attorney, Mary Ellen Juarez, Assistant Director, Finance, Kim Peterson, Recording Secretary PUBLIC COMMENTS Keith Moens, Arlington Heights resident, asked if now that all of the assets have been transferred to IPOPIF, did the Board receive a Third Quarter Investment Statement, which Ms. Juarez advised that IPOPIF has not released their December Statement yet. APPROVAL OF MINUTES A. October 23, 2024 Mr. Henderson moved, seconded by Mr. Falk, to approve the minutes of the regular board meeting held on October 23, 2024. The motion passed unanimously. TREASURER’S REPORT A. Report from the Village Treasurer Ms. Juarez advised that the balance on the Cash Flow report is only thru November, as they have not received a December Statement yet. Ms. Juarez stated that they always may be a month behind at the Quarterly Board Meetings, depending on how quickly IPOPIF distributes the Statements. Ms. Juarez advised that at the end of November, the Fund had $201 million and in terms of Cash Flow, the year ended with $556,463. The Village had to subsidize the property taxes that did not come in from Cook County, which totaled $4,190,000. The Illinois Funds Account ended with close to $3 million. Ms. Juarez advised that she spoke with IPOPIF and they only require a seven-day notice to withdraw funds, therefore she thinks as much money as possible should be kept in the Illinois Funds Account, as it gains the most interest there and a balance of about $50,000 should be kept in the Chase Checking Account. Ms. Juarez stated that they can just draw down from the Illinois Funds Account when money is needed to pay for the pensions until it runs out. Ms. Juarez asked if the Board is comfortable with keeping $50,000 in the checking account and if they want to leave a cushion in the Illinois Funds Account or would they rather she transfer the money to IPOPIF and take advantage of the higher interest rates. Since she only needs seven days to initiate the transfer, that is definitely an option. Ms. Juarez advised that she will be watching this fund a lot more -1- now than she did before. Mr. Henderson advised that the Board did discuss keeping a month and a half of benefit payments in one of the accounts so that it is more accessible, as well as keeping the property taxes. Mr. Henderson asked the Board if they want to keep the property taxes or have them sent to the State for investment and just have Ms. Juarez request the money monthly when she needs to make benefit payments. Mr. Malone suggested that it’s better to keep the money invested right up until it’s needed. Ms. Juarez asked how much money do they want to keep in the Illinois Funds Account, as well as the checking account. Mr. Malone stated that he thinks $50,000 should be kept in the checking account and the Illinois Funds Account should only have the minimum amount in it to keep it open. Mr. Goodloe advised that most other Boards are establishing a repeat monthly withdrawal to make benefit payments and setting a minimum target balance in the checking account and sweeping everything else into the consolidated fund and it comes in. Mr. Henderson moved, seconded by Mr. Klopack, to sweep all cash, except for $50,000 in the Chase Checking Account, to IPOPIF. Roll Call was taken. The motion passed unanimously. Mr. Henderson moved, seconded by Mr. Milutinovic, to instruct Assistant Finance Director Mary Ellen Juarez to withdraw from IPOPIF on a monthly basis an amount necessary to make benefit payments and to cover administrative costs. Roll Call was taken. The motion passed unanimously. PAYMENT OF BILLS A. Approval of the Check Register Mr. Henderson moved, seconded by Mr. Falk, to approve checks #760 through 766, and the checks to Kim Peterson and Goodloe and Puchalski. Roll Call was taken. The motion passed unanimously. Mr. Milutinovic advised that Tom Kuehne, the Village’s Finance Director and the Pension Board’s Treasurer, is retiring on January 30th and is being replaced by Melissa Gallagher on February 3rd. Ms. Gallaher will assume all of the permissions as authorized agent with IPOPIF. Ms. Juarez will continue to be an authorized agent as well. Mr. Milutinovic advised that this item will be placed on the next agenda for the Board’s official approval. Ms. Juarez stated that she will update the Chase Checking Account and Illinois Funds Account to reflect this change. REPORTS A. IPOPIF Third Quarter Statements Mr. Henderson advised that Pension Board reviewed the statements, therefore he is not going to go through them. OLD BUSINESS A. Disability Application – status update for Officer Nickolas Trudeau Mr. Goodloe advised that the process slowed down a bit as he worked through some additional records and body camera footage that he received from the Village in response to the subpoena he issued regarding the incident in question. Mr. Goodloe stated that three psychiatrists have been selected to examine Officer Trudeau, so he just need to get the appointment dates confirmed. He expects the appointments will take place within the next few weeks and once he gets those reports back an evidentiary hearing will hopefully get scheduled. B. Operating Account (In-Flow) adjustment to monthly drawdown -2- Mr. Henderson advised this item was already covered. C. Final transfer of assets to IPOPIF Mr. Milutinovic advised he spoke with Dave Wall last week regarding the $5 million left in the US Bank Account. Mr. Wall stated a letter was sent to US Bank instructing them to sweep all of this cash into the IPOPIF consolidated fund. D. Annual Physical Examination – Nicole Grelecki Mr. Goodloe advised that the 2025 physical examination has been set up for Ms. Grelecki and pursuant to the Board’s direction, a different doctor was chosen to examine her, which will take place February 11th. NEW BUSINESS A. Annual Budget Approval for 2025 Ms. Juarez advised that the property taxes and contributions for 2025 will be $4,427,000. Mr. Falk moved, seconded by Mr. Milutinovic, to approve the annual budget for 2025. The motion passed unanimously. B. Semi-Annual Review of Closed Session Mr. Henderson advised there are no closed session minutes to review. C. Statement of Economic Interest Mr. Milutinovic advised that he filed everyone’s information with the County and they’ll email everyone sometime in March, with a due date of May 1st. D. Approve annual Cost of Living Adjustments (COLA’S) for pensioners Mr. Henderson moved, seconded by Mr. Klopack, to approve the Cost-of-Living Adjustment for retirees commencing January 1st. Roll Call was taken. The motion passed unanimously. E. Review of Trustee term expirations and election procedures Mr. Milutinovic advised that all of the elected Trustees are up for reelection this year. Mr. Milutinovic stated that he will handle the election, which will take place in April. F. New Hire Joseph F. Tonkovic – December 29, 2024 Mr. Milutinovic moved, seconded by Mr. Falk, to accept Joseph F. Tonkovic into the pension fund as a Tier 2 participant. The motion passed unanimously. G. Resignation of Kenneth Ruff – December 12, 2024 Mr. Milutinovic advised that Kenneth Ruff resigned and has transferred to Naperville PD. He has not formally requested repayment of his contributions. -3- OTHER BUSINESS Mr. Milutinovic advised that the Illinois Public Pension Fund Association (IPPFA) spring conference will be held on May 7 – 8 and asked for a motion to approve expenditures. Mr. Malone moved, seconded by Mr. Milutinovic to approve the necessary expenses for those who will be attending the spring conference. Roll Call was taken. The motion passed anonymously. ADJOURNMENT Mr. Henderson moved, seconded by Mr. Malone to adjourn the meeting at 6:19 PM. The motion passed unanimously. -4-

Agenda

Packet

AGENDA Board of Trustees of the Police Pension Fund Community Room, Police Department 200 E. Sigwalt January 22, 2025 5:30 PM I. CALL TO ORDER II. ROLL CALL OF MEMBERS III. PUBLIC COMMENT Anyone wishing to speak on a subject not on the Agenda may speak at this time. Please limit your comments to three minutes. IV. APPROVAL OF MINUTES A. Approval of Meeting Minutes - October 23, 2024 V. CLOSED SESSION VI. TREASURER'S REPORT A. Report of the Village Treasurer VII. PAYMENT OF BILLS A. Approval of the Check Register VIII. REPORTS A. IPOPIF Third Quarter Statements IX. OLD BUSINESS A. Disability Application - status update for Officer Nickolas Trudeau B. Operating Accounts (In-Flow) adjustment to monthly drawdown C. Final transfer of assets to IPOPIF D. Annual Physical Examination - Nicole Grelecki X. NEW BUSINESS A. Annual Budget Approval for 2025 B. Semi-Annual Review of Closed Session Meeting Minutes Page 1 of 13 C. Statements of Economic Interest D. Approve Annual Cost of Living Adjustments (COLA's) for Pensioners E. Review Trustee Term Expirations and Election Procedures F. New Hire Joseph F. Tonkovic - December 9, 2024 G. Resignation of Kenneth Ruff - December 12, 2024 XI. OTHER BUSINESS XII. ADJOURNMENT Persons with disabilities requiring auxiliary aids or services, such as an American Sign Language interpreter or written materials in accessible formats, should contact the Health & Human Services Department, at 33 S. Arlington Heights Road, Arlington Heights, IL 60005, healthmail@vah.com or 847/368-5760. Page 2 of 13 MINUTES OF THE REGULAR MEETING OF THE ARLINGTON HEIGHTS POLICE PENSION FUND BOARD OF TRUSTEES MULDER COMMUNITY ROOM, POLICE DEPARTMENT 200 E. SIGWALT STREET WEDNESDAY, OCTOBER 23, 2024 Board Secretary Tom Henderson called the meeting to order at 5:30 PM. Roll call was taken with: Board Members Present: Petar Milutinovic, President Steven Klopack, Vice President Tom Henderson, Secretary Bill Falk, Assistant Secretary Harry Malone, Trustee Board Members Absent: None Also Present: Jeff Goodloe, Pension Board Attorney, Mary Ellen Juarez, Assistant Director, Finance, Kim Peterson, Recording Secretary, Dave Wall, Wall Capital Group (remotely). PUBLIC COMMENTS None. APPROVAL OF MINUTES A. July 24, 2024 Mr. Henderson moved, seconded by Mr. Falk, to approve the minutes of the regular board meeting held on July 24, 2024. The motion passed unanimously. TREASURER’S REPORT A. Report from the Village Treasurer Ms. Juarez presented the Police Pension Fund Financial Report and stated that as of September 30th, the Fund had $201,066,770 in net assets. Ms. Juarez explained how the majority of the assets were sent over to IPOPIF, and what was left has been divided between the existing J.P. Morgan Chase (checking) account and the newly created Illinois Funds account. The Board agreed during their last meeting to not hold more than one and a half times the pension payments in the J.P. Morgan Chase account and would transfer any additional monies into the Illinois Funds account where it could accrue more interest. Ms. Juarez advised that in September $5.3 million was transferred into the Illinois Funds account and in October, $1 million was transferred from that account into the checking account to cover benefit payments. Ms. Juarez is projecting that an additional $1 million will need to be transferred each month into the checking account to cover benefit payments, which would leave the checking account with $1.1 million and the Illinois Funds account with $2.3 million at the end of the year. Mr. Henderson asked Ms. Juarez if the monthly pension payments total around $900,000, which she stated they do. He also asked when the Fund can expect to see property tax revenue. Ms. Juarez advised that if everything goes as planned, the Village should start getting payments in March. Mr. Henderson advised that moving forward, the Board will need to figure out how much money they will need to keep in both of these accounts in order to cover the monthly benefit -1- Page 3 of 13 payments and any other administrative costs. Ms. Juarez explained how the Fund is making more interest in the Illinois Funds account versus the J. P. Morgan account and that the Board can wait until the next quarterly meeting to make those decisions. Mr. Falk stated that he thinks it would be best to have a consistent cash flow so IPOPIF can handle their investments properly. Mr. Malone advised that the Board should figure out a consistent amount for withdrawals so that they don’t have to make these projections every time they meet. Mr. Goodloe advised that starting out, IPOPIF wants everyone to have a three-month cushion, however after that three-month mark, they want everyone to retain only the cash necessary to pay imminent benefit payments and administrative costs. Mr. Goodloe stated that most Boards are withholding one or two months worth of benefit payments and administrative costs and then set up a repeat monthly withdrawal from IPOPIF so that they know the cash will always be there to make benefit payments. They then set a target in their operating account, whether it be one or two times benefit payments and administrative costs, and whenever the balance exceeds this target number, they rebalance and then take the excess and transfer it back to IPOPIF. Mr. Henderson advised that the Board established what they will hold back at the last meeting, but didn’t establish a draw down. Ms. Juarez advised that in January the monthly pension payments will be $975,000 at the very most. Mr. Henderson asked Ms. Juarez how much money the Pension Fund typically receives, which she advised that approximately $100,000 a month from participant contributions is deposited into the Fund, as well as a little over $4 million in property taxes spread throughout the year. Mr. Henderson asked if the Board is in favor of doing a monthly draw down, versus pulling big amounts out, which they all agreed with, and since there is enough money to get through the end of the year, they decided to revisit this item at the next meeting. Mr. Henderson asked if the Board receives a quarterly statement from IPOPIF, which Mr. Goodloe advised that the Board will receive their own statement on a monthly basis and then a quarterly statement from the consolidated fund. Mr. Milutinovic moved, seconded by Mr. Falk, to accept the Treasurer’s Report. Roll Call vote was taken. The motion passed unanimously. B. Approval of the Check Register Mr. Henderson moved, seconded by Mr. Klopack, to approve checks #754 through 761, check #762 to Puchalski/Goodloe for $2,846.88, check #763 to Kim Peterson for $500.00 and check #764 to Jeremy Klimisara for $9,037.54, which is a pension refund. Roll Call vote was taken. The motion passed unanimously. PAYMENT OF BILLS None. REPORTS A. Quarterly Investment Report – Wall Capital Group • Potential purchase or sale of securities, portfolio rebalancing, and/or potential retention or termination of investment managers/advisors Mr. Wall stated that all of the securities, except for the International Mutual Fund, have been transferred to the consolidated fund, although cash was not sent. There is still $5.7 million, which Mr. Wall recommends that it all be sent to what was the NIS account, and then transferred to the consolidated fund for investment. Mr. Wall stated that he could prepare a letter of direction to ask the custodian to send the funds to the consolidated fund. Mr. Milutinovic asked if the Board needs to do anything with the International Fund, which Mr. Wall advised that he will check to make sure the account number was on the letter to the custodian for the funds to be transferred. -2- Page 4 of 13 Mr. Henderson moved, seconded by Mr. Malone, to move all residual cash remaining in investment accounts held by Wall Capital at U.S. Bank into the NIS account and then that money will be transferred to IPOPIF. Roll Call vote was taken. The motion passed unanimously. Mr. Wall advised that everyone should have received a copy of his report and noted that the Fund finished off the year great, with a 24% rate of return. Mr. Wall thanked everyone for the confidence they had placed in Wall Capital Group over the years and stated that he will miss everyone. Mr. Malone and the other Board members thanked Mr. Wall for all that he has done serving as their financial advisor. OLD BUSINESS A. Transfer of Assets to IPOPIF Mr. Henderson advised that this item has already been completed. B. Disability Application – Status update for Officer Nickolas Trudeau Mr. Goodloe advised that following the last meeting, he sent a subpoena to the Village asking for Officer Trudeau’s records. At the end of September, the Village sent Mr. Goodloe the documents he requested, including the body camera footage from the alleged incident that lead to Officer Trudeau’s disabling condition. Mr. Goodloe advised that there is still one set of medical records that he lists on his application, that he is still waiting for in order to move forward. As soon as he gets the medical records, three psychiatrists can be chosen for Officer Trudeau to get examined by. Mr. Goodloe stated that the delay is not on the pension board, nor it is on the Village, it’s on the applicant, as it’s his burden of proof. Mr. Goodloe will continue to make every attempt to get these records. C. Review/Approve Actuarial Valuation and Municipal Tax Levy request Ms. Juarez advised this was done during the last meeting. D. Review/Approve Municipal Compliance Report Ms. Juarez advised this was done during the last meeting. NEW BUSINESS A. New Hire Daniel Halter – August 14, 2024 Mr. Henderson moved, seconded by Mr. Klopack, to accept Daniel Halter as a Tier 2 participant in the Police Pension Fund. The motion passed unanimously. B. New Hire Zackary Hicks – August 26, 2024 Mr. Henderson moved, seconded by Mr. Klopack, to accept Zackary Hicks as a Tier 2 participant in the Police Pension Fund. The motion passed unanimously. C. Officer Gary Lynch purchase of creditable service time-new pension service entry date is 12/18/2018 Ms. Juarez advised that in July, Officer Gary Lynch transferred creditable service from Park Ridge in the amount of $100,000 -3- Page 5 of 13 Mr. Milutinovic moved, seconded by Mr. Klopack, to acknowledge the payment has been made in full and accept the new entry date of December 18, 2018. The motion passed unanimously. D. Notice of Death, Steven Hudgens, August 8, 2024, surviving spouse, Carmella Livoisi-Hudgens Mr. Klopack moved, seconded by Mr. Milutinovic, to terminate the pension benefit for Steven Hudgens, effective August 8, 2024 and approve the survivor’s pension benefits for Carmella Livoisi-Hudgens, effective August 9, 2024. Roll Call vote was taken. The motion passed unanimously. E. Establish 2025 Board Meeting Dates Mr. Henderson moved, seconded by Mr. Malone, to approve the following dates, January 22, April 23, July 23 and October 22, for the 2025 Police Pension Fund regular board meetings. F. Annual Independent Medical Examinations Mr. Milutinovic advised that Nicole Grelecki is the only disabled beneficiary that is still required to have a medical examination. Mr. Malone asked if it’s possible to change doctors to get a fresh look at her disability, which Mr. Goodloe advised that the Board can choose a different doctor for her to see. Mr. Goodloe asked what the condition of her disability is, which Mr. Henderson advised that it is her elbow/shoulder. Mr. Goodloe advised that he will take care of setting up her exam. OTHER BUSINESS PUBLIC COMMENTS None. ADJOURNMENT Mr. Henderson moved, seconded by Mr. Malone to adjourn the meeting at 6:15 PM. The motion passed unanimously. -4- Page 6 of 13 Board of Trustees of the Police Pension Fund 1/22/2025 Item: Annual Budget Approval for 2025 Department: Police Item Description: ATTACHMENTS: None Page 7 of 13 Board of Trustees of the Police Pension Fund 1/22/2025 Item: Semi-Annual Review of Closed Session Meeting Minutes Department: Police Item Description: ATTACHMENTS: None Page 8 of 13 Board of Trustees of the Police Pension Fund 1/22/2025 Item: Statements of Economic Interest Department: Police Item Description: ATTACHMENTS: None Page 9 of 13 Board of Trustees of the Police Pension Fund 1/22/2025 Item: Approve Annual Cost of Living Adjustments (COLA's) for Pensioners Department: Police Item Description: ATTACHMENTS: None Page 10 of 13 Board of Trustees of the Police Pension Fund 1/22/2025 Item: Review Trustee Term Expirations and Election Procedures Department: Police Item Description: ATTACHMENTS: None Page 11 of 13 Board of Trustees of the Police Pension Fund 1/22/2025 Item: New Hire Joseph F. Tonkovic - December 9, 2024 Department: Police Item Description: ATTACHMENTS: None Page 12 of 13 Board of Trustees of the Police Pension Fund 1/22/2025 Item: Resignation of Kenneth Ruff - December 12, 2024 Department: Police Item Description: ATTACHMENTS: None Page 13 of 13