A regular meeting of the Retirement Board was held at Town ...



A regular meeting of the Retirement Board was held at Town Hall, Wednesday May 31, 2017 at 3:00PM.

Members present: Wayne Marquis, Chairman/Appointed Member; Cory Grace, Ex-Officio; Steve Swanson, Fifth Member; Joe Collins, Elected Member; Mike Hagan, Elected Member.

Others present: Travis Ahern (Administrator); Susan Little (Staff); Isabelle Eckel (Consultant).

The Board meeting is being recorded with a digital audio recorder.

Wayne read agenda item: Minutes of the April 26, 2017 meeting to be accepted and signed. Wayne asked the Board if everyone has had a chance to review the minutes. Wayne asked if anyone would like to make a motion to accept the Minutes. (Vote: Steve Swanson motioned, Joe Collins seconding and the Board unanimously approving).

Board discussed the 2016 Annual Statement. The Board voted unanimously to accept and sign the 2016 Annual Statement. (Vote: Cory Grace motioned with Joe Collins seconding and the Board unanimously approving).

Eric Mandell, CFA/Senior Relationship Manager and Christopher Jenks, CFA/Product Specialist with BMO Global Asset Management reviewed portfolio performance. Eric explained there were no major changes within the firm. They have $235 billion under management globally. The same Investment Team manages our portfolio. Chris explained 2016 was a market of two halves. Momentum corrected mid-year and gave way to valuation performance. The first quarter environment in the US Small Cap Market showed investors rewarding higher risk companies based on prospective sales and earnings growth. This was evident at the sector level where biotech stocks were some of the best performers. Portfolio performance 1Q 2017 was -0.85% vs the benchmark of -0.13%. Chris said this shows fundamentals are not being rewarded. Steve asked how do you decide when to get rid of stock. Chris said when they see some deterioration in score changing the risk and return analysis.

The bills payable and payroll warrants were unanimously accepted and signed. (Vote: Joe Collins motioned with Steve Swanson seconding and the Board unanimously approving).

May Payroll 05312017 $968,125.97

May Expenses 0517 $184,902.91

Purchases were unanimously accepted (Vote: Joe Collins motioned with Mike Hagan seconding and the Board unanimously approving).

Sales were unanimously accepted (Vote: Cory Grace motioned with Joe Collins seconding and the Board unanimously approving).

| SECURITIES PURCHASED: | | | |

| | | | |

| | | | |

| | | | |

| | | | |

|Lyrical May | | | |

| | | | |

| | | | |

|4681 | | | |

|Flex Ltd. | | | |

| | | | |

| | | | |

| | | | |

| | | | |

|Twin May | | | |

| | | | |

| | | | |

|470 | | | |

|Analog Devices Inc Com | | | |

| | | | |

|2530 | | | |

|Host Hotels & Resorts Inc REIT | | | |

| | | | |

| | | | |

|470 | | | |

|Boeing Company Common | | | |

| | | | |

|390 | | | |

|3M Co Com | | | |

| | | | |

| | | | |

|900 | | | |

|Dover Corp Com | | | |

| | | | |

| | | | |

| | | | |

| | | | |

|SECURITIES SOLD: | | | |

| | | | |

| | | | |

| | | | |

| | | | |

|Lyrical May | | | |

| | | | |

| | | | |

|4515 | | | |

|Symantec Corporation | | | |

| | | | |

| | | | |

| | | | |

| | | | |

|Manulife May | | | |

| | | | |

| | | | |

|35000 | | | |

|U.S. Treasury N/B 2.875 11/15/2046 | | | |

| | | | |

|105000 | | | |

|US Treasury N/B 2.25 02/15/2027 | | | |

| | | | |

| | | | |

| | | | |

| | | | |

| | | | |

| | | | |

| | | | |

| | | | |

|Twin Capital May | | | |

| | | | |

| | | | |

|950 | | | |

|Alaska Airgroup Inc | | | |

| | | | |

|790 | | | |

|Qualcomm Inc Com | | | |

| | | | |

| | | | |

|950 | | | |

|Expeditors Intl Wash Inc Com | | | |

| | | | |

|1250 | | | |

|Rayonier Inc | | | |

| | | | |

| | | | |

|270 | | | |

|Nvidia | | | |

| | | | |

|550 | | | |

|Verisk Analytics Inc | | | |

| | | | |

| | | | |

| | | | |

| | | | |

| | | | |

| | | | |

| | | | |

| | | | |

|Manulife April | | | |

| | | | |

| | | | |

|5000 | | | |

|Discover Financial Svs 5.2% 04/27/2022 | | | |

| | | | |

|10000 | | | |

| | | | |

| | | | |

|Jeffries Group Inc 6.875% 4/15/2021 | | | |

| | | | |

| | | | | | |

| |

| |

|The Board unanimously approved the membership of: |

|Jessica Cooper-Gray, General Cafeteria Worker, start date 04/24/2017 (new position) |

| |

|James T. Caron, Firefighter, start date 05/01/2017 (Jay Wessell - promotion) |

| |

|Mark W. Cecieta, Firefighter, start date 05/01/2017 (replaces Dave Mondi - promotion) |

| |

|Adamo C. Ferriero, Firefighter, start date 05/01/2017 (replaces Mike Farley - retirement) |

| |

|John D. Hodgkins, Firefighter, start date 05/01/2017 (replaces Fred Ingraham - retirement) |

| |

| |

| |

| |

| |

|Norman St. Hiliare, Plumbing Inspector with Code Admin., start date 5/1/2017 (replaces Peter Sakelakos - retirement) |

| |

|Christopher Siers, Library Information Tech. Coordinator, start date 5/8/2017 (replaces Rachel Alexander) |

| |

| |

| |

|Michael Blanchette, Maintenance Mechanic I, start date 5/15/2017 (replaces Andrew Smith). |

| |

|Deborah Russo, General Cafeteria Worker, start date 5/22/2017 (replaces Barbara Farese - retirement). |

| |

|(Vote: Joe Collins motioned Steve Swanson seconding and the Board unanimously approving). |

| |

|The Board noted with sympathy the passing of Eugene Vezena, retired Foreman Line Worker with the |

|Electric Division, died 5/13/2017; Nannina Cobuzzi, retired housekeeper at Hunt Hospital, died 4/14/2017. |

| |

|The Board unanimously approved the transfers of: Christine Dean, transfer to Lexington Retirement |

|totaling $59,205.14, 13 yrs. 9 months C/S (4 yrs. 4 months Danvers liability); Andrew St. Pierre, |

|transfer to MTRS totaling $14,742.59, 1 year 5 months C/S. (Vote Cory Grace motioned with Joe Collins |

|seconding and the Board unanimously approving). |

| |

| |

| |

Approvals received from PERAC: Fran Hegarty

The Board unanimously approved the refund of Kyle James, direct refund totaling $14,894.37, 5 yrs. 8 months C/S; Alison Sabean, direct refund totaling 476.26, 3 months C/S. (Vote Joe Collins motioned with Cory Grace seconding and the Board unanimously approving).

Travis Ahern, Administrator/Finance Director reviewed PERAC Memo’s and other items of interest. Travis explained to the Board there are no PERAC Memo’s. He informed the Board Channel 5 ran an expose on the costs for out of state travel of some Mass Public Pension Systems. He advised this does not involve Danvers since we do not participate in out of State Travel. The total travel of the Board and staff is typically to MACRS or training sessions either held at PERAC in Somerville or other PERAC sponsored events within the State. Danvers typically hosts one or two Board education courses at Danvers Town Hall.

The Board discussed issuing an RFP for Custodial Services. Travis reminded the Board because there has been an issue with Comerica providing accurate 2016 PERAC Schedules we requested a 30day extension from PERAC which gives the System until June 1st to submit the Annual Statement. After the extension was granted, Comerica was given two deadlines and failed to meet both dates. He explained once it became clear they were not likely going to be able to provide the schedules we hired a third party on a project basis for $4,000. The hope is Comerica will reduce their fee to at least cover the cost of the third party since they failed to deliver the schedules. Travis emphasized at no point have the assets been in jeopardy. There was an accounting that all assets had been received from State Street to Comerica. He explained Comerica overpromised they understood the PERAC Schedules and would be able to provide them in the required format. Completing the schedules was made more difficult because of the size and structure of the Danvers portfolio and all the changes to Investment Managers due to re-bid requirements. (Vote: Joe Collins motioned Steve Swanson seconding and the Board unanimously approving issuing an RFP for Master Trust Custody services).

The Board unanimously approved the travel budget of Wayne Marquis to attend the MACRS Conference. (Vote: Joe Collins motioned with Steve Swanson seconding and the Board unanimously approving – Wayne abstained from the vote). Change to original budget to include hotel taxes.

The Board unanimously approved the travel budget of Mike Hagan to attend the MACRS Conference. (Vote: Joe Collins motioned with Steve Swanson seconding and the Board unanimously approving – Mike abstained from the vote). Change to original budget to include hotel taxes.

Isabelle Eckel of Morgan Stanley/Graystone updated the Board on portfolio performance. Isabelle explained as of April 30th the YTD results are +5.82% versus the Strategic Benchmark of +5.34%. Isabelle reviewed trailing performance and asset allocation by asset class. Wayne asked we are underperforming the Domestic Equity Benchmark. Isabelle explained this is a reconciling difference caused by the way Comerica handled the $400K monthly withdrawal in December. Rhumbline S&P changed trade vs settlement date valuation and Comerica didn’t adjust the way they booked the December 31st withdrawal until April.

Meeting Adjourned: 4:40 (Steve Swanson motioned with Joe Collins seconding and Board unanimously approving)

NEXT MEETING: June 28, 2017

_____________________________ ________________________________

Joseph Collins, Elected Member Michael Hagan, Elected Member

_______________________________ ________________________________

Corinna Grace, Ex-Officio Member Wayne P. Marquis, Chairman

_______________________________

Stephen Swanson, Fifth Member

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