Potter County Retirement Board Meeting Minutes for 1-27-2011

~ Minutes ~
POTTER COUNTY RETIREMENT BOARD MEETING
January 27, 2011


CALL TO ORDER

ROLL CALL Members: Commissioner Doug Morley, Commissioner Paul Heimel, Commissioner Susan Kefover, Treasurer Krista Miller, all present; Recording Secretary Judy Snyder, present. Board member Kathleen Majot, Chief Clerk, absent.

MOMENT OF SILENCE

PLEDGE OF ALLEGIANCE

MINUTES Dec. 31, 2010 and Jan. 4, 2011. Comm. Kefover moved to approve both sets of minutes as submitted; Comm Heimel seconded. Morley, yes; Heimel, yes; Kefover, yes; Miller, yes.

NEW BUSINESS

Jeff Davidek with C.S. McKee reported that balance of the county’s retirement fund is at an all-time high, standing at $10,220,656 at the end of 2010.
• The economic prospectus for 2011 estimates growth approaching 3.5%, which is a little more than one-half the pace of a typical post-recession rebound.
• List of 2011 concerns includes shadow inventory in real estate, high consumer debt burdens, state and local budget constraints, rising inflation and interest rates abroad. While these factors have the ability to damage short-term consumer and investor activity, none should materially slow the pace of growth over the next several quarters.
• Virtually all of the underperformance is attributable to stock selection within the energy sector. One of the portfolio’s bright spots was the technology sector.
• The International Equity Portfolio produced a return of 6.61% for the 4th quarter. For the year, the portfolio achieved a return of 7.54%.
• Fixed Income Commentary – The broad market lost 1.3% for the 4th quarter. Allocations in Treasury Inflation Protected Securities (TIPS) have been modestly reduced, but these continue to be the largest positive exposure versus the benchmark.
• Summary – In short, McKee’s “bottom-up” approach makes sense for the 2011 environment, since any constant overweight to risk could be met with unacceptable volatility and inferior performance.

Mr. Davidek fielded several questions from Retirement Board members concerning the economic ramifications of shale gas development and was complimented by the board for C.S. McKee’s successful management of the fund to recover from considerable reductions in balance during 2008-09.

OTHER BUSINESS

ADJOURNMENT
Comm. Kefover moved to adjourn; Comm. Heimel seconded. Morley, yes; Heimel, yes; Kefover, yes; Miller yes.


Prepared by Cheri Potter