Investment Advisory Committee and Trustees of Public Funds Meeting

Attendance: David Fielding, John O'Keefe, Marie Ferrarin; Andrew Shaw – Trustee of Public Funds.  Representatives from Johnson and Illington (Town's money managers).

Fielding called the meeting to order at 8:40 am.

Ferrarin moved, Shaw seconded, to approve the minutes of March 27, 2009 as submitted. Motion carried unanimously.

Group A and C Funds

Fielding provided a summary of all Group A and C funds as of June 30, 2009 as well as a page from the Schwab statements reflecting the portfolio allocations and performance year to date. Fielding indicated he was dollar cost averaging into Exchange Traded Funds over six months -- the equity portion the committee voted on at the March 2009 meeting. He indicated that the total amount to be invested in the equity market should be completed by September 30. In regards to the Schwab offering of 2% interest rate, the Town was not eligible because it was for individuals and not entities.

Group B Funds

Johnson Illington Advisors, money managers of Group B Funds, distributed a performance report as of June 30, 2009 for each of the four funds they manage. The periods of performance reported included current quarter, year to date, last 12 months, and annualized inception to date. The committee reviewed each account’s performance to the bench marks for each of the periods covered. Discussion followed on what they were thinking on a forward looking basis in regards to possible inflation, economy and global impacts. As of June 30 the portfolios were 38% in the equities market and have been increased another 5% in July and will increase in the future as the economy gains traction. Inflation is not an immediate concern but is a concern in the future. The general consensus is 2% inflation but our advisors presented a projection from their model that indicates a higher rate. Most of the bonds held in the portfolio have a short duration. Our managers will be selling some of the government agency bonds in the near future. There will be global impacts to the recovery of the economy. Our managers were not concerned about these impacts. The US is still the "big guy" and many other countries rely on the US. The managers distributed a chart going back about 50 years reflecting various recessions and the length of time before recovery.

At the close of the meeting Fielding asked why quarterly statements were not received until half way into the next quarter and if all the members of the IAC committee could receive their quarterly statement via email. It was agreed the statements would be sent via email earlier without Illington and Johnson's quarterly letter.

A discussion followed as to the cash flow needs from Group B Funds for fiscal 2010. O’Keefe will review the CIP and provide Fielding the information as well as new email addresses of IAC committee members.

Fielding will communicate the information to Johnson Illington Advisors.

O’Keefe is to notify Johnson Illington Advisors and Fielding when in October the Selectboard will meet to hear the annual investment report on all funds.

The meeting adjourned at 10:30am.