Showing posts with label Sheridan Road. Show all posts
Showing posts with label Sheridan Road. Show all posts

Saturday, September 23, 2017

Financial Sustainability Committee -Interviews Finished. What next?

Hi All,

The Financial Sustainability Committee (FSC) met again on WED.  Sept. 6, 2017

I was anticipating  at the 9/6/17 FSC meeting a lively discussion of the five companies among the FSC members to help narrow down which company may be best to meet the goals requested in the RFP.   That did not happen even though the agenda said they would discuss the interviews.
  • What seemed to be the most important topic at this AM meeting was,  which person from which company would the employees like to work with the most.  Really?  Yes.  That was a main focus of the one hour meeting.  The committee is planning to get a small group of employees to role play an investment advisor one-on-one  or group meeting session with some, not all,  of the companies and their "key person" that would handle those contacts in the future.  The employees would then tell the FSC members which person they liked the best.
  • The other key point that was mentioned was the DB Prudential FIXED pension.  Well, that was intentionally NOT part of the RFP and specifically said so in the RFP.  Yet, that seems now to be a considering factor when finally choosing a company.  Not fair !
  •  I can't express in words how disappointed I was with this meeting, yet several FSC members mentioned out loud several times how "productive" this meeting was.  
FYI:  Interviews were held in August for 5 companies. The FSC minutes approved just mentioned the names of the company and the presenters.  No other facts were in the minutes.  Just 45 minutes for presentation and 15 minutes for questions was given to each company.   Then the committee took a 15 minute "break".  Many FSC members gathered in another office room area.  I believe there was talk about the company just interviewed.   I, of course, was not permitted nor invited to that space and the tape recorder for recording the meeting was in a different room.  Since this was an open meeting,  I believe this separate discussion after each interview was a violation of the Open Meetings Act.

Also, at the interviews, the FSC committee members received a handout from each company.  I, as audience member was not permitted to receive those handouts and subsequently was denied a copy of those handouts in a FOIA request.  During the presentations, not all companies mentioned the pricing and the committee members did not ask.  Therefore, that kind of information is missing in my notes.

The rest of this blog are comments from my notes as I heard and understood them.  Because I could not follow along with any handouts... I may have misunderstood or made some errors in my notes.    I apologize for any misrepresentations.  I will correct this blog upon any verifiable facts of error.    Therefore:  my notes and opinions about the 5 companies that responded to the RFP:

1.
Mentioned by a few at the Sept. 6 morning meeting was that one company, SHERIDAN ROAD,  most likely will not be chosen.  While a reason was not clearly expressed (except perhaps not local)   I personally thought they were the weakest presentation.    I did not hear what the transition plan would look like if they got the job, nor heard about their research group or the pricing plan.  That may have been in the handout that I did not see.

2.
Committee members hinted on 9/6/17 that: &CO,  another company may not be in the running for the complete "all in"  job mainly because they do not do one-on-one or group interactions with the employees.  That job ...&CO said is for an independent record keeper that they would help the township hire.  The cost for the record keeper would be included in &CO fee structure.   In the &CO presentation, their key was that they have freedom from all conflict of interest.   They also gave a service guarantee with money back /conditions.   They do not buy or sell.  I liked this company and the people presenting at the interview.  I did not see their handout that went with the presentation.


FYI:
 RPA, Graystone Consulting, and Gregory Schwartz & Co. were the other 3 companies interviewed.  Again, practically nothing discussed about their interviews and proposals.  RPA did not talk about the DB Pension fixed Prudential funds as it was purposely left out of the RFP by the township.  However, 2 of these companies currently do work with the township in the financial/investment area.  Both Schwartz and Graystone have worked with the fixed Prudential DB Pension Plan with the township.

3.
RPA:   Their claim is that they are an independent firm, are fiduciary for everything, and have unbiased freedom to provide any plan.  They mentioned that the township must have a IPS or better one (an Investment Policy Statement).  The Board of Trustees must know it, understand it, follow it, and RPA is here to help with all that, to select a manager, get the benchmarks to be used, value communication.  They would work on portfolio construction:  actuarial, cash flow, DB, and better policy statements.   No money would be managed by RPA.  I liked this company and the people presenting.   Again, I did not see the handout for their presentation.

4.
Gregory Schwartz & Co.  has been the township financial/investment advisors for a long time.  They were with the township through the recession years.   My notes mention that they will provide training to the Board of Trustees as well as continuing working with the employees on their various fund accounts.  They are advisors and fiduciary. They reportedly have been working with Supervisor Savoie, Treasurer Kepes and Finance Director Theis with making changes since the 2016 local election.  Will  Schwartz & Co have an edge in this RFP process?  TBD.   I did not hear or record the cost/fee to hire.  I did not see the handout that was with the presentation.

5.
Graystone Consulting was brought in to township "vendor" status by Savoie and Kepes ( and Board of Trustee vote based on FSC recommendation)  during that same time period of campaigning for the 2016 local election.   I did not agree with the hire.   I felt there was a better company at that time.   With Graystone, the township ended the "guarantee" part of the fixed DB Prudential Pension on Dec. 3, 2016.  That is an entire blog itself.
 
Graystone Consulting is a division of Morgan Stanley. They claim global reach and research second to none.  They are a financial services firm.  My notes mention the portfolio construction would focus on cost effectiveness, mix of managers, risk allocation and thematic views.  I did not see or receive any handout from this company to review.

I also recorded in my notes that this interview with Graystone was different from the others in that the FSC members continually interrupted the "presentation" with questions, where the other 4 interviews had questions only in the last 15 minutes.  It seemed as though the committee wanted to make sure certain points were made at this interview.  Just an observation and gut feeling.

It has been reported that Graystone continues to be of "assistance"  to Savoie and Kepes.  Whether or not it is paid work is not verified by me.

It will be the Board of Trustees that make the final vote to hire, but what information will the FSC bring to the Board?  Where is the discussion of the choices?

 I wonder how close the RFP information that these companies prepared their presentations on is to the reality of the accounts 3 months later?  Will dollar figures be updated and relayed to the companies before the hire?   Will the companies CHANGE their proposed PRICE to do business with the township?

FINAL THOUGHT:
I still think there should be a FORENSIC AUDIT of the township.   I've been requesting this for years.  I'm not accusing anyone of criminal activity, but that kind of audit seems to be the only route left to get this township to open up the books on ALL the accounts.  Even  in UHY, Inc. 's  2015 annual audit (found in the Oct. 10, 2016 BOARD PACKET of the Board of Trustees : item #4) they report they audit only the 4 major funds.  Well,  there are at least 17 to 20 funds at the township.  I want a complete audit.  The company that is hired to help create the best financial and investment advice and portfolios deserves the complete truth of township revenues, expenditures, accounts, funds and debt.   My opinion.


Marcia






Sunday, August 13, 2017

Bl. Twp. INTERVIEWS for INVESTMENT ADVISOR

Hi All,

PUBLIC MEETINGS... held at the Bloomfield Township Offices in the CONFERENCE room.

MONDAY  8/14/17 @ 7:15  AM......and again THURSDAY 8/17/17 @ 7:15 AM  .....get up very early ....  the Bloomfield Township  Financial Sustainability Committee will be interviewing companies that responded and apparently "qualified" from the RFP that was posted on the township website.

FYI:    The township DENIED my FOIA to review the RFP submitted proposals. I wanted to learn more about each company  before the interviews as Public Comment comes before the interviews.  Weird.  Township's way of silencing voices?

FYI:  My FOIA reply included the following paragraph ( I highlighted in red an interesting statement):
A portion of your request has been denied. Per 15.243 (1)(f)(ii), “The promise of confidentiality is authorized by the chief administrative officer of the public body or by an elected official at the time the promise is made.” Per page six (6), section VI (c) of the Request for Proposal (RFP) for Investment Advisor and Consulting Services for 401(a) Defined Contribution Plan, 457(b) Deferred Compensation Plan, Retiree Health Care Trust (VEBA), Equity Fund for Defined Benefit Pension Plan, Retirement Health Savings Plan and 529 College Savings Plan, “The Township will treat all information submitted as available for public inspection once the execution of the contract has occurred.” Therefore, the RFP responses as requested in your FOIA submittal are not available at this time.
 
I attended a previous FSC meeting on July 24, 2017 where a "matrix"  was created by Treasurer Kepes and Finance Director Theis  and was given only to the members of the FSC.   That "matrix" was about the 9 RFP respondents.   The committee members (on recommendation from Kepes), will only interview 5 of the respondents although 6 were deemed "qualified" respondents as one did not have any public fund clients yet.  The "matrix" had line items for "entities and assets" which mentioned very brief info about how many institutional clients and some mentioned assets;    "recordkeeper" line item (on matrix all answered "no" );  "consultant/advisor"  all answers on matrix for this was "yes"  and then there was "management and team"  and each listed names of employees with those companies that apparently would be handling the township investments IF THEY get the job.

FYI:  The FSC members did not get the full RFP proposals at this meeting.  The "matrix"  didn't have a line item for COST !    Have the FSC members even seen the full proposals?  If yes,  have they then shared any thoughts or ideas with each other?  Has there been behind closed doors discussion about these companies?  Is there a set list of questions to be asked at the interviews?  Who knows?

FYI:  Schwartz & Co.  has been doing the township investments for more than a decade.    Graystone Consulting recently was chosen by the FSC for a previous study about Prudential Defined Benefit Pension Plan (even though another company seemed more qualified/ but Graystone had an OHCC possible connection to  FSC members).  At the July 24, 2017 meeting I THOUGHT  I heard Treasurer Kepes say that Graystone Consulting was ?currently? doing some sort of study or work for the township ???  No minutes to check.  Would seem to be a conflict of interest if Graystone is consulting and also being interviewed.  

So, what companies are on the agenda MONDAY and which ones are on the agenda for THURSDAY?
Here are the 5 companies from the "matrix" that will be interviewed one of the days (Mon. or Thurs.) but I don't know the order and it was NOT mentioned in the AGENDA.
So, in no particular order and listed as the names were printed and shown on the "matrix":

Sheridan Road
AndCo Consulting
Retirement Plan Advisors
Graystone Consulting
Schwartz & Co.


FROM THE RFP language: 

The township is ".... seeking an investment advisor and consultant for its various fiduciary funds.  The Township has not created an independent board to manage these assets, but it does have a Financial Sustainability Committee that is involved in this RFP process."
From the RFP ( consolidated by me) 
 
1.  401(a) Defined Contribution Plan   -  current balance over $5 M    -  current number of participants 117  -  Currently American Funds -  began 2005 for new hires

2.  457(a) Deferred Compensation Plan  - current COMBINED balance is over $21 M   -  current participants 313  -  choice of 2 :  Empower or Voya

3.  Retiree Health Care Trust (VEBA)   - current COMBINED balance is about $10M  - does NOT mention # of participants  -  started 2005- more investment funds added recently

4.  Defined Benefit Pension Plan  -   $160 M held and managed by PRUDENTIAL/ NOT part of this proposal  - does NOT mention # of participants -   
         HOWEVER:    "There are other pension assets held in an Equity Fund for the Defined Benefit Pension Plan.  This is where the Township INVESTED its $80 M in pension obligation BONDS issued in November 2013.  The balance has decreased because the Township has had to transfer funds from this account to the assets held with Prudential per certain provisions in the contract.  The current balance of this fund is about $55 M. "     Note:  RFP response was due June 15, 2017 to the township.

5.  Retirement Health Savings Plan  - current # of participants is 101  -  Current balance is about $900 k   -  began in 2011 for new hires 

6.  529 College Savings Plan  - currently 24 individual accounts   -  current balance combined is over $600 k  -    American Funds


For the following extra "NOTES" ... See BOARD PACKET July 24, 2017 Board of Trustees  for more details:      https://bloomfieldtwpmi.documents-on-demand.com/
NOTE:  this RFP does not talk about the 17 budgeted funds (twp. used to report there were 20 funds)   with the four main funds being General, Road, Public Safety, Water and Sewer.   The FINANCIAL REPORT (as opposed to Investment Report)  shows an adopted budget of $92,988,410.00   PRIOR FISCAL YEAR  with expenses over budget by ($1,396,395.00).    I believe that any department that needs to go "over budget" must come before the Board of Trustees for approval before going there.   Almost $1.4 M over budget last year???   I don't believe any department head/ responsible person  came before the Board of Trustees requesting an adjustment to their budget.  How much and what funds were involved  with withdrawals  and moved into investment funds?




 NOTE:  this RFP does not talk about the Oakland County Local Government Investment Pool which basically Savoie and Kepes began investing w/township board approval/ in the fall of 2016.  Initial deposit was approximately 1 M.   Perhaps more?   What twp. account funded that initial deposit is unknown to me.  Since then,  the township has deposited more money...again from unknown accounts by me.... and perhaps unknown to many others including Trustees.  Have not seen specifics at Board meetings.   FACT:    On  June 1, 2017  the balance was $26,137,593.16.  Records show that a total of  $4 M was withdrawn in June.   The July 1, 2017 balance in this investment pool is $ 22,137,593.16.    QUESTION:  What is that figure now in August 2017?

NOTE:  this RFP also does not specifically mention the T-Bills with FIFTH THIRD SECURITIES  as an investment vehicle.  Is it  because the township made this initial transaction on June 15, 2017 ( the same day the RFP proposals were due to the township). Once again,  what Twp. account did $14M   get withdrawn from in order to undertake this investment form?   Is just the Treasurer making these investment decisions?  Don't know.
 








Please try to attend the meeting.  No video, usually poor quality audio, and debatable minutes.  My opinion. 
Marcia