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.
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:
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.
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.
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.
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.
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.
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?
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.