The Kentucky Association of Counties Unemployment Insurance Fund held a Board of Directors' meeting at 11:00 a.m. on Thursday, March 22, 2012 at 400 Englewood Drive in Frankfort, Kentucky.
The following Directors were present: Chairman Kent Clark, Madison Co. Judge/ Executive; Vice-Chair Hugh McCormick, Henderson Co. Judge/Executive; Phil Sammons, Boyle Co. Magistrate; Rick Smith, Clark Co. Commissioner; David Brown, Henry Co. Magistrate; R. T. "Tucker" Daniel, Johnson Co. Judge/Executive; and Chris Eaton, Barren Co. Sheriff.
Others present were: Gina Schafer, Program Director; Denny Nunnelley, Executive Director/CEO; Gail Mitchell, Administrative Assistant; Larry Davis, Financial Manager; Brian Roy, Deputy Director; Tim Sturgill, General Counsel; Carolyn Jones, Chief Financial Officer; Scott Martin, Director of Member Services; Rich Ornstein Attorney; and Sonya Chesser, Executive Secretary.
Vice-Chair Hugh McCormick called the meeting to order at 11:08 a.m. on behalf of Chairman Clark who arrived at 11:12 a.m.
Motion made by Phil Sammons, seconded by Tucker Daniel, to approve the minutes of the February 23, 2012 meeting as presented. Motion carried.
Ms. Jones presented and discussed the following financial reports: balance sheet as of February 29, 2012; FY 2011/12 budget detail for period ending February 2012; PAF budget for period July 1, 2011 through February 29, 2012; deposit detail; check detail for February 2012; and the customer balance summary as of February 29, 2012 reflecting credits only.
Motion made by Tucker Daniel, seconded by Phil Sammons, to approve the financial reports as presented. Motion carried.
Ms. Jones presented a copy of the Fund's current investment policy and guidelines for the board's review. Mr. Sturgill said, per KRS 66.480, the Fund is limited to the same investment opportunities as its member counties. He said the statute requires funds over the FDIC insurance limit to be collateralized by the banks through a pledge of their assets; however, the Fund does not qualify for collateralization according to the Department of Financial Institutions. He said the Fund can invest in obligations backed by the US government and of its agencies. He highlighted on the types of investments that the Fund could participate in. Chairman Clark asked that all of the Fund's investments be backed by a government guarantee. Judge McCormick recommended having the audit committee review the investment policy with staff and make a recommendation to the board at its next meeting.
Ms. Schafer recommended having representatives from Central Bank to attend the next board meeting to advise the board on investments. The board agreed.
Ms. Jones presented a copy of the Eaton Vance investment summary the board's review. Mr. Nunnelley recommended selling shares with Eaton Vance Floating Rate Fund Class A, and look at selling shares with Eaton Vance Government Obligations Class A. Motion made by Hugh McCormick to close out the two accounts with Eaton Vance. Motion withdrawn.
Chairman Clark asked if the Fund would incur penalties in closing out the Eaton Vance accounts. Mr. Sturgill said he would have to review the matter. The board directed Mr. Sturgill to find out if the Fund would incur penalties to close out the Eaton Vance accounts.
Motion made by Hugh McCormick to withdraw from both Eaton Vance accounts unless the Fund runs into a penalty issue. Motion withdrawn.
Mr. Nunnelley recommended that the Fund take the dividend instead of reinvesting it back into the Eaton Vance accounts.
Motion made by Rick Smith, seconded by David Brown, to withdraw monies from the Eaton Vance Floating Rate Fund Class A and stop the reinvestment of dividends received from Eaton Vance Government Bond Obligation Class A Fund and have monies sent to the Fund. Motion carried.
Mr. Nunnelley said staff will review the investment policy and guidelines and will present a recommendation to the board.
Ms. Schafer presented a copy of the fourth quarter claim charges totaling $805,519.12 as of February 27, 2012. She also presented the premiums for 2012. Ms. Schafer presented the Kentucky Labor Force preliminary estimates for January 2012 for the board's review.
The next scheduled board meeting will be held April 26th at 11:00 a.m. with lunch to follow.
Motion made by Phil Sammons, seconded by David Brown, to adjourn the meeting at 11:52 a.m. Motion carried.
