During a special meeting September 10, the Board of Selectmen met and heard from two representatives of a Windsor company that was later unanimously hired to oversee the town’s pension fund. That evening, selectmen also revisited and approved a motion to help purchase a used van for a parent’s organization supporting the Newtown High School’s Marching Band and Color Guard using undesignated post-12/14 donations.

Prior to brief deliberation and unanimous endorsement to hire the Devon Francis and Christopher Rowlins of Fiduciary Investment Advisors (FIA), the firm made a presentation and took questions from selectmen about how their oversight might help the town’s current pension firm Westport Resources and its advisory board meet or exceed annual investment benchmarks.

The presenters said that if hired, FIA would become a partner and co-fiduciary to help safeguard municipal and taxpayer pension investments.

“We’re not stock pickers, we do research on investment managers,” Ms Francis told selectmen, adding that no fewer than five firm members would be engaged in overseeing Newtown’s pension fund. The firm currently works with 38 of Connecticut’s 169 towns and cities, including Monroe, Trumbull, Wilton, Weston, and New Fairfield, as well as a number of regional entities including several major colleges and universities.

Ms Francis said while some clients come to FIA to make sweeping changes, the firm mainly concerns itself with working to identify and address needs and concerns related to local pension fund management.

“We are the guide on the side,” she said.

Mr Rowlins said that FIA’s goal is to be sure pension goals and objectives are being met.

Selectman James Gaston asked what taxpayers would be getting in exchange for the firm’s $35,000 annual retainer.

Mr Rowlins replied that FIA will maintain an electronic portal warehousing documentation related to local pension business and practices. He also said the firm will compare Newtown’s pension performance with similar municipalities.

“We’ll be benchmarking performance across our entire municipal sector,” he said, adding that before and after results are available so selectmen can gauge the firm’s effectiveness after taking on various municipalities as pension oversight clients.

Mr Rowlins said the firm’s first initiative, if hired, would be to issue a 16-page questionnaire to perform a “qualitative vetting” of the town’s vendor. He said FIA would also ask to be present beside Westport Resources representatives or any other future fund managers during public presentations to town officials.

In recommending the firm, one of two interviewed for the job, Finance Director Robert Tait said that a discussion in March regarding the local pension fund’s performance, that investments are reaching a point where it is appropriate to retain an advisor. He said similar to an auditor, the advisor is retained on an annual contract that would be covered by the pension fund.

The firm offers a 30-day cancellation policy in the event Newtown wishes to separate from its services.

During a May selectmen’s meeting, it was revealed that Newtown would have enjoyed a $6 million increase to the pension fund balance if investments had met the benchmark assigned by town policy. At the time Mr Tait agreed that the town’s sole investment manager (Westport Resources) agreed that the benchmark is conservative, but other investors had met that same benchmark.

For nearly three of the past five years, as the town’s pension investments have drifted between a negative 2.5 and negative 6.1 percentage difference between the portfolio and benchmark, local officials had been suggesting the Pension Committee seek cost proposals from other potential fund managers.

It is unclear whether the retention of FIA is being embraced by the committee.

Band Van Purchase

In other business, selectmen approved providing $17,500 from undesignated donations to a post 12/14 fund to help purchase a van that would be owned and insured by the town, but available to the band and guard parent’s support organization to help ferry instruments and other equipment to and from approximately a dozen off site events each year where the ensemble performs.

An original plan was proposed to combine the town donations with additional donations made to the school district to complete the purchase, but the Board of Education voted against applying district funds for that purpose.

Scott Reiss and Michelle Buzzi representing the group were on hand, and explained that in lieu of securing the full purchase amount for the vehicle, they would seek to negotiate with the seller to finance the balance of payments over time.

First Selectman Pat Llodra said that after 2½ years, it was appropriate to spend down the remaining donations, and that the van purchase was an appropriate use of the funds.

The proposal to purchase the van now must go to the Board of Finance and Legislative Council for approval before being awarded.