Trustees' Finance and Audit Committee

Board of Trustees
September 22, 2011

Agenda for Trustees Finance and Audit Committee Meeting
September 22, 2011 Johnson Trustees Room 8am to 9:30am
Chairman Evelyn Arana-Ortiz

  • Welcome/Introductions
    Chairman Evelyn Arana-Ortiz
  • Review and Approval of Minutes from August 25, 2011
    Chairman Evelyn Arana-Ortiz
  • Investment Portfolio Manager Review: The Boston Company
    The Boston Company
    Brian Ferguson
  • Review and Approval of FY2011 Draft Audited Financials
    O’Connor and Drew, P.C.
  • BPL Fiscal Updates
    Sean Nelson, Chief Financial Officer
    • Form 990
  • Approved Schedule
    Chairman Evelyn Arana-Ortiz
    • Thursday, October 20, 2011 at 8:00 a.m. in the Johnson Trustees Room
    • November date TBD
  • Other Business
    Chairman, Evelyn Arana-Ortiz
  • Adjournment
    Chairman, Evelyn Arana-Ortiz

Minutes of the Trustees Finance and Audit Committee Meeting
September 22, 2011 Johnson Trustees Room 8am to 9am
Chairman Evelyn Arana-Ortiz

A meeting of the Trustees Finance and Audit Committee was held at the Boston Public Library, Trustees Room, Johnson Building, on Thursday, August 22, 2011 at 8:00 a.m.

Present at the meeting were: Chairman Evelyn Arana-Ortiz; Trustee Zamawa Arenas; Edward Maheigan, Boston Public Library Budget and Procurement Manager; Sean Monahan, Supervisor of Accounting; Krista DeNofrio, City of Boston Budget Analyst; David Waterfall, Assistant Corporation Counsel, Boston Law Department; David A. Dilulis of O’Connor & Drew P.C.; Michael Black, New England Pension Consultants; and Cheryl Delaney, Special Library Assistant.

The Chair noted that she received apologies from Trustees Donna M. DePrisco and Byron Rushing, as well as Mr. Ray Sullivan and Mr. Anthony Jordan who were unable to attend due to prior commitments.

Ms. Arana-Ortiz, Chairman of the Finance and Audit Committee (Committee) presiding.

On a recommendation of the Chair, the Committee agreed to re-order the agenda and take up the Review and Approval of the FY2011 Draft Audited Financials out of turn.

The Committee agreed to reschedule the Committee’s Thursday, October 20, 2011 to Friday, October 7, 2011 at 8:00 a.m. to review the Auditor’s Report.

The Chair reviewed the agenda and addressed the first item on the order of business pertaining to the Minutes of the Trustees Finance and Audit Committee Meeting held on August 25, 2011. On a motion made and duly seconded, the Minutes of the Trustees Finance and Audit Committee meeting held on August 25, 2011 were approved and subsequently posted on the Boston Public Library’s web site a

The auditors from O’Connor & Drew, P.C., presented a review of the draft “Trustees of the Public Library of the City of Boston, Basic Financial Statements and Management Discussion and Analysis, June 30, 2011”. 

The auditors highlighted new reporting requirements: More detailed, itemized balances are reported under new Government Accounting Pronouncements, GASB Statement 54 for Fund Balances; and more detailed reporting of Significant Accounting Policies. Discussion followed and the Committee agreed that the increase detail in reporting provides a more complete picture of the Boston Public Library’s fund balances. Discussion followed. The auditors will prepare a document with prioritized bullet points to the Draft Management Letter for the Committee prior to the October 7th meeting.

The Chair moved to the next agenda item of Investment Portfolio Manager Review of The Boston Company. Jessica Rockland and John Bailer of The Boston Company addressed performance. Ms. Rockland began with a review of their philosophy and process to frame the performance discussion. Mr. Bailer further discussed The Boston Company’s concentration on value over growth stocks and use of fundamental research, adding in a catalyst to avoid value traps. The company screens for stock with quantitative screens and fundamental analyses. Their partnership with Bank of New York Mellon provides an expanded team of researchers. Their portfolio is led by a project manager, rather than team-led. Discussion turned to the current performance since inception. Ms. Rockland reported that the goal for the Boston Public Library investments is to outpace the Russell 1000 value, which has not been achieved. Mr. Bailer reviewed the unprecedented U.S. market performance in general over a ten-year performance since the mid-19th century. Mr. Bailer expressed confidence in U. S. stocks for the next 10-year period and reviewed a variety of investment growth prospects. His assessment is that stock earnings will outperform fixed income investments.

Michael Black of New England Pension Consultants (NEPC), consultant to the Boston Public Library stated that the active approach of The Boston Company was a positive factor especially under current market conditions and cautioned against selling low and buying high. Discussion on information in the NEPC’s September 5, 2011 memorandum, The Boston Company Review regarding the overall performance of The Boston Company followed. Mr. Bailer noted The Boston Public Library portfolio was managed more conservatively in the large cap value style which lowered the performance over dynamic equity, however consistence of performance made up the difference.

The Committee will meet on October 7, 2011 to further discuss options relative to The Boston Company’s performance, and Mr. Black will attend the meeting.

There being no further business, the meeting of the Trustees Finance and Audit Committee meeting adjourned at 8:45 a.m.

Respectfully submitted,

Nancy Grilk
Clerk of the Board

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