Investment Board
May 18, 2006
The Honorable, The Legislature:
Pursuant to s.
25.17 (14r), Wis. Stats., I have attached a revised copy of SWIB's "Investment Policy, Objectives, and Guidelines," recently amended by the board of Trustees plus a copy that shows the language added or deleted as a result of the changes. In summary, these amendments:
1. Modify the authority to make investments in private equity. These Investments, primarily leveraged buyouts and venture capital, comprise approximately 2.1% of the assets of the Core Trust Fund. In 2005, the Board decided to concentrate on a smaller number of larger purchases, the Board at that time also contracted with a private equity consultant to review all initial prospective investments and confirm that they meet appropriate standards for a prudent investor. The current amendments increase the authority of the Chief Investment Officer-Private Markets to review and approve all proposed buyout fund investments up to $300 million. The old guidelines limited the authority to investments of no more than $200 million. Any proposed buyout investment in excess of $300 must go to the board for approval. The new amendments also define "follow-on funds" and clarify that the portfolio manager is not required to have the outside consultant review proposed follow-on and secondary fund purchases. In addition, the new guidelines no longer require private equity funds that invest more than 50% of capital in emerging markets to secure prior Board approval. The portfolios still are restricted, however, to make no more than 33% of total commitments outside the U.S. and only 15% of their commitments in emerging markets. The emphasis for private equity portfolios to invest in limited partnerships means less risk and volatility in the portfolios, thus justifying the higher limits. The result is that staff has authority and the flexibility to invest in these funds, without having to await the results of Board approval or consultant review. In the current, very competitive marketplace in which partnerships are often oversubscribed, this will allow staff to secure a position in those partnerships that afford the potential to earn the highest return.
2. Incorporate targeted asset allocations for 2006 for the Core Trust Fund adopted by the Board of Trustees. Each year, the Board reviews how the assets are allocated and adjusts the allocation targets when warranted. It also reviews portfolio benchmarks and adopts changes as necessary. The guidelines have been revised to include the benchmark for the REIT portfolio as the portfolio was initiated in mid-2005.
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3. Change the criteria for investing in foreign countries. Investments in emerging market countries have been evaluated using a rating system published by Freedom House, an organization with the stated purpose of promoting democracy. In the latest version of the guidelines, the evaluation of sovereign debt has been distinguished from stocks and corporate bonds. Sovereign debt is evaluated based upon credit ratings issued by recognized rating agencies of Standard & Poors and Moodys. Sovereign debt rated B3/B- or above is eligible for investment. However, investments in unrated debt or debt rated below B3/B- is subject to approval by the Investment Committee based on an analysis presented by portfolio managers. Investment in emerging market debt is limited by the guidelines to sovereign debt of countries included in the JP Morgan Emerging Markets Global Diversified Bond Index.
Corporate bonds and stock issued by companies domiciled in emerging markets continue to be subject to the Freedom House screen. In addition, the Index of Economic Freedom, a screen based on economic factors, will be used to evaluate investments. Bonds and stocks of companies that are organized in countries rated "Not Free" by Freedom House and "Repressed" by the Index of Economic Freedom are not permitted investments. Investments in countries that fail to pass one of the two screens may be permitted based on an evaluation of risk factors and approval by SWIB's Investment Committee.
4. Reduce the current authority of fixed income portfolios to invest in Rule 144A investments from 40 to 20% of the portfolios market value. Rule 144A of the Federal Securities Act makes it easier for institutional investors to buy and sell unregistered securities, which are private debt investments of public issuers that are not available to non-institutional investors. These bonds are frequently registered as a public bond at a later date. The Board and staff decided that the lower number was sufficient.
5. Include the benchmark and guidelines for the newly created Global Bond Index Fund, which is being managed internally. The benchmark is the same as for the actively managed internal Global Bond Portfolio. However, the guidelines are more restrictive as the index fund is intended to replicate the benchmark and all securities held in the portfolio much come from countries in the benchmark.
6. Make minor changes to the State Investment Fund (SIF) guidelines. The new guidelines clarify the statutory language applicable to SIF's investment authority and that maturity, issuer and credit quality limits are applied at the time of investment.
7. Make minor changes to the other smaller funds regarding investment objectives and permissive investments.
8. Include statutory changes that changed the name of the Fixed Fund to the Core Fund and increased from 15% to 20% the funds that may be actively managed by external managers.
9. Incorporate minor amendments to include statute cites, administrative rules, name changes, and rewording of existing guidelines.
SWIB's "Investment Goals, Strategies and Performance Report" was filed in March and provided a more detailed discussion of strategy and investment changes implemented as a result of changes to the Guidelines. Please contact me if you have any questions.
Sincerely,
DAVID C. MILLS
Executive Director
Referred to the committee on Retirement Systems.
State of Wisconsin
Department of Administration
May 1, 2006
The Honorable, The Legislature:
In compliance with Wisconsin statute 16.548, please find the Wisconsin Office of Federal/State Relations quarterly report to be submitted to the Legislature for the first quarter of 2005. This report provides information on the activities of the office and the status of federal legislation of concern to the State of Wisconsin.
Please contact me if you have any questions about this material.
Sincerely,
STEPHEN E. BABLITCH
Secretary
executive order #148
Relating to the Department of Natural Resources Discretion in Administering Piers and Wharves Regulation in the State of Wisconsin
WHEREAS, waterfront property owners deserve, to the greatest extent possible, certainty about their rights to place piers and wharves in the waters of the State; and
WHEREAS, the Wisconsin Legislature passed
2003 Wisconsin Act 118 which revised regulations in chapter 30 of the Wisconsin Statutes related to piers and similar structures, and I signed
2003 Wisconsin Act 118 into law on February 6, 2004; and
WHEREAS, Act 118 contemplated further action in order to create general categories of permissible pre-existing piers and wharves and permissible new piers and wharves; and
WHEREAS, my administration has successfully worked closely for more than 18 months with a broadly representative stakeholder group to develop mutually acceptable standards for permissible piers and wharves that reasonably balance the rights of waterfront property owners and of the public to access and enjoyment of the waters of the State; and
WHEREAS, the Department of Natural Resources has authority to administer the laws governing placement of piers and wharves in the waters of the State, including the ability to exercise enforcement discretion in administering those laws; and
WHEREAS, the 2006 boating season is quickly approaching;
NOW, THEREFORE, I Jim Doyle, Governor of the State of Wisconsin, by the authority vested in me by the Constitution and the Laws of this State, do hereby:
Take this action to provide waterfront property owners certainty, to the fullest extent possible, as to their rights to place piers and wharves;
2.
Direct the Department of Natural Resources to do the following:
a. Not seek removal or modification of any pier or wharf originally placed by the waterfront property owner before February 6, 2004, provided that:
i. The pier or wharf does not exceed 8 feet in width;
ii. Does not have a wider loading platform at the waterward end of the pier that is more than 200 square feet or more than 300 square feet if it is no more than 10 feet wide;
iii. That the pier or wharf does not interfere with the rights of other waterfront property owners; and
iv. That the pier or wharf was not the subject of enforcement action initiated by the Department before February 6, 2004;
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b. Continue to allow minor reconfigurations or re- locations of any pier or wharf originally placed by the waterfront property owner before February 6, 2004, provided that the size of the pier or wharf is not increased;
c. Continue to recognize the terms of any existing permit or other written authorization for a pier or wharf provided that the pier or wharf is in compliance with the conditions of the permit or authorization;
d. Not seek removal or modification of any pier or wharf originally placed by the waterfront property owner on or after February 6, 2004, provided that:
i. The pier or wharf does not harm the public interest;
ii. Does not have a wider loading platform at the waterward end of the pier that is more than 200 square feet or more than 300 square feet if it is no more than 10 feet wide;
iii. The pier or wharf meets existing length and boat slip density standards;
e. Continue to implement the terms of s.
NR 326.04(1) with respect to pier length by allowing piers to extend the greater of the three foot depth contour or to the point where there is adequate depth for mooring a boat or using a boat hoist or boat lift in common use on the waterway;
f. Grant an individual permit for new piers or wharves on lakes 50 acres or more, for a property on which there are three (3) or more dwelling units or commercial structures, provided that the standards in s.
30.12(3m), Stats., are met, and provided that the piers or wharves are not located in an area of special natural resource interest, and provided that the piers or wharves do not have more than the following number of boat slips, whichever is smaller:
i. Four (4) boat slips for the first 50 feet of the property's shoreline footage and no more than two (2) boat slips for each additional 50 feet of the property's shoreline footage; or
ii. One boat slip for each dwelling unit, plus an additional number of boat slips if the additional slips are open to the public and the use of the additional slips is limited to the transient docking of boats for less than 24 hours;
g. Continue to accept and review individual permit applications for any new or existing pier or wharf;
h. Continue its practice of refraining from ordering the removal of any pier or wharf or from denying a permit for any pier or wharf unless all reasonable alternatives are considered.
3.
General Provisions.
a. Nothing in this Executive Order creates any right, benefit, or trust responsibility, substantive or procedural, enforceable at law by a person against the State of Wisconsin, its agencies, or any person.
b. Nothing in this Executive Order shall require the Department of Natural Resources to violate or ignore any laws, rules, directives or other legal requirements or obligations imposed by state or federal law.
c. This Executive Order does not limit any person's rights or obligations otherwise provided by law.
IN TESTIMONY WHERE OF, I have hereunto set my hand and caused the Great Seal of the State of Wisconsin to be affixed. Done at the Capitol in the city of Madison this eighth day of May in the year two thousand six.
JIM DOYLE
Governor
By the governor:
DOUGLAS LA FOLLETTE
Secretary of State
Milwaukee Public Schools
Division of Business Services
May 10, 2006
The Honorable, Senate:
According to Wisconsin School Law 121.87 in accordance with 13.172, the Board is required by law to submit the enclosed reports. School Law 121.87 states "...annually by May 1 the board of school directors of the school district operating under ch.
119 shall submit a report to the legislature under s.13.172(2) that specifies the number, percentage, race, sex, grade and attendance area of pupils transferred outside their attendance area without written consent under s.121.85(6)(am)."
Enclosed you will find a report that meets the requirements stated above. The total number of intra-district students bused under Chapter
22o designation for the school year 2005-2006 equals 17,535. Of that number 586 either did not return a consent form or checked box indicating no consent. Students who have moved during the school year and no longer require parental consent were subtracted from the non-returned figure. The district did meet the requirement of ninety-five percent (95%) parents providing consent.
Sincerely,
MICHAEL TURZA
Director
State of Wisconsin
Office of the Governor
May 5, 2006
The Honorable, The Legislature:
As required by Article V, Section 6 of the Wisconsin Constitution, I am submitting the annual Executive Clemency Report to the Legislature, covering those clemency cases upon which final disposition were rendered for applicants during the 2005 calendar year. Below is a list of applicants that received a full pardon in 2005:
Kip Bronk, (date of birth June 21, 1966) convicted on or about January 7, 1986 of Burglary, for attempting to steal two 12-packs of Pepsi from a closed service station, in Kenosha County and was sentenced to ninety days in jail, two years probation and to pay a fine. The Governor's Pardon Advisory Board recommended by a vote of 5-0 to grant a pardon. Following the Board's recommendation, Mr. Bronk was pardoned on July 13, 2005 because of the length of time since the crime and the non-violent nature of the crime. In addition, Mr. Bronk demonstrated valid job concerns because a pardon was necessary for him to continue his licensure as a hazardous material commercial truck driver.
William Carter, (date of birth July 26, 1945) convicted on or about July 28, 1967 of Unlawful Purchase of Codeine Preparation, for purchasing two four ounce bottles of Robitussin A.C. in a forty-eight hour period without authorization from a physician, in Milwaukee County and was sentenced to two years in prison. The Governor's Pardon Advisory Board recommended by a vote of 4-2 to grant a pardon. Following the Board's recommendation, Mr. Carter was pardoned on November 4, 2005 because of the length of time since the crime and his positive adjustment. Mr. Carter also demonstrated community achievements by becoming active in his church and the church's ministry program.
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Craig Danielson
, (date of birth February 9, 1965) convicted on or about October 28, 1985 of Burglary (Party to a Crime), for stealing food from a high school cafeteria at the age of 19, in Jackson County and was sentenced to sixty days in jail, two years probation and to pay $107.40 in restitution. The Governor's Pardon Advisory Board recommended by a vote of 6-0 to grant a pardon. Following the Board's recommendation, Mr. Danielson was pardoned on June 17, 2005 because of the non-violent nature of the crime, the length of time since the crime, the support of the District Attorney in the county of conviction and his positive adjustment.
Ted Dorton, (date of birth July 4, 1964) convicted on or about July 26, 1985 of Burglary, for taking a television and computer equipment from a school, in Winnebago County and was sentenced to sixty days in jail, two years probation and to pay $383.00 in restitution. The Governor's Pardon Advisory Board recommended by a vote of 7-0 to grant a pardon. Following the Board's recommendation, Mr. Dorton was pardoned on November 4, 2005 because of the length of time since the crime, the non-violent nature of the crime and the support of the Judge and District Attorney in the county of conviction. In addition, Mr. Dorton showed substantial need, hoping to expand his current business to include an auto dealership, but could not become bonded without a pardon.
Vicki Karnitz, (date of birth June 7, 1957) convicted on or about January 7, 1991 of Disorderly Conduct (Domestic Violence Related) in Brown County and was sentenced to pay a $180.00 fine. The Governor's Pardon Advisory Board recommended by a vote of 6-0 to grant a pardon. Following the Board's recommendation, Ms. Karnitz was granted a pardon on June 17, 2005 because of her extensive personal growth and the length of time since the crime. Ms. Karnitz also demonstrated valid job concerns because she could not further her career as a security agent without a pardon.
Maudwella Kirkendoll, (date of birth September 5, 1975) convicted on or about April 28, 1995 of Conspiring to Deliver a Controlled Substance in Milwaukee County and was sentenced to twenty-nine months in prison and three years probation. The Governor's Pardon Advisory Board recommended by a vote of 5-1 to grant a pardon. Following the Board's recommendation, Mr. Kirkendoll was granted a pardon on June 17, 2005 because of his lack of other criminal justice system contacts, his positive adjustment and personal growth. Mr. Kirkendoll demonstrated community achievements by becoming a mentor and an employee of a non-profit agency.
John Madison, (date of birth June 5, 1934) convicted on or about January 14, 1954 of Burglary (2 counts), Assault and Robbery (Armed), when he was 19 years old, and sentenced to spend more than one year but less than ten years concurrent in the Green Bay Reformatory. The Governor's Pardon Advisory Board recommended by a vote of 5-1 to grant a pardon. Following the Board's recommendation, Mr. Madison was pardoned on October 13, 2005 because of the length of time since the crime, his lack of subsequent criminal justice system contacts and his community achievements.
