The board’s examination of the police and fire pension funds revealed a complex financial landscape shaped by investment performance and contribution requirements. The police department’s pension fund required a city contribution of 28.9% of payroll, with a noted shortfall of approximately $49,762 due to higher payroll expenses. Despite this, the funded status improved from a low of 79% to approximately 85%, thanks to favorable mortality outcomes and strategic adjustments. The board acknowledged a reduction in the investment assumption from 7.4% to 7.2%, with plans to lower it further next year.

The fire department’s pension plan faced its own challenges, with the city required to increase contributions from 28.7% to 31.81% of payroll. This adjustment was driven by a decrease in active firefighters and a modest salary increase. A shortfall of $103,200 was identified, yet the city is preparing to cover this deficit soon. The fire pension fund’s funded status saw a slight decline from 83% to 82%. The state contributed $291,000 to the fire pension plan directly, with any excess directed towards reducing the unfunded liability, under a historical consent agreement with the union.

Investment performance was a focal point, with the board reviewing long-term returns of 7.4% over the past decade. For the fiscal year, the fire department’s fund returned approximately 4.8%, while the police fund mirrored this performance. These returns were slightly below the benchmark increase of 5.5%. The board noted strong gains in domestic and international equities, with the S&P 500 rising by 6% during the quarter and mid and small caps experiencing even greater increases. International markets also performed well, aided by a weakening dollar. However, real estate investments faced challenges, with ASB reporting a decline, prompting discussions about a gradual exit strategy to improve future performance.

In terms of administrative matters, the board approved the renewal of liability and cyber insurance without opposition. The cyber insurance policy remained unchanged, offering $250,000 coverage for $800. Liability insurance premiums decreased for both police and fire coverage. The absence of a request for proposal (RFP) process for insurance renewals was noted, with a suggestion made to consider it in the future for fiduciary responsibility.

The board also addressed compliance with recent Florida statutes affecting third-party contracts. New laws prohibit contracts with entities disseminating personal information to certain countries and address human trafficking concerns. An attorney informed the board that affidavits would be required from contractors to ensure compliance, protecting the board from liability if violations occur.

The financial report for the police department was approved unanimously, with plans to review fire department updates at a later time. The board was informed that the city’s lump-sum contribution to the police pension trust fund is expected every December, with the shortfall to be wired to the custodial bank shortly.

The meeting concluded with a review of quarterly investment reports. The board discussed the positive quarter in public markets, with equity markets experiencing significant gains due to stable unemployment rates, healthy consumer spending, and a strong GDP. The Federal Reserve’s interest rate cut of 50 basis points was seen as stimulative. Fixed income investments rose by 5%, with notable changes in the yield curve as the inverted situation corrected itself.