The meeting spotlighted the detailed presentation by a representative from Foster and Foster, who discussed the valuation report for the fire and police pension plans. As of October 1, 2025, the city’s contribution requirement for firefighters had increased to 32.33% of the pensionable payroll, translating to approximately $900,000. This was a notable rise from the previous year’s $860,000, driven by factors including a negotiated 23% salary increase for firefighters, changes in mortality assumptions, and the city’s decision to lower its investment assumption from 7.2% to 7%. The presenter stressed the necessity of reasonable assumptions, noting the 7% target is average for pension plans in Florida. Additionally, a state premium tax reimbursement was expected to help mitigate some financial burdens.

The board also addressed the potential implications of reaching 100% funding for the pension plan. It was explained that achieving full funding too rapidly could strain financial resources, akin to making excessive mortgage payments. The presenter emphasized the importance of balancing funding levels with the city’s broader financial health, noting that a fully funded plan would reduce the city’s contribution to about 12% of payroll. Projections suggested that once the impact of salary increases settled and investment returns improved, the funded status might stabilize and potentially enhance in the coming years.

Significant discussions centered around the unfunded liabilities of both pension plans, with an expectation that city contributions could reach a million dollars annually due to rising payroll costs. The actuary explained that the police plan’s unfunded liability had grown from $4.3 million to $6.1 million, attributed to investment losses and higher-than-expected salary increases. The necessity to adjust assumptions to conservative estimates was highlighted, particularly given that salary increases averaged 12.3% over five years, surpassing prior assumptions of around 5.5%.

Further discussion ensued about the city’s use of premium tax funds to offset contributions, with up to $123,000 available for this purpose, while surplus funds addressed unfunded liabilities. Adjusting assumptions in light of recent salary trends was deemed prudent, with an experience study recommended to update these assumptions. This adjustment would likely necessitate additional funding requests from the city to accommodate anticipated salary growth.

The meeting also covered a review of the pension fund’s 10-year growth, with both funds earning an average return of 8.4% over the decade. The fire fund grew from just over $11 million to approximately $21.6 million, while the police fund reached around $20.7 million. The presentation included an analysis of market conditions, noting declines in large-cap growth segments, particularly technology-related equities, while international markets held steady. Asset allocation was also discussed, pointing out compliance with investment policies despite challenges in real estate and large-cap growth.

Real estate investments were examined, with ASB, the manager for this segment, pending redemptions. In the interim, another manager offering attractive coupons was added to the portfolio as a temporary measure. A discussion also arose about the risk profile used in the fund, focusing on standard deviation as the primary metric for assessing return variability.

Towards the meeting’s conclusion, the board approved conducting an experience study, a best practice necessary for compliance with auditor expectations. Although concerns were raised about the cost, estimated at $15,000, the study was unanimously approved. The board deferred a discussion on cybersecurity to the next meeting and clarified the process for any changes to the Deferred Retirement Option Program (DROP), which would require collective bargaining.