##VIDEO ID:v1Q24Pw9Zu8## market value investment net of fees got be a little time to say that number one is Gainesville at 23.8 we're ranked Tommy here pres here can you see okay and come across Miami Beach yeah fire roll call we've got um AJ present lethan pending Michelle present Dean present Sten have you come across Miami Beach Miami Beach let me look it's hard to find yeah it's not the easiest okay um I guess we'll go to public comment uh anybody got a public comment you have any public comment seeing none we'll move on to uh can we do this reappointment now or do we need to wait wait for have for so do we want to can we go to the minutes yeah okay let's go to the minutes of the August 6th meeting 2024 and uh I guess what I'm looking for is a motion to approve those I'm approve the minutes second any discussion seeing none the minutes have been approved motion on our side to approve minutes motion motion to approve second all in favor I I I okay and then I guess we'll go down to expenses paid the police side you have a list of them there does anybody have any input on this or any problem with this or you want to talk about it none seeing none I say that we we should approve the expenses paid as stated on the uh um sheet here any objections any just second need a motion right yeah you got a motion a second approve see that I approve all the expenses that are on these list fire any questions comments on expenses motion to accept motion to accept I'll second first who second motion second all in favor I I approved great okay next is uh on the fiscal year expense report that were PID you guys got a list of um of what we had on the police side our budget was $97,400 we spent 64,65 64 left in the budget at the end of September 30th was 32,7 4736 on the fire side their budget is 97,500 they spent 65,500 70 and they have a remaining balance at the end of September was $31,995 and on the approval fa has to go to the state and to the um Finance okay do you have a motion to approve the police budget this is the expenses are the expenses stated tomm second all in favor say I I I anybody against no seeing none we budget passes or whatever you expenses pass Fireside any questions comments just a question so if we have a balance of 3,999 is that just carry over or is that pending expenses we start with a brand new budget okay no questions I'll make a motion to accept motion to accept second AJ second I'll approve all I I okay liability insurance and cyber Insurance renewals okay the Cyber insurance is still the $25 $250,000 that we've been using all along for the last several years and still the amount is $800 for each plan for cyber insurance and for our liability insurance and that um I had the fire of police for this year was 3,992 53 which went down 20 went down 23 I think it was about $23 and the fire was 34 3434 for this year and this is for a million dollar policy and theirs went down $25 so everything down the stay the same cber so if you approve those then I can go ahead and get um the invoices paid which will be on the next one and cyber Insurance they'll send me all the paperwork and then I'll get that paid also D you have a question on the on the um Insurance renewals is that effective date January 1 of each year October 1 fiscal year um we are basically here in for the fire it's on 12 12 12 I think it is and and the free side is in November but they're extending it because we don't have a meeting till December so they're allowing an extension and is that through the same insurance company that we currently have compy allied Allied yes and did we do an RFP on that did we shop the market no we've been with them for about three years now maybe four and they just keep offering us the renewal I'm sorry they keep offering us the renewal rates yes the same yes how move we accept the insurance as quoted both policies accept want need a second on that I'll second so moved passed any anybody against it no so passed on the fire side I would like to make one comment that um motion to approve for this year going forward as policy stated but next year we consider shopping the market again for competitive quotes I just think it's a good fiduciary responsibility every couple years to shop the market okay any concerns on fire side that makes sense how how do we do that about two months prior to Renewal um we can set out an RFP and we can coordinate with Pedro um to do that as well so that we should make note to do that at a one of our particular quarterly meetings correct probably qu before in August then we'll probably get a list of yeah RFP put on r y have to send out send them information they requ typically three to five companies we would reach out to that are a-rated AAA rated insurance companies to do that so we'll put that on the agenda for the last quarter yes third quarter M we would do that for the fire side as well right yeah okay all in favor for current renewals for 2025 do we make a motion yes motion motion to accept motion to accept second okay all in favor we're good all right now du you're up okayer a little formal right good to see everybody um what do you say start with police I know we're still waiting on one fire trustee and then we'll move to fire after that sound all right uh we did get the reports to the right folks in the right places so looking at police over here and would ask you to open to page six and it should not take me too long to go over I see a lot of familiar faces so you know the way I like to go about the presentation I'll uh start on this page talk about the city's contribution requirements why it changed and give you a a little bit of background information on on the moving parts and then if you have more specific questions I'll be happy to get into that so if you look on page six down to the city required contribution you see the two columns there the city's requirement for the current year that's the right hand column is that 28.9% of payroll u i i gave you that number a year ago that was the October 1st 2023 valuation but we we budget one year in advance um so that number has already been known um and and what that means is the city is required to put in that 28.9% of pensionable earnings take all the pay of the active police officers added up it's right around 2.8 million or so right now so the city should budget that just take 28.9% times that projected payroll and as a reminder uh the city does put in a lumpsum deposit that's the policy into the trust fund every December it's actually for all three pension plans in the city so what I just said for place is the same for fire I met with the the new controller and brand new Finance director this afternoon whenever I see turnover going on at the city uh any City and I I see new names and so on I figure it's best if I just stop by and introduce myself and see if there's any questions so one of the questions that came up if you look on this report near the bottom on page six it's also the same for fire which I'll get to in a couple minutes is there was a shortfall the the city takes its best estimate every December and puts in a lumpsum payment but if payroll goes up more than expected Ed then there may be a shortfall that comes due by the end of the fiscal year so that was true we measured a shortfall of 49762 so two two things on that first it's not an issue it's it's common around the state secondly the city will be wiring that shortfall this month in December to the to the custodial bank and it'll be properly uh noticed on the annual report that goes in for the police and fire pension plans every March so I just wanted to make everybody aware that there is a shortfall but it's not an issue it's it's common and it'll be handled within a couple weeks or so so if you back to the two columns the city's requirement is actually expected to go down slightly as a percent of payroll down to 28.0 three budgeting for fiscal 2526 I fully expect the city will end up putting more dollars in because all the active police officers almost certainly going to get some kind of a pay raise but the explanation as to why the decrease uh there's one big component and that is we had three retiree deaths uh two that were retirees they they were actually retired police officers that their their benefit option there was no continuation after their passing and there was one benefit officiary so a survivor of a former retiree who passed away so three in one year and that is the biggest reason for the decrease uh you did have a source of loss on the investment side and he said well you're crazy Carrie told us we'd get over 16% well remember we smooth we we was a four-year average so the good news is that 16% that you got this last year both plans both police and fire that will phase in Over a four-year period so you you've had some very good investment performance over the last two years but we're still holding on to that one negative Year from a few years back as it's phasing in but that investment loss on the four-year average basis uh was smaller than the mortality gain so that's why the answer here you see is a slight decrease in the City's contribution as a percentage so before I get you an update on the funded status and then move on to fire can I answer anything so far any burning questions for the police okay if you jump over to page 18 I'll get you an update on you probably want to turn it sideways this is the uh the funded status this graph and yes it was going down a little bit since reaching a high water mark in fiscal 21 when we were at about 85% but it it bottomed out at around 79 and 23 and now it's coming back up and here's the good piece of news there is it not only went up from 23 to 24 remember the both pension boards approved at the July meeting to lower the investment assumption over a two-year period with this report it's lowered from 7.4 to 7.2 that that means going forward you're expecting a 7.2% return now when I'm here next year I'll do the other phase in down to seven but for this report at 7.2 remember when you lower the investment assumption you initially lower the funded state status as well just because you expect fewer earnings in the future on income so it's you need more to deposit today to make that up well if you look at this graph the fundit status still went up even though you lowered the Assumption and again that has to do with the mortality experience so um I will call this part done with this report I don't have any other recommendations um other than the reminder that when I'm here next year uh one further reduction the investment assumption down to seven will be done and then we can talk further from there if we want to do further you know additional reductions after that so can I answer any questions for police the only question I have we had two people that retired this year yes as well that will change any of this as well or uh did they retire by September 30th probably just recently yeah we they'll be captured next report it it doesn't there's really very little moving part from retirements from one year to the next by the time somebody puts in a 25 career 25 years we've basically fully funded their pension so they just make that transition into payment status but it it doesn't affect these numbers really thank you okay um do you want to approve the report now or do you want to just do it after I do fire and both boards handle at the same time I doesn't matter to me let's prove it down okay all those in favor of approving the report motion to approve all in favor I perfect thank you very much moving on to fire very similar information I believe we'll start on page six um actually slightly different as far as the contribution rate the the the investment performance was very similar to police uh but I'm fortunately there were no uh retire passing for the fir plant so that's good news and really that has a lot U of an explanation as to why um looking at page six with the city requirement it's actually going up as a percentage of payroll uh from 28.7 to 31.8 one um actually there's another moving part to that is there's one fewer active firefighter When I Was Here a year ago there were 36 active firefighters not in the drop and with this report there's 35 and the salary increase was actually um fairly modest compared to the year before I think if you remember when I was here a year ago I was reporting a pretty big salary increase I think that had partially to do with uh negotiations that had completed and there was some perhaps some back pay perhaps some hurricane overtime pay and so on so last year there was a recognition of a big increase in salaries this report very low salaries so when when you have a very when payroll actually stays kind of flat the city's requirement can actually go up just a bit if you have sources of loss and we did have some sources of loss on the mortality side and on the investment side the other item too is as with the police report the investment assumption is lowered from 74 to 72 with this report so all of that baked in explains why the city's requirement is actually going up for fire from 28.7 to 3.81 um the bottom of this page shows that there was a shortfall as with police the shortfall for fire was 103,2 again um I met with City staff today they're aware of it um I gave them a a kind of a a weight to budget for next year to come up with maybe some margin um to avoid shortfalls going forward but again it's it's not an issue because they're writing the check for the 103 it's going in the next couple of weeks and uh we'll just see next year whether you know perhaps there'll be a prepay next year if they budget with a little bit of a margin so any questions on this page for fire before I move on to your funded status do you have an actual DD contribution what it actually was the yes uh while we're still frozen on this page for the 153 if you go to let me find the right page in the report it's about the middle um page 28 the state contribution continues to go up a lot remember when I say State contribution it's it's a tax and insurance premiums for fire it's Hazard insurance insurance for uh policies owned by citizens of Coco Beach uh police it's an auto insurance premiums but looking at page 28 for fire the the actual CH uh State contribution came in at 291,000 this last year so the city's actually getting full benefit of all of those dollars on page six for a direct offset dollar for dooll the city is Frozen at the 153,000 every year we just keep plugging in the same 153,000 everything above that helps to pay down the unfunded liability which is debt what that does is it saves the city on interest payments on paying off the unfunded so bottom line is that entirety of the 291 the city is using to help fund the pension plan and if you wonder why and that's because there was a a consent agreement between the union and the city going back years now probably close to 10 years ago and that agreement stands now just so you're aware as the trustees that agreement can change you you have nothing to do with it as the board but a new agreement could come in as long as both sides agree to the same thing the both bargaining parties say we want a different answer on the use of State monies if they both agree to the same then then it can change but either side can just pick a different number and for it to be recognized for example the city can't say hey uh Union we'd like to give you half of it for a share plan cash and that if the union says no we'd rather have a salary increase we don't want a share plan then it wouldn't happen the city would continue to get the 291,000 just a little background information on that so any other questions on that or anything else on the Fire Let's uh just look at the funded status then real quick um also on this is page 18 for fire um actually very stable it looks like looking at the green bar chart it went down just a a tick from maybe 83 to 82 very stable so even though you you booked um a net actorial loss for the year and even though you lowered your investment assumption the funded status still basically stayed about the same so what that shows you is that we do have some conservative methods in the plan for funding that even when you have things that would add liability the funded status still is trying to go up over time so that is it for fire there's no other questions then we should get this one approved as well no questions no questions any questions motion to approve motion to approve to approve second second all all in favor all okay appreciate it I'll be here the rest of the meeting so if anything comes up let me know [Music] um up so he need to be Reed basic motion to accept I'll second that second it all in favor I thank you Dean all right very good hey Debbie on that note I know Joe and I se was appointed when did that come up in two years okay I didn't realize it was that never mind thought we took took over for some did that's awesome once you're on you're on definitely next on the agenda will I think Mariner I heard Carrie was on the pH or Carri car car that's me there we go can you all hear me okay yes think so yeah Wonder wonderful okay thank you um I think before I launch into the investment report um typically after you all approve your Actuarial valuation there's this exercise where we have to declare our expected rate of return for the next year the next few years and the long-term thereafter um the state likes that to match what's in your Actuarial valuations which I believe is 7.2% um so I don't know if you want to tackle that now or if you'd like to wait till after I'm finished whatever you prefer let's do that now Carrie are you there I am and so Madison I think if you're okay can they say so moved if I just say I'm comfortable with the 7.2% Declaration from the next year the next few years and the long term thereafter I think each board can just say so moved um right if you um wanted to make the motion in that specific language the board can um say so moved that's fine want to make a motion so moved so moved for the police board 7.2% is our assumption yes okay fire side so moved so moved so moved we do vote all in favor and then if you all will just yeah okay we're good perfect so switching over to the quarterly reports and Doug stole a little bit of my thunder but that's okay I'm not upset um this opening to page three I'll give you a little bit of economic commentary and then we'll get into to each of the funds U but flipping in your books to page three if you look at the chart on the top right there our typical kind of equity markets chart you can see all of the bars go to the right which makes your consultant very happy um it was a good quarter really in public markets across the board so if you start from the top of that chart you can see the S&P 500 up a little less than 6% U mid and small caps up even more than that on the order of 9% and I think you know there's a few things going on in the background here um obviously the the interest rate hikes that we got from the FED in 2022 and 2023 really haven't kind of broken anything or sent us into recession like a lot of kind of Market pundits would have thought um unemployment remains really pretty healthy um consumers continue to spend GDP is surprising to the upside um all while we are getting inflation under control and I think you see that kind of come through through and their results for the quarter within us equities and then on top of that we did get a 50 basis point um rate cut from the Federal Reserve in the second half of September and that was really stimulative for markets I think thinking you know the FED is done with their rate hike regime likely we kind of back off a little bit from here um and you see that really coming through in the strong numbers that we got for the quarter um it was an interesting quarter and I think a positive one too from a market Health standpoint um we've talked a lot about growth stocks and just a few of them that have really led the way well we did see a lot more kind of broad Market participation for the quarter which was a good thing so more names kind of positively adding to results and then on top of that it actually was a more value oriented sector value outperform growth significantly um sectors like REITs financials Industrials that are very sensitive to the interest rate environment um really did well as rates came down with the FED cut rates came down pretty significantly um so put all that together very good results within domestic Equity markets as you see in the numbers um in overseas markets there in the middle you can see for each indic we're up kind of on the order of 7 to 8% um a lot of that actually was weakening dollar kind of on the lower interest rates that we saw to end the quarter um translating those International Equity results from local to to US dollar currency that was a nice tailwind and then last but not least um within fixed income the full aggregate um up 5% and if we move in yearbooks to our typical yield curve chart which is at the bottom of page 10 for each book um you can see just how dramatic the drop in rates was we started where the orangish yellow line is we finished where the blue line is and so obviously the front end of that curve very impacted by Fed rate Cuts directly reacting to that but even the longer term kind of two to 10 year maturities and and so forth also dropped um which gave us that nice pop INF fixed income and notably for about the last two years we've talked about the inverted yield curve and specifically the two and 10year maturities um we've had a situation where you could invest in a 2-year Treasury and earn more than you could in a 10-year treasury we actually saw that correct itself through the quarter um essentially that that kind of two to 10 years is pretty flat right now but we are no longer in a situation where the 2-year yields more than the tenure does the front end of the curve is still higher but as the FED Cuts if they continue to cut I think you'll see that normalize a bit um it was good to kind of see that indicator go away because that has historically has been a pretty precise indicator of a recession to C um so really good kind of firing on all cylinders this quarter really good results um and put us in a nice place to end our fiscal year um and happy to answer any questions you all might have economically before we move into the pensions no questions thank you Michelle so hearing none I will move just to page 13 in your respective books which is our uh line chart showing the the trajectory of the market value for each of the funds and just starting with fire you can see we ended the quarter um with about $18.8 million in assets there in the bottom we give you kind of the 10-year snapshot of of cash flows gains and losses you see that 10year return still a 74 that's really great considering that we're looking for a 72 going forward we did meet that on a 10-year basis for police on your side you can see we are just north of 18 1 12 million dollars in market value about 18.6 million um and also you know at that 7.4% return over the 10 year as well um so good to see those long-term numbers still very strong um moving from there to 14 in your books just to take a look at kind of our high level snapshot of where the assets are um for fire first just about rounding up a little 51% of your assets were in domestic Equity at the end of the quarter about 16% was an international Equity I'm going to round up to about 16% in domestic fixed income about 4 and a half% in global fixed income about 11% in real estate and then a little bit of cash on hand and then flipping over to police you all very similar U just about 51% domestic Equity about 15 a half in international 16% in domestic fixed income 4 and a half in global fixed um also about 11% in real estate um and then just a negligible couple percent in cash for you all as well so that was the overall snapshot um from there if we move in your books to page 19 that's our second asset allocation it but it shows you a little more closely where we are in our investment policy ranges for each of your asset classes and just in summary I'll say you know fire all of your triangles very close to the black line indicating your target with the exception of real estate which is by Design as we draw that down and as that's taken some market value hits so very well in line with your investment policy parameters on the fire side and police very similar story both funds really very close to your targets um for all asset classes with the exception of real estate which we've strategically started to let that kind of pull back some um getting to the good stuff which would be performance flipping in your books to page 22 um on the fire side you can see you all were up uh just shy of 5% about 4.8% the Benchmark was up about five and a half um police very similarly um you're up just shy of 5% as compared year policy Benchmark um on the fiscal year Doug again Doug kind of spilled my thunder but that's okay on the fire side um we show you all net of fees just over 17 there's a couple of extra expenses that Doug takes out of his numbers um on the police side you know rounding up to about 16.6 net of fees uh both funds three-year number still very much impacted by that challenging 2022 but if you look out to your kind of fiveyear 7year numbers all still in that sevenish percent range so your longer term numbers still very good there within the individual segments looking at Equity overall um both funds were up just about 6% for both domestic and international Equity um the policy up slightly more than that um within domestic equity on the fire side you all up just about 6% rounding up about 5.8 um on the police side about six um your underlying managers actually did pretty well for the quarter we did go through that transition we terminated all spring and put Windslow in your portfolios for the large cap growth segment um and I think that will be additive going forward that was obviously a very challenging piece um just to give you some perspective we were not in the fund for the full quarter um but the fund did do well it was up about 3.6 for the quarter as compared to the russle um index which was up a little less than that about 3.2 um so off to a good start there um I mentioned value really led the way for the quarter so you'll notice your Brandy Wine your Vanguard Equity income very good absolute returns both of them up on the order of about 8 and a half% um they were a little bit behind the Russell which was up about a percent more than that um some select energy names energy was actually down a little bit for the quarter um as well as some Pharmaceuticals were slightly down um no long-term concerns I think again very good absolute numbers um and then within the midcap growth segment there your Touchstone fund pretty well in line with this Benchmark up a little north of six as well um and the extended Market that kind of mid and small that did the best up a little over eight um looking to International on the next page on 23 um each segment was up on the order of about 6% um the all country did do about eight um so when we look at europacific growth it was actually a more value oriented environment overseas as well and so not having as much much exposure to to sectors like financials um also being underweight China which was kind of a big story for the porter was a bit of a drag for europacific um DFA mostly kept up kind of gave you about 7% um but did not keep up completely with the value index also a little bit of select energy exposure there was a bit of a drag um within fixed income very good absolute numbers both funds up just about 5% overall um the bulk of that coming from your domestic dodging Cox manager which was up a little north of 5 a half% not only good credit selection but they've taken kind of some strategic positioning from a duration standpoint um that has served them very well um into Global Pimco Global good quarter for them up a a little over 3% but they did Trail a bit um the full Benchmark uh was up a little over four they did not have as much exposure um to the belly of the US curve and kind of missed that big big uh pop in prices came with that fall in rates um and then last but not least on the real estate side um negative but we're starting to see those negative numbers flow ASB was down about a percent The Benchmark was basically flat um to take a little bit of a breath there um we do continue to get distributions from ASD the last quarter was about 10,500 we've gotten about 45,000 back year to date um they have been able to sell some property they did sell a couple of properties in the last quarter a lot of that went to Debt Service and kind of paying off debt because some of their ratios had gotten a little bit High um but they do have four properties right now that are under contract um two office properties um and two retail properties in New York they've got eight other properties that they are currently shopping out so I do think you know in the next couple quarters we'll start to get more meaningful outflows um from ASB especially if we can get interest rats to settle down and kind of stay there a little bit um so I'm going to take a breath and see if there's any questions um and just say you know congratulations 16% on the fiscal year is really excellent any questions me questions thank you Carrie we don't have any questions you got it my pleasure and I'll just say too I did send to Debbie some portfolio updates through November 30th and I'll just say November was a great month um the value of both portfolios was up over $19 million so we did have some nice games um in November which puts us off to a great start for our new fiscal year great hey Carri it's Dean I have a question and it's maybe a question for you and the and the group itself on September 30th Debbie sent out an email that had the Foster and Foster 2023 comparison and then it had a look back of uh four years or fiveyear average did anybody else take a look at that it was pretty interesting where just just ran some numbers uh Coco Beach fire for 2023 the market value we were ranked number 203 out of about 208 uh at 7.12% and uh police were number 207 at 6. 88% just for comparison the average in the medium the average was 10.6 the medium was 10.51 uh gsv General was extremely high and they were number one at 23.08% 207 out of comparable municipalities Foster fost okay one point and I might jump in first Debbie if I can so I mean it's a great question um and I can I can quickly answer it if you go to 23 in your books you know two things are the biggest drivers of kind of your ranks and your results one is your 15% allocation to real estate most of my funds are 10 and the other is the performance of ASB and you can see see it on the bottom line there of 23 on the one year they've been down 21.5% the index was down more like eight on the three year they were down over 8% the index is down more like a quarter of a percent uh both that allocation and that manager performance have been a drag a significant drag um and we are doing what we can to kind of Remedy that unfortunately it's one of those things that isn't easily fixable it's going to be up to ASB to give us our money back and allow us to do something different but really that's been the biggest piece of what has what has been a challenge for us yeah thanks it was just interesting to to look at the comparison so encourage you to take a deeper dive and see how you compare against the other municipalities be back like three I think yeah third in the state so that's because of asby it saved us right and then it started to not save us and the rest of the market saved us so it's it's just an inversion it's a slow exit out of asby so I got that right that makes sense yes that's right thanks absolutely the next on the you guys and December those I'll get it right so you guys are agree that we can hold all those dates any conflicts so far we at this time none at this time great right now y next is the attorney's office Okay Madison are this is Madison yes I'm here standing in for Pedro um I'm an attorney with and S kind um unfortunately peder had a conflict today so he sent me in to present our special report um to the board this is uh basically an administrative issue regarding two Florida Statutes that have been enacted this year and they concern contracts that the board engages in with third party vendors and service providers or contractors um the first statute states that the board may not enter into a contract with an entity that would disseminate personal identifying information to certain foreign countries of concern and those countries are China Russia Iran North Korea Cuba Venezuela and Syria um and basically this uh goes into effect for the board um if there have been any renewed or newly enacted contracts since January 1st of this year um and what we have prepared is an affidavit to send for the administrator to send out to those um contractors and service providers um to attest that they are not disseminating information to foreign countries of concern and any contracts going forward that the board renews or executes uh we will draft that specific statutory language into the future contract um a similar situation with a second Florida statute that was enacted regarding human trafficking again just stating that the entity that is Contracting um with the board is not using human trafficking or coercion to provide its labor or services in similar situation any newly enacted contract will have the administrator send out an affidavit to sign and any future contracts uh will include the statutory language um to you know ensure compliance with these newly enacted statutes are there any questions um regarding that does the affidavit make us free from um being ass sued or thrown in jail or whatever it may be simply because we had it signed even if that company does do this um yes so the affidavit is um ensuring that the board is in fact complying with the statute um and if the entity does violate the statute the board would simply terminate the contract and have no further liability okay and those affidavits are completed by an officer or representative of the third party service provider um and provided to the board so they're attesting to that fact and as long as we have that a then we have our bases covered in terms of what's required by the statute any further questions no no I think we're that's it Carrie no I'm sorry Madison no for the questions okay great um well that's it um on my [Music] okay that's it February I make a motion to adjourn on the police side do we need that y second all in favor motion to adjourn motion seconds second all in favor all right thank you for