e e just hang tight for a minute is doing some digging in our area over there digging between Mud Lake and see no I have I'm not aware of any problem old main kid all the way down through the off what used to be Cross Road run straight down that Ravine one that runs to Church [Music] Road Church I've never followed it back to M Lake but I've seen it to it I mean it does where Old Road cross it and goes through the woods and ends up there's a big Ravine back there okay and it dumps off in that Ravine there's a creek that flows off to the left I guess it eventually ends it up in the river yeah yeah it runs back down buffalo blood yeah yeah only reason I know youed ride a horse back there h e e e e e sorry delay okay okay what's another minute I got some more trivia if you want to hear more trivia I do so the the James uh James has the most unbelievable resolution has determined that the universe is not expanding what to do it is a big bunch of so expanding when you're looking out the other way objects are supposed to be getting smaller and smaller as you go further right they determine that they're not moving universe is not expanding so it's not Contracting either it's just static maybe it's just at the C it stopped expanding do we have his papers hand me that Mr you hand me those papers right there Mr Sir you decided to come down here okay we were trying to help you out right how you doing good okay we'll call the General employees retirement plan pension board meeting to order Miss kaiser roll call J present Alan Bush here jnis here Troy Bell pres Tammy M thank you Miss Kaiser has everybody had a chance to review the minutes from the February 27th meeting yes if so is there a motion to adopted is there second a motion second any further discussion seeing none all in favor say I I motion passes all right I think that brings us to item three Patrick Patrick is not going to attend he says he has nothing to add at this time okay I think that brings us to item four then that may be me it is good afternoon everyone um let me how much time do I have we've just started okay the plan is doing very well awesome uh and there were some changes that were made last August you may recall when the house bill three language had to be added to the investment policy we went ahead and made some interesting shifts one we increased the allocation Target to the large cap essentially the large cap Stocks by 15% and we took the money away from uh publicly traded real estate the Reit which had a 5% Target we took money away from convertible bonds uh in infrastructure um we added 2% to bond so those are the two areas that uh that we changed and as it turns out you know the large cap us equities have done very well since we since we did that um page one um is reason why we we shifted uh decided to um move away or at least reduce the allocation to International had to do with the long-term history of international with the exception of the last year um International has trade has done about half the returns of US stocks and you can see this table here 15year history a US S&P 500 is averaged 15.6% per year and if you run your finger down the column there you can see that the other uh areas of the world have not come even close to the S&P 500 so what's driving this difference has been um a number several factors but I think technology has been the biggest the US tech stocks tech companies are clearly uh the main main drivers that have been of US Stocks outperformance relative to non- US Stocks the US is not an a heavy industrial country as you know we we we're a big consumer of things that are made uh around the world heavy Industries but we were more Light Industry technology intellectual property type of uh where Tech fits nicely so when you look at this you think wow International stocks the Euro zone is really cheap from a priced earnings perspective uh and from a a yield perspective but we still maintain a view that the US still has an advantage over foreign and and I should add that many US companies that you're familiar with operate around the world so they have the ability to open up divisions and operations in any country they want uh so we go to page four and look at the summary remarks we had you had a very good fourth quarter and you also had a very good first quarter of this year so this is a second uh half you've gotten first half of your fiscal year now in place here 1.2 million was earned 5.6 net pretty much in line with the model and the best performers were um growth as you'd expect Voya has made a nice turn uh in your favor they were up 15 uh versus the index which is up 11 both large cap growth and the 500 which is up 10 six it's nice year to date you're up 15.3% earnings net in the top 11th percentile which is pretty impressive so uh this plan is doing a little bit better than the police and fire here and um but the and and your allocation models are the same as theirs uh uh the oneyear rolling one-year number 2.7 earned uh 14.1% a little bit behind the model but he's still ranked in the top 29th percentile you can see growth again is a dominating uh dominant Factor Boya 43 it's amazing 39 for the index and sidex large capap value at about 23% I like the fiveyear number um 6.1 million um averaging about 6.4% net you know F FRS is at 6.7% with their assume rate of return um have we is this is this plan moving down uh to s five or anything like that I think it's at 75 at 75 okay um we did some rebalancing in February um moved some of the equity uh gains uh into some other areas for cash for expenses and then in March um we did some more rebalancing uh and that's what we do you know it when as appropriate um so if you go to page 10 um well actually page eight page page eight shows you the history going back 10 years and you know all the ending mark values are the same because they're all ending in March 31 all the beginning values are different because they start at different times but you if you go back 10 years I had the privilege of being here 10 years ago you had 18 million in the program um the flows net over the last 10 years have been about outflows of about six and a half million and you've earned um entially uh almost twice what you've spent here um it's not I shouldn't say what you've spent but twice what the outflows have been it's almost twice it's say 1.8 times now page nine is something that was one of the prior um trustees wanted us to insert this in here um and it what it does it's taking snapshots of of one-year returns ending um ending March 31 so you see the most recent one on the left um the next two are capturing the horrible experience we had in 200 um 22 we've talked about at length because the one- year inning in March 23 um captures three bad quarters in 22 you know rates went up bonds you know were crushed as well as stocks um the year ending march 21 was up you're up 30 almost 36% that's at post covid kind of things were back on track and the vaccines were now available and people were really excited about what was happening so you can just can see visually the volatility that that remains persistent in the market 10 and 11 are just some details about the Flows In and Out of these different products and this makes the audits easy because the auditor looks at these numbers and it's easier for them to tie back page 12 is how things looked at the end of March um a little bit of an overweight to cash I'm not sure if that's if you need that extra cash for any particular reason but I don't really have a problem with that overweight at the time for the time being because uh you're earning about 5% a little over 5% on annual Bas on that cash anyway that's pretty good you think about it if we're earning 5% on the cash and inflation is really probably closer to 2% I know the FED is still or the labor department still reporting it around 3.3 but there's a lot of lagging information that's in there it's probably closer to two now you're getting a real rate of return on the bonds of about 3% which is phenomenal that's a good segue to take you into some a little more detail here um if you go to page 16 now the Sykes bond this is a um Bond program that's it's actively managed um but if you look at the 10-year number it's average 2% per year if you go to the page that's gross of fees you go to page 18 these are the net numbers 1.6% for 10 years on the right hand side you see that so the index earned 1.5 and your active manager which ranked in the top 40th percentile which is very good when you consider they don't own low quality bonds which yield higher returns that's a pretty pretty decent rank but it but it's nowhere near 7 and a half% right right pretty dismal so the bond market has been manufactured has been orchestrated by fed policy since the Great Recession the FED brought rates down but more and more sugar in the IV that forall the revolution basically but here's what's interesting if you look at the um the yield if you look at the fiscal year to dat return for the Veris stes bonds is 5.3% % return in 6 months now so if you got 5.3% in six months and look to the left minus 6 for the most recent quarter that means you had pretty close to a 6% return in the prior quarter right it was that got shaved down by 6 that's why your fiscal year day is 5.3 but if the economy really is slowing and I think it is and the FED begins to lower rates this year before the end of the fiscal year maybe two rate Cuts you could see the bonds for the fiscal year earn 89% it could happen because when they bring rates down policy rates because the duration of the bond portfolio the multip there's a multiplier effect in the return so the principal value of the bonds go up by the rate decrease times the number of years in the duration so if the duration is six years and the rates go down a half a percent that's a three-year 1/ half time * 6 is three that's a three point 3 percentage Point bump so you could see an 89% return in the bond that'll be best Bond return you've had here in I don't know 15 years it could happen we know we've not had anything nice to say about bonds for a long time but uh this is a a very interesting time time to talk about bonds um let's go back I'll give you some more good news and then we'll talk about private real estate you go back to page 15 and look at the um the 500 Index um which is part of the large cap strategy um you have if you look at these compon components you have Fidelity 500 at 3.3 you have large cap growth 1.2 and so forth if you add up the two um growth pieces you you have roughly 2.5 million and the value here is about 2.7 so they're roughly they're roughly the same so there's a balance there and then in the center is the 500 Index which is a which is a big stabilizer for you uh in a very good long-term performer you have midcap and you have small cap so things are um nicely structured here for the for the domestic Equity con and steers is a is going to continue to uh by the way look at the con here's fiscal year-to dat number 14.6% what happened there you had a big rally in the fourth quarter about 11% rally add that to the three and to get the 146 you with me so that's that 35% of this for of the con Sears piece is comprised of utilities many and and so with this ramping up of these IIA centers data centers they're expecting a 15% growth in electric consumption in the next I don't know five seven years AI right AI did I say IIA did had a big lunch had heavy lunch today across the street I'm glad you're here um you're pushing the right buttons so so the utilities are getting a nice Tailwind right now because the view is they're going to have a surge in demand demand for their what they sell of course they have to go to the rate commissions and get get approvals but still the the user demand is expected to grow and that's part of what's driving con and steers that's part of it um second do the cost of natural gas then increase the demand I was going to ask you about that I'm asking you that's right down your alley um uh Nat gas in the US is still Dirt Cheap yeah compared to Europe yep um but aren't they opening up more LNG um terminals terminals thank you yeah even now we're even yes we are um yeah I mean in Louisiana and Texas um and they're exporting we're the largest exporter of LNG in the Milky Way yeah in the universe we really are we've overtaken Cotter and Australia um so we have a lot of cheap gas and it's going to Europe and Japan in South Korea and and that'll that that'll continue for a long time and that's in part why another reason why we are more Pro Us in the equity side because the Europe is is struggling to deal with the high cost of energy they got a real problem for obvious reasons so the Germans are moving a number of operations more and more operations into the US factories final assembly that'll continue I think they're paying gosh $28,000 cubic feet in uh in Europe and I think Henry Hub price here is around 270 it's in the two yeah one10 I mean these are rough numbers but um all right American core let's talk about them real quick uh you don't have a big allocation thank God to them um on page 16 I think it's around 5% they um 4.8% they're uh they have office exposure and that's the main drag they have that so they're having to mark down these offices and um but they have strength in in the industrial area they have strength in the multif family area although those areas are all being marked as well the um take a nice industrial um asset and it it's fully leased and they're getting and the rents are stable so the noi the net operating income is stable but the problem is the the refinancing Market is not very stable so the cost to finance these buildings is going up so when the when that when that happens the um now banks are want to see a certain amount of coverage ratio in their in the noi is as it relates to The Debt Service they want to see a lot of extra money so you can maintain and keep the place looking nice fresh and keep it up as well as have ample money left over to make interest payments and that's that has started to shrink so the the and in the multif family area and you guys see this here because you see a lot of permitting but uh the permit request for multif family has that is starting to wne it's dropping off and that's in about three years that will be reflected probably in a tighter um market for apartments and and and good rents and kids can't afford to buy houses unless their parents chip in and I'm not going to chip in so some of you are weak and you got to help them out but I'm not um no my kids are okay they got their they somehow pulled it off huh just inhance I'm not leaving them anything I'm G to have a blast disappear we know what happened um so uh but there's going to be pressure here in this asset what's going to happen is as the rest of the portfolio grows that 4.8% will become 4.2 and then 3.9 we're not adding to it it'll eventually become a smaller and smaller problem and I'm hoping that the what that the outperformance that I'm expecting in the Buy portfolio will mitigate some of that um finally on a brighter note high yield this is a very interesting uh flag to watch because when you see high yield performing well it usually suggests a very strong indication that the economy is nowhere near a recession you look at the uh the one-year return of 9% which page are you on page 16 16 um Vanguard Vanguard High Yield Corporate Bond blend it's a it's a it's an index it's a Vanguard index um it's not exactly the same as the Bloomberg high yield index but they're I I can't that's the benchwork comparing them to longer term the numbers are about the same but it's interesting you look at the one year and end the returns of high yield have been pretty impressive high yield represents companies that have below investment grade ratings so they're considered junk so when a company has a balance sheet that has a lot of debt uh it tends to the debt tends to the bonds tend to fall into junk status but people are buying these bonds because they like the yields you don't have a lot I mean of the five million you have in fixed income um only 826 th000 of it's in high yield but it's enough to bump the overall the fixed income up so you look at the fiscal year today at 6'2 you would have gotten only 5'5 if we had all in the with syes so that extra kick from that 79 does did did have an overall positive effect when are we going to have a recession here's something else interesting we have a negative the curve yield curve has a negative slope positive negative right historically this is what we learned in school when you have a protracted negative y curve it pends to a recession you haven't had one anybody venture to weigh in on why election year that's actually pretty pretty good guess anybody else I mean you guys know more than I know what do you think cheap moneyone lots of money if fiscal policy the all these all these projects all the money being spent to build this and build that all this infrastructure is keeping a lot of people employed and they're spending money they're going to Walmart and they're buying beer and buying cars and trucks and that's why we don't have a recession I yeah I don't I don't really think I think what the what honestly I think what the FED has done by raising rates is have the UN one unintentional consequence is they screwed up the real estate market the residential Market got screwed up because people don't want to sell their house because they're they're going to move somewhere finance that house and have a higher monthly pni so they're going to stay still so there's nothing on the market I'm not sure they fig they knew that was going to happen um and we know what's happened in the uh the commercial Market uh but that was inevitable that that was going to have to be you know catch up there so I think we're all right we have an election coming up so I think the administration's going is is going to want to see oil prices come down they actually came down today and yesterday um gasoline prices have come down diesel has come way down I remember when diesel was a buck 40 over regular now it's like what 40 50 cents difference so what can I say overall one couple things that are really good here one is that you have not fallen into the Trap of of getting involved in private equity and private Credit Now a number of pension systems around the country especially the big ones uh made very large commitments to private private Market private Market's in trouble there's no liquidity there's no transparency the general Partnerships that basically run these programs uh have their own valuation metrics so the independence is lacking gr the grah is it Graham Dodd let's see Dodd Franks Dodd Frank's bill was supposed to clean up a lot of that after the big recession and it really didn't because these the lobbyists are so powerful Washington to protect the private Market they've been able to get away with a lot and continue to get away with a lot so um you if you're concerned about the marks that we've talked about with private real estate there are pension systems in Florida bigger big plans that have 28 30 32% of their Assets in private and they're and the stuff's not being marked so they're they're in for a root Awakening when these things start to finally and what's happening is all these companies that are in the portfolio is private companies they're having the same problems with their banks that the real estate guys are having to run this business they have they have a certain line of credit they have certain term loans those loans are coming up for Renewal the banks are increasing the rates by two and a half times and these small companies which historically have had a really difficult time accessing Capital are now facing serious problems with the banks and so you have the private Equity the balance sheet you got the equity side then you have the the debt side their their the borrowings that they have and that's what's what's going to be clobbered here in the next couple years but you don't have any exposure to those markets the state of Wisconsin just made a100 million commitment to uh uh Bitcoin state of Wisconsin Retirement System these are public meetings and I'm probably going to be be shot to death tonight saying all this stuff but um I I don't understand Bitcoin I don't get it I know a lot of smart people who who are all in and I know smart guys who say stay away from it what's your gut instinct stay away from yeah like can't touch it it's not real listen to me didn't famous football player get you know you know if you yeah if if you think about his history going all the way back to the Greeks go back as far as you want to go gold silver these things had weight right now I have a Tesla it's sparked out there it's 11 years old when I fill it up with electrons you know how much the weight goes up in the car zero I go 220 miles on one tank of electrons but it has no weight what I don't like about Bitcoin is that there's no there's nothing tangible about it but I'm not that smart there's a lot more going on because there are people around the world who are suffering from repression they want to get their money out of Ukraine or get their money out of Argentina or get their money out of Chile and they don't trust the government this is an important mechanism for them to just go and they're and they've moved it and they have this blockchain formula that protects no one knows how to get to it now I asked a guy the other day who presented to a client who co-authored a book on blockchain I mean on bitcoin which is about blockchain as well and I asked him what does the Federal Reserve think about block about Bitcoin and he said oh they're all over it oh they they love it such a  and I did I I did something turn the Vol out I did I did my own research on it sure enough the treasury has does have a bunch of it from these are criminal investigations that stuff that they have they've seized yeah they didn't acquire it intentionally they got that's right they did not acquire it these are assets Bitcoin assets that they've seized in criminal indictments investigations that they still have and they haven't yet figured out what to do with it and they don't trade it yeah but it's still just gambling because if it's just a contract or a means of in the transaction you can replicate it how infinite times over yes so it's just you going to be the first one in first one out or you want to be the last one and last one well that's to me it's like a chain letter yeah remember chain letters yeah heard of them yeah he gotta smile when he the first guy um but if you had a room of of eight guys and they all had just a one of those cars you used to get in your hotel room and Mr Bush says his car is wor $10,000 and you've convinced all of us because you're convincing it's worth 10,000 and we trade it we do a new roof for me yeah I'll buy some assalt for you and we trade all of us are merchants and we agree that it's worth $110,000 except the last guy right and he goes to the bank he says I want to cash this in for 10,000 they say not worth anything right I don't know uh but anyway you're not in Bitcoin and I don't think you ought to do it anything else you want to talk about interest rates you said that the Fed was going to lower rates is that going to affect that will affect the bank's interest rates downward is that right yeah uh if all right so I think the am interest that we get on to yeah if you look at the the there there is a a Futures Market mechanism that that's a consensus of where interest rates will be at the end of the year and it and it is suggesting two quarter point decreases but this this mechanism has been wrong for about a year last last October it was predicting um three decreases in the first quarter of this year and we didn't have any um the European Central Bank announced that they were going to start to cut in June they've already they said we're going to start to cut we're going to do it we have an election coming up they said they would but they haven't yet they have not yet okay um I would say it's I'd say it's an even bet that I think it's 50% probability they do two cuts this year but I what do I know and I think the other 50% is they to do nothing toss of the coin yeah I I they want to keep the dollar strong because that is a that's an inflation uh fence it keeps prices down uh they want and that's our number one priority right now is to keep inflation get down they're reporting 3.3% but as I said earlier I think it's it's probably closer to two but they have a lot of lagging data I'm hopeful they go they drop by 50 it'll help uh the mortgage rates will fall down closer to 6% it'll help a lot of people but it but you're right everything right now is being driven by inflation expectations but we made money what you're making money in this market anything else are things in the pan hand okay I thought you spent time over there okay all right that's all I have thank you thank you I was going to ask one question yes sir what do you think the impact on our um revenues based on the two Wars that we're dealing with Oh you mean all the our [Music] spending this you know what's funny this is this is like a time machine going back to the 1960s when none of you were born yet you w you were um we had we had the we had the Cold War we had Vietnam we had the space race where we were spending I don't know almost 15% of our economy was was driven to get on the moon before the Russians and so we were going Full Throttle in the 60s we're going Full Throttle right now um so your question was what's it going to do well in the short term it's going to it's going to create jobs because it creates orders and the the military Industries take a long time to gear up and when you if if um if LED Martin's going to get an order for uh Patriot missiles or Hellfire missiles they want they want a big contract they don't want just you know we want 20,000 we want a million so that means they gota they get a million unit contract as you know they got to then build a big facility it takes maybe they'll build it in patka next to the gypson place but there's a there's a lag effect but I think it takes time but that suggests strong economy into the foreseeable future because of all this demand and and look to make shells 155 and 105 that those takes a long time to ramp up to make that stuff right take years so yeah the military buildup and and and the European Europe has a lot of military companies too like Bae is another company I like um they build all that stuff that's personal thing don't go don't go byy it just buy the index does that help you you probably agree with that don't you anything else thank you very much have a nice summer yes we try our best is there a motion to accept the report I'll make a motion there's a motion say have a second any further discussion all in favor say I I like sign motion passes right I think we are on to number five see we have Miss Parish on the line hello um good afternoon everybody just a quick um information memo uh regarding some IRS changes that were made um in the reporting requirements of disability annuity payments oh actually this is just for First Responders um and other disabled taxpayers oh okay so this this would be um for everyone if for some reason there was a um disability and it's considered to be Duty related um are certain uh tax implications whether it be that it's going to be taxable or non- taxable um with this guidance um basically any disability that's calculated based on age or years of service that portion is taxable so moving forward if and when you were to have a disability application and that disability was granted um the order for that would State um how the disability um is calculated um whether the benefit is a fixed percentage or it's based on years of service like I said um based on that whether or not it would be taxable um again we are you know we're not going to provide um legal or tax advice um directly to the member but just to set them up um for success in their tax reporting so nothing to be done on your end just um you know kind of an FYI of some um IRS changes that were recently implemented any questions for Miss Parish seeing none I think we're moving on to the resource center contract yes um I have reviewed the agreement um sent from Resource Center there was one small change just in the uh public records um contact person and information um so that was fixed from what was sent to us everything else is good to go we are happy with the agreement and would recommend that it be signed at this meeting unless there are any questions has everyone had a chance to look at the agreement I can get it started I had a few questions who pays the fees outlined in the fee structure I'm assuming the plan pays the retainer um does the plan pay all the other separate fees related to a specific retiree so I just want to make a note this is the exact agreement um as all the other boards except the fees are slightly different just based on um membership so I just wanted to make that note um so it looks like all of the services that are listed in exhibit B are covered from that retainer um and then if there's anything outside of that it'll be on a caseby casee basis but it's pretty inclusive that exhibit B list so just curious the $100 separate setup fee per disability or retirement application is that paid by the plan or or the retiree they're typically paid by the plan um and they're really nominal and not Material at all the relationship the reason that they're there is I can give you instances from our past where we have had larger cities reduce their Workforce by say a third in a f Monon period or four month period of time and we processed 400 benefits and had additional people working a lot of extra hours to process all of those benefits timely and those are the kinds of situations where that activity means something but on an ordinary basis it doesn't but do are not charged to the retiring member um we do tend to spend a lot of time with people in that process I I don't have an issue with it I just wanted it for clarification purposes we don't want to charge the member for the services are you sure AB I am sure about that um I noticed under section three um all extra or extraordinary expenses such as printing charges postage for mass mailing overnight delivery charges and special travel expenses um shall be reimbursed by the fund what kind of control do we have over that anything would be approved in advance the only thing that because even the meetings and us here that's ordinary travel not extraordinary the only thing that shows up there are um Mass mailings and things like that and again they're not huge based on the number of members of these PL um but we pass through some of the postage charges and mailing expenses is travel to the regularly scheduled pension board meeting included in the service fee retainer yes okay um who is the point of contact uh for the pension plan since we're not going to have an administrator in house we have planned that the person taking my position is going to be the point of contact okay all right that's all the questions I had is there anything else from the board I did notice uh on one of the pages that we have a document that um has the city attorney's contact information on it was that just an insert oversight no that's intentional because she is the uh the records management officer for the city okay so typically um on any other agreement um it would be the administrator that would be listed as the records custodian but when it's an agreement with the administrator for administrative Services it's typically the city clerk in this case it's the City attorney but they won't be on any other agreement um it would be whoever the contact person is or Resource Center in fact that was our one change to the agreement because I had it I think as the city clerk yes okay so if and when that changes how do we do we have to update the whole contract I would just do um a little addendum that would reference this um this agreement and then that moving forward it was changing it shouldn't well I guess technically her you know her name and position could change if that were the case it would just be a quick addendum but the Florida Statutes require that this specific contact information be in there that's why it says her name her address her phone number email facts that's all required to be in there okay and you had indicated that the person taking your position will be the the point of contact for the city between the pension Administration being done by the resource center and the city so anything that like suppose that they need an agenda uploaded into our agenda system because they're not going to be using it that would be the person in my position would be the one to upload the agenda and make sure that it was available on our website and all that information so it would be a city employee it will be a city employee okay thank you anything further from the board if not entertain a motion to approve the contract I make motion motion is there a second I'll second motion motion second on the floor to approve the contract is there any further discussion seeing none all in favor say I I I all opposed Mo passes Miss Kaiser quarterly expenditures yes this is the expense report from October so it's it's really year to date it's through it's a six Monon um no unusual fees um simply the the contribution refunds and the normal fees from the attorney Foster and Foster uh the budget it shows that the um administrative budget is the whole budget's 59,000 we're at 45 right now but we have all the admin expenses in that we're going to get in I booked those at the beginning of the year any questions from the board sorry I'm always looking at who's taking their contribution refund so yeah somebody's getting a new kitchen um again any questions from Miss Kaiser on the quarterly expenditures no Jill can you remind us what the anticipated expense was going to be for the administrator or is that on the next rep that's on the next one y on the new budget all right you don't need a motion for acceptance on those to you yeah I need okay yeah all right is there a motion for acceptance I need a motion first Mr Bush you want you want to be the motion yeah I'll make a motion thank you sir all right is there a second thank you Mr B there's motion and second on the floor all in favor say I I I all opposed motion passes all right M Kaiser then we're looking at the budget next for next fiscal year starting in October um the uh TRC the pension administrator that's the expected expense right there for the next fiscal year 27300 and we're going to conference well there I I book for I give a budget for three people the board is five so the idea is every two years you go to a conference and uh the next one will be the one offered by the state in the fall which is usually really good for new members um they just they're geared toward that it's very small conference you have very easy access to experts rather than large conferences and where is it it it's usually in held in Tallahassee um but it varies and we're going to have to wait Orlando too they will do Orlando too y um generally they have one in the spring and the one in the fall they didn't have one this spring they're still trying to get over covid related issues and I expect them they expect they have one in the fall is this for adoption yes all right we've got a proposed budget for October 1 2024 to September 30th 2025 for consideration is there a motion on the floor I'll make a motion to accept it as presented thank you Mr Dennis is there a second thank you Mr Bush any further discussion seeing none all in favor say I I all opposed motion passes any public comment seeing none we can move on to other business um was there something else yes Scott I so we wanted to begin the update on signature authorizations on file since your next meeting isn't until the end of August the city is still pending a replacement for Jill expected to come on in July who would then act as a City contact so we would look perhaps to begin the signature authorizations but complete it when that replacement for jel is known and so so we do believe that it would be appropriate to have a motion to update the authorizations on file and since we have a couple of you here it would be useful to get that done while you're present okay so to be clear is the motion that you would like considered to approve Jill's replacement as a signature or someone else here today simply I believe it's to update allow an update of the off oranization signatures but it's anticipated that that person could be designated but since that is not known yet we would hold that whole thought until that process is complete so either we agree to it now or I start sending paperwork out in in between these two meetings the next meeting TRC will be hosting basically and they kind of need ation to get on the books with capital city with truest bank with all the banks and all the sub funds so the request is to have an agent of TRC as a signer okay yes but you know in general we require additional updates as well yeah they need to get ands okay so so the record reflects accurately what you're looking for do you mind articulating the motion for the board to consider the simple motion would be to update the signature authorizations um if you wanted to make a very specific then we probably need to do it twice but the current motion would then be to add us to the signature authorizations um I think though that for um people like Sun Trust you're really going to redo the whole form if you're adding somebody then you're going to also on the same page reaffirm the existing authorizations so we're looking for a motion to reaffirm the existing authorizations and to add TRC as a signer correct yes and so I think that will probably come back and we'll do it again when the city designates or has an additional person okay understood so there's a a motion to be considered will someone sponsor it or put it Forward Mr Bell I will grudging the uh offer the motion as all right there's a motion on the floor is there a second second thank you any further discussion or clarification seeing none all in favor say I I all opposed motion passes we just want to be functional thank you I think we all do uh so related to that um Jill what are the terms who I know we've got a commissioner that's not running um for re-election so potentially we'll have a new member um come the next calendar year correct calendar year yeah and is there anybody currently on the board that is getting ready to term out it would be in January as well um I'll have to look into that I don't think so okay so we also need to be aware that we'll be looking um to um vote in chair Vice chair and secretary at the same time correct and Jan okay any other business when is our next meeting August 27th 27th and it'll be at the nor oh come on really that's my birthday that's my son's birthday too Anna I can think of much more fun things to do than attend a pension board on my birthday he's gonna be four birthday so your birthday maybe not being attendance it is the 27th yes sir he just wants cake to bring cake did he say 22 or 27 27 27 you know I could get behind that yeah just saying you like Cura cake I do but chocolate on chocolate yeah yeah write that down all right stop you don't get you don't get a vote on that motion all right motion to adjourn make a motion to adjourn all right stand adjourned thanks everybody thank you Anna bye bye back to Orlando you drive back today well you got uh take a little h mark --------- e uh let's call the uh Paca police officers uh retirement pension meeting to order roll call I'm here here pres she had an opportunity to read the minutes is there a motion to accept the minutes motion to accept second move by Matt and second second is there a any discussion all in favor I I all oppos motion carries um sass sass report all right uh hi everyone I'm Le and G portfolio manager at sass thank you for having me here today uh before I begin with the presentation let me give you a quick a couple of updates on the company uh recently we made two strategic hires at the firm we've hired back Christine Turner uh going forward she's going to be the director of client service institutional client service so if you have any questions related to the portfolio please feel free to reach out to Christine or myself we should be able to help you out going forward and then in addition to Christine we also hired uh Brian angle he's our new director of institutional sales and he's going to help us you know move forward the initiative that we want to grow in that in that part of the business so we're pretty excited about our future prospects these are two talented people that have joined the firm so it's very exciting for us um so getting back to the per the performance review very quickly I'll start with the performance real quick on page nine um so far we're up to a pretty good start for the fiscal year so fiscal year to date uh Bond Market has definitely bounced back uh we had a bit of a a rate reversal since the lows since the highs of that we saw back in October uh so if you look at the total return on page nine the market in total has generated roughly 6% return and your portfolio is actually outperformed in a very strong absolute Market um uh since then last quarter was a bit of a I would say a shaky start it's been you know this elevated uncertainty where you have a very strong month in January then you have a selloff and all of that is really related to what is the view of of the inflation going forward you know inflation is going to be driving pretty much everything not just the bomb market and the monetary policy but the risk premium inequity markets and pretty much every financial asset class you can think of uh so everybody zered in on inflation our personal view is that the inflation is going to be moderating we're should be seeing a two- Handle by the end of this year just judging by where all the leading indicators are pointing to it's interesting uh the most recent print that we got back uh last uh week with Chicago PMI one of the most uh leading indicators you can think of a very important hub for our economy it just spreaded a 35 handle you just to put things in perspect perspective that's the lowest Sprint we've seen going back to covid days and really depression depression level ter territory so you know um looking at the the most recent CPI numbers there's some kind of Fuzzy Math there going on there's a lot of impute imputed numbers that get into the CPI math math if you were to replace that that part of the composition with realtime data we would actually find that the realtime inflation numbers is actually running below 2% so if we were to ignore the lagging data which is the CPI numbers and focus on leading indicators like the PMI numbers like these uh the job openings that just sprinted today they're all pointing to the economy that is definitely slowing down and we believe that we should see some kind of normalization with regards to monetary policy I.E the FED starts cut cutting rat soon we should see at least one or two Fed rate cuts by the end of the year and then more going forward our base cases for 225 basis points rate cut by the end of the year um I wouldn't be surprised if we get if we become more more aggressive but again it's a it's an election year the FED doesn't want to be perceived as as political trying to help one party over another uh so there's a bit of a caveat to that to that assumption but generally speaking the the economy is definitely slowing down nationally there's some regions where they're still doing pretty good or Pockets to your point you mentioned this Renaissance of the AI data centers and their pockets of the economy where the economy is humming but when you look at the cyclical part of the economy manufacturing um you know parts that they definitely have a huge effect in the marginal growth of the economy uh so we're basically excluding the the parts that are not cical like you know Education Health Care you know that's that doesn't matter what the econom is doing we need those are essential services so if you just strip that part of the economy out and focus on the true cyclicality part of the economy you can clearly see that the economy is is definitely decelerating because you know let let's face it the monetary policy it is very very tight given these current rates that we we're seeing so we're we're big Believers on the um inflation moderating and therefore we have positioned your portfolio to benefit from that Trend and what does that mean that means rates should start to moderately head lower and therefore we've increased the sensitivity because of that assumption so if rates are going to go lower from the current levels of four and a half perent ten year your portfolio is actually sitting at a pretty good um spot to have a pretty good Total return going forward um chair will permit I you and I were talking out there a little while ago yes give them a sense of how the portfolio environment the bond market environment it's changed how it has changed over the last let's say 11 12 years you can talk about coupon and things like that going forward versus what we've seen in the past how would you com what's your expectation on how bonds will benefit this pension plan it will definitely benefit used to be you know Bond the bond market was your anchor right to to provide that diversification benefit especially when you have you know a rising probability of a recession you would probably see some kind of elevated volatility on risk assets like stocks but then you can count on the bond part to maintain your total you know risk management for the portfolio in the past because of you know the quantitative easing one two three all these policies that really derived as a result of the great financial crisis that we went to 2008 we had this strategic shift from a free market-based economy to a central planning uh you know lever economy basically Central Bank driving everything right so Central Bank announced these series of quantitative easings a zero rate policy for a long long period of time and the side effect of that is that for at least on the bond market we had this anemic yield environment for long for over a decade it a drag it was a huge drve to your total return a lot you know it was a basically an indirect Financial repression environment but the stocks did benefit because of the uh low cost of funding and that really propelled the valuations and everything that you can think of on the on the equity side so you did really benefit on the equity side but from the bond part of part of the equation it was a a pretty anemic period in terms of Total return now going forward as a bond manager I'm pretty excited to see a 5% yield in the highest quality asset class that you have in your portfolio first of all you got two benefits I mentioned the diversification benefit from a total risk management standpoint but now you're actually getting paid you're getting paid to wait to to manage the risk u a 5% yield in a 2% inflationary environment that means you're getting a 3% real yield that is a historic discount that you get with bonds which normally you don't usually get that type of uh rate so that leads why don't you leverage that with we talked about this earlier and you can go into more granular detail why wouldn't you increase the duration or certainly try to make make this these great times last longer is and maybe you're already doing that and we have already done that so we have increase of duration the effect of duration uh because we have an overweight to mortgages mortgages is kind of hard to quantify the duration which is the measure of sensitivity to moves and rates with a a simple Bond like a treasury or a corporate bond you know exactly what the duration is with mortgages it's a little bit more of a Fuzzy Math because there's a lot of uncertainty on the model the prepayment patterns and that makes the duration a little bit more uncertain but generally speaking recently we have increased duration because of our view that rates have peaked in terms of the nominal levels inflation is moderating and therefore and and the economy is slowing down therefore it makes sense to increase the duration and we we have incre we have a higher sensitivity of your portfolio versus the market so in other words if rates are going to go down from the current levels you should benefit going forward one more thing we've done is and it's also not just rates are going down but which rates are going down see that's the the second order of thinking um typically when the FED starts cutting rates the the not all the maturities move at the same kind of parallel pattern typically the shorter term maturities tend to outperform they move significantly lower and you have that normalization of the difference between long long dated maturities and short dated maturities so that is another lever that we have positioned your portfolio to benefit from that normalization because currently it's inverted it's upside down and normally that never that happens only 10% of the time over the last you know 80 80 plus years so you're going to benefit from a lower rate environment and from a normalization of that difference and then finally from a sector allocation because of our view that we might potentially see an increased probability of recession we have decreased uh the exposure to credit risk corporate bonds because of they're really they're very uh Rich right now richly valued versus everything else they're kind of correlated with Equity asset class with stocks so stocks are trading at all-time High Vol vix the volatility is basically low there's just there's just this complacency everybody's going in for this uh you know this Allin yield and and this the end result of that is we're seeing these record rich valuations in the credit market so what we've done is we've actually reduced the weight on the credit side and we swapped that into the mortgages look at page 17 maybe you can um is this the way it looks right now or is this dated uh the page 17 in your book yes maturity distribution so this is a maturity yes it is right now but the more important part is look at the page before that which is the duration distribution right because the maturity and duration sometimes it's a little bit off sure that's better okay so the best uh sensitivity to look at is actually the duration so this is exactly what I'm talking about you see that huge power in the middle that is your portfolio so what we're saying here is that in a normalizing uh environment when the two when the short maturities start yielding less than the long Daya maturities that's what we call the normal environment because you want you expect that as an investor right if I'm going to be Investing For 30y year Horizon I want to get compensated for the uncertainty I don't know if you're going to have inflation 10 years from now so therefore it's normal to expect a higher yielding maturity versus say a two-year because with two years you have a much better visibility what's going to happen in the next two years so that is the normal expected environment so as we get to that environment of rates your portfolio is actually going to benefit versus the market in in in a big way just because how how we're positioned um currently in addition to the higher sensitivity of rates and then finally one page ahead of that you could see this the current characteristics I talked about the 5% yield so you can see the yield in your portfolio and the fact that we have this and the sector allocation at the bottom half of that page you you would notice that we have an overweight in mortgages and that is by Design because we like that uh the relative value prospects of that asset class normally mortgages it's it's almost like a no- free lunch because yeah you you have no credit risk it's it's government guaranteed and it's backed by the by the asset class down Ling homes um the problem there is you always have this prepayment risk right we all have mortgages typically when you have a rally in rates we all call our you know buddy our loan officer and say Hey I want to refinance my mortgage well that's not a free lunch because there somebody's going to lose on that equation and typically who loses it's actually the whole the Creditor of that mortgage back Securities but in this case because rates have increased so much a lot of this Legacy production in the mortgage uh asset class is trading at 85 cents 90 cents on the dollar okay so the prepayment risk is is very minimal is you actually want them to repay you want them to refinance or you want them to sell the house or move or get a job so when you move you essentially sell your house and that loan gets put back to the trust at par at par so you have that extra capital gain now which is it's a perverse way of thinking so from a prepayment risk we're very confident that it's very minimal at this level because of the discount in prices and the fact that you have no credit risk and you get a similar carry relative to corporate bonds it really makes sense for us from a risk reward standpoint to be overweight mortgages and underweight credit risk so that is the third lever of us being active relative to the market uh so one more page I wanted to share with you and this is something that not many folks talk about but here it's another fact that really assures us on our view that the inflation is going to be moderating and that's page 31 um and this is kind of putting the monitor head on not many folks talks about the money supply but generally speaking based on the long-term studies to get to that 2% inflation Target that the FED has been you know basically F pursuing for many decades you essentially need a six% growth constant growth of money supply given the our real output potential growth potential and the velocity of our liquidity in the system so you need that six% growth and funny enough back in 2020 when we got the covid and that emergency response everybody you know the FED started printing money and we had this huge increase in in fiscal debt you would notice that the supply of money increased by a rate of close to 30% that that and that is completely unprecedented it's never happened before and funny funny enough is if you divide that by three um you get to that 9% CPI and that's exactly we actually breached the 9% CPI and then we've been basically uh normalizing since that high but what you would what you would notice recently is actually now we got we actually have a shrinking money supply not not a reduced rate of growth but actually a shrinking a nominal shrinking of money supply in the last year and a half so if you give it enough time because these things operate with the lagged effect a year and a half two years into it enough time to make its way into the real channels of our economy this is another strong supporting argument that the inflation is going to be moderating and potentially we might be talking about deflation at at a near point the only reason why we haven't talked about deflation yet is because we still have this crazy fiscal policy that keeps you know um enabling these new programs and and we're trying to basically defer you know the eventure realityy of of facing a a severe slowdown in the economy so here's another a very strong argument that not many folks talk about but this is taking the monetarist head on and and uh supporting our fact that uh our our belief that the inflation is going to be Mon moderating and then having a high quality asset class like the core portfolio that you have it's a great uh idea right now especially given the the carry that you get right now with a 5% yield so with that I'll conclude my brief presentation and I'll take any questions if you have any additional questions motion we accept the sress report is presented second all in favor I all opposed motion Carri capital city thank you okay good morning Dwayne madin Capitol City trust in Tallahassee page down Jill please to the policy review currently we're holding 6% in cash which is kind of high because we're a little bit underweight in equities and underweight in bonds cash is yielding 5.3% and it's there because of a being a placeholder and at earning 5.3 there's very little risk um so um it's more of a some dry powder in case we get a pullback and also it's an attractive yield so if you look um International is underweight the policy percentage 6.2 versus 8 because growth in the US is simply better than many countries um overseas um um bonds are underweight because of the uncertainty in the direction of interest rates we've seen them go up and go down depending on what month you're looking at um eventually rates will come down we think we hope um the rest of the portfolio convertible bonds is a little bit overweight because it has an equity component in it but it is less risky than equities so a little bit exposure to equities there with less risk um but in general um we're uh overweight inequities about as much as we can be because um the economy is decent um it's growing um unemployment is low and um things are getting better it we're 're probably going to avoid a recession um we're we are not assuming that there is recession that's going to happen having said that let me uh page down to the performance for the first quarter the year to date is the fiscal year to date up 18.76% the fiscal year to date a little bit behind the S&P 500 because of small cap midcap and international um high yield bonds 7 a half% versus the Bloomberg aggregate of 5.9 so highi bonds did their job by acting like an equity when equities go up so let me just um talk a little bit about what happened and then why it happened so the first quarter equities were up 10.56% and that was one half of that came from Nvidia Facebook Amazon and Microsoft so one half of the stock market's return came from four companies in addition artificial intelligence which is a growth theme is uh building out its infrastructure so it can eventually make money and by doing so it has attracted a lot of capital and interest in the technology sector especially semiconductors so that also helped push stocks up because of the excitement about artificial intelligence in addition and this is really something I like is that 383 stocks had a positive return in the first quarter that shows increased breadth and that's what we want we don't want the stock market to be concentrated in five or six we want stocks we want everybody participating small cap and midcap are starting to uh perk up and earn uh close to what large cap is earning um US Stocks beat non- US Stocks because of the strong dollar but also um if you take the dollar equation out of it it it it's not it's almost the same as the us but still the growth here and the companies here in the US Stock Market are are pretty darn good so that's what happened why did it happen earnings growth was steady in the low double digits in the first quarter many companies expanded their profit margins inflation came down a little bit consumer spending was strong unemployment was still low and there was an increased confidence that we're going to avoid a recession so investors were um excited exuberant maybe uh stocks went up more than they should have because earnings didn't reflect that that's what we call PE expansion so stocks got ahead of themselves nevertheless we'll take it um the downside going forward is that growth is slowing GDP growth was only 1.3% in the first quarter which is not great um stock valuations are very high and that's why you see the stock market slowing down and there's still uncertainty regarding when the FED will lower interest rates because certain parts of the economy are doing quite well and that kind of scares inflation a little bit but um in general um economy is slowing down and so if you want to page down to the next slide we can look at April returns through April April was not a good month it pulled pulled back a little bit so the year to date is only 14.3 and stocks you know year to date are [Music] 15.98% 39 per year on the for equities most of that coming from stocks less of it coming from the high yield bonds but um long-term returns have been good on the equity side because of what Sawgrass was talking about lower rates pushing equities up but bonds suffered at the expense of that but equities made up and and and did a good job um holding up the fund um going forward like SRA said equities are still an excellent diversifier I mean bonds are still an equity bonds are still an excellent diversifier of equity risk and especially since they're yielding close to five and any questions so far page down to the asset allocation so this is a capital city trust not including the infrastructure or the private real estate and um you see SE 70% in equity the part we manage 11 11,675 560 and if you page down you can see the index funds many of the funds we use are lowcost index funds that have almost no fee there's a one or two active managers but this keeps the cost down and gives you adequate diversification over all parts of the policy uh and and so it's very coste effective and simple to understand um that concludes my comments any questions question is there a motion make a motion to accept the report as uh reported on second we moved and second that we accept the Cap City trust report is there any discussion all in favor I all oppos motion carries thank you tell us how we doing uh well I tell you fiscal year to dat you're doing very well um I think um I think you Dwayne may have already indicated that but I'll show you in our report turn to page um page seven fiscal year today net that said this is the first two quarters of your fiscal year 14.7% um we saw a little bit of a pullback um three about four weeks ago and then we saw things kind of recover so I'm going to just take a stab and say you're about sort of you're probably right around the same number around 15% fiscal year to date so if we just put everything on ice from here until the end of the fiscal year and um end of September I'm I'm thinking you're going to have a double digit return this will make Patrick very happy Patrick on the line he's he's he's I just saw him asleep I'm here so Patrick we've got F wonderful burges yeah 15% what do you think buddy that's awesome that would be so wonderful if we could end the year like that yeah okay that would help and maybe bump up the multiplier for the police officers too yeah so um before I get into the report I just wanted to get remind you what we did last year when the house bill uh three language had to be uh Incorporated in the investment policy we made some changes and the big picture is we downshifted uh the allocation to inter from International uh from convertibles uh from the we eliminated the reate completely we downshifted 2% from the private real estate and we pushed um 2% more into bonds from 18 to 20% on the target for the for the core Bond and then for the uh large cap ss&p 500 we stepped that up from uh 25% to 40% so we we still have a a uh a very strong a favorable view towards us equities versus foreign stocks and I think this so far this has played out well for you guys so I'll skip page one uh look at that another time if you want takeaway there is that is that International stocks remain cheap but we we think that that they're cheaper reason better prospects in the US on page four summary remarks very strong quarter 650,000 was earned 5.2 net a little bit behind the model not much now now Dwayne is carrying qu considerable amount of cash right now uh and he remarked a few minutes ago why he likes making that 5.4% annual return on that cash that's pretty good ranking is very impressive top quartile so where did you make the money you made it first of all the top reform was the S&P 500 that's the Vanguard institutional index followed by midcap and Euro Pacific ific So within those first two the big drivers were ow were growth technology and for the one year the 13 a half net is 1.6 million I wouldn't be surprised if we end up somewhere in that neighborhood for this fiscal year maybe a little better um there's the leader again and remember you've increased the allocation by 15% we went up to um 40% from 25 so think about it you you put a big slug of money into the best performing category so the timing there was pretty good thanks for recommendation you're welcome um sometimes there's no wisdom here a lot of it's just luck sometimes you get it right sometimes you don't um the three-year average is not that impressive because 2022 is embedded there that horrific year uh but the fiveyear number I think uh resembles represents really what to expect going forward somewhere around 7.4% Net is that where we are Patrick now 7.4 I believe so let me check real quick so anyway if that's the case um it's pretty pretty good 10-year average 65% I should mention F FRS for our retirement system they're using a 6.7% average expected return so you're um we're at we're at 7.5 verges 75 okay yes and is is there a step down uh going on per year or is that a discussed every year give me one other one more second and I'll check that uh let's see you can see the numbers on page seven 10 years ago you were just under $10 million uh about 7.3 million represents the inflows from the chapter money monies from the city and payroll deduction um minus expenses so that's that 4.3 million negative that's that's the net flows over the last 10 years more money's going out than has come in but the good burges we just voted to keep it at seven and a half right now s and a half okay but you earned roughly almost twice as much as you spent net outflow over the last 10 years so that's pretty healthy um any questions about the report I I don't see any changes that I'd recommend at this time I think Dwayne's doing an outstanding job um he's keeping the expense is way down that's why yes know 65% of this is in indexes and they've done very well for you motion to accept the burg Chambers report is presented second is the discuss all in favor hi all car guess I need to turn my mic on foston Foster patri I think there was two items on the agenda um of which was chapter 185 monies and one of which is the um part that Jill is highlighting right now on the screen uh but as far as the use of the state monies and the fluctuating multiplier and all that I think we talked about it quite a bit at the last couple meetings and I think the plan is to have a workshop with the employee and with the City commissioners down the road so I don't know if we really need to talk about that today but I'd be happy to talk about it if somebody wants to just other than determining a a time oh yes other than just determining a time to um schedule the workshop I I don't have any questions I discussed at the last meeting that um right now the Commissioners are um very much over their heads in workshops primarily due to the budget so for the next until they get the budget settled which has to be settled by October 1st um I would recommend against trying to get their attention um however you know after October 1st when the budget is settled and they have more opportunities for work shops the goal is to get the employees the retirees and the Commissioners all up to speed on what we've been talking about for the last two or three meetings at that Workshop Jill would this be a joint meeting with the other or no I'm sorry this is 185 Mony I'm sorry well it it would be a joint meeting because both the the fire fire and the police get the state monies and you're both struggling with the same issues the um General pension has already passed that they're getting a 4% all of retirees are getting a 4% increase but they don't deal with State monies so that's already been passed by the commission and is done so it's really the police and the fire and it since it you might have different takes on how to deal with the issue and that but they the general people coming to that meeting need to be understand what the issues are from both of your perspectives even though you might have different ways of of solving it so should we look at and I don't know if the anyone from the fire um pension board mentioned this or not but should we look at having a meeting between police and fire um with Patrick to where we can discuss our options and get all of us on the same kind of on the same uh wavelength for lack of a better term level of understanding yes sir um exactly yeah um before we involved the commission not trying to exclude the commission from anything but just so that the two boards have an understanding because um I'm not sure that we're total understanding of what we can and can't do at this point just speaking for myself not speaking for the fire or speaking for our other it's it's really up to you you know if you want to contact have your um you can always contact another board directly there's no sunshine issue with that um or you could have our um chairperson contact their chair port person if you wanted to set up a a joint Workshop just for State monies and just say you know this is going to involve both boards just to understand what we're both dealing with um I'm sure that could be arranged too but getting the commission's attention is going to be difficult until that budget is gone through and I think it gives us an opportunity to kind of work out all the um I guess the different nuances that uh and be able to make a better presentation to the commission and that way everybody will have a better understanding if the fire police department got together and did a joint Workshop because I don't think it's it's prudent to do a separate workshop and go over the same thing over again I think it's not the best use of Patrick's time if we did that so right yeah I it's going to be difficult to get the commission up to speed in one meeting when it's taken the boards you know like three four meetings Workshop to even really totally understand the issue but perhaps if we had a workshop where everybody was police and fire were on board that you could narrow down your options Jill is this something that is I just was thinking I was looking at when we did the valuation last year and we actually produced it February 13 board doesn't meet until do they meet early March or what do they meet which board the commission well any I think the all three boards meet together or at the same day yeah they they met it's usually early March yes that the February 27th meeting was the March meeting and then okay so you know maybe maybe on that day kind of like we did the luncheon at the other at the other meeting maybe we should do it then if since since nothing's going to happen for a little while and it's aren't changing October 1 2024 maybe we should I should you know I'll be there already for that February 27th early March meeting next year and we could do the same thing where we have a lunch and it's just police and fire and we talk about this whole issue and how we want to present it to the members and to the commission um that probably sounds like the most efficient way to do it yeah but do we want to wait nine months to do that to get fire and and police pension board members on the well what would have to happen is something would have have to H happen o 2025 you know nothing's going to happen before October 2024 and then that it would actually have the results of the valuation so we could see what actually is projected to happen with multiplier um next year so I mean if we had a we could have a joint workshop for the police and the fire in September or October or something but we won't know the impact of like the investment return that happens this year and what that's going to do to the state monies so it may just make sense to wait since nothing is going to change between October 1 2024 and October 1 2025 I think it it's just a thought but I can certainly come up for a workshop before then this is out of my wheelhouse but I think there's a sense of they don't want to waste a lot of time in thinking about this you know six months goes by and then another six months maybe maybe you could do an earlier workshop and know you're waiting for the U uh returns for the year but you could you right now we're 15% fiscal year to date you could you could have a have a a table that shows 10% a 15% you know different outcomes and whatever the outcome is you know it is what it is but in the meantime they can get a better understanding of the issues sooner I think the best thing for us to do in my opinion would be for us and fire to kind of come to some sort of maybe not a total consensus but to have an idea before we go present to the commission because we don't want to waste their whole day if we're sitting there all willy-nilly going back and forth we want this we want this you want this this is how we're going to do it and we don't come up with something during that meeting it's a wasted meeting for the commission but the commission a workshop is not where they make decisions they don't vote in understand that so but we don't want to waste the entire day for a workshop and have nowhere near where for a decision afterwards yeah if we had a couple like he said a couple of ideas going in that we're we're looking at this one or this one us and fire talk about it and then we put present that in the workshop we've limited everything there's a good possibility we' come up with a consensus by the end of the workshop and we're done with it we don't have to carry it on for another day I kind of see what he's trying to say there I think so two workshops one for police and fire only and then one where you present your ideas to the commission and I would even say he has to be present for the workshop I mean we could do it on Zoom I think as long as we have his his buyback and his say so and tell us what we're looking at I I want to think you would have to be present that hey Patrick do we have to have a consensus with the fire pension board meaning do we have to do the same thing or do they have to do same thing that we do with the 185 monies yeah well like like Jill said you guys are completely separate but you have the exact same issue where you know your ordinance says that every year we evaluate the state monies and determine how much the multiplier should be so if there's going to be a change it seems like you know it would make logical sense for both of you guys to have the same approach but you wouldn't have to but the other thing is is that you know if we did a joint Workshop you know my expenses would be split between you guys and it it would just be more efficient probably to have a joint Workshop between the or a joint board meeting between the police and fire pension boards that that's not a bad idea so you guys are all you know understand it well before we put in front of the members in the commission that that does make sense and I can work with anytime you know September October what whatever you guys want late possible to overlap the two board meetings fire and police and during that overlap maybe do that words it's still part of the meeting but it's each of us cut off like 20 minutes early when is the September meeting Joe yeah it's late August I think it's August 27th regular quarterly exactly and that way we would we would come in during the end of their meeting and we would discuss all this and then we would proceed with our meeting right after that so we're not doing any special trips or yeah between they end at 11:30 basically an hour and a half and you normally wouldn't start till 1:00 so you'd have between 11:30 and 1:00 for that joint meeting what time does the PR department get started with the meeting 10 o'clock okay that sounds that sounds right in fact uh the if we're going to do a joint Workshop I think uh starting it starting the workshop itself at 11 and that only gives them an hour to for their meeting right okay and we would do the same thing we would only have an hour for our meeting but we would give up the half hour for our joint Workshop okay M but also uh one thing too is I think what I would like to make sure that we we've done is have all the projections in have all the different scenarios in have all the information uh so that when we do meet with the commission that they will have a good understanding of what we're asking for and they need to understand what their contributions going because that's basically what they're going to be concerned about uh and we got to make that clear uh so if it's and if it's not a burdensome own the city and that kind of thing they are they will probably be more apt to make a recommendation to go take it to the commission to vote them probably at their next meeting so but if we don't have all that information and if we don't uh have all the different scenarios and that kind of thing and leave that meeting with one we're going to probably end up me having two or three other meetings that kind of thing as well and then waiting on waiting to get on this commission calendar again the the only concern is you're making a decision and the where the it's going to change if you did this Workshop in August it will not change anything until it's passed the commission which is in the next budget year so the changes will not happen till October [Music] 2025 for the 2026 fiscal year right so you're making a decision in say November the the commission would make that decision it wouldn't be implemented till the next October right because they have to they have to build it into the budget exactly so that was G be my next thing Patrick do you think it would be beneficial for police to do a similar study that fire completed on fixing the multiplier because we're talking about trying to get the two boards on the same page but right now the two board or not yeah we certainly could then you'll have some numbers concrete numbers to go off of for that scenario um I did want to point out is that you know you mentioned having the exact numbers so that the city knows the impact on their funding requirements and and and that's fine except that what we're really talking about here is a structure change right so right now if the market goes down everybody's multiplier goes down in the in if we changed it I just have a fixed multiplier that doesn't fluctuate then if the market goes down the city's costs are going to go up so none of of this really affects their current funding requirements it's all kind of theoretical as to what would happen in the future but it's still an understanding that everybody needs to have an understanding of what changes would impact how they would impact the members and how they would impact the city but I can't give you exactly the impact that it's going to be two years from now if they decide to change their structure you see what I'm saying that's why you were advocating waiting until the valuation report came out well I I was but but really I think based on the fire meeting we had earlier I think that you know this is a very complicated subject and and I don't think even the fire board completely understands what's going on and I don't think the police board completely understands so having a joint meeting in September where we can hash it out some more um and we can do the study for the police of increasing the multiplier by 0.1 and have that for that meeting and that way the boards can understand the current structure and possible changes remember we're talking about possibly changing the ordinance and and how we how we structure the benefit multiplier and if we have a share plan or we don't have a share plan you know all all those things are things that are going to affect the future not necessarily the immediate but we all need to understand it before we present it to the city Commission in the membership so I think it would be productive to have a joint meeting in September in between the two meetings where the police and the fire can just talk about this one issue but I also think that the city manager probably needs to be a part of this Workshop that we're that the fire department and the police department is going to have just so that he can be enlightened and probably help uh the commission understand better what we're trying to do as well yeah I agree because when it comes before the commission when the commission has questions they're going to ask him and the finance director so we probably should even have Miss cardi in that meeting as well is this something that we need to make a motion on or is this something that we just contact the fire board on we have staff to contact the fire department I don't think that we actually need to make a motion on this uh but I guess we can make a motion to actually do the actual Workshop though my understanding that's the timing is probably not good for the city manager or the finance director until we get closer to October one and they finish out their budget process so there will be a meeting in December as well a workshop would be productive they just might be harder to get in August if you tried to over after two meetings let's put the workshop off until December then because it it just makes sense to have them in this meeting because you know the city manager is able to talk to the commission one onone and to have those individual meetings with them to help them understand yes uh prior to us having that Workshop shop with the commission so they'll come in with some idea what we're trying to accomplish I agree I think we should do it in December and it does give um Mr Bill and Miss cardi more planning time and opportunity to participate in this so maybe we could look at doing that well then I might want to go back to my original comment and say if you're going to wait till December maybe we should wait till March because then we'll have the valuation done we'll know the impact on state monies and we still have we still have um six months you know to get something done before October 1st 20125 I think my my only my only concern on waiting until March is we are as a municipality we are right back where we are now almost with we're already doing budget workshops with our commission we're doing multiple meetings with department heads and assistant department heads um the finance department is extremely busy March APR that's fine then yeah that's no problem we can we can just do it in December and then when I come in March everybody will kind of already understand what's going on so so that's perfectly fine would you want to consider an October special meeting and then if you had further things to work out or discuss you could use December for that purpose we can do our meeting in August or September August whichever it is with the joint and I think we can get I think we'll have an idea after that meeting so we'll be able to go to him in the March meeting and we'll be able to set something but I think in a I think Jill's point is that when in August we're still going to be dealing with several workshops shops yes they they're not finalized on their budget and don't need we're not going to be able to have them in here but this is more fact finding is this is just for us and fire department to go these are our options this is what's best for us this is what's best for them and then discussing that to see if maybe we can come up with something better or if they have something better but if you want it to the commission but if you want the city manager and the finance director involved in the August Workshop that's where the rub comes in it's better for not the commission but for the sake of the city manager and finance director it'd be better in December right I thought yeah yeah I'm sorry I thought we did that but for some reason back yeah yeah no I think it I think it honestly I think to me the best time to do it is and in December to be able to have the joint meeting with just fire and police it gives staff an opportunity and plenty of time to plan it ahead as well as to have the city manager and the the um Finance director involved in December what do you think Mr nor it's December 3D I I'll put it on my calendar sounds good to [Music] me so is there a motion to that to have a joint meeting with fire department on December 3rd to conduct a workshop for pension 185 Mony second been moved in second that we have a workshop with the fire department on December the 3 uh so that we can start preparing to make a recommendation to the commission is there a is there any discussion all in favor I I all opposed motion carries can I ask one other thing then wait Patrick so so the fire board had me do a study of you know because there one of the scenarios would be to just fix the multiplier where it is you know and not have it fluctuate anymore for active employees or retirees but now that it's been kind of reduced um they wanted to see what if we increased it by 0.1% um chill's putting it on the screen now so if we you know would you like me to do that study so that we have it for the December joint meeting yes sir please that'll take a vote as well yes let's go ahead and make that make a motion to that effect motion for the study on 185 for the police department for the police department for the police pension fund second been second by Al second is there any discussion all in favor I all the polls motion carries Patrick anything else oh I think Joe's got one other issue I'll stick on for so this issue is basically you know the multiplier does change as you guys are well aware and so these two members here Cornell Brown and Thomas Tipton they went into the drop you know and their benefit was say $1,000 a month but during the time they were in the drop the multiplier reduced so it might have went from 1,000 to $980 well then when they left the drop um the city or the board or whoever kept paying them the $1,000 instead of what should have been $980 so that's the issue that happened with these two members and the total is not you know very significant the total overpayment for brown was $377 and the total overpayment for Tipton was 647 but they were overpaid and in that should be recovered and I don't know if you guys want to do like recover it over a three-year period or or just one time or or what you guys wanted to do with that and this was a clerical error on our part yes yes I just want to make sure I understand yeah the pension administrator at that time didn't put it in the files and so when they actually left drop didn't realize the changes and it was caught now it's been a couple of years that each had been retired it was caught by the actuary um and have they been made aware of the overage they have not been made aware of the overage um I was waiting to hear from the board how you wanted to deal with it whether you wanted to say the board will take care of it or you want us to go back to them and explain it and try and make a payment plan given the amounts of the overpayment it's it's really up to you is is the attorney one yes she is Anna is here I mean that's such a nomenal amount and it's our mistake I almost want to go let's call it a wash and make sure they understand that their rate is now this can Anna can we legally do that can we wash this meaning that we can you can especially if um you know if I were to be involved in contacting them um since it is such a nominal amount it might cost more realistically for me to contact them to try to you know recoup the amount um that you would really be potentially saving the fund money by just you know kind of letting this one go um again completely up to you you're within your um you know authority to try to recoup um to fix the overpayment but again given the amount you know my recommendation um would be that it would be you know completely reasonable to um let this one go so no so no legal ramifications on the board no le no moral or ethical related decisions if a motion was to be made to um that's correct okay I I think just the nominal amount we're talking about the fact that it was our mistake in the first place I mean if we were talking $10,000 obviously I would feel a little differently but we're talking about about $1,000 total between the two of them our mistake like she said it probably cost us more for her involvement I I think we eat that got motion what would the motion need to be Jill uh motion that we go ahead and just accept the fact that we've taken a loss of 37716 for Cornell Brown and 64750 for Thomas tiffon where they were overpaid through their drop in retirement accounts is that your motion that's my motion second it's re a motion that we will accept the overpayment of Carell Brown and uh Mr tipon uh is there any more discussion all in favor I all opposed motion carries Jo just to confirm there are getting paid the right amounts now correct yes because of the um the last two years when the um actuary went and increased their payment then decreased the payment that's what triggered him finding it so yes they're getting paid correctly now yes did they know that there was no no you don't do just just the question is a reti in the I get a notice every time so far that there's been a change in the 185 monies or whatever where my pension yes yes do they get something similar yes okay that's all y the actuary creates something and I make a letter to them explaining the increase or decrease okay anything else Patrick M J anything else um we have to go on to um CLA and cl right I'm any anything else from Act no okay uh let's then take up item seven uh clauser and Hoffman and Jensen uh Livingston uh Adam um sorry it's not Adam that's okay it's Anna on Adam Adam covered H for me last time um so I'm sure Joel provided you with um just a short disability memo there was a change um from the IRS in instructions on how to report disability annuity payments for First Responders um so depending on how the disability is calculated will depend on um whether it's taxable or not um so essentially if any part of the pension benefit is based on age or length of service that amount um gets put into a specific box um on a 1099r so to help out with this um moving forward any disability final orders we'll have a paragraph at the end saying how the benefit is calculated um you know whether it's just a flat 50% um you know final average salary um or whether it's based on age or years of service that will be listed um to help the member um you know with their filings again we're not giving legal or tax advice um but just want to help Point them in the right direction if we can do that an action on our on our no no just an informational um you know just going forward and if and when there is a disability we would work with the administrator just to make sure that we have all the correct information um regarding how that benefit is calculated resource Cent contract yes so these um are ready for Signature um I believe you know Jill has passed it out to the board um we had only one small change from Patrick's proposed um agreement it was regarding the contact person for uh public records request so you know on our end we're satisfied with the agreement and we recommend that it be um signed today unless there are any questions um we should be ready to move forward is there a motion to accept the contract and and to authorize the chair to sign make a motion to accept the contract and to authorize the chair to sign it second is there any discussion all in favor I all oppos motion carries great thank you um and if Jill you could um either send it to me or directly to um resource center and then we can go from there okay thank you okay item eight quarterly expenditures J yes quarterly expenditures up on the screen um nothing out of the ordinary bounce check that's it is there a motion to accept these uh to pay these expenditures make a motion to we accepting the report correct that's correct yeah motion to accept the report as presented okay second it's been moved that we accept the report as presented is there any discussion all in favor I all oppos motion carries item nine budget for fisical year 25 2025 um you can see that uh I've bumped some of the fees Foster and Oster things like they had a new fee schedule come in to affect this fiscal year um there's uh the resource center pension Administration costs in it and there's enough schooling money to for three trustees to go to one conference so the idea is uh trustee goes every other year to a conference okay let's what's the percentage of an increase in the budget you um yes I can here is the budget from last year right here on the expenses so it's 58 for investment almost 59 for investment expenses and 54 for admin expenses here it's 50 uh 4 six for investment fees and 64 okay hey Jill yes Jill yes I you know because of these we actually if you look at that other thing we were at 30,000 last year and 24,000 for this coming year last and I think because we have those multiple go ahead because we have the multiple workshops possibility I think we should keep it at 30 it doesn't mean we'll spend all that but at least you won't have to amend the budget yes uh last year the budget was high because some of the expenses from the prior year flowed into the that year that they weren't um expensed they weren't received in time to be expensed in in the proper year but if you'd like those numbers to increase uh I can see why you're you're thinking that way with the increase in studies and the increase in UH responsibilities as far as attending workshops okay so that means well I guess PRI of taking a vote we can actually go ahead and make the adjustment but that way we want to do an amendment so are we suggesting that the 24 uh uh th000 be moved to 30,000 in the the budget correct yes for fost and Foster okay so with that change is there a motion to accept the budget I motion that we accept the budget with the amended changes that we just discussed it's been moved in second that we accept the budget with Amendment we uh changing the $224,000 for for and Foster the $30,000 is there any discussion all in favor all right all oppos motion carries is there any public comments at this time uh just so you know it's not reasonable to expect a response from this board on any public comments since we have not heard uh had an opportunity to investigate whatever you may be discussing but we will hear from the public if you deem necessary no public comments uh let's uh is there other business and the meeting dates we wanted to make a recommendation that the board begin to update signature authorizations on file with your next meeting at the end of August the city is in the process of still hiring a replacement for Joe and we would expect that person might be included on your signature authorizations so we would hold it pending those further updates but we would like to begin that process now so we were asking for a motion to update your signature authorizations for both capitol city and other investment managers so that we can begin to step in all right the chair will entertain a motion to update the signature so that uh it will ref let the new uh management changing management uh that the pension board has now uh yeah approved uh looking for another word that's okay as approved is there uh a motion for that effect yeah I make the motion that what you just said is there a second a second it's been moved the second that we uh that we authorize signature changes uh so that the new management company will have access uh to managing this pension fund is there any discussion all in favor I all oppos motion carries is there anything else just a reminder that the meeting date is August 27th and that um it will be the new pension by then the new pension uh administers creating meeting will be at 1:30 again yes it'll be at the normal time so don't block our emails be 9 or 10 the the fire is at 10 normally the police is at 130 1:30 right uh this meeting is early because this room is um had had a meeting at four o'clock that couldn't get moved so okay okay is there motion to adjourn motion to adjourn stand adjourn hi guys nice to see everybody all right thank you yes