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HomeMy WebLinkAbout07-16-2024 MinutesCITY OF SEBASTIAN POLICE OFFICERS' RETIREMENT SYSTEM PENSION BOARD OF TRUSTEES QUARTERLY MEETING MINUTES Council Chambers, 1225 Main Street, Sebastian, FL 32956 Tuesday, July 16, 2024, at S:OOPM TRUSTEES PRESENT: Tim Wood David Puscher Paul Reeves Ken McDonough Robert Allen TRUSTEES ABSENT: None OTHERS PRESENT: Siera Feketa, Foster & Foster Troy Jenne, Foster & Foster Bonni Jensen, Klausner, Kaufman, Jensen & Levinson Anthony Brooks, Sawgrass Asset Management Brian Engel, Sawgrass Asset Management Scott Owens, Graystone Consulting 1. Call to Order — Tim Wood called the meeting to order at 5.02PM and a quorum was determined. 2. Roll Call — Troy Jenne called roll call. 3. Public Comments — None. 4. Approval of Minutes a) April 16, 2024, quarterly meeting The April 16, 2024. quarterly meeting minutes were approved as presented, upon motion by Ken McDonough and second by Tim Wood. motion carried 4-0. Tim Wood wanted to clarify his term expiration date since it was in question at the last meeting. We confirmed it was corrected to reflect Tim Wood's term not expiring until 2025. 5. New Business a) Update on Trustee seats i. Introduction of Robert Allen, City Appointed �. Robert Allen was recently appointed to the Board and was welcomed by all those participating. b) Proposed 2024-2025 budget i. Troy Jenne reviewed the budget requirements and budget amounts. ii. Bonni Jensen also spoke to Robert Allen to help him understand how this budget was very different than a typical budget. iii. Robert Allen asked when this resets and commented they were close to budget for the current Fiscal Year. Siera Feketa commented this was done annually, and they would add a bit more cushion moving forward. Paul Reeves asked what the timeline of the Fiscal Year was. Siera commented for 2023-2024 it was October 1, 2023 through September 30, 2024. Siera continued to discuss the budget and commented they would also present the expenses for the Fiscal Year at an upcoming meeting so they could review the expenses. The Board voted to approve the 2024-2025 proposed budget as presented, upon motion by Tim Wood and second by Paul Reeves; motion moved 4-0. c) Proposed 2025 meeting dates i. Troy Jenne reviewed the proposed 2025 meeting dates. The Board voted to approve the 2025 proposed meeting dates as presented, upon motion by Tim Wood and second by Paul Reeves, motion moved 4-0. 6. Old Business —None. 7. Reports (Attornev/Consultants) a) Sawgrass Asset Management, Anthony Brooks/Brian Engel, Investment Manager i. Quarterly report as of June 30, 2024 1. Brian Engel introduced himself and gave a Sawgrass company overview. Anthony Brooks spoke about their Large Cap growth strategy. 2. Anthony Brooks spoke about their risk conscious growth market strategy. Anthony said downside capture was a core strategy as well. Anthony said they look for long-term growth starting small and with a steady increase. Anthony further covered their strategies in depth for the Board. 3. Anthony Brooks then covered the past performance of their plan including the past few years. Anthony discussed market volatility going forward with focus on the fast growing magnificent 7 and said they were looking to avoid this potential volatility. 4. Anthony Brooks reviewed the 10-year peer rankings commenting they had ranked very well in relation to their peers. Anthony reviewed the risk profile. 5. Anthony Brooks showed where their strategy was very consistent during down times and still did fairly well in the bull markets. 6. Paul Reeves requested an example from Anthony to detail a recent move that worked out per their strategy. Anthony Brooks went over a detailed example for the Board that satisfied the request. 7. Robert Allen asked about the management cost, which was 50 basis points. Robert asked about fractional ownership of shares which he said was becoming a trend. Robert asked how this could impact the market analysis going forward and Anthony Brooks said he believed this could help their strategy, as opposed to others. Anthony said he believed that in the long term; it could make the market more efficient. 2 8. Ken McDonough said he felt more comfortable with a team like theirs who do well in a bad market and hold their own during strong markets. Anthony Brooks confirmed this strategy was the core of their performance. 9. David Puscher spoke about his experience with Sawgrass and how they protect on the downside which could be very beneficial. b) Graystone Consulting, Scott Owens, Investment Consultant i. Quarterly report as of June 30, 2024 �. Scott Owens said it had been a very good fiscal year so far. Scott commented on the market and interest rate fluctuation and its potential effect on the market. Scott covered the fact that 5-6 stocks are going through the roof, but if you don't cover the passive option, you risk getting hurt when they trend downward. 2. Scott Owens briefly discussed Sawgrass. 3. Scott Owens gave an update on the market environment for the quarter and the economy. Scott discussed the strategy of the Federal Reserve and that it appeared to be working in many ways. 4. Scott Owens reviewed the potential for a market downturn based on historical data. 5. The total fund gross returns for the quarter were-0.45%, slightly underperforming the benchmark of 0.19%. The 1-, 3-, 5-, 7- and 10-year gross returns were 11.40%, 3.10%, 8.15%, 7.59% and 7.09% compared to the benchmarks of 11.41 %, 2.70%, 7.55%, 7.71 % and 7.20% for the same respective periods. Since inception (02/01/2011), total fund gross returns were 7.43%, slightly outperforming the benchmark of 6.81 %. Scott Owens briefly touched on the performance of the plan. 6. Scott Owens reviewed the asset allocation. Scott Owens discussed fixed income versus cash. Scott Owens advised they were only underweight Real Estate but overweight Russell 1000 growth, so they offset each other. Scott discussed the outlook on real estate. Scott reviewed the asset allocation compliance. 7. Scott Owens reviewed the performance of the managers. 8. Scott Owens was asked about the Polen fund performance by Robert Allen. Scott explained the strategy for going into the Russell 1000. 9. Tim Wood mentioned that at the last meeting they discussed having Intercontinental come in and present for large CAP growth. Scott Owens discussed the options if they removed Polen. Paul Reeves requested to see a passive manager as well to compare to the growth. lo. Scott Owens discussed the strategy for when the rates begin to drop with the Board. ��. Scott Owens advised they were in compliance in all categories. 12. Paul Reeves requested to hear from a growth manager to compare to the Sawgrass strategy and David Puscher concurred. They agreed to hear from Intercontinental next meeting. 3 The Board approved to allocate the monev with Polen large cap to the Russell 1000 Index, upon motion by Paul Reeves and second by Tim Wood, motion carried 4-0. c) Klausner, Kaufman, Jensen & Levinson, Bonni Jensen, Board Attorney i. Discussion of 1099 reporting of disability payments. �. Bonnie Jensen explained that the IRS had viewed this as "maybe" tax free, so they marked it as taxable. Bonni explained the process going forward to include an explanation for new disability claimant in their documents for clarity. ii. Addendum to Operating Rules and Procedures 1. Bonnie Jensen reviewed the addendum commenting that this was updated as discussed at the last meeting. Bonni commented this was so that disability retirees over the age of 55 do not have to complete the disability affidavit. Bonni commented this would be added to operating rules & procedures. 8. Consent Agenda a) Payment ratification i. Warrant #11 b) New Invoices for payment approval i. Warrant #12 c) Fund activity report for April 10, 2024, through July 9, 2024 The consent agenda was approved as presented, upon motion by Tim Wood and second by Paul Reeves: motion carried 4-0. 9. Staff Reports, Discussion, and Action a. Foster and Foster, Siera Feketa/Troy Jenne, Plan Administrator i. Update on PF-6s (Disability Affidavits) �. Troy Jenne commented they had one disability retiree, and he would be getting the PF-6 shortly so he would have an update at the next meeting. Tim Wood asked if there's only one. Siera Feketa commented yes, under the age of 55, but she could show him the list of disability retirees after the meeting to confirm they aren't missing anyone. ii. Reschedule Quarter 4 meeting 1. Troy Jenne commented Foster & Foster had a required training and unfortunately had a conflict with the Quarter 4 meeting date as he had to attend the training. Troy commented he was having some trouble rescheduling the meeting due to voting being held at the city and vendor availability. 2. The Board and consultants discussed meeting on October 16, 2024, at 3PM or possibly earlier at 2PM if needed since there was a council meeting to follow at 5PM. A time of 2pm was agreed upon. iii. Update on member portal 1. Troy Jenne gave an update on the portal commenting they would roll it out based on VAL data as they have not received pay feeds yet. Troy commented they would update it with the pay feeds when received. Siera Feketa asked the Board if they wanted a portal 4 workshop when it was rolled out. The Board agreed they would like to host a portal workshop for the members. iv. Educational opportunities 1. FPPTA Fall Trustee School, September 22-25, 2024, Orlando, FL 2. Division of Retirement Annual Conference, November 13-15, 2024, Daytona Beach Shores, FL a. Troy Jenne discussed the upcoming Trustee educational opportunities. 10.Trustee Reaorts. Discussion. and Action a) Robert Allen asked to see our assets and obligations performance SF provided Robert the 112 report and the VAL report. b) Ken McDonough asked about the cost study and Siera Feketa explained that Doug Lozen was working on it, and it should be done shortly. 11.Adiournment —The meeting adjourned at 6:35PM. 12. Next Meetinq — Tuesday, October 16, 2024, @ 2PM, Quarterly Meeting. Respectfully submitted by: Approved by: Troy Jenne, Plar. Administrator Date Approved by the Pension Board: Tim Wood, Chairman 5