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Home My WebLink About10-16-2024 MinutesCITY OF SEBASTIAN POLICE OFFICERS' RETIREMENT SYSTEM PENSION BOARD OF TRUSTEES QUARTERLY MEETING MINUTES Council Chambers, 1225 Main Street, Sebastian, FL 32958 Wednesday, October 16, 2024, at 2:OOPM TRUSTEES PRESENT: Tim Wood Paul Reeves Ken McDonough Robert Allen TRUSTEES ABSENT: David Puscher OTHERS PRESENT: Troy Jenne, Foster & Foster Bonni Jensen, Klausner, Kaufman, Jensen & Levinson Tim Nash, Intercontinental Services Scott Owens, Graystone Consulting 1. Call to Order — Troy Jenne called the meeting to order at 2:02PM and a quorum was determined. 2. Roll Call — Troy Jenne called roll call. 3. Public Comments — None. 4. Approval of Minutes a) July 16, 2024, quarterly meeting The Julv 16. 2024, auarterly meetina minutes were approved as presented. upon motion by Tim Wood and second by Paul Reeves: motion carried 4-0. 5. New Business a) Cost of Living Adjustment (COLA) update i. Troy Jenne commented that two retirees had incorrect COLA amounts. 1. Joseph Buyers was overpaid by $767.88, and Steven Marcinik was underpaid by $901.44. 2. Bonni Jensen commented the Board would need to approve of the new benefit amounts. The Board voted to approve the COLA adiustments as presented upon motion by Tim Wood and second by Ken McDonough; motion moved 4-0. 6. Old Business — None. 7. Reports (Attorney/Consultants) a) Intercontinental Services, Tim Nash, Investment Manager i. The Board agreed to amend the agenda to allow Tim Nash to speak as he was not on the agenda. 1 1. Tim Nash reported on the Boards holdings in the path of hurricane Milton and there was no damage to any of those properties. 2. Tim Nash provided handouts to the Board for the June 30, 2024 report and advised the third quarter report would be forwarded shortly. 3. Tim Nash commented that the Federal Reserve reducing the long- term rates was likely to help the real estate values moving forward. 4. Tim Nash advised there were no staff changes working on their plan. 5. Tim Nash reviewed the redemption queue movement to expect in the future. 6. Tim Nash reviewed the investment returns with net asset value of $696,096 as of June 30, 2024. 7. Tim Nash reviewed the two diversification models used for their plan. 8. Tim Nash commented about the value of multi -family properties and strip malls in the portfolio. 9. Tim Nash commented on lease rates and expirations. 10. Tim Nash reviewed the fund debt currently with 34.2% of properties had no debt, 57.2% had fixed debt and 8.5% had floating debt. 11. Robert Allen asked the cutoff for carrying over and the percentage that triggers this. Tim Nash explained this to him. 12. Tim Nash reviewed the ground up projects for the Board after a question by Robert Allen. b) Graystone Consulting, Scott Owens, Investment Consultant i. Large cap manager search 1. Scott Owens reviewed the large cap versus passive manager potential moving forward. 2. Paul Reeves asked what percentage of portfolio was passive and Scott Owens commented 16% and reviewed the allocation potential for passive. ii. Quarterly report as of September 30, 2024 1. Scott Owens gave an update on the market environment and performance for the quarter. 2. Scott Owens commented this quarter fixed income was up 4-5%. 3. The total fund gross returns for the quarter were 5.21 %, slightly underperforming the benchmark of 6.44%. The 1-, 3-, 5-, 7- and 10-year gross returns were 20.43%, 4.92%, 9.03%, 7.95% and 7.71 % compared to the benchmarks of 22.83%, 4.99%, 8.75%, 8.17% and 7.87% for the same respective periods. Since inception (02101/2011), total fund gross returns were 7.68%, slightly underperforming the benchmark of 8.31 %. 4. Scott Owens reviewed the asset allocation, commenting all were in compliance. iii. International manager search 1. Scott Owens reviewed the performance of the managers to include Fiera Capital SMID Growth and Russell 2500 GR. 2. Scott Owens further commented on International Value Manager Search to include Highland, Aristotle, Franklin Tempelton, Lazard, Todd, MSCI SAFE and MSCI ACWI ex USA. 3. Scott Owens recommended rebalance to include reducing Genter to Two million, hold six months cash, and place anything over into Highlands FI. The Board approved rebalance to reduce Genter to Two million, hold six months cash and place remainina into Hiahlands Fl, upon motion by Tim Wood and second by Paul Reeves; motion carried 4-0. 4. Scott Owens recommended moving to more passive strategy to include selling Highland Int. Value moving funds to MSCI EAFE. The Board approved to sell Hiahland Int. and move this to MSCI EAFE Value, upon, motion by Paul Reeves and second by Robert Allen; motion carried 4-0. 5. Tim Wood asked about the effect the upcoming presidential election would have on their investments. Scott Owens explained the unique situation having a clear history with both having been in power. Scott discussed the differences between the two candidates and the potential effects this could have. 6. The Board discussed the potential effect of the election and their beliefs on the changes that could occur in both directions. c) Klausner, Kaufman, Jensen & Levinson, Bonni Jensen, Board Attorney i. Operating Rules and Procedures 1. Bonni Jensen discussed the updated Addendum to the Operating Rules and Procedures. 2. Bonni Jensen reviewed the changes to include the change to the term "Plan Administrator." 3. Election adjusted to four-year terms from two-year terms and elections rules to include the electronic election option, as was used by Foster & Foster. 4. Records Management Liaison Officer (RMLO) changes were also discussed. 5. Two signatures required for financial changes to plan funds include one Administrator and one Trustee. 6. New IRS provision when we are not able to locate disability retirees. ii. Bonni Jensen requested motion for educational requirement for new Trustees within first six months. 1. The Board discussed changing requirement from six months to two years. 2. Bonni Jensen discussed the experience study costs and recommended deleting the last sentence. The Board voted to accept the updated Operating Rules and Procedures with chanaes to educational reauirements being, mandatory within two nears and to delete the last sentence of the experience cost study, upon motion by Tim Wood and second by Robert Allen, motion moved 4-0. 8. Consent Agenda a) Payment ratification i. Warrant #13 b) New Invoices for payment approval i. Warrant #14 c) Fund activity report for July 10, 2024, through October 9, 2024 The consent aaenda 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, Troy Jenne, Plan Administrator i. Update on disability affidavits (PF-6s) 1. Troy Jenne commented they had one disability retiree that had his paperwork outstanding, and he had returned the required documentation. Bonni Jensen asked the Board if they had any concerns with his documents. Tim Wood confirmed this was done every other year until 52 or 55 years, for early or normal retirement. The Board voted to receive and file the disabilitv affidavit, upon motion by Tim Wood and second by Ken McDonouah: motion moved 4-0. ii. Educational opportunity 1. Troy Jenne discussed upcoming training opportunities. a. Florida Public Pension Trustee Association (FPPTA) Winter Trustee School, January 26-29, 2025, Renaissance Orlando at Sea World. °IO_Trustee Deports, Discussion, and Action — None. I I .Adjournment — The meeting adjourned at 3:52PM. 12. Next Meetinq, — Tuesday, January 21, 2025, at 5:OOPM, Quarterly Meeting. Respectfully submitted by: Troy Jennz, Plan Administrator Date Approved by the Pension Board: Approved by: Tim Wood, Chairman 4