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BOARD MEMBERS PRESENT:
Jim Freeman, Chair (Left the meeting at 9:04 am, and returned at 9:05 am)
Dale Hoffner, Vice Chair
Cheryl Miller, Secretary
Robert Schofield (Not Present)
Leland Taylor (Not Present)
Allen Tusing
STAFF AND OTHERS PRESENT:
Scott Christiansen, Board Attorney
Lindsey Garber, Attorney
Scott Owens, Graystone Consulting
Cassi Bailey, Assistant City Clerk/Pension Plan Administrator
Chair Freeman called the meeting to order at 8:30 am. and conducted a roll call.
1. AGENDA APPROVAL
MOTION: Mr. Hoffner moved, Ms. Miller seconded, and the motion carried
4-0 to approve the May 20th, 2024 General Employees’ Pension Board Agenda.
2. PUBLIC COMMENT
No public comment.
3. APPROVAL OF MINUTES
MOTION: Mr. Tusing moved, Mr. Hoffner seconded, and the motion
carried 4-0 to approve the February 26th, 2024 minutes.
4. APPROVAL OF EXPENSES
a.) Christiansen & Dehner, P.A. invoices dated 02/29/2024 & 3/31/2024
b.) City of Palmetto Reimbursement invoices dated 03/05/2024
MOTION: Ms. Miller moved, Mr. Tusing seconded, and the motion carried
4-0 to ratify the paid expenses as presented.
General Employees’ Pension Board of Trustees
May 20, 2024
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5. INVESTMENT REVIEW
Scott Owens, Managing Director with Graystone Consulting, presented the end of the quarter investment review. He went through the investment summary, which was included in the Agenda.
Mr. Owens noted that it was another good quarter. The market took off. It has been a very good quarter and year so far. We have been very defensive, which is why our return was lower than the benchmark. He first discussed the market’s overall performance. It seems that the “storm” isn’t going to be as bad as they once thought. He noted that it got very interesting in the fixed income sector. Cash was the highest earner, up 1.37% for the quarter. The market is a leading indicator. He feels that if the market continues to go up, it is going to be hard for an active manager to beat the benchmark.
He discussed recession indicators throughout history. He noted factors that are both in favor of and against the possibility of an upcoming recession.
Mr. Owens went on to talk about our portfolio. We had a return of 5.77% for the quarter, but we are at a negative 0.21 alpha. He wanted to discuss if we wanted to continue to be as risk adverse as we have been. We left some money on the table for risk adverse managers. We are right on top of our targets overall with our managers. He highlighted Sawgrass in particular. He made a suggestion if the Board wanted to change their stance. Mr. Freeman noted that they’ve talked about this before. He didn’t know if they wanted to make a change, as they had just gotten in with them. Mr. Owens stated he was on board with that mindset as well. He believed it came down to how much risk the board was comfortable with. If the market goes down, our portfolio should do well. If the market does well, we won’t get as big of returns. If it were him, he would get out of the core, and go to Russel 1000 growth in passive. Mr. Tusing noted that historically they have been a little more protective but have reached out some. He doesn’t feel comfortable making changes right now. Mr. Hoffner is comfortable where we are now. Ms. Miller asked if the FED decreases rates how that will affect Sawgrass. Mr. Owens responded that if the FED decreases rates, it will be of benefit to the growth side of the market, specifically the tech companies. A higher rate environment favors value, a lower rate environment favors growth. She then asked how the presidential election will affect interest rates and the market. Mr. Owens stated that historically during election years, it has no impact on the FEDS decisions. The FED said that before they lower rates, they want to see pain in the economy. This hasn’t happened yet. However, debt has increased. The service on the debt has increased, which is an issue as well. Private debt has increased through the roof. Debt is as high as it’s ever been.
Mr. Owens went on to show how each manager performed. We’ve gotten back $26,000 from UBS. We’ve received two contributions back, and the last one was in October. It has been a little over a year since we requested a full redemption. Mr. Freeman believed it was odd that it was taking this long. Mr. Owens agreed but stated that we are stuck in this holding pattern.
We are up 11.57% so far this year for our total fund. We have a very defensive portfolio. Everything is balanced at this time.
The fee analysis was discussed. Our manager’s fees are about half of what they would be on another platform. This platform saves about $50-60,000 a year compared to the other platform. Mr. Freeman clarified that they could pick any manager, even if they aren’t part of the plan. We just wouldn’t get the benefit of the lower price.
General Employees’ Pension Board of Trustees
May 20, 2024
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MOTION: Mr. Hoffer moved, Mr. Tusing seconded, and the motion carried
4-0 to approve the investment consultant and manager fees as presented.
6. BENEFITS DISBURSEMENT APPROVAL
a. DROP PARTICIPANT
· N/A
b. SEPARATED NON-VESTED EMPLOYEE
· James Callihan (04/08/2024)
c. SEPARATED VESTED EMPLOYEE
· None
d. RETIRED EMPLOYEES
· None
e. DECEASED RETIREES
· None
f. DECEASED ACTIVE EMPLOYEE PAYOUT
· None
MOTION: Ms. Miller moved, Mr. Tusing seconded, and the motion carried
4-0 to approve the benefit disbursement
7. NEW MEMBER ACKNOWLEDGEMENT (Informational Only)
· Mark Adriano (02/02/2024)
· Jose Santiago-Alvarado (03/13/2024)
· Robert Lemensa (04/10/2024)
· Matthew Johnson (05/08/2024)
· Christopher Collins (05/08/2024)
8. SEPARATED MEMBER ACKNOWLEDGEMENT (Informational Only)
· Mark Adriano (03/26/2024)
· Jeremiah Radojcsis (03/07/2024)
· Kristin Hutton (05/15/2024)
9. RETIREMENT OF ATTORNEY SCOTT CHRISTIANSEN AND INTRODUCTION OF ATTORNEY LINDSEY GARBER
Mr. Christiansen shared that he would be retiring as of August 1st, 2024. He has represented Palmetto’s Pension Boards since 1994.
General Employees’ Pension Board of Trustees
May 20, 2024
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He is recommending that all 48 of his clients transfer their legal representation to Klausner, Kauffman, Jensen and Levinson. Lindsey Garber would be our Attorney. They have 8 Lawyers in their firm. Debbie McCord is his assistant, and she will be transferring to the Klausner firm as well. Mr. Christiansen will also be of council for their firm. He won’t be attending meetings, but he will be able to assist if they need his guidance.
Lindsey Garber spoke to the Board and shared a little about herself. She has about a dozen clients right now. The fees will be a little bit different. The fees for associates will be $400/hour. Their rate for travel is half of her hourly rate at $200/hour. This will then be split between the General and Police Pension Boards. They will freeze an increase for at least 3 years. Mr. Christiansen’s current fee is $515/hour.
MOTION: Mr. Tusing moved, Mr. Hoffner seconded, and the motion carried
4-0 to approve the transfer of the legal services from Christiansen & Dehner, P.A. to Klausner, Kaufman, Jensen & Levinson effective August 1, 2024 with the adjustment of the fee schedule.
The Board members shared that they were sad to see Mr. Christiansen retire, as he will be missed. They thanked him for his years of service. We look forward to working with Lindsey.
10. ATTORNEY CHRISTIANSEN’S REPORT
Mr. Christiansen reminded the Board that the financial disclosure forms are due July 1st through the portal.
He wanted to update the operating rules and procedures before he retired. The changes that need to be made include the electronic filing of the financial disclosure forms, the ESG reporting requirements, and the new confidentiality requirements for public records requests.
The new law includes certain individuals to be exempted. Some veterans are among those who are exempt. They must ask to be exempted from the release of their records.
MOTION: Mr. Freeman moved, Mr. Tusing seconded, and the motion carried 4-0 to authorize Attorney Christiansen to update the operating rules and procedures.
11. PLAN ADMINISTRATOR’S REPORT
Nothing additional to report.
General Employees’ Pension Board of Trustees
May 20, 2024
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Chair Freeman adjourned the meeting at 9:34 am.
Minutes approved: AUGUST 26, 2024
CHERYL MILLER
CHERYL MILLER
Secretary