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BOARD MEMBERS PRESENT:
Jim Freeman, Chair
Dale Hoffner, Vice Chair
Cheryl Miller, Secretary
Ana Rodgers
Robert Schofield
Leland Taylor (Entered the meeting at 8:34 am)
Allen Tusing (Not Present)
STAFF AND OTHERS PRESENT:
Lindsey Garber, Board Attorney
Scott Owens, Graystone Consulting
TJ Loew, Graystone Consulting
Cassi Bailey, Assistant City Clerk/Pension Plan Administrator
Chair Freeman called the meeting to order at 8:31 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 Amended August 26th, 2024 General Employees’ Pension Board Agenda to add item #12, and update item #13 to reflect Attorney Garber’s Attendance.
2. PUBLIC COMMENT
No public comment.
3. APPOINTMENT OF ANA RODGERS TO THE GENERAL EMPLOYEES’ PENSION BOARD OF TRUSTEES (INFORMATIONAL ONLY)
4. APPROVAL OF MINUTES
MOTION: Ms. Miller moved, Mr. Schofield seconded, and the motion
carried 6-0 to approve the May 20th, 2024 minutes.
5. 2025 PROPOSED MEETING DATES
MOTION: Mr. Scofield moved, Mr. Hoffner seconded, and the motion
carried 6-0 to approve the 2025 proposed meeting dates.
General Employees’ Pension Board of Trustees
August 26, 2024
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6. ADDENDUM TO THE OPERATING RULES AND PROCEDURES
Ms. Garber explained the changes that Attorney Christiansen made to the operating rules and procedures.
MOTION: Ms. Miller moved, Mr. Taylor seconded, and the motion carried
6-0 to approve the addendum to the operating rules and procedures and authorize the Chairman to sign.
7. APPROVAL OF EXPENSES
a.) City of Palmetto Reimbursement Invoices dated 08/13/2024 & 08/01/2024
b.) Christiansen & Dehner, P.A. invoices dated 07/31/2024, 06/30/2024, 05/31/2024
c.) Foster & Foster Invoice dated 08/07/2024
d.) First State Trust Company Invoice dated 04/03/2024 (received 05/31/2024)
MOTION: Mr. Schofield moved, Mr. Hoffner seconded, and the motion
carried 6-0 to ratify the paid expenses as presented.
8. INVESTMENT REVIEW
Scott Owens and TJ Loew, Graystone Consulting, presented the end of the quarter investment review. The summary and full packet were included in the agenda.
Mr. Owens gave Ms. Rodgers an overview of what the role of the investment consultant is. Our portfolio tends to be very defensive.
Mr. Loew started off by saying the market doesn’t seem to want to go down. He discussed the trends of the last year, and what he anticipates moving forward. Value was down, growth was up. Growth is leading this market higher. Technology and Tech services are not changing. They’re still going up. International markets were up about half of what US markets have done for the year. The market has mixed returns; they can’t figure out what the FED is going to do with rates. We are seeing jobs/per unemployed persons coming down. Last month it was down 1.1 jobs per unemployed person. Unemployment rates are going up. The question continues to be, is the FED going to put us into a recession and if so, how bad will it be. Participation in the market is increasing. They are anticipating unemployment rates to continue to increase. Credit card debt is increasing. Inflation is coming down, but prices are continuing to be high. This is a recipe for disaster. This creates volatility in the market. Price to earnings was highlighted on page 13 of the summary packet. They are seeing more value in fixed income.
Mr. Owens went on to discuss our plan’s portfolio. He explained to our new trustee how to interpret the packets they provide. Our portfolio is currently up 1.1% for the quarter and 13.94 % for the year. He highlighted individual managers. Mr. Owens would like to revisit the manager Congress at the next meeting. He wants to bring back a search. He also thought we should keep an eye on Clearbridge. We currently have 2.5% in cash.
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August 26, 2024
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He recommended reducing cash down to 1% and putting the 1.5% difference in Madison. Real Estate is illiquid, and we can’t sell it. We have requested a full redemption from UBS.
As of August 16, 2024 we are at 15.66% return for the year.
We are in compliance with everything within our portfolio.
Mr. Freeman asked how he would characterize the quarter they’re reporting on. Mr. Owens stated that was a complicated answer. He broke down each part of the contributing factors. The only thing that was positive was large cap growth. Nothing else was. Two thirds of our portfolio did not beat the benchmark for the quarter. This is the 3rd quarter in a row that we’ve had a negative alpha. Mr. Freeman had concerns about the direction we’re heading. Page 42 of the summary was discussed. We’re in the 98th percentile. That means 98 percent of plans did better than us. If we’re defensive, why are we doing worse? Should we be looking at making changes?
Mr. Owens agreed it was a bad quarter. He explained his thought process. He discussed individual managers and the purpose they have in our plan. Our plan is primarily designed to protect in a down market, which on the flip side means they won’t have as big of a return in an up market. He will bring a search for Congress at the next meeting. We have not gotten any more returns from our redemption of UBS. Sawgrass can be discussed further at the next meeting.
Mr. Freeman asked why they don’t include the net return on the charts. Mr. Owens explained why they can’t. They have to compare the gross return. It is a compliance restraint. Net returns are listed on page 42.
Mr. Schofield asked about the technology side. Artificial Intelligence, AI, is the future. He asked what our stake in technology was. Mr. Owens answered that it is in the large-cap growth space. Discussions continued regarding the benefits/disadvantages of having more funds in technology vs. being defensive. Mr. Owens will conduct a search for growth managers with a passive option.
Ms. Rodgers asked if there are any distributions coming from the plan. Yes, page 20 of the summary shows net distributions. We are paying out more than we are bringing in. We are net spenders. The actuary does a 5-year smoothing. That helps with volatility.
MOTION: Ms. Miller moved, Mr. Schofield seconded, and the motion
carried 6-0 to take cash down to 1% and put the difference in Madison.
The agent appointment custodian agreement was discussed. We currently have this agreement already, they are just updating it. The attorney already looked at it.
MOTION: Mr. Hoffner moved, Ms. Miller seconded and the motion carried
6-0 to approve updating the agent appointment custodian agreement.
General Employees’ Pension Board of Trustees
August 26, 2024
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MOTION: Ms. Miller moved, Mr. Taylor seconded, and the motion carried 6-0 to approve the investment consultant and manager fees as presented.
9. BENEFITS DISBURSEMENT APPROVAL
a. DROP PARTICIPANT
· N/A
b. SEPARATED NON-VESTED EMPLOYEE
· Casey Odell (07/14/2024)
c. SEPARATED VESTED EMPLOYEE
· N/A
d. RETIRED EMPLOYEES
· Aubrey Drummond (07/19/2024)
e. DECEASED RETIREES
· George Fountain (07/19/2024) Annuitant- Susan Fountain
f. DECEASED ACTIVE EMPLOYEE PAYOUT
· N/A
MOTION: Mr. Schofield moved, Ms. Miller seconded, and the motion
carried 6-0 to approve the Benefits Disbursements as presented.
10. NEW MEMBER ACKNOWLEDGEMENT (Informational Only)
· Steven Spangler (06/05/2024)
· Marissa Martinez (07/05/2024)
· Emin Mathew (08/14/2024)
· Joshua Rhodes (08/14/2024)
· David Korb (08/14/2024)
11. SEPARATED MEMBER ACKNOWLEDGEMENT (Informational Only)
· Jose Santiago-Alvarado (07/23/2024)
· Matthew Johnson (08/08/2024)
· Christopher Collins (08/09/2024)
12. Professional Services Agreement (addition)
Ms. Garber explained that this agreement is for the transition of services from Attorney Christiansen to Attorney Garber.
MOTION: Mr. Taylor moved, Mr. Schofield seconded, and the motion
carried 6-0 to approve the professional services agreement and authorize the Chairman and Secretary to sign.
General Employees’ Pension Board of Trustees
August 26, 2024
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13. ATTORNEY GARBER’S REPORT
Ms. Garber noted that she would send Ms. Rodgers all pertinent information relating to the board.
At the next meeting she will ask for authorization to update the Summary Plan.
14. PLAN ADMINISTRATOR’S REPORT
Nothing additional to report.
Chair Freeman adjourned the meeting at 10:08 am.
Minutes approved: NOVEMBER 18, 2024
CHERYL MILLER
CHERYL MILLER
Secretary