Minutes 05-24-23 Firefighter Quarterly Meetingr
LER T Retirement Plan & Trust for Firefighters of the City of Clermont
DRAFT Minutes Quarterly Meeting
May 24, 2023
1. Chair Judd Lent called a Quarterly Meeting of the Firefighters Retirement Plan Board of Trustees to
order at 11:05 AM on May 24, 2023 in Council Chambers at the Clermont City Hall. Those persons
present included:
TRUSTEES OTHERS
Judd Lent, Chair Scott Baur & Kyle Tintle, Administrator (Resource Centers)
Adam Watkins, Trustee Bonni Jensen, Attorney (KKJL)
Ariel Guerrero, Trustee Mitchel Brennan & Larry Cole, Investment Consultant, (BCA)
Katherine Falcon, Trustee Nancy Ziccardi, City of Clermont
Electronically:0
Nadine Ohlinger (City of Clermont)
Brian Liffick and John Graczyk Auditors (Cherry Bekaert)
Justin Conley, Senior Accountant (Cherry Bekaert)
2. Extraordinary (Exigent) Circumstances for Trustees Joining Electronically
No Trustees joining electronically.
3. Approval of Minutes:
The Trustees reviewed the Quarterly Board Meeting Minutes dated February 22, 2023.
Adam Watkins made a motion to approve the Quarterly Board Meeting Minutes dated February 22, 2023.
The motion received a second from Judd Lent, approved by the Trustees 4-0.
4. Reports:
Quarterly Investment Report: Investment Consultant, (Mitchell Brennan & Larry Cole BCA)
Mr. Brennan presented a market overview and manager analysis handout. He reviewed the markets for
the year to date which were dominated by large cap growth stocks. Mr. Brennan provided an overview of
the market for the quarter ending March 31, 2023. About 8 name in the index contributed to about 80%
of the overall gain. Consumer sentiment is down. Inflation has appeared to have peaked in 2022
followed by 10 months of decline. Rates and rate increases may be at or near their peak. After the
interest rate hikes, bonds have very little downside. The rate curve remains sharply inverted.
International equities have started to outperform the domestic market.
Mr. Cole addressed the banking crisis. The Plan has very little exposure to troubled banks. He explained
the asset holdings and liabilities for regional banks. The plan has little to no exposure to operationally or
by current holdings. He does expect additional bank failures. Commercial real estate valuations are
starting to crack. Polen and EuroPacific performance came back strong with growth issues. The plan
redeemed about 85% of pending redemptions from the PREDEX private real estate holdings.
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LER T Retirement Plan & Trust for Firefighters of the City of Clermont
DRAFT Minutes Quarterly Meeting
May 24, 2023
The plan started the quarter with $28,134,737 in total assets and ended with $29,351,143, a gain of 3.5%
compared to 4.3% for the benchmark. Mr. Brennan reported the Vanguard Equity Income Fund
performed under the large cap value equity benchmark, as the market rotated back to growth issues.
The consultant continues to have confidence in the manager. Private real estate continues to post losses,
but the manager held by the plan performed above the benchmark with lower office holdings.
Mr. Brennan has a rebalancing recommendation to raise cash by selling:
$100,000 Fidelity Large Cap Value Fund, $500,000 Cohen & Steers Global Infrastructure, $1,000,000
Fidelity Short Term Bond Fund, $500,000 Vanguard Corporate Short Term Fund, $100,000 Vanguard
Equity Income, Totaling 2.2 million dollars
The plan has $800,000 in cash
Purchase:
$700,000 Fidelity Large Cap Growth Index, $300,000 iShares Convertibles, $500,000 American Funds
EuroPacific, $1,100,000 U.S. Bond Index, Totaling $3,000,000
Mr. Cole explained that the increase to bonds should take advantage of falling interest rates going
forward, with bond prices stabilized. The cash portion resulted from normal contributions and the
PREDEX redemption.
Adam Watkins made a motion, based on the advice of the investment monitor Mitchel Brennan, to approve
the rebalance recommendations. The motion received a second from Katherine Falcon, approved by the
Trustees 4-0.
Audit Report: Brian Liffick and John Graczvk (Cherry Bekaert)
Mr. Liffick presented the September 30, 2022 audited financial statement. The audit is pending the
GASB67 notes. He provided an unmodified (clean) opinion. The audit found no management override of
controls. While the audit does not consider the effectiveness of internal controls, the process did not
identify any material weaknesses or significant deficiencies; no corrected or uncorrected misstatements.
He addressed quantitative aspects of accounting practices. The auditor maintains independence in the
process. The auditor encountered no difficulties or disagreements with management, no outside
consultants. The management representation letter will be issued after after the draft audit is finalized
on receipt of the GASB67 notes.
Mr. Graczyk reviewed the financial highlights. The Plan's assets decreased to $26,966,206 in 2022 from
$30,484,926 in 2021. Employees met contribution requirements and Chapter 175 premium taxes
increased. Mr. Baur noted the efficiency of the Plan as the administrative costs are so low.
Katherine Falcon made a motion to approve audited financial statement, subject to receipt of the GASB67
notes and Management Representation Letter. The motion received a second from Ariel Guerrero,
approved by the Trustees 4-0.
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LER T Retirement Plan & Trust for Firefighters of the City of Clermont
DRAFT Minutes Quarterly Meeting
May 24, 2023
Attorney Report: Bonni Jensen (Klausner, Kaufman, Jensen & Levinson)
Ms. Jensen reported that House Bill 3 (HB3) passed the Florida legislature. The Board can only pass
investment decisions on pecuniary factors rather than any environmental social governance (ESG)
considerations. The Board will need to file a new comprehensive and detailed report by December 15tn
and every year thereafter. The Department of Management Services has not yet released the details of
the new report. Mr. Brennan noted that HB# will not impact the current investments, nor exclude as part
of the selection or evaluation process for managers.
The last item Ms. Jensen covered was the required submission of the Form 1 by the Trustees before July
Vt. She recommended submitting the form via email to receive a receipt.
Administrator Report: Scott Baur (Resource Centers)
Mr. Baur noted a form 1 was included in the Trustees meeting packet for their convenience. Mr. Baur
presented the FY22 Actual Expenses and FY24 Administrative Budget to the Board; he explained the
budget a State requirement. The Board discussed Trustee education and local conferences.
Adam Watkins made a motion to approve the FY22 Actual Expenses and the FY24 Administrative Budget as
presented. Judd Lent seconded the motion. The motion was approved by the Trustees, 4-0.
5. Benefit Approvals
A discussion of the City's policy of injury compensation and what the collective bargaining agreement
(CBA) says about members entitled to all benefits (including pension). Ms. Jensen said the issue may be
nonnegotiable. The City has taken the position that workers compensation is not pensionable, even
though it is paid through the paychecks. Judd Lent commented the plan documents do not specifically
include workers compensation payments and no contributions are made on workers compensation
payments. The change does have an impact; members will have to make contributions on workers
compensation payments.
A letter can be sent to the City that there is conflict between the City policy and the CBA and the pension
ordinance. Judd Lent said the payments do appear to qualify, so the Board should take action. A request
should go to the actuary to determine the cost. He may need to know the amounts of the workers
compensation payments. The Board may request a cost estimate by the actuary to include workers
compensation payments in pension compensation.
Adam Watkins made a motion to request a cost impact statement from the actuary which includes workers
compensation payment in pension payments. Katherine Falcone seconded the motion. The motion was
approved by the Trustees, 4-0.
The Board considered an effective date for the request. A request was made for Ms. Jensen to draft a
proposed ordinance for a proposed payroll change.
6. Benefit Approvals
One benefit is still pending; Steve Elliott has not received a check. Judd Lent and Adam Watkins have
recused themselves from voting on their own buybacks. Both will be sent a 8b voting conflict form to be
completed and attached to the meeting minutes for May 24tn
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LER T Retirement Plan & Trust for Firefighters of the City of Clermont
DRAFT Minutes Quarterly Meeting
May 24, 2023
Ariel Guerrero made a motion to approve the buybacks for: Bryan Bull, Ryan Bennett, Jeffrey Brimmer, and
Bryan Davis. Adam Watkins seconded the motion. The motion was approved by the Trustees, 4-0.
Ariel Guerrero made a motion to approve the buyback for Judd Lent. Katherine Falcone seconded the
motion. The motion was approved by the Trustees, 3-0.
Ariel Guerrero made a motion to approve the buyback for Adam Watkins. Judd Lent seconded the motion.
The motion was approved by the Trustees, 3-0.
The warrants for February 22"d and March 24t" were submitted for reviewed.
Adam Watkins made a motion to approve the warrants for February 22"d and March 24t", 2023. Katherine
Falcone seconded the motion. The motion was approved by the Trustees, 4-0.
7. Plan Financials
Mr. Baur presented the Board with the Interim Financial Statement dated March 31, 2023 for
informational purposes. The interim financial statements were received and will be filed.
8. Other Business
Mr. Baur told the Board he received The Resource Centers does not receive biweekly data from the City.
The Board makes a formal request to receive biweekly data. A request was made by the Police Officers'
Board to switch meeting times for the August 23rd meeting. The Board agreed to move the August 23rd
quarterly meeting to 9:00 AM per the request.
9. Public Comment
No members of the public had any comment.
There being no further business and the next meeting having been previously scheduled for August 23,
2023 at 9:00 AM, Judd Lent adjourned the meeting at 12:56 PM.
Respectfully Submitted,
Ryan Moore, Secretary