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Clermont Police 02-22-23 Quarterly Meeting Minutes signed(1C City of Clermont CLERP'MONT Retirement Plan and Trust for the Police Officers DRAFT Quarterly Meeting Minutes FEBRUARY 22, 2023 1. Chris Martin called the meeting of the Retirement Plan and Trust for the Police Officers Board of Trustees to order at 9:02 AM, February 22, 2023 in Council Chambers at the Clermont City Hall. He called roll, there was a quorum. John Baker was welcomed back to the Board. Those persons present included: TRUSTEES OTHERS Chris Martin Scott Baur & Kyle Tintle, Administrator, Resource Centers Jason Sayre Bonni Jensen, Attorney, Klausner Kaufman Jensen & Levinson Jimmie Harper Mitchel Brennan Investment Consultant, BCA John Baker Chuck Carr, Actuary Southern Actuary Services (Electronically) Ross Hutto Nadine Ohlinger & Nancy Ziccardi, Clermont (Electronically) 2. Extraordinary (Exigent) ClrcumstancesforTrustees Joining Electronically No Trustee were joining the meeting electronically. 3. Approval of the Minutes The Trustees reviewed minutes for November 30, 2022. The minutes were amended as Scott Tuffs was not present at the last meeting. Jason Sayre made a motion to approve the Minutes for November 30, 2022 as amended. John Baker seconded the motion. The motion was approved by the Trustees, 5-0. 4. Reports a) Mitchell Brennan, Investment Consultant (Burgess Chambers Associates) Mr. Brennan the economic environment in 2022, which included a rotation from growth to value and a contraction in prices. Earnings still increase during the period where the Fed raised interest rates until the final calendar quarter. What made this year so bad, bonds lost value along with stocks to their worst record in modern history. The pace of interest rates increases now appears to be slowing. The current inverted yield curve now forecasts a likely recession in 2023. Mr. Brennan reviewed the specific performance for Polen, which performed under the lager growth benchmark primarily due to a holding in Meta. Unfortunately Polen under performed during a down market. The manager still performs above the bench market during the rolling longer periods, so the consultant continues to have confidence in the manager, even though the recent performance disappointed. In a similar fashion, the Euro-Pacific Growth Fund has a growth bias and performed under benchmark in the recent market. Both Polen and Euro-Pacific Growth are performing slightly above benchmark for the current year to date. The assets gained 4.5%gross and 4.4% net for the December 31, 2022 compared to a gain of 4.9%for the benchmark. The portfolio returned-15.6% gross for the calendar year compared to-12.6%for the bench mark. Mr. Brennan attributed the relative underperformance in 2022 to Polen and the Euro-Pacific Growth allocations. The Board rebalanced the real estate allocation and received about 2/3 of the requested amount. Due to headwinds with commercial real estate he recommended an additional CC City of Clermont CLERMONT Retirement Plan and Trustfor the Police officers DRAFT Quarterly Meeting Minutes FEBRUARY 22, 2023 redemption of $350,000 from Predex. Chris Martin addressed the underperformance. The losses from Polen and Euro-Pacific Growth impacted longer term averages for the Plan as well. As of Friday, February 17, 2023 the portfolio's balance was $28,436,000, an increase of 4.5% for the current quarter. The Board considered the allocation to Polen. Mr. Brennan will recommend the Board reevaluate the manger allocation or trim the allocation to Polen as the consultant continues to monitor performance. Jason Sayre made a motion, to give the investment consultant the discretion to move, up to 25% of the Polen portfolio back to the benchmark prior to the next meeting of the Board. Ross Hutto seconded the motion. The motion was approved by the Trustees, 5-0. Ross Hutto made a motion to raise $350,000 cash from Predex. The motion received a second from Chris Martin, approved by the Trustees 5 — 0 Jason Sayre asked for information and what other Boards are doing with Polen. Predex has commercial, office, residential, industrial, and retail holdings. Mr. Brennan and Mr. Baur both noted no one they are aware of has trimmed or increased investment in Polen. Mr. Brennan will bring further rebalancing recommendations to the next meeting. b) Bonni Jenson, Attorney Report (Klausner Kaufman Jensen & Levinson) Ms. Jensen reported the ordinance changing the definition of salary passed. She will bring the Summary Plan Description to the May meeting to update. Ms. Jensen reviewed a memo on internal controls. She reported a Miami area administrator embezzled funds by continuing payments to deceased members. Ms. Jensen would ask the auditor test for deaths. Funds also received fraudulent account changes. She will ask the auditor to address internal controls in the audit process. This is the beginning of a conversation that will last a while. Ms. Jensen reviewed the previsions of the SECURE Act 2.0. Public safety officers can claim $3,000 exemption from income for health insurance premiums without a deduction from the pension check. Members receiving a duty disability pension can continue to claim the payments tax free past normal retirement age. Members retiring from service with 25 years of service can now take distributions from pensions without a 10%penalty. The act also increases the age for minimum required distributions and reduced penalties for non-compliance. The SECURE Act allows employers to match student loan payment with a matching contribution. The final memo was the updated mileage rate for 2023 which is 65.5 cents. c) Scott Baur, Administrator Report (Resource Centers) The Board received the requested cost estimate from the Southern Actuarial Services for the enhanced benefits, which will have to be part of negotiations. The Board considered the Chapter 185 premium tax receipts and covered pay. Members may continue to receive health insurance benefits through the City following retirement, but the employees do not receive any benefits to offset costs. Ms. Ohlinger said the City does have 5 tiers base on 2013 service to offset costs for retirees. She reviewed the City contribution tiers. The audit engagement letter addendum was reviewed by the Trustees. The Board would like to have the auditor attend the next quarterly meeting. S- City of Clermont C LER�T Retirement Plan and Trust for the Police Officers DRAFT Quarterly Meeting Minutes FEBRUARY 22, 2023 Chris Martin made a motion to approve the audit engagement letter addendum. Jason Sayre seconded the motion. The motion was approved by the Trustees, 5-0. On February 27 conclusion expected to the Jeremy Kevitt situation with an open plea to the court. Ms. Jensen said we will need to bring information to the Board of Trustees to decide if the plan should have a further hearing. She provided a brief overview of the process. 4. Benefits and Approvals No benefit approvals. Share account allocations for 2022 were reviewed and discussed. Jason Sayre made a motion to approve the 2022 Share Account Allocations. Ross Hutto seconded the motion. The motion was approved by the Trustees, 5-0. S. Plan Financials The Trustees received the interim financial statement for December 31, 2022. The Warrants for February 22, 2023 were reviewed by the Trustees. Jason Sayre made a motion to approve the Warrants dated February 23, 2023. Ross Hutto seconded the motion. The motion was approved by the Trustees, 5-0. 6. Other Business There was no other business. 7. Public Comment There was no public comment. 8. The next pension board meeting will be Wednesday, May 24, 2023 at 9:00 AM. Chris Martin made a motion to adjourn the quarterly meeting. Ross Hutto seconded the motion. The motion was approved by the Trustees, 5-0. 9. Chris Martin called the meeting adjourned at 11:02 AM Chair �-->/` —y- I r 54e. SPI'rp}�nF Date slavla�