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Clermont Police 08-23-23 Quarterly Meeting Minutes signedn E M E 5 d T City of Clermont SS CLERI-I�/ ONT ) Nov 2 s �oz3 Retirement Plan and Trustfor the Police Officers L� 7- DRAFT Quarterly Meeting Minutes By AUGUST 23, 2023 1. Jason Sayre called the meeting of the Retirement Plan and Trust for the Police Officers Board of Trustees to order at 11:29 PM, August 23, 2023 in Council Chambers at the Clermont City Hall. He called roll; the Board had a quorum. Those persons present included: TRUSTEES OTHERS Jason Sayre Scott Baur & Kyle Tintle, Administrator, Resource Centers Jimmie Harper Sean Sandra, Attorney, Klausner Kaufman Jensen & Levinson John Baker Mitchel Brennan & Larry Cole, Investment Consultant, BCA Debbie Kocsis, Salem Trust Scott Borror, Clermont Assistant Director of Finance Those Joining Electronically: Bonni Jensen, Attorney, Klausner Kaufman Jensen & Levinson Chuck Carr, Saltmarsh, Cleaveland, & Gund Nadine Ohlinger & City of Clermont John Graczyk, Deputy Chief Clermont Police The City of Clermont is aware they need to appoint a trustee as Ross Hutto is no longer serving on the board. Mr. Baur reviewed the election procedure as a trustee election will be held to fill the other seat on the Board vacated by Chris Martin. He noted that Trustees serve 2-year terms on the Board; however, the term for Chris Martin expires on December 1, 2023. The newly elected Trustee would therefore serve for only 1 meeting before needing reelection to the Board. He proposed for this election only that the Board fill the seat for the remainder of the term for Chris Martin (one meeting) and the next 2-year term beginning December 1. The Board agreed to the proposed election by consensus, noting the variation from normal procedure and the Board Operating Rules and Procedures. Ms. Jensen requested the board designate a chair. John Baker made a motion to have Jason Sayre as interim chair. Jimmie Harper seconded the motion. The motion was approved by the Trustees 3-0. Jason Sayre made a motion to have Jimmie Harper as interim secretary. John Baker seconded the motion. The motion was approved by the Trustees 3-0. The Board designated Jason Sayre as Interim Chair and Jimmie Harper as Interim Secretary. 2. Extraordinary (Exigent) Circumstances for Trustees Joining Electronically No Trustee were joining the meeting electronically. 3. Approval of the Minutes The Trustees reviewed minutes for May 24, 2023. The minutes were amended as John Graayk is the Deputy Chief of the Clermont Police, page 3 the motion needs the name of who made the motion and who seconded the motion and corrected the typo on page 4. City of Clermont DEMO Retirement Plan and Trust for the Police Officers %teOfCM .' DRAFT Quarterly Meeting Minutes AUGUST 23, 2023 Jason Sayer made a motion to approve the Minutes for May 24, 2023, as amended. John Baker seconded the motion. The motion was approved by the Trustees, 3-0. 4. Reports a) Mr. Cole and Mitchell Brennan, Investment Consultant (Burgess Chambers Associates) Mr. Cole reported good results for June 301' quarter, but performance is under benchmark. Mr. Brennan explained the top 10 companies in the market account for most of the gains. Stocks have become expensive by historical companies. Those top companies also account for about one third of the index but only twenty percent of the earnings. Those top 10 companies gained on average 40% year to date with the rest of the S&P companies gaining only 5%. The overall portfolio does not exactly match the Russell 3000 bench with a tilt to value holdings. Accordingly, the Plan holdings trailed the benchmark. Historically small cap issues perform better, whereas certain large growth companies dominated markets recently. The consultant will recommend adjustments to make the holdings look more like the benchmark. Mr. Cole reviewed recent markets. Equities had significant gains. He believes inflationary pressures to continue to continue with additional interest rate increases into 2024. So far this year, large companies have performed over smaller companies and growth over value. Mr. Cole reviewed the current assets allocations with a slight overweight to domestic equites and underweight to real estate. The consultant does not recommend further real estate redemptions. The assets gained 2.9% for the June 3011 quarter compared to 3.6% for the benchmark and 11.6% fiscal year to date compared to 13.3% bench to finish June 30th with a $29,009,268 in total assets. The current artificial intelligence bubble resembles the 1999 dot com bubble. Since July 11 the market seems to have broadened. Polen, which does not hold the largest growth names in some concentration as benchmark, account for most of recent underperformance. Burgess Chambers & Associates recommends selling $1,000,000 of Polen, $200,000 of Fidelity Mid -Cap, and $100,000 of Fidelity Small -Cap Index, and purchasing $1,150,000 of Fidelity Large -Cap Growth (FSPGX) and $150,000 of Fidelity Large -Cap Value (FLCOX). Mr. Cole stressed incremental moves in the portfolio. Mr. Cole emphasized incremental changes to make the Plan's holding look more like the benchmark. The 5-year 6.9% average annual gain ranks in the top 35%. The Board considered Polen's performance. Jason Sayre made a motion, based on the advice of the investment consultant, to sell the above listed amounts in listed funds, and make the recommended amounts of funds. John Baker seconded the motion. The motion was approved by the Trustees, 3-0. Mr. Cole addressed the updates to the Investment Policy Statement to comply with House Bill 3. The Board must invest plan assets based solely on pecuniary factors rather than any Environmental, Social, and Governance (ESG) considerations. He also adjusted the target range for the real estate allocation. City of Clermont CERI."T00 4T Retirement Plan and Trust for the Police Officers eO,'�1,,,,,,„DRAFT Quarterly Meeting Minutes AUGUST 23, 2023 Jason Sayre made a motion to approve the Investment Policy Statement. John Baker seconded the motion. The motion was approved by the Trustees, 3-0. b) Chuck Carr, Actuary (Southern Actuarial Services) Mr. Carr reviewed the October 1, 2022, actuarial valuation report which determines the 2023-24 contribution on the projection method. The city will contribute the same amount in fiscal year 2023 (FY23) and fiscal year 2022 (FY22) in transition. The city has a $718,628 credit in the plan against the future contribution requirements. The contribution rate will increase to 30.43% total with a net 25.26% contribution after the chapter 185 premium tax receipt. The city contributed 5.81% of pay for FY23. The amounts are in line with historical contribution requirements except for the last 2 years. The lower amount was due to strong investment results for 2021. Mr. Carr stated the Board can smooth future gains and losses, but that would also delay recognition of recent market gains in 2023. Finally, the funded ratio is 116.14% as of 2022 reflecting all the market losses for the year. The Board considered the contribution requirements. Jason Sayre asked if the Board could table the approval of the valuation to the next meeting to allow time for further input by the city. Jason Sayre made a motion to table the discussion until the next meeting. John Baker seconded the motion. The motion was approved by the Trustees, 3-0. c) Debbie Kocsis, Custodian (Salem Trust) Ms. Kocsis reported that TMI Holdings, parent company to Salem Trust, will merge with Argent Institutional Trust Company doing business as Salem Trust. The custodian will not change any systems in the merger. She presented the online pension portal to provide online access to retired members receiving payments. Members with the approval by the Board can also allow deposit account and member information access online. The custodian will notify the retirees and mail initial information. The Board considered the additional services. Jason Sayre made a motion to approve pension portal for retirees with read only access. Jimmie Harper seconded the motion. The motion was approved by the Trustees, 3-0. d) Bonni Jenson, Attorney Report (Klausner Kaufman Jensen & Levinson) Ms. Jensen previously discussed the requirements for House Bill 3. She filed the intent to forfeit on the attorney representing Mr. Kevitt but received no response. The pension payments to Mr. Kevitt will be stopped immediately. Jayson Sayre made a motion to enter forfeiture based on failure of the member to respond. Jimmie Harper seconded the motion. The motion was approved by the Trustees, 3-0. & City of Clermont LEMON Retirement Plan and Trust for the Police Dicers Cc,,eOf,;o,,,� DRAFT Quarterly Meeting Minutes AUGUST 23, 2023 Jayson Sayre made a motion to direct the Resource Centers and Salem Trust to not make the September 1, 2023 pension payment to Mr. Kevitt. Jimmie Harper seconded the motion. The motion was approved by the Trustees, 3-0. Ms. Jensen discussed an incident where a person collected social security for a deceased parent for 30 years. Her firm provided an updated Special Tax Notice. The Trustees will distribute the annual benefit statements. e) Scott Baur, Administrator Report (Resource Centers) Mr. Baur discussed the decision made by auditor Cherry Bekaert to no longer audit standalone government pension plans, including the City of Clermont Police Officers' Retirement Plan. The Board considered Saltmarsh audit services. Jimmie Harper made a motion to accept Saltmarsh as the auditor for the plan based on the Attorney review of the audit engagement letter. Jason Sayre seconded the motion. The motion was approved by the Trustees, 3-0. Mr. Baur discussed the 2 upcoming trustee educational opportunities, the Department of Management Services 52°d Annual Conference and the FPPTA Fall Trustee School. S. Benefits Approvals The Board had no benefits for approval. 6. Plan Financials The Trustees received and reviewed the interim financial statement through June 30, 2023. The Warrant dated August 23, 2023 for payment of Plan expenses was reviewed by the Trustees. Jason Sayre made a motion to approve the Warrant dated August 23, 2023. John Baker seconded the motion. The motion was approved by the Trustees, 3-0. 7.Other Business The Board had no other business for consideration. 8. Public Comment No members of the public had any comment. 9. Next Board Meeting S- � City of Clermont CLERI'IONT Retirement Plan and Trust for the Police Officers DRAFT Quarterly Meeting Minutes AUGUST 23, 2023 The Board previously scheduled the next pension board meeting for Wednesday, November 29, 2023 at 9:00 AM. 10. Adjournment Ross Hutto made a motion to adjourn the quarterly meeting. Chris Martin seconded the motion. The motion was approved by the Trustees, 3-0. Chair \— S J l��Secretary Dat 1 2oj 23