Good afternoon. Welcome to the General Employees Retirement Committee meeting. It is Wednesday, July 10th. And Ronaldo, if you'll take the role. Yes, Trustee Hilton. Here. Trustee Genoa. Trustee Penan Allen. Here. Okay, we do not have a vote or a fifth member at the moment, but we do have a column so we could proceed. the next . We do not have a fort or a fifth member at the moment but we do have a quorum so we could proceed. All right. Great stone consultant. We got it. Yeah. Another, the year-to-date, fiscal year-to-date is fantastic so far. The fiscal year-to-date is fantastic so far. We've got what eight weeks left, something like that, eight or 10 weeks left, and hopefully we can just hold on to these returns for about double what our assumed rate is. Do you want to talk about a little bit about what's going on in the market and our relative performance? TJ is going to talk about the market and the economy, and then he's going to kick it back to me. I'll talk about the managers in the portfolio. Great. And I think economy and then he's going to kick it back to me. I'll talk about the managers in the portfolio. Great and I think Scott set up the stage perfect because we've seen strong performance and what why you know we're starting to hear conversations about the slowing economy and things are we're having layoffs and unemployment's come up a little bit but why are we having such strong returns and the book I handed out will start on page two of that. And what do we mean by strong returns? You look at the first benchmark, the S&P 500. For the quarter? For the quarter. For the quarter? For the quarter? For the quarter? For the quarter? For the quarter? For the quarter? For the quarter? For the quarter? For the quarter? For the front. So the one that just handed out says June Capital market Here says June on the front. This is what we're gonna be in page We're gonna be in page four. All right. We're going to be in page four. Ten, D. Bill, that's two. June one. Yes. If we look at page four, the first benchmark, the S&P 500 up, 4.28% for the quarter. So still good performance, but if we start going down that list, and you look at the Dow Jones down, negative 1.27%, you have the Russell 3000 value down 2.25%. The Russell 3000 growth is up 7.8%. Russell 1000 index up 3.57, values down. Growth is up. And once we get below that first half, everything's negative. That's mid cap companies, small cap companies. And when you tend to see small cap and mid cap companies underperform is when there's weakness in the economy, right? They're the ones that are going to get hurt the most when the economy starts to have some faltering. Now, if we talk about why is the economy faltering or why are we seeing a slow down in growth? Well, that's what the Fed wanted. We've been coming quarter over quarter saying the Federal Reserve has taken rates from 0% to over 5% to slow the economy down. Well, it's starting to work. We're seeing GDP, which is how we measure us as a nation what our growth rate is. Last year was that 3%. For the first quarter, that year over year growth is it cut in half, about 1.5%. We think for the year, the full year is going to be about 1%. And even next year, 1% growth. So we've cut our growth by two thirds and that looks like it's going to be a continued trend going forward. So why? What is happening in the economy or what do we think is next and why did we have such strong returns? If we go back to page four and look at the S&P 500 for the last 12 months, it's up 24.5%. So even if we're seeing some weakness and we're seeing some uncertainties here, we've had very, very strong performance. But when we look at the bottom of this page, and we look at what's led the market forward, it's been a continued story technology. In video, it's been the stock that's really lifted this market up last year it was up 300 percent On top of that this year it's up 150 percent And video now makes up about 7% of the S&P 500 if we took out the S&P 500 and the next nine stocks That 15% for the year so far goes down to 3% return. Those 10 stocks are making up a majority of that return and making the market go up. But what we're seeing, and when we think about what's happening, we still have 70% of companies beating earnings, but then we have companies like McDonald's that are struggling to find their value. They're actually going back and creating the value meal. That went away for a while. They're coming back and expanding their menu again, trying to keep customers because a lot of the repeat customers are now saying, I can't even afford to go to McDonald's. I need to stay home, start cooking for myself. They're trying to find different ways to spend their money. And we're seeing that both not in lower income, but also in middle income families as well. It's the tale of like we're talking about here that there's the ones that have and the have nots. 10 companies are moving forward and keeping the economy afloat, keeping the S&P 500 up, everybody else is lagging behind. And we're starting to see that as consumers as well. And when we think about the consumer and what's. So, we're seeing that as consumers as well. And when we think about the consumer and what's happening there, we're seeing them start to slow down. We're seeing negative savings rates at the peak of the pandemic. We had $2.3 trillion in savings. That's not only $500 billion. That's a lot spent into the economy. That is individuals trying to keep up their lifestyles as we've seen the cost of everything go through the roof. So how are they doing that? Well, they're spending their savings and they're using their credit cards. We talked about it a little bit last quarter. Dealinguencies continue to go up on credit card debt and on auto payments. The consumer is falling behind. They're starting to tap out. Consumer confidence is going negative. They're starting to tap out. Consumer confidence is going negative. They're starting to feel bad about this economy. And that's what you see for this quarter. This feeling is kind of spreading through the economy. If we go and take a look at page five in international markets, the MSCIEFA negative for the quarter, down 0.42, your to dates up 5.34 over the last 12 months up 11%. But what's interesting in a point will make in international markets is they're starting to reduce interest rates. So where we're talking about doing it, they're actually starting to do it. So next quarter, we're're gonna start monitoring this. Do we see better economic performance? And we think at some point when we start reducing rates, that's gonna be some tailwind for international markets. So, it's something we're gonna monitor now that they're reducing rates, how is that affecting their equity markets, and then when we start reducing our rates, how is that gonna affect international investing as well? An outlier on this page is at the bottom, the bottom half, it says MSCI EM on the left hand side, up 5.12% for the quarter. But if you look at the three-year number, negative 4.68, right below that, what is driving that? A majority of it is China. Down 17% per year for the last three years. They're going through what we had back in 2008, 2009, in like a micro area. It's not spreading globally like our financial crisis. It's then contained to China where they've had extended real estate markets over leverage in the real estate market. They're having unemployment problems. And instead of having inflation, they have deflation. Then in the price of goods next month, we can get our car cheaper next month than this month. Why would we go spend our money? And that causes growth issues. If you're sitting on your money, you're not spending money. How does a car company employ individuals? They can't, right? So deflation is worse than inflation. They're having all kinds of issues. We see for the quarter, it's positive. Over the year to date, it's positive. They might be getting at a bottom, but that's been a big drag on international markets over the last three years. But the story has been the next page six. It's been fixed income markets. We've kept rates higher, and Drone Powell was on TV yesterday talking that for the first time that there is the possibility that they may reduce rates. And why is that? For everything we just touched on, that the economy is starting to slow down, that there is now traction where there's to a point where they see inflation coming down, they're seeing the economy slow down, that gives them the ability to cut rates. But as you can look for the quarter, the 90-day two-belt, that's cash and equivalence, is up 1.37%. The Bloomberg aggregate, the second benchmark down is flat. The next one down is flat. It's pretty flat across the board, but still year to date negative over the last 12 months, it's positive over the last three years. It's negative over the last seven years, it's positive. What we're seeing in the fixed income market is it can't figure out what is going on. We have good data, we have bad data, it keeps shifting. Last year we went from 3.8% on the 10-year treasury, all the way up to 5%, all the way back down to 3.8, we went back up to 4.5%. My head's spinning, just talking, right? We don't have traction until we have clear direction from the Fed. We think fixed income markets are going to be volatile. But I think we're starting to see that clear picture. Everything we talked about on the economy, that we have companies that are actually negative, and just a handful of companies that are doing well, that individuals like ourselves are starting to hurt and having struggle in the economy, that's what they wanted, and now they're starting to indicate that there is a possibility of rate cuts. I think we're in closer, we're in the eighth or ninth inning, compared to the first, second, fourth inning of this ball game. So, coming second half of this year, we obviously have an election coming up. I think we have the Feds meeting in September. There's a chance for them to cut there if they don't do it. They have a more chance in December. I think they try to stay out of politics is what they try to hope. And so if they don't cut in November, I mean in September, they probably would hold off till December, but they're staying data dependent. They want to make sure that we see inflation numbers come in, and they're consistent instead of going from 2.5% inflation back to 3.5, back down to three. They want to see just some in, they want to see consistent numbers as they kind of walk this tight rope of keeping inflation in check, but also not having unemployment continue to creep up. But I think that's such the stage for positive results. We've seen good results so far for the year. If there's not questions on the economy, I'm gonna hand it over to Scott to talk about performance for the portfolio. Great, thanks, DJ. If we look at page seven. For the quarter, we're up about a half a percent, point six two, versus the benchmark of about one percent. It's about a half a percent lower return. For the fiscal year to date, we're up over 14%. Now keep in mind, our target is 7.25. But the policy was up 14.9. So again, a little bit lower return. The one year number, 1142 versus 1190, a little bit lower return. And the reason I'm pointing this out, because if you look at the three-year number, we did a little better on a relative basis. Say, well, why is that? Well, because that three-year number includes the down market. And I'm telling you all this because I really want to talk about your large cap managers and why we have a little bit lower return relative to the market. So keep that in the back of your mind. Let's take a look at the next page page 8. This is how we're allocated. We're a little overweight equities, little underweight fixed income, little underweight alternatives. And if you take a look at the next page page 9, you can see there's not anything that we're really overweight in. So we're overweight equities by 5 percentage points, but it's 1% here, 1% here, 1% here, 1% here, there's not anything. As you can see in the large cap space, that's the thing we're most overweight, Buckhead, Clearbridge, and Sawgrass, those are your three large cap managers, we're most overweight there, and that's the best performing asset class. So that's good. Fixed income, we're a little underweight. And so when you're overweight, something, you gotta be underweight, something else, and that's what that is there. That's why that's underweight. Now let's turn to page 10. This is your value manager, Buckhead. And it's done fine. For the fiscal year to date, a little bit behind, but every other time frame. So I'm not concerned with that at all. The one year number 1495 versus 13, so almost two percentage points. The current quarter down, because value was down 2.17, and they were only down 0.17, so they outperformed by 200 basis points. So they're doing a fantastic job, very low volatility manager. If you look at that bottom line down there, their return is actually higher, but they've got a lot lower risk. So that's exactly where you want to be. They're doing a fantastic job. Now let's talk about large cap growth. This is your next two managers, Clear Bridge and Sawgrass. Okay. Clear Bridge is pretty close, right? If you take a look at the one year number 29 versus 33, amazing returns, 29. Little bit lower than the benchmark at 33. It's got about the same risk. And let's turn the page to sawgrass. Sawgrass for the one year number, up 20, call it 22 versus 33. That's 11 percentage points. This is a $10 million holding. That's a million dollars that was left on the table. Now, this is what, so if we take a look, sawgrass is very low volatility. The reason that the three-year number we outperformed was a large part due to sawgrass, right? Because they're very defensive. The market went down, they didn't go down as much. And what we've said is, that's exactly gonna happen when the market goes down, they don't go down as much. But when the market goes up, they're not gonna go up as much, right? And here's what's going on in the large cap space. So you have two managers in the large cap space, Clearbridge and Sawgrass. Clearbridge has about the same risk as the benchmark. Sawgrass has a lot lower risk. And we paired it together for that reason. I, if the market continues to go up, I think it's going to be very, very, very difficult for any active manager to beat the benchmark. And the reason is, as TJ pointed out, in the large cap growth space in the benchmark, it now is 50% tech. There's not a lot of active managers, they're going to overweight that much to tech. So that sector weight is very heavy in the benchmark. Your active managers are going to be a little more diverse. Also, in the tech sector, it's not like there's 50 stocks that are doing well. There's four or five. Your managers aren't going to have the same weight as the benchmark. So as long as those stocks, those tech stocks continue to do well, you're going to have a lower return if you have an active manager. So what some plans have said, you know what, we're okay with that. We got 29% with lower risk, our target seven, we're okay that that's happening, right? But other plans have said, you know what, why don't we put, why don't we've got two managers, why don't we put one of that in a passive investment. So that we're at least we get the benchmark. You would be, if you switched out of sawgrass, you would really be going from something low risk to high risk. I don't want to say that way. You'd be going from much lower risk to benchmark risk, right? Because sawgrass, if you went to Clearbridge, the risk would be about the same, but you would get the benchmark return. I'm not, I'm bringing this up for discussion. I'm not making a recommendation, but I do want to point out that if the market continues to go, you're probably going to underperform your benchmark because large cap has been such a jug or not and it is so concentrated. Again, because of that in 22, because your managers were diverse and don't have that, that's why it outperformed in the down market, right? Because they didn't have all of that concentration. You would be giving that up. So, you know, I don't, you know, I think it's something that we need to discuss and recognize, because what I don't want is, you know, we come back quarter after quarter and say, why are our managers doing well? Well, I'm telling you why they're, why they wouldn't keep up, and it's because it's a very concentrated benchmark. We can always buy the passive option, very inexpensive. We access it that way. You know, that, I mean, that's an option for you all. I just assumed leave well enough alone. You're 14, your target seven. That's not a, I mean, if you were at, if you're at five in your target seven I would say hey these guys are holding it back So you know so so where you are in that process But I do would just want to set that expectation that I'm in and I did want to point out there is a cost I mean over that time frame the cost is a million dollars now In 22 you got all that back right because it saved you a million dollars Right so because it outperformed by the about the same amount by about 10 percentage points so it outperformed by that much so you know you made a little extra back then you're it cost you a little extra now so I you know I wanted to bring that up just so that we all know all the rest of the managers are doing pretty pretty good if you take a look at Boston really knocking it out of the park. The one year number 15 versus 11, the quarter, about 1.3% better return. It has a high upside capture, up capture 104 down capture 97. It's hard to draw it up better than that. The next page, page 14, MDT advisors. The one year number outperformed by 900 base points. So what saw grass gave up, MDT advisors, the one year number outperformed by 900 base points. So what saw grass gave up, MDT made back, right? It's not the same dollar amount, but it's the same percentage, right? So, and you take a look for the fiscal year to date, 29 versus 21, and for the quarter outperformance by about 1%. When I say outperformance, I do want to, for the quarter, that means less negative, right? And that's one of the things that you get with these defensive managers. When the market goes down, they protect. And this is a perfect example of that. Harding Lovener, your international growth manager, for the one year number six versus 11, for the quarter up half versus our, I'm sorry, up a quarter versus up about one. So about three quarters of a percent difference. Over the long term they're fine significant out performance over the five, seven, ten over the longer term. Not really concerned a little bit lower risk, a little bit higher return over the long term. Now García Hamilton this is another one so if you remember we got into García Ham oh, and I do want to point this out. So the police and fire have a very similar portfolio. They did a little bit better because they're not as risk of versus you all. Again, nothing wrong with that. You probably did a little bit better than them in 22, because you were more protective in nature. But it's interesting because when we do a manager search and we come here, we do the show the same managers to both of you and it just depends on. So your managers are doing exactly what you would expect them to do and their managers are doing. There's no secrets here. I just wanted to let you know that it's there. So and this is another one. So Garcia Hamilton, if you take a look, we had Garcia Hamilton in the intermediate term, but then we said, hey, we want to have it in short term because we have this inverted yield curve. So if you take a look at the one-year number for the short term, it's 4.32, and if you take a look for the intermediate term, it's 3.18. So it's actually done really, it's done exactly what we'd expect. Short term did better than longer term. The fiscal year today, interest rates went down a little bit. So that's why you see the longer term doing better. And then for the quarter, you see the short term doing better. So that's exactly what you would expect with an intermediate term and a short term manager. They're going to be doing better at different times. That's why we did this. And then real estate, real estate has been very, very tough. Most of the real estate managers that we have spoken with have stated that they feel that we're getting kind of to the, so the reason the value goes down is because they appraise the properties, right? So it's the appraised value plus your income. And the appraised value, they started getting lower appraised values because the calculation is net operating income divided by a caprate. When cap rates are low, values are high, kind of like bonds. But when cap rates go up, the value comes down. Well, cap rates were out in all time low and they're starting to come up. So the praised values are coming down. That's why you have a negative number. You're still getting the same income. And so what most of them are saying is they feel pretty strongly that the cap rates kind of normal, it's getting closer to that where it should be. And then when interest rates, the other thing, that's one thing. The second thing that they're saying is, as interest rates start to come down, you're going to start seeing more activity and maybe it pays values to go back up. You know, we've, we can't get out of it, right? So we're just, we're taking it. But hopefully the bleeding has stopped. And then the infrastructure, we got into that, it cut about three years ago, and it's done fine for the one year number, five versus three, the fiscal year to date, 12 versus 11, and for the quarter down one versus down point three. If you take a look, if you take a look at the standard deviation, that's the risk, it's 12 and a half. If you look at all your other equities, it's between 15 and 20. So it's very low risk. It's 12 and a half. If you look at all your other equities, it's between 15 and 20. So it's very low risk. It produces about four or five percent income. It gives you some diversification and it's doing a fine job. And then if we take a look at the, on the next page, you can find a checklist. Everything's a yes. There's nothing out of compliance. So we're not recommending any changes at this point. I think we're right on top of it. I think the biggest part of the discussion is the large cap growth and we discuss that. We'll stay the course. I do think the managers that you have are defensive and if the market does volatility does increase and you'll be more protected. That concludes our prepared remarks. Thank you very much. Thank you. That's been thank remarks. Thank you very much. Thank you. Thank you. We have any questions? Any questions? I'll ask you to answer actually a lot of those. Great. Very good. Thank you. We'll get next. Ah, the plan is actually very. Hello everyone. Good afternoon. It's nice to see you all. My name is Shelley Jones. I'm an actuary with Gabriel Ritter Smith and Company. And we're going to go through the actuary evaluation today. Hopefully you have the blue book with the moon kind of on it. Or do you? No. No? Do you have enough at copies of the record? Well, we probably sent them a while ago. No. No. Do you know if it copies of the record? Well, we probably sent them a while ago. Oh, wow. Because it was done in 15th. Yeah, March 15th. Since George, sorry. Oh, no. Yeah. Sorry. Yeah. Yeah. Sorry. You're going to try and make a photocopy or print up a PDF. Oh, you're going to get them. All right. Yeah. You can try and make a photo copy or print up a PDF. Oh, you're going to go get them. All right. So we'll hold off on your report and skip ahead to the pension attorney. Hold on, Madison. Okay. Hello, everybody. So an update just remind all of you are if you have done it already the financial disclosure forms that were due July 1st just following up. You can check on the website. You type in your name and it will say whether it's filed and accepted or not so maybe just double check that. Yeah, worry. I just had a question on it. When we did the paper before, I filed in both counties because I live in Broward and work in date. But the online option just said Broward. So before you had to file it directly with the supervisor of elections in the county that you resided in. Okay. So now that middleman is cut out. So this is now the online direct filing with the Florida Commission on Ethics. So I think it's fine if it just says Broward County. I wanted about that. I was like, wait, do I have to file this again? Yeah, and county? No, because the cut out the middle man having to do that. OK, so now they're going to catch us faster. Yeah, exactly. They'll be keeping track of all of you. Yeah, I'm sure. Any other questions on the financial disclosure forms? OK. And we do have in the packet, I believe, the pension eligibility ordinance that we reviewed a couple times. I think there were a few changes maybe two meetings ago and it wasn't finalized yet. But you should all have a copy of that that just changes the eligibility date from two years to one year credit service. And that before the board's approval. Okay, yeah. Right. Okay. I do have something to add on that and I'm not sure this is a if you could kind of help me with this one. I've had several members approach us about eligibility. Yes, we're talking about moving from two years to one year. However, some of them feel very strongly that when they were hired, their vest and period was six years. And then right before they became eligible to be vested, suddenly the plan changed and it moved to 10. 10 years of vesting. Exactly. Yeah. So then they're feeling pretty, heated, hot about the fact that they were hired at a certain, sorry, I'm so sorry. They were hired expecting to be fully vested at six and yet suddenly they're now at 10. So a lot of the more of the age now or at the point where they would love to be able to leave. But they can't because they're now being pushed to the 10 and then all the changes. So they wanted to know how would that, with them mentioning the fact that they were hired at a certain the fact that they were hired at a certain, I guess, contracted term, I guess. How would it affect the last resolution that we made where the city changed what we had asked them to change for the rollback? They only did it for a specific group. And those people who are so close to that deadline were excluded. How would it affect, would we be able to put in an amendment to that to now ask again to have those people be reinstated and be added to that group? We could do that. I mean, I can look into it. About those people. Were they a certain, do you know how many they are? Well, now they're on that many because I look quite a few of them decided where it was had enough and up and left. And in the, in the right now, we have so many new people people but we don't have the head knowledge so it for me it would gain us more if we could retain those people so they could help train the new people because they're leaving because they're like we can't we're trying to buy years we're trying to do this so we could leave but wouldn't they be wanting to leave, would they be wanting to leave if they're vested or they're, they just want to have that vesting period be the six years and they're planning to stay on. They want to be able to have the six years so that it'll, it'll move them closer to eligible for retirement. Because right now it's not. Right. They have to go into by it's not right they're not they're they have to go into by the years and if they're so close to the amount of years that they that they could retire the cost to buy the years of is that is out of their reach so it's not as again it's not that it's probably only about 10 people so this was done in the last resolution to why were those, do you know why those people were excluded from that resolution that gave the rollback? One of those were talking about questions. I don't know. Well, we don't have the language in front of them. So it was all, yeah, I don't have the language. I always got to make a cut. It was just like for, it's invested members, there's some point there's always has to be a cut off right. So when this is your main what is the cut off usually cut off is you know, are you best at an on vested to the change right. Usually somebody's going to miss my a few weeks, a few months you know things like that. Mm-hmm. Do we know the resolution number of hand? No, I'm so sorry. Okay, that's okay. I can look into it. So let me look into that and I can report back. And if that's something, 227? I think it's 227. I think that's the most recent one, right? Uh-huh. And it's 227. And maybe Ronaldo could run some numbers to see how many people were talking about. I'm assuming these are people that are in their 50s. They're looking to retire. 40s, 50s. Because it would change it from from 62 to 55. So it would change even late 40s. I would change it even late for these. I'll look into it and report back to the board. Okay, perfect. Thank you. Yeah, no problem. Once you've settled on an ordinance too, we can drop the costs as well. We can either do a BS study or if it actually goes to commission, then we'll need an impact statement. Right, right. Okay, that's it for me. Do you have anything else? No. No. Thank you. So that's how I'm going to get our additional board members on the back to the actual report. We have that. Yay. So it's the blue book with the moon on it. So this is as of October 1, 2023. So it's the blue book with the moon on it. So this is as of October 1, 2023, our fiscal year beginning. And the actual evaluation report gives us mainly the sense of the minimum contribution that needs to be made, right? And that kind of sets the contributions. The, it also has plan updates in terms of membership, the assumptions used, the benefit provisions, the funded ratio, the funded status of the plan. And it's pretty comprehensive, obviously, about 60 pages, but I won't go through all of them. I'm going to hit the highlights and that starts on page four with the executive summary. The executive summary, bottom line on top, the contribution is that bolded number, which is $5,703,775. It's 54.8% of payroll. The payroll for this projected fiscal year beginning October 1,2024 is $10,400,000 and $630. So that $5.7 million, some of it's going to be covered by members. The remainder goes to the city. The amount we anticipate member contributions is that second-volted number, which is $728,114 at 7% of payroll. The remainder is $4,975,661. It's 47.8% of payroll. That's the city's contribution that we add a minimum needs to be made in the next year. The this amount, the $4.9 million did increase from the prior year from quite a bit, $640,000 approximately. The reason for that is really twofold. Really experience is what drove it mostly. That increased of the $640,000 that it increased about 490 of that was due to experience during the year. There was an increase in active population, the number of people in the plan grew. There was a salary loss, there were higher salaries than we had anticipated. And then also on the asset side, on a smooth basis, we're still smoothing in. Remember, when we do our funding calculations, we smooth it over five years. We're still smoothing in those 2022 losses, unfortunately, and that's sort of drawn us back. On a market value basis though, this particular year, we booked a really good number. We had a little 11.38% return on a market value basis, which is really strong on our old assumption of 7.35. That's a really strong number to book for the year, but again, it's gonna take time for it to smooth in. So on a smooth basis, the assets returned 4.35%. So again, our assumed rate last year was 7.35 and we didn't make that number. And that's really what kind of contributed to the increase in the contribution. So that was the largest reason for the increase. The second portion, about $150,000 of this X 640 was due to the assumption changes that we made. Remember, we did an experience study and we presented that to you about two or three meetings ago. I can't remember now. And our assumption changes were to lower the investment return assumption from 7.35 to 7.25. That increases the contribution. We also increased our higher assumption. So, obviously, we'll have to see how that all plays out. Those were kind of the two main drivers of the increase in the contribution due to salary increase. And we have a higher assumption. So, hopefully, we won't have a loss on salary next year. But obviously, we'll have to see how that all plays out. Those were kind of the two main drivers of the increase in the contribution due to salary increase. Any questions on that so far? The employee turnover was 160%. Yes, so we actually had an offset in gain on turnover this year. And so that actually lowered the experience, the liability in a sense than what we had anticipated, right? If more people leave than we expected generally, that's a gain. But again, there were new people who came in. And so that's really kind of what drove that liability increase. So we got a little bit back from people terminating, but overall we had a loss on the liability because of the salary and just the increase in population. Any? Any? How is employment here at the city? I mean, are there a lot of vacancies or? I'm not sure. I'm not sure. I know in our department we have been able to, sorry. In our department, I'll put a few of the positions were failed. We don't have that many empty. We have I think three maybe vacancies. Yeah, and in the general department, like general general. General budget. Yeah. I think the increase was about 16% in terms of population. It was the water division had an increase in population too, but yeah, those two grew in terms of active membership. So the people that are leaving, are they quitting? And they're not vested or are they retiring? We see in retirements or this particular year? Resignations. It's a good question. Just give me a second. I got a fine page. So of the people who left, there were 12 people who left. 11 were non-vested and one was term-vested. So most of them this particular year were not vested. Okay. And again, that when they when a non-vested member leaves the plan doesn't see as great of a gain in terms of right if somebody who's vested leaves, then it's a bigger gain generally, just in terms of dollars. Yeah. Any other questions? Good questions. Yeah, termination is always a strange one to think about. But once you kind of mull it over, I think you'll say it sinks in. So our Yes. Yep. And page That was page 46. So we can see how active participants have Yes. And page 40. We're owned by 41. Have an additional drop member. One less terminated. Fested. Five additional retirees one less disabled and then you see the new higher is deceased I guess one less five additional retirees so the net net, here's the net, when they're column. I love it. Look at the sea. Oh, let's see. retirees. Did I read that column? Oh, so we got, uh, no retirees five were deceased or or their payments ceased. Okay. 10 retired, the the the the the the the the the the the the the the the the new the new the new the new the new the new the new the new the new the new the new That's really where you see the big big increase. So today, where's the, I have two questions. If we look at page 10. Yes. Are those are those percentages right? Like the 1,000, 316% and 842% and... Of payroll. So like the percentage of... Yeah, the one... It's 1,300% of payroll is that accrued liability, the total accrued liability, which includes inactive, right? And then is there a chart in here that shows where the funded ratio, the trend of the funded ratio? Yeah, so I think the best way to look at it is probably the accounting schedule. It's kind of the easiest one to look at. And it's more marked to market for the fund and that's on page 20. Yeah, I always get confused with the funded ratio because like you got your vested benefits security ratio. That's different from the funded. There are. Yes. So there's multiple funded ratios. So, depending on what you want to know. Okay. So, the funded ratio itself is usually the smooth value of assets over the funding liability. And that's obviously a very smooth number because you're not taking the market value of assets. And so in general that funded ratio, the funded ratio that has the smoothing in it is really your funding ratio in terms of how you're funding your plan. The market value ratio, which is kind of on page 20, is more of a market to market number. And that's for accounting purposes. They want to know where are you at right now. And so it's not perfect because the valuation liabilities kind of lag, but essentially on the foundation for the foundation for the foundation for the foundation for the foundation for the foundation for the foundation for the foundation for the foundation for the foundation for the foundation for the foundation for the foundation for the foundation for the foundation for the foundation for the foundation for the foundation for the foundation for the foundation for the foundation for the foundation for the foundation for the foundation for the foundation for the foundation for the foundation for the foundation for the foundation D is kind of the ratio. And you can see we really hit a peak in 2021 when the when the market went up and it was 78% funded. Okay. And since then with that 2022 market downturn, Okay, and since then with that 2022 market downturn That's really what the change was there for that particular year. Mm-hmm and We're kind of slowly getting out of that As that number Where do you? Yes? Are assumed rate of return So we say 14 versus seven that number is gonna be a lot better. Oh, yes. Oh, yes, are assumed rate of return. So so so so we say 14 versus seven. I know there's going to be a lot better. Oh, yes. Oh, yes. Yes. We're assuming this we're assuming the seven and a quarter to get to the 63.98. Mm-hmm. As up today or as of June 30th, we're like 14%. So that that number. Okay. It should go. Because this is low. Yes. Yes. Yeah. Yeah. And so that's, and that's kind of why the contribution is going up, right? We have to get back to fully funded. Yeah. We're trying to get back up to fully funded. Yeah. And so that's why that contribution is really increasing because, hey, we're saying, this is on a smooth basis it's been low we need to increase our contribution and make up because for the deficit. Historically since 2014 we were at 76% funding and then we dropped but we stayed in the 70s. right? But yeah, 78. And really the... 22, 21 or 17. 22 had the market was down, so that's what happened there. And then we've been trying to dig her well. Yeah. So this is... Is that... I'm looking at the project in $10 million. That's a $10 million deficit, right? Yes. But it'll be lower if you have 14. My question is, is there, let's say at that seven, if it's 14, what would that number be? I mean, would 100 percent of what's the value of the portfolio? It's 86 million. So that'd be 4 million. That's 4.2 million, someone have all part, right. So that would drop that down about about $6.00 million. Well, that's $10 million. No numbers covered table. That's not a. Oh, yes. Sorry. Yeah, the net. The 48 million. I'm sorry. Okay. So we take that 48 and we. So we're back. If it's a $4 million to the good, that puts it up 44. So that would bump that back up to like that 65 range. I'm just looking at 23. 44. Yes. Yeah. Yeah. Okay. Right. Right. Come on. Yeah. And and don't forget. We've Right. Right. Right. Come on. Yeah, and don't forget, we've been, we've been lowering the assumed rate of return that increases the liabilities. So we've been trying to work on the assumptions as well along this way. So the fact that even though we've been lowering our expectation, we've been staying in the 70s, I mean market fluctuations are going to be a problem. But if you were to, I think so. It was, yeah. It was, yeah, we've been steadily dropping that down. And so if you were to kind of take, what they call a trend line on the funded ratio, you would see that it would be trending upward over time. It's just market fluctuation is our problem. In this measure, right? Because we're looking at the market value return, instead of the smooths. And if we were to say, we were, I'm not scared to get it right. So if we were to say, hey, what would it look like and not maybe the adjustments, we would have been, the unfunded ratio would have been lower lower. So there would have been more and more fun because we're wondering if increases are unfunded ratio. So what we were trying to do was, hey, it really, sorry, what we were trying to do in really good years, when we got more than this, you know, more than our summary, let's, let's reduce it a little bit. And that's what we were doing. And then 22 hit. And it just kind of, yeah, it kind of threw a mess in. And that was the guy out of that hole. Right. Right. And so from a funding perspective, we have a little bit more time because we smooth so much, right? We're smoothing assets assets we're smoothing the unfunded liability payment amortization right so over 25 years now so it's it'll all be worked in over time essentially that's what time is on your side in these so just looking at the 10 years, it doesn't paint the whole picture of the plan as well. I can certainly see commission having that issue with this amount. Yeah. And really, I'll actually, I'll get to it on page 16. On page 16, the smoothing, right? When we had our valuation in 2022, we didn't increase the contribution immediately, even though the market returned, you know, negative 10.68. We didn't increase the contribution immediately to get that unfunded amount to zero. Instead, we smoothed it off. And that's why item H, you can see that the deficit that we're trying to smooth in was $9 million. Now it's $4 million. So we took some off, a lot of, but we still have $4 million that we need to smooth in. If we have a good return this year, like in the 16 range, we'll probably be back to normal and we won't have to deal with these losses that we're still trying to get rid of. And that will be a good booking for sure. And that's it. I know it's it's hard to see the contribution increase, but eventually, it is what it is. The smoothing can only do so much is what I guess I'm saying, is that we try to smooth so that we don't see big contribution influxes so that in the end year to year it's relatively smooth but with big changes in the market it's difficult to smooth. City manager my call for a meeting like the then the police plan when he sees a big jump. Yeah what's's the goal? I mean, I'm ignore excuse my ignorance here. What's our goal for for being funded? Because we're down to 63. What's yeah, so on a and on it. Yes, essentially we're at 63 on a market value on a on a smooth value. We're about 66. So, but obviously the goal is to be 100% funded. Yeah, I don't think we have anything in policy that. What? That we have a goal of the way 70 the way the funding calculation works is that we're working towards paying off all the unfunded liability over certain times. So if you look at page. Which is like back 20 years or something. Yes, page 57. All the way in the back there gives you a sense of the unfunded liability and how we're paying it off. And there's different bases. Right now the unfunded liability is about $45 million and we're paying it off and the payment is $4 million. And you can see there's different bases with different years left. So we're paying off all the unfunded. It's just, it's time. Mm-hmm. And that's again, so that this city doesn't have to pay $45 million today. Right. Do you, in your experience, have you seen cities that have a policy in place where it gets below, say, 70% of the city is required to kick in. I actually have a utility board, utility pension plan that does that. Once their gasp numbers are below a certain threshold, they increase their contribution over the minimum. Yeah. Then that's really how you can increase the funded ratio immediately. And they have a policy that, and they have a cap too. So it's not unlimited in terms of how much my mail for the- In the city police plan they have that. Once it drops below 70% the city is required by a lot of do they still have that yeah 70% yeah kicking a couple extra million quite a burden on the city oh it is provision especially when times are down yes, and so that's another reason why we smooth because in 2022 Most of the time things rebound it just takes a little bit of time. Yeah, I don't know so overall over the long term It's even though it's a it's a jump this year over the long term You know, there's gonna be years where where decreases quite a bit like in 2021. So that's why we do the smoothing, is so that we're not knee jerking and causing a lot of, we're trying to limit budgetary constraints in terms of how much they can increase their contribution. So this page is actually interesting because you can see historically the plan amendment change we made back in 2012 apparently cut our unfunded liabilities. Yes, I feel five million. was were like major plan changes we made right and we're still we're still You know kind of recognizing that Decreases so it works kind of both ways Because We were spreading that out 30 years. Yes, the recognition of but we now're not, we're doing it going to be doing it at 20 years. 25 years. Well, 25. Yes. Is that just for anything going forward? Yes. Okay. Yes. Interesting. Right. We have any other questions? Do we have a motion? Do we need to approve the report? Is this one more? Is this one the one that we keep? Yeah. The one that's pulled down to the, or is it going to be posted on our webpage? It will. Us one posted. And you'll get a formal copy to the finance director. Okay. We get a formal copy to the finance director. Okay. We get a motion in second. A second motion. Oh, I'm sorry. A motion. Motion. Second. Very good. All in favor, aye. All right. Thank you. Thank you. I think too, and I don't know if you're going to do it, Scott, but the assume grade of return for the year the next years Or maybe you are Generally that's what happens after the valuation Yes, so so we Agree that the the 7.25 assumed rate is appropriate for the short term intermediate term and long term thereafter. The topic we have for we are missing two board members on our plan and it's been going on for quite a while. Would you say it's a year now that we've been short? Yes, we have a short. Yeah, so we need five members to have a full board membership. We've only got three and let you address that topic. This is a sad state, I'm sorry. We're now in the last. Is your mic on? On. Sorry, it's on. Sorry. In the last year and a half, we have had, we have to have four meetings a year, correct? Correct. And so we've had six meetings. Should. All right. And so we've had six meetings. Should. Yeah. About six meetings. Yeah. How long have we been missing members out of those last six meetings? At least four. Four of those meetings have been missing one or two. Correct. So I know Larry resigned. November last year. So that's two meetings. So for four minutes. So how many? Four. So two before that we had four members. Has there been any feedback from the mayor regarding the status of his appointments or any replacements or what's going on? Can you give us an update? Yes, the last time I spoke with the mayor via email, he said he's working on it. However, recently, I've been getting quite a few calls from commission members, saying they're on top of it. They haven't forgotten about us and the mall is rolling and we're almost at that point where we should have someone by the next meeting. So basically no dates, just. I don't have a date right now. I should have a date within the next week or two I would hate to have a total of eight meetings two years worth of meetings where we can't make decisions it makes a plan ineffective and pointless for us to even be here may yeah makes the board ineffective correct so hopefully we can get some sort of resolution by the next meeting. I hope so too. It seems highly likely that that will happen. Based on the conversations I've had in this week only. I'd like to suggest, I just thought of it this afternoon, that Barbara Kramer is no longer a commissioner. She's turned out, but she is a city resident and the mayor could appoint her to be the fifth member on our board. She's had experience sitting on the board. She was very good. Well, I'm respected and we'd enjoy having her back on. So she'd like to reach out to her and see if she's interested. I certainly will. She would make a great fit. She's been here for years so she's very knowledgeable about inner workings of being a trustee. I'll reach out to her. Okay. Good. Do you have a regard in the fiduciary liability policy? Yes. At the last meeting, the board members voted to give the chair the authority to sign off on the new policy. And it was actually lower than before, surprise, surprise in these times. So they didn't require any documentation, they just renewed it. So we are good to go. So we just need a motion to approve Already done Another bill right you just need me to sign something What at a cheaper rate which is good so no hesitation on Do we need a right? Whatever motion need them. Do we need a right to need a more? No. Whatever. Motion second. Hi. The administrators report. Do you have anything? No? Not much. I think when I stepped out, Madison already spoke about the disclosure of forms. And we just addressed the vacancy. I have two more items. The keep in mind that we made a decision last year that trustees attend two FPGA conferences per year. So keep that in mind. We have another one coming up in end of September going into October. So you guys should keep that in mind. If you already had your two, that's it for you for the year. The other thing is we are contracted with this company, the Bruin Group, PBI, that those are debt processing in terms of detecting when our retirees passed away. The cost is currently at $1,000 per year, but we split it between both pension plans at 500 each. Recently they reached out to me with a new program that they have called CERD debt, have called CERDI debt, C-E-I-T-R-T-I-D-E-A-T-H. It's supposedly a lot more efficient and better at detecting, um, yes, you smiling really well. Like trying to say. I know how easy this process is. You all want to hear what their sales is. Yes. So, basically, well, let's get to the cost first. It's $3,000 for the year 1500 each plan. So it's three times the original cost, which was very affordable to begin with. However, their thing is that it's 99.9% more effective than the current affordable program that we have. Personally, I'm just here to tell you about it. I'm not for it. Why? Our plan between both plans, we only, we barely have 500 members. We're not like some cities like Fort Lauderdale or some other cities that have thousands of members. So yes, it would take a lot of work, not a lot of work. It takes some work from me going back to verify these things because they would take that extra step. But is it needed? But this is to identify potentially a retiree that died and you didn't know about it, right? Like our pension check's still going out? Yeah, pension sticks still go out. There might be the occasional somebody died on June 30th and a check went out July 1st. Yeah, I can't. Yeah, maybe a couple months. June 30th and I checked when I was in July 1st. I can't. Yeah, I mean, maybe a couple months. But not like someone, a family member that was fraudulently keeping it because it's direct deposit and you didn't know. Most of the times, if we missed that payment, we might never get it back. So they're saying, yeah, yeah. So they're saying, even with the Social Security checks can happen. You know, they're trying to pitch it to say that given the average retiree in our plan is making more than $1500 a month, by just paying $1500 a month, you already are covering your cost of potentially missing someone, you know. It's $15500 a month, you already are covering your cost of potentially missing someone. You know? It's 1,500 a month. No, retirees. It's 1,500 for the year. Oh, yeah. Okay, for you. So, when I worked at IT, we had a monthly process where we submit the Social Security numbers of every employee to Social Security. And they validated the name and the birth date and the sex of my grades with what they have on their records. And if, you know, sometimes there's mistakes, but it could also be used the same way to identify someone who's passed away, you know? You give them a little file of all Social Security numbers for all your retirees and beneficiaries. It'll come back and tell you if anyone died. That's what we do now. I mean, you'd have to run it every month, but it's free. I mean, we did it anyway, and IT, I don't know if their new payroll system still allows that. Or I would think maybe your pension software, I mean, I don't know if you have the ability to do that. I remember on the Social Security website, you can enroll and be authorized to like be able to submit the file to them. Yeah, I'm just here to tell you, but you know, our plan is too small for that. That's what I think. I think we had thousands of employees then, yeah, but. What did the police department decide to do? Just researches see what other cities are using this new software if it's worth their time. So just look into it. Talk to other city administrators and see if anybody else is using it, if not, then move on. Well, a question for you? I know there was a time when you were having difficult to get an update from HR, how is that going? Are you getting your updates more frequently now, timely basis? Nikki helps out a lot, despite not being her job. She's on top of them for it. Okay. So I get it now, would I get a lot of it through Nikki? Okay, so so it really has improved just has it has to be something. It's a third party that's stepped in voluntarily. So I get it. But not directly. Nikki still works in the police department. Yes, I guess she's their HR over that side. Okay, yeah, you're hearing about things that are general employees from that side of this. Yes. Okay. Yeah, she's our liaison. Mm-hmm. Yeah, so's our liaison. Yeah, so if you want me to take the same approach as we do, did in the police plan reach out to a few administrators, see if they're using it. If you have any nobody, because this morning when I sat here, I asked Madison if she on Bob's offices works with a lot of other cities, and she said she's never heard about it. So that alone tells me I need to ask around some more. Have we ever had this happen? What? Someone passes away and our checks. It happens. It happens. Somebody passes away and we missed. They got paid and they pass away. Yeah, it happens. It happens. Do we recoup? Yeah, I've been fortunate enough to always get the passed away. Yeah, it happened. Do we recoup? Yeah, I've been fortunate enough to always get the money back. Yeah. So let's start that. We have honest, ex family members tied to the retirees, I guess, by this dipping in. We get it back. The back is always able to pull it back. Good. Sounds like it's not an issue we need to. That is not the reason why I said I don't think we need to delve into it right now. More time. Okay, no more time in it. Okay. Anything else? No, that is it for me. I'm going to go on. We got a couple minutes minutes. And in voices. Motion. Go ahead. Second. A little favor. I. I. I. I. I. I. I. I. I. Second All in favor I Look like we have Janice here for public Open discussion. I will call this meeting To be adjourned our next meeting will be on August 13th at a Tuesday Think it is usually it is this one. This was an odd Tuesday. Tuesday, okay, thank you. We are next meeting. Oh, I don't know, we'll adjourn this meeting. Thank you. Thank you. Thank you. Oh, three, two, wow. Yes. Please. Yeah. Bye.