All right. Okay. All right. I'll do uh Oh, that's all right. Good everybody. go ahead and get started. I'll do roll call for uh the police side. Uh Dan Adabasio here. I'm here. Chris Qan, Tommy Blair
here. William Stanley present. Joseph Smith here. All right. Fireside. AJ Anderson present. Steven Lee here. I'm here. Michelle and Dean all present.
All right. Public comment. Okay. All right. Did everybody on the police side have a chance to review the minutes from February 4th and 7th and 27th of March? Yes, sir. Make a motion
to approve. Wow. Second said minutes on the police side. I made the motion. I'll second it. All in favor? I fire side. Motion to accept the minutes
from the last. Motion to accept. Second. All in favor? I motion. I think we only have police. All right. Anybody questions on police side about expense report? Okay. Motion to approve the expenses
paid. So move. I second. All in favor? I I I fire. Any questions on expenses? No questions. Motion to approve.
Second. I second that. All in favor? I approve. Expenses approved. All right, moving on to the Mariner quarterly report. Miss Kerry, welcome to our new facility. Finally, thank you. Still smells good, so that's kind of
fun. high tech has done a awesome job of getting us upfitted. Yes, a great job. Completely agreed. Good afternoon everyone. Good to see you all. Um I will start where we typically do with your quarterly reports and then we'll get into a couple of other items
that I brought with me today. Um I'll also give a little bit more up-to-date market commentary. I know things have changed quite a bit since March 31st. Um so I'll give a little up-to-date commentary too. And I do have the Tommy report so you can see where we were at the end of business day last Friday as
well. Um, but just kind of looking back to where we were March 31st in each of your books. Um, I will go to page three where the market charts start there. And if I get too loud, let me know. I'm kind of trying to move away a little bit from
this. Um, just looking at the top right chart on page three, you can see US equity markets were negative for the quarter. That's probably not going to surprise anyone. You saw and and felt um the news about tariffs coming. We started the discussion with Mexico and
China. Um but then later in the quarter talked about the fact that Liberation Day was coming April 2nd. That would um impact kind of the the broader world in other countries. Um and so you saw US equity markets sell off in response to that. You can see the S&P 500 was down
um a little over 4% all the way down to small cap stocks or the Russell 2000 which was down nine and a half percent. We saw technology pullback pretty considerably. Um so a lot of the Magnificent 7 we've talked a lot about actually gave up some ground with the exception of Meta which was only
slightly negative about a percent and a half. The others were down kind of on the order of about 10%. um interest rates came down, that had something to do with it. But I think the fact that um the AI trade had been pretty hot. Then you saw the Deep Seek kind of coming out of China, their AI
product that took uh a lot less inputs and seems like it might be cheaper to make. That also kind of weighed in on some of those techy related names. Um but that's kind of what was going on in the US. I think the good news for the quarter was that asset allocation worked. And what do I mean by that? your
other segments of the portfolio were actually positive. So in the top right if you move to sort of the middle there in the yellowish orange you can see the MSEI all country index was up a little over 5%. Developed markets in total were up about seven. Um and that had to do
with at least a few different things. One was we saw the dollar weaken and so when we were translating those local currency um returns from overseas markets back to the dollar that was a tailwind. But you also saw the European Central Bank cutting interest rates which was
stimulative. European financials in particular did really well for the quarter. Uh but you also saw Germany kind of saying like look as one of the largest most stable um economies in that region we're not going to be so budget conscious. We're going to throw some dollars at infrastructure and defense spending. And that was very wellreceived
by markets very stimulative. And then in the bottom third there within fixed income or bonds you can see we were up almost 3%. Um, and if we follow kind of our typical yield curve chart on page 10 in your
books on the bottom right there, you can see and we're looking at the yellowish orange line. And then if you follow that down to where the blue line is, that's how rates moved through the quarter. There was a lot of volatility, but we kind of started at the yellowish orange line and ended up at the blue line, which meant rates came
down. that obviously pops up prices within bonds and some of that was um concerns that growth is slowing, inflation's kind of coming under control. Um but again, rates came down and and that was good for the pricing of bonds. Um you started to see sort of
more quality come into favor within bonds. So tips, the inflation protected securities actually did the best for the quarter, but kind of government mortgages led the way as opposed to corporates which have done very well for the last couple of years. Um, so there was a little bit of a kind of a riskoff
environment even within sort of fixed income there. Um, one thing we don't have a chart for, but I will touch on is separate real estate. We're continuing to see small green shoots within that space. Um, for the third quarter in a row, the benchmark was positive about
1%. Seems like maybe valuations, property valuations are sort of flat, but you're getting that rough 4% income there. Um, and so real estate was was marginally positive. Um and you'll see in the index in your book had printed. We didn't have ASB when we printed your books, but actually ASB was even
positive a percent and a half, which was a nice change. So I think again volatile quarter. Some of that volatility has no doubt continued. We had a really a record April. Um but that asset allocation is working and I think that's a good thing after many years of the U equities kind of leading the way. You're
seeing the other pieces of the portfolio pick up the slack in this time of volatility that we've seen. Um any questions on March 31st? And I will give kind of some more up-to-date commentary I think when we finish this. But any questions up to March 31st. What did that quarter close at for our plan? Do you did you cover
that? Uh no, I'm just kind of setting the table, but I will get into that. We were marginally negative to cheat a little bit. Um and it's going to get a little bit better when that ASB value plugs in, but um on the order of down about 1% slightly less than that. So I think all things considered, not not terrible. It's actually a little bit
less than that. Um but I I'll kind of get into that in your books. Um, I think flipping to page in each of your books, we'll go to 14 kind of where our highlevel asset allocation snapshot is. And I want to make sure which book I'm in
here. Okay, this is going to be for fire. I'll start with you. Um, your pension fund was just over 19 million at the end of March. And again, keep in mind this doesn't have ASB, so about $19.01 million. Um, as for your asset allocation, you
are at just about 49% domestic equity. Um, I'm rounding up to 16% international, rounding down slightly to about 18% domestic fixed income or US bonds, about 4 and a.5% in global bonds, about 10 and a half% in real estate, and
then just a little bit of cash less than 2% for you fire. And for police on that same page 14, you were at about $18.6 6 million without ASB to end the quarter. Um very similarly about 49% of your assets were
in domestic equity. About 15 and a half was in international. Um just about 18% was in domestic fixed income. Very similarly about four and a half cent was in global fixed. Just shy of 11% in real estate. And then about a percent and a half in cash as well for you. Um, and
for both of your funds, you can see if we move to page 19 in your books. Um, all things considered, both plans really pretty close to target across all of your asset classes with the exception of real estate as we know
that has kind of pulled back and we're going to have a separate conversation about that today. Um, but all of your other asset classes really nicely in line with your targets. Um, so no rebalancing there. Um, if we receive cash, if we need to raise cash for planned benefits and expenses, we always
pull your most current market value so that we know we're kind of selling where you may be overweight. Um, or if we receive cash, we're adding where you might be underweight. And so that does a nice job of of keeping us um in line with our asset allocation over time. Um, flipping in your books to 22
for performance and I'll start with fire. fire without ASB, you were down about 60 basis points. Your benchmark was down about 90. Um on the fiscal year, you are down about 80 basis points and the benchmark is down a little over 1%,
about a 1.2. Um and for police for your quarter, you are down a very similar level. I'm going to round up to negative 60 basis points. Your index also down 90. You're down about 80 basis points as well. in the fiscal year
policy index down about a 120 um within the individual segments equity for both funds um positive excuse me negative overall down about 190 um for fire and down about 180 for police obviously with US being the largest portion of your
equity we that segment kind of brought us down um we did do better within domestic equity for both ends though fire was down about 4 and a half uh police was down about 430 um the index was down 47 70 and so few different things going on here. um your kind of
larger managers. Winslow did protect you a little bit though that segment was strongly negative in the growth segment down 8% the index was down 10 and so some of their positioning in um kind of those magnificent sevens o overweing some underweing some and seeing kind of
some others do a little bit better did help wins low there in the midcap growth space um touchstone a little bit um under a little bit more than the index about nine and a half versus a about a little over seven for the midcap growth index that fund has continued to
overweight somewhat technology. Also, biotech did really well this quarter. They don't do as much. Biotech was viewed as kind of insulated from sort of trade issues. So, that was a little bit of a drag there. Um, obviously you have the index fund. Uh, Brandy Wine on the value side positive but did trail a
little bit. They're pretty underweight financials which did well, but Vanguard equity income was a nice offset to that which was up almost three. some of their kind of defense co contractor oriented um securities as well as some others really held up a little bit better and
so that segment overall um did slightly better your index um internationally you can tell just by looking at the numbers it was very much a value on quarter overseas as well and so that DFA fund that we put in not that long ago really kind of bolstered both
of the funds returns um that segment international equity up a little north of seven for both of you the index was up about 5.4. On the growthy side, you saw Europacific, you know, marginally positive about two and a half, a little north of two and a half. Um, but the index did about twice that. Um, Novo
Nordisk that kind of associated with some of those weight GLP1 weight loss drugs did pull back a little bit for the quarter. Um, Chinese equities did very well. Europacific spent a little bit underweight there. Um but again then look at DFA international value very heavy in kind of European financials and
some select energy exposures which did very well which kind of carried the day. Um within fixed income overall we were pretty much on the nose there up about 2.8. Um domestic side Dodge and Cox did about a 290. Um, and on the
global side about a 260. Um, and then ASB as I mentioned. Um, when we get that in your books, it'll be a positive about a percent and a half. Um, so I think all things considered, you know, a negative order, but I hope kind of better than you expected and I do think we held up better. Um, which is definitely a good
thing. Um, any questions on 331? Um, I would say things to kind of watch would be Euro Pacific, a very long tenure manager for you. Um, has hit kind of some rough patches here in the last few quarters. We still follow them, but that's one just so that you know, I'm
watching very closely. Um, I would say also Brandy Wine, you know, back to Insumption, they've done well for you, but I think they switch their model maybe a little bit early. Um, and so you've seen some near-term underperformance from them as well. Um, I'm not ready to say make a change, but I do want you to know that those two are
on my radar kind of in the next few quarters. Um, any any questions on 331? Any aspect of of kind of the book or the managers or allocation or anything? Um, okay. So, kind of fast forwarding to current day, April was
obviously a very volatile month. Um, we had liberation day on April 2nd. Markets were expecting that we'd see either a universal flat tariff or reciprocal tariff. We got both. There was a very dramatic sell-off for the first part of April, those kind of first few business
days in April. Then April 9th, you did see Trump kind of walk it back a little bit and put a 90-day reprieve on some of the tariffs, which definitely helped. Since then, you've seen some walking back, some exemptions. Um, and though April was incredibly volatile, it
actually ended down less than 1% the S&P did. Um, so at one point in the middle of the month we were having the worst April we've had since the Great Depression, but actually we recovered quite a bit through the end of the month um on some of those I think concessions and the fact that you know maybe the
president's willing to kind of take a step back a little bit as he saw how much the the initial announcements really royal the markets. Um, I did put in each of your packets, hopefully it's under your quarterly books, what I called the Tommy report, um, to kind of show you that through the end of
business on Friday, um, we've actually recovered pretty nicely on the police side, we've got you at about 18.7 million. Um, and on the fire side, just shy of 19 million. Um, so although we've gone through all of that and have kind of the whiplash to prove it, um, you
know, so far through the beginning of May, we'd made up quite a bit of what we gave away in April, which is really pretty incredible. Um, any questions on the update? You said the um, closing out the quarter of March 31st. You said the total fund
was down about about 60 basis points, but it's going to be a little bit better than that when ASB gets plugged in as being positive. Probably a handful of basis points. Remember, you say compared down as a snapshot, it's probably like a third of the way through the quarter now, but you say how how much has it
gone up since then? Something probably flat to a percent because I think we were down yesterday and I know things were kind of mixed earlier today. Um, so I'd say kind of flat to maybe half a percent. Cool. If I had to guess. Um, and again, changing daily, changing hourly, any sort of tweet development
makes a big difference, but right at this moment in time, I'd say kind of flat to half to 1% kind of range. Um, there are a couple of other items in your packet today from me. Um, one is a real estate debt manager search. So,
this is I had kind of set the table for this at your last meeting as each of the plans is coming on 5% underweight within real estate. Historically, you all had it all in that kind of core position with ASB. Um, but right now is a very attractive environment for real estate
debt. So, what you had with ASB and what we will ultimately replace was real estate equity. The managers might use a little bit of kind of debt, but mostly they pay cash for the properties they buy. They're up and running and they get a coupon. Um, the candidates I want to kind of discuss with you today are are
in the debt space. So they either write loans kind of to real estate operators or they buy kind of debt oriented securities that they think are undervalued. Um and because of where interest rates are, the coupons in this space are really pretty attractive. So Mavic, one of the strategies that I'll
talk to you about, the current yield on their portfolio right now is about 11%. Um and both of them are pretty defensive managers. You'll find Bloomfield does very small pieces of typically kind of three to five million in size deals. Um, Mavic looks for securization for every
loan that they make. They may be secured by, you know, two pieces of land or some some sort of collateralization that gives their them comfort in their ability to be repaid. And so, I wanted to just kind of walk through these with you, kind of get your temperature, see what you think. Um, and maybe if you
like what you hear, um, we could hear from them at the next meeting and you could kind of learn more and ask some questions and see if it's something that you might like. Um, so just kind of jumping into this book, what's on page four, as I mentioned, the two firms um that I will
speak to you today is a firm called Bloomfield Capital out of the Michigan area. Um, and a firm called Mavic Capital out of New York. Um, and you can see the respective funds there on the right that they're raising. For Bloomfield, it's their capital income fund five. Um, for Mavic, it's their
real estate special opportunities fund, too. Um on page five, just a little bit of of the landscape of each of these managers. Um Bloomfield's been around since ' 08. U Mavic since ' 09. Um their founders and their employees though have been investing before that. You'll
notice both of those kind of are right around the great financial crisis. Um but they've got very well-tenured professionals that managed through the GFC kind of in their prior lives. Um they're both entirely employeeowned. Um with Bloomfield, the majority owner is a gentleman named Nicholas Coburn. Um,
with Mavic, it's Vic Uppel who owns 100% of it. Um, these are pretty small, nimble shops, although they're they're both um, SEC registered. So, Bloomfield is about a little over 400 million in total capital. Mavic is about a billion and a half. Um, and as I mentioned, Bloomfield out of Michigan, uh, Mavic
out of New York. Yes. Um, how did you arrive at these two? Does your company have history with any either one? We do. I have clients actually invested in both of these strategies. So they're on our approved list. Um so managers we like quite a
bit. Also looked at managers that would take a million in commitments as well. That's what I would look for for you. So managers we approve uh that we have strong conviction in that also would take the size that we're looking at here. Is this the fund that we're drawing down
out of or is this So So you have a 15% real estate allocation. Right now you're tilting towards 10 to 11 as the values went down and we're getting a little stream of capital from ASB. So my intention is to propose that the 5% that we do more debt oriented and keep the
10% more equity oriented. We're still going to replace ASB, but I'm thinking let's plug this piece in while that runs out. Um and then when we get kind of low enough with ASB, we'll replace that core piece too. probably when we get down to something like 5% in ASB because even a
kind of core equity more real estate manager will want to see a million- dollar commitment as well. Um so Bloomfield as I mentioned very small um position sizes 3 to 5 million um they may make loans they also may buy kind of
existing loans bonds um lines of credit etc. um they're they literally their head of real estate uh worked for a very large shop um kind of in the GFC and she flies out to the properties and actually checks them out. Um they're very hands-on kind of with what they do and they again can do a lot of things. They
may buy securities, they may write their own loans, um etc. Uh Mavic similar, but they'll go a little bit lower. They'll kind of go a little bit further out on the on the risk spectrum. They may make mezzanine loans which kind of sit under senior loans. They may take equity
positions. Most of it's going to be debt, but they do have the ability to pull those levers, which gives them a little bit more juice, little bit higher risk and return. Um, but as I mentioned, you know, they are always looking for owner guarantees for collateralization kind of guarantees in
place before they'll do a deal so that they can make sure they do their best not to lose any capital. Um, differentiators for each of these vehicles. on page seven. Um Bloomfield actually does their own kind of they soup to nuts do everything
in-house. So due diligence kind of ongoing property um management, asset management, um taking the keys, they do all of that inhouse. Um so their management fee, you'll notice, is is high. It's about 1.75%. Um we do like that they have all
of those functions in house. They're not relying on third parties and they're paid kind of in a way that we believe their incentives are aligned. Um, Mavic kind of similar deal. They've got folks on their team that have worked out situations where there's kind of distress. Um, they like rescue financing
kind of opportunities. Um, and we've seen them execute this strategy successfully both in sort of benign markets and in markets right now where we believe there's quite a lot of opportunity as something like two to three um, you know, trillion dollars in in commercial real estate loans are
coming due over the next couple of years and a lot of lenders are no longer lending. it really seems like the ability to kind of cherrypick um exists right now. Um on page eight for both of the shops there are they both have deep teams um but there are four decision makers on each strategy um and again
very comfortable with the backgrounds of all of those decision makers. On page nine um the Bloomfield fund looking to be a little smaller so their target is about 150 million. Mavix is a little higher at a little over 500 million. Um, but I did verify with both
firms. You can see under the commitment, they will take a million dollars. Um, so no worries about the minimum commitments there. Um, again, Bloomfield's a little more core. Mavic has the ability to be a little bit more opportunistic there. And in the target net IRRa column, second
from the right, you can sort of see the Bloomfield a little bit more kind of down the middle. Target returns expected to be 9 to 11%. Mavic's shooting for a 17 because they do have some of those levers. And the fund lives will be a little bit different, too. Um, Bloomfield's fund life will be probably
five to six years. Um, Mavix is going to run probably closer to 10 between their investment period, their harvest period of about five years. Um, and then they've got the ability to do a couple years of extensions as well. Um, so Bloomfield's going to be a little shorter, a little bit more kind of um,
you know, pretty pretty senior, sticking to more senior structures where that Mavic is going to be more opportunistic, but again looking for a higher return profile there. Um, when it comes to terms on 10, um, as I mentioned, Bloomfield, um,
1.75% management fee. Um, they don't start collecting until they've called their capital. They call on what they've collected. So, we're not paying fees before our fund gets invested. Um, and then same for Mavic. Their management fee is one and a half uninvested capital. So, kind of once they've called our dollars. Um, and they both have
preferred returns of 7 and a half% for Bloomfield, eight for Mavic that they have to hit for you net of fees. But then after they do that, they are entitled to a share of the profits, 20% of of the profits um to each firm, which is pretty standard. Um performance over
time on 12, and this is going to be Bloomfield for their three previous series that are kind of similar to what they're doing here. Um you can see they have a s in the box they have a series A um 2018, a series B 2021, series C 20,
uh 23. Um, second from the bottom, the net IRRs on those funds are ranging anywhere from kind of almost 10% to right at that seven and a half. Um, and the most recent fund is running um, close to nine. And again, you know, interest rates are much higher than they
were for kind of series A and a good part of series B as well. So, keep that in mind. Um, a lot of these loans tend to float to sort of the sofur overnight and so interest rates are higher. You can imagine those net IRRa numbers all else equal should be easier to hit.
Um and then Mavic on page 13 um they had kind of a different structure that they invested prior to the opportunistic strategy. So all you see here is is just the first opportunistic strategy which went back to 2020. But they raised a little over 300 million. Um and by the
way, neither one of these managers will use leverage. So they're not going to use any borrowed money. They're just going to take what they get from investors like you. Um they're not going to kind of lever up. Um but that Mavic fund is at about 16.6 six net IRRa and and a total value paid in of about 1.3.
Um, so we do believe both of these managers can give you that kind of 8 to 10 net or north of that depending upon which way you decide to go. And again, I think it's an interesting time for debt. I think there's a lot of capital that's going to need loans and restructuring and I think a good manager is going to be able to write some pretty great
terms. Um, and so I would just say, you know, if you're interested, um, happy to happy to probably video them in, but you can hear from them. They can give you some sample deals. Um, you can ask them tough questions. When do things go sideways? Um, if you like the idea and if you don't, I'll stop talking about
it. What's the proposal real estate deals in this? So, we actually have room right now with our existing investment policy because your target to real estate's 15 and we're at about 10. We're kind of at 10 and a half, 11, but there's room
there to possibly plug this in at your current asset allocation. So, we actually wouldn't we would take from where you're overweight, but we wouldn't have to make changes to your investment policy for this because your target to real estate actually is 15. So, did we put 5%? Yes, that would be my proposal
would be to commit a million dollars. Get rid of the other. Well, we did redeem ASB, so down the road we are going to be replacing that too, but we're a little further kind of down the road for that piece than we would be for this piece, if that makes sense. Um, to me it makes sense to instead of doing
more to core I think that piece is going to rebound but I think the return potential is higher for you here and it gives you a nice pair that way too. Do you have a favorite to go to or split across the two? So we would definitely want to pick one because I think the minimum they would probably take would
be a million. Um, I like them both. I really like the Mavic team. I just think again the current yield on that portfolio is about 11%. Um and and again very careful with their underwriting to kind of overcolateralize and make sure that they're covered. So um I I like
them both a lot and I have exposure more than one to both of those strategies. Um but if you were comfortable with that more flexible structure where they can do kind of mezzanine loans where they're not first in line or even take an equity position if it makes sense like to me
that's that strategy is very compelling. preferences. All else equal. Yes. Yeah. And the management fees slightly lower there, too. I'm But I just think they're really good at what they do. Um, Mavic, one of their
majority investments investors is a guy named Seth Clarin, who's very well known in the hedge fund space, very well respected kind of investor. Um, just a neat team, you know, kind of very accomplished team. And um I think you know the again the environment I think is right for both of these strategies
but if you're going to ask me which one I would choose Mavic um I might be I'm asking this question but as as much pressure I guess interest rates come down and you say that does happen yes kind of within the next six months or year whatever yeah how does it affect this um part of the portfolio? So
coupons may come down um but we've seen kind of even in lower interest rate environments these managers hit 8 to 10. So maybe you go from 11 to 13 to more like 8 to 10, but I still think they'll hit that range. But typically be more volume then because it's a better deal to finance, right? So you have more
volume of transactions they would cover. So or is it just Yeah. So So for a borrower, it's always better when rates go down. The thing is with some of these maturities on, let's say, you know, multifamily or something like that, when their existing loan comes due, they can't they don't really
have a choice. If they can't kind of pay it back, they have to refinance. they're kind of at the a mercy of whatever the environment is. Um, so kind of from a macro standpoint, if rates come down, yeah, the return profile does go lower as well. Um, but there are a lot of borrowers out there that when their loan comes due, they they don't have the
ability to say, "Let's kick this down for 90 days or their lender may not let them." And in a lot of cases, we're seeing that. Um, and it's either give the keys back or refinance at whatever, you know, kind of the the market rate is. Um, so we got two things we're going to go on here. One, to invest the 5%.
Yes. And then two, who we have to do. That's exactly right. Whether you and you don't even you don't have to make that decision today if you don't want to. I am happy to have you hear from them too if you'd like. It's really up to the boards. Um, but I would say yes, either either now or at the next meeting. Dan, you're exactly right. Do
you want to do it at the 5% and then who would you like to to choose? That's right. Where does that million sit right now in in different kind of you're not super overweight anywhere. So what we would probably do is take, you know, in parts
from across your portfolios. Um, as you saw when we looked at your asset allocation, you're maybe a little overweight here and there, whatever, but it's not a ton. There's a little bit in cash. We would probably take proportionately from from your asset allocation. If if no area was overweight, we would take proportionally
from the other asset classes. Carrie, u I have to wonder if they return 11% and they're loaning money with interest rates being what they are today, they would have to charge a really high
rate to do that. Yeah. So, a big part of it is the interest rate and typically there's floors. So what they might say is sofur plus six or seven the secured overnight funding rate that replaced liebore plus six or seven but they'll give a floor too can't go below is that
called secondary lending um did you say secondary lending? Yes. Is it called so they charge a higher rate? It's basically the only capital in town is what it is is if you can't get a loan from a bank or whatever the lender can really write their own terms. So,
it's more risky than a normal loan typically. Yes. What you see particularly from Mavic though is if say you're refinancing a multif family property, we might get a guarantee from you on on your home on other assets. Like that's what Mavic does. They look
for other security guarantees to make sure they get repaid. Uh so they're not suffering losses from making risky loans. They're not. their their kind of since inception loan loss ratio is ex extremely small. Typically you see kind
of 25 basis points to half of a percent over time. Theirs is probably 10 basis points. I think they lost capital on one deal and that is something we can ask them about. You feel pretty strong about recommending Mavic over the other one.
I like their their ability to kind of go into different structures. So, is there any reason that we would want to wait to make that decision rather than make it today? No. If you're comfortable, no. So, first we got to make a decision that
we want to allocate 5%. Yes. So, and fire has to make their own, right? So, I move that we allocate 5% to either one of these later to be investments.
Second. in favor. All in favor? Here we go. The um fireside, I make a motion that we accept the 5% and table the decision until next meeting so I can do a little bit more research on that. And
I'll second that. All in favor? I. And Michelle, if I can facilitate that, connect you with people in any way or anything, let me know. My pleasure. Um, thanks for the time on that. Um, one of the other items I had, and I promise I'm almost done. Um, is just an investment policy review.
Michelle had asked me at the last meeting just sort of to refresh everybody, um, on what is in our investment policy statement. So, I tried to distill that down to just a few slides for you all. Um, and that is in your packet. It's kind of the the orang-ish and blackish cover there. Um because obviously your investment
policies are are pretty much mirrors of each other. Um but just flipping through it as a refresher as to what's in your investment policy. We open up with kind of the purpose of of the policy. We state our long-term objectives noting that we have a very long time horizon as a pension.
Um that we will invest according to the prudent person standard. It just means making very well um wellfounded sort of non-conlicted decisions at a very taking it very seriously. Um and we do state that the board shall uh perform their duty as fiduciaries under Orisa which is
just a very again a very high standard of you know doing things thoughtfully the right way without conflicts seeking the advice of professionals etc. Um in sections two and three of your investment policy statements um we get into what types of assets we're
going to invest in and how much and the ranges. Um and we also spell out the benchmark um that we will use for both your total fund and for each of the segments in the asset classes. So in the benchmark index box which is on the far right you see all the indices that we
use. And what we do to create your total fund benchmark is we weight those indices according to the targets. So your policy index is going to be 50% of the Russell 3000 15% of the MSCI ACUE XUS etc. That's that total fund policy
that we benchmark your fund against. Um we also say our goals are we want to beat that index. We want to rank very highly as compared to our other peers in the pension space. Um obviously we want to beat our actuarial assumption have some positive developments there. Uh we
also list CPI plus three in the policy. I'd say that's kind of a distant fourth though. Um and the asset class benchmarks are also defined as I mentioned. You see those those are in kind of the table that's on that slide on two. Um, we talk about authorized investments on slide three. It's pretty
broad. It basically says, you know, pursuant to Florida statute and the plan ordinance. We can use anything approved by the board, stocks, bonds, other evidence of indebtedness and ownership. Um, by Florida statute, we have this language that we will not be invested in
more than 25% of foreign securities. Um, a couple of the other notable limits, and this this is not exhaustive, but it's sort of some of the more kind of the bigger ones within domestic equity, a 5% issuer limit for any individual equity. Um, a 3% issuer limit for
corporate bonds. Um, and our real estate is limited to 15% of the fund. And there's a few other kind of, you know, stocks must be traded on exchanges and things like that that are contained there as well. We also include pulled language funds. That basically means we acknowledge especially with the sides of
our pension we may not have a separate account manager for equities and for fixed income. We may use mutual funds which both boards do um very widely use mutual funds. We understand we will adopt the prospectus of that um mutual
fund when we use it. Um there's some other limits listed here. Equities will not um exceed 70% of your pensions. Again foreign securities are limited to 25%. that's statutory. Um, we will not make investments in scrutinized companies by Florida statute. Um, and we
will make investment decisions for pecuniary reasons. That's that House Bill 3 we did a couple years ago. Going back up to three, no investments in scrutinized companies. Um because we use mutual funds, my firm actually sends a letter to kind of pulled mutual fund
vehicles every year and says, "Hey, please look at the list of scrutinized comp scrutinized companies and don't invest in them." The vast majority of them don't. We're talking about companies in Iran and Sudan and Cuba and some of those other hot button places. But still, so you know, any poolled
vehicles that our clients have exposure to, we send letters to the mutual fund companies and say, "Please look at this list and make sure you're not in those." So that is still covered for you all. Even though, you know, we use mutual funds, we don't have obviously separate account managers. Um section five on page five,
there's kind of some communication language as to how the individual parties will communicate. So we expect the custodian will give monthly statements. Um any investment manager if we used separate managers would give us quarterly reports would affirm that they comply with statute. Um investment
consultant quarterly reports making sure to give you the net return of your fund. Um the board will meet periodically to review the plan. um and that the board will complete its bi-annual report for that HB3 say you know that we comply
with the pecuniary um considerations that new statute that we have um on six compliance we will use a third party custodian meaning no investment manager will also custodian our assets so there's no kind of pricing issues there um we do have language in your
investment policy that board members will get continuing education we don't kind of give a number or a time frame Um, I would argue some of the discussions we've had like today with kind of debt oriented real estate you could count as education. I definitely would never dissuade anybody though from going to some of the conferences. Um, if
you had um, actually, let me back up one. The board will set the expected rate of return, which we do when you approve your actuarial studies. If you had separate account managers, they would vote proxies for the benefit of your plan. Um, I will only give you managers for pecuniary reasons. Um, and
if I was to do an RFP for you, those managers would have to comply with the statutory language um, that we would only consider pecuniary um, considerations and nothing kind of outside of that. The next two pages are just very specifically the items that we look for
from your managers, kind of how we evaluate how they're doing. Um, not only performance versus the benchmark, but their ranks. Um, are they taking more risk than the benchmark? Has their style changed? Have we seen managers leave? Um, are they changing their process? Is
the SEC involved? Are they losing a lot of money? Um, uh, fee increases, servicing issues, are they selling the firm, does that mean it's going to change dramatically? Um, and then anytime, you know, the the manager doesn't have the kind of majority confidence of the board. None
of this stops you from making a motion on any day to terminate or hire any manager, but these are sort of the guidelines that we kind of give oursel there. Um and then the very last sections just 8 through uh excuse me se no 8 through nine ordinances and review
obviously if our IPS um clashes with city ordinance or Florida statute those will prevail over our IPS um best case scenario you look at it annually at least if to hear you know we're not recommending any changes um and then the IPS actually gets filed with the city
after adoption um and is effective 31 days after that um and then just in summary saying you know looking through your policies, still comfortable with those. Um, not recommending any changes there and happy to answer any questions that you all might have. Good overview. Thank you. Okay. Thank
you. Absolutely. I thought that was a great idea, Michelle. So, thank you. And I have just one more handout that's more of an information item than anything. But Dan, I did not forget that you asked me what a 2% Bitcoin allocation would look like. And it's a short history like we talked about. I
used the Black Rockck eyesshares which tracks the price of Bitcoin. So it's kind of short-term data, but I did run it so you could see it and I have enough for everyone. Um, it's a 2% allocation and I took it from domestic equity, so you know, kind of one risk asset to the other. Uh, so I'll hand that out kind of
as an FYI and a follow-up to your question at the last meeting, too. And so the blue line that you'll see on this page is what it looks like with the 2% Bitcoin and not coming out of the domestic equity. Last but not least, you got it.
So, obviously, Bitcoin's been on quite a tear. You can tell. Um, it does make a difference on the year-to- date basis and on the one-year basis. Uh, about 40 Yeah, about 40 basis points quarter to date. Um, and about 50 basis points on the one-year. Um, I think the thing that
we struggle with on the consulting side is just, you know, the the lack of kind of cash flows and the predictability of cash flows associated with Bitcoin. Um, I think that's why we haven't seen a ton of adoption on the institutional side, although that's kind of slowly starting to change. Um, I still don't have any
funds that have done this. Um, but it's not pos it's possible that, you know, that may change. Um, I don't know, Pedro, have you seen any of your are any of your sort of public fund clients doing anything with Bitcoin? No. No, none. uh none have or or I mean
it's been discussed I think Paul you know to the same extent the the the questions being thrown out but um I mean I I don't want to speak for you but other other consulting firms have have not recommended uh anything in that in that space um so so it's it it really
hasn't gone anywhere um further than further than you know just a discussion or or a comment here and there. Thanks Pedro. I thought so, but I wanted to double check. I know you probably see quite a bit um in the state. So, thank you for that. Um so, you know, with the
returns, I know it's very it's tough, you know, to to not take a look at that. Uh but again, I think our our take is it's so hard to model kind of um what factors, you know, make Bitcoin do well when there's no sort of associated cash flows um that you can predict. It's all
really just kind of price movement there. Um, so happy to revisit this or answer any questions that you all might have. Um, but we just haven't done a ton in that space so far for those reasons. So, if I understand correctly, the total fund loss for the quarter 49% if it had
just 2% of it in Bitcoin, that loss would only be and the one year loss would be. So, the one year gain is 2.84 4 with 2% Bitcoin for just that quarter. The one year
about 40 basis points on the quarter and about 50 basis points on the year. It's pretty crazy. Yeah. And by the way, this figure the actually this is a good way to answer leam the 50 basis points ASB was in by then. So that kind of gives you an idea of the
difference that that made. That's why there's a small discrepancy between what was in your book and here. We had ASB probably a day or so ago. So that is actually in that number. How but Bitcoin has a component on how do you enter and exit that? So there are
mutual funds now that track the spot price and so that's essentially what I think institutional investors are doing if they don't want to buy and maintain a wallet and actually buy coin. Um they're using some of these spot ETFs um that move based on the price of of Bitcoin.
That's how I think a lot of entities are are sort of getting that exposure. go out and buy our own. Yeah, we got to manage. Yeah, you don't want to deal with the wallet and the currency storage and all that kind of stuff. I think so.
Yeah. Interesting. It is. I mean, it really is interesting and it's certainly evolving pretty quickly. Certainly. The blue line basically says if we had Bitcoin at the same exact and I took it from domestic equity. That's right. Kind of one risk asset to the other. Yeah.
The 2% would have made yeah a 50 basis point difference on a one-year basis. I would think this impressive let's do it another quarter. Sure. See where we are next quarter. Maybe we'll do it for a
year and see where we are. We can definitely keep an eye on this situation. To your point, Dan, I'm happy to make some regular updates on that. We can check in here and there about that. Absolutely. And that concludes my lengthy presentation. So, thank you for the time, but I hope it was good
discussion. So, thank you for the time. Thank you. Thank you. Appreciate you driving out here and giving us another great presentation. Oh, my pleasure. Thank you. Thank you. All right. Pedro, we're still there.
Yes. Uh, still here. All right. Sure. Sure. Um, so, uh, nothing, uh, nothing actionable on my part today, which, uh, which I'm sure is is welcome, use, uh, just wanted to go over a couple things, just housekeeping, moreformational than anything else. But, um, first, I did
want to just bring your attention, uh, to my, uh, my yearly, uh, public advisory, uh, that your financial disclosure forms, those form ones, um, that you love completing each year, they are due July 1st. So, um, just wanted to put that on your radar. We do have some
time. Uh, but since we're not meeting again until August. Uh, just wanted to take this opportunity to to remind you that that those were coming up. Uh, and that you can go ahead and take care of that, you know, today, tomorrow, now. Um, recall just like last year, you're
doing you're filing these now electronically uh through the ethics portal. Uh and so you know the same uh login credentials that you had last year would work. Uh hopefully it'll be a little bit easier this time as the uh the second go around. But obviously if
you have any questions or you need anything just you know please let me Okay. Uh and then second uh just wanted to discuss uh or go over the Florida legislative session. So, as you guys are likely aware, uh Florida legislative session was supposed to have ended last
Friday on May 2nd. Uh however, uh the the term was extended uh through June. Uh and so they're going to have a break or a recess now and reconvene back uh I believe it's on the 12th of May. Uh and then they'll go for another two and a
half weeks or so. the I think the the the the primary purpose of the extended sess session is is really to deal with the budget. Uh however, obviously, you know, amendments could come up and could be taken uh up by the House or the or the Senate andor the Senate. So, we'll
uh we'll keep you posted. Um but the expectation is that there won't be any changes uh that would affect uh local law plans such as ours uh or uh the Florida retirement system. There had been two bills filed that could have potentially affected the uh local law
plans. Uh and there was one bill filed that that we've discussed, you know, the last year or two. Uh that would have amended the Florida retirement system to add back a cola. Uh but none of them seem likely to go anywhere. Uh the first
two bills that I mentioned uh really were were kind of dead on arrival. They they they weren't even assigned to a committee and never made it to a committee agenda. Um, and the F FRS bill, uh, just really hasn't made much traction. And so I I just I don't know
there's going to be enough time to kind of go through everything and get it for a vote. But, um, nonetheless, uh, whenever session does end, we'll we'll have a final report for you guys detailing, uh, did pass and and and any impacts that they may, uh, they may have
on our plan. Other than that, nothing uh nothing else to report on from my end. All right, Pedro, I appreciate it. Okay, yes, absolutely. All right, moving on to Gan. Uh, is everybody good with August
5th for the next quarterly meeting? No issues, Dean issues? All right. Uh, make a motion to adjurnn. Second. All right, I
Motion to adjurnn. Motion. Motion. Second. Second. Second. All in favor? I just get everybody real quick. So, uh, I was talking to