And we have a determination of a quorum. Uh this time we'll open it up for public comments. Any public comments? No. All right. We'll move on to new business. Uh first one we have the actual plan expenses as of September 30th, 2025.
>> Okay. on the tablet is just going to be page two. So the actual expenses um the left side is the budgeted amount for uh the 2024 2025 uh fiscal year and then the right side is what we actually spent. So
obviously the the issue is that we don't want to be over our budget. So we were under it. Um the budget was 140, we came in at 123. Some of those items that will be tweaked obviously for the next time. Certain years you're going to have more expenses like the actuary. We had
several um several cost studies and things that we did during that year. U the administrator we did have a fee increase which we hadn't budgeted for the year before. So we'll tweak some of those things. Um but in in general we were pretty close on our budget. The overall
uh you know only $17,000 difference is is pretty on point. So I can discuss any issues you have with that. Any questions? Otherwise, I'll be looking for a motion to approve uh the actual expenses as presented.
>> Okay. Motion to approve. >> Second >> and second. >> All in favor? >> I. All right. Moving on to uh trustee terms. Uh my term, my member elected expires uh March 1st. you like to serve
again? >> Sure. Do we need to do any kind of vote or anything? >> All I'm going to do is we will get um the uh notice together. Nomination notice will be sent out to all the members, all the, you know, uh police and fire. Um and then if nobody runs against you, you'll automatically um
continue to serve. If somebody does run against you, there'll be a runoff. We'll have all this done before the next meeting. >> Sure. >> Yep. That sounds great. Do we need a motion for that? >> Uh no. >> All right. And then the uh moving on to the approval of minutes from our last uh
October 28th meeting 2025. >> And we just need a motion to approve those minutes. >> Yes. Motion to approve. >> Okay. >> Second. >> All right. All in favor? I I >> All right. Perfect. Moving on. I don't see anything listed here under old
business. And for our reports, uh, being, uh, Doug Loen is running a little bit late, uh, Brad, do you mind bumping up, uh, for Mariner Institutional and, uh, giving us your quarterly report and the, uh, real estate and plan history presentation?
>> Absolutely. >> Good afternoon, everyone. So try to get to the table. Thank you. So the cover of the quarterly report starts on page 48 of the tablet if you're there. If not, it's the hard copy
that I sent out. So I have a few things for you. One, our our, you know, quarterly report, uh, fourth quarter of the calendar year, first fiscal quarter that we'll go through. Um, right after our meeting last quarter, um, there was
an article in the Wall Street Journal that I shared with you all. I I gave it to to Troy to share with you all. Um, about our real estate investment um, uh, particularly with Intercontinental. You know, we have two. They didn't mention the principal one. Um well, we've been doing a lot of discussion obviously over
the last couple years on this, right? And uh you know, one of the things that came out when we had the extended discussion last quarter was that no one on the board was around when this investment was made in 2017. So I put together an a presentation that just
lists out all the actions with the real estate since we started it. You know, I got all the historical minutes to give you a historical perspective of okay, what was the decision-m like of the board back then, why did we put it in, what was going on at that time, what our
experience has been, and then what are some of the reasons that we kind of, you know, uh, suggested it, why did we invest in it, how it ended up doing, and then also some of the reasons, you know, we've had discussions about private real estate versus REIT. So, I wanted to uh
provide you some perspective on that. So, we'll get into that as well. Um, uh, be happy to, you know, I've had some conversations with, um, after the the the last meeting, uh, shared this with, um, uh, Trusty Van Deeventor and, um,
had some, uh, feedback from him that was incorporated here. So, I appreciate that. Um, but I thought it would be great discussion for the board just to kind of finalize this. Um, it's becoming an increasingly smaller part of our pension, right? We just put in a large redemption. We actually received all of
the money that we asked from principal a few weeks after we asked for it because they cleared out their their redemption queue. Um so um but in any case and also if you remember last quarter I brought some global bond managers for you guys to consider. Um
and then there was some feedback of okay let's take a step back. So, I found our educational primer on global bonds um to go through, you know, what it is, how it might, you know, add to the pension so we can have a more informed discussion about that if you choose to. I know that
you have Doug coming in as well. So, maybe I'll I'll check your temperature when uh we get to that part to see if you want to do that this meeting or or hold off on that. So, sound good. >> All right. So, let's go to the quarterly. Um, it was a decent quarter
for the pension. Um, after two kind of really strong quarters in a row, it was, I guess, more measured. Um, but positive. If you flip to, uh, page two and three of the hard copy and, um, you can just focus on 51 in the tablet if
you're there. You can see on the upper right hand side what happened in the quarter. You know, 2.7% for the S&P 500. Um, international stocks continue to do really well. Uh, so they were up 5% for
the quarter. Bonds kind of just eaked out. It was fairly tamed from a a rate perspective. So about 1.1% in red in the US aggregate bond index. And then you can see for the year, so about 18% return for the S&P 500. So three tremendous years in a row. To
remind you, 2023, 2024 were both 20 plus% return years. We didn't quite get to the 20% mark, but 18% is well above average. So, it's really been a strong run for for the S&P 500 here. Um, one of the things we haven't seen in a while is on the lower right hand side, those
returns for international equity. You know, 32 plus percent for international stocks last year. Um, you know, both the stocks of oil, but also the currencies, right? The dollar weakened. We kind of talked about this in the past. um uh and uh that really
helped uh you know uh kind of amplify the returns for US dollars and international assets last year. You know in the quarter um you know we had three uh interest rate uh cuts by the Federal Reserve. Uh they
meet today and tomorrow. We'll see what they do. It doesn't the the futures markets aren't pricing in uh them taking any action, but um I think it's I think I heard it was a 40% likelihood. So, we'll see what happens there. Um
uh economy continues to grow. I think one of the things I find interesting is you you I don't know if you've heard this term, but they have the misery index, right? It's you add inflation plus unemployment and it's they call it the misery index, right? you don't if both of them are high it's not good for
people right so right now you know inflation's at 2.7% unemployment's at 4.4 four. Um that so that 7.1 figure is actually in the 25th percentile of the over the last 50
years. So 75% of the time that number has been higher. So things have been worse. The University of Michigan puts out a consumer confidence survey. Um, and that number and I think it's 52 point something and I forget I can get the
actual number but that's in the 95th percentile meaning that 90 or yes 95% of the time that figure has been higher. So there's been more consumer confidence even though things are relatively good from an economic
perspective and certainly from a market perspective. Right. We've had three incredible years in a row. I think that kind of speaks to one there's, you know, inequality. You know they they a lot of economists talk about the economy being K-shaped and you know the the halves are doing really really good particularly
with ice asset prices but the have knots are kind of struggling because while inflation is 2.7% if you think about from a aggregate perspective prices are 20 plus% higher for that basket of goods versus precoid times before inflation
started rearing and then you have obviously social media political all that stuff um uh But on the whole I think you know um things seem solid from a growth perspective. Things seem solid from a corporate earnings perspective.
One of the things last year um uh that I saw was you know about 80% of the return of the S&P 500 was driven by earnings growth as opposed to multiple expansion which is kind of a healthy thing. If you look at the two years before
particularly 2023 it was the opposite. 80% of the return came from the market valuing earnings more as opposed to the actual earnings growing. So I think that that's a that's a positive sign. You have some good things going on in terms of taxes. So lower taxes. Americans
should be getting uh a much larger tax rebate this year that should help spend uh uh boost consumer spending potentially. Uh but then there's obviously a lot of Greenland. There's a lot of geopolitical issues. You know, we still have wars, all of this stuff. So,
um, you know, I'm thankful that I don't have to time, you know, tactical day-to-day moves in the market, right? We're managing a pension. We're built to withstand whatever happens. The the the um uh the environment seems decent, but
there's always potholes. You know, one of the things is the second year of a polit of a presidential administration historically has been the lowest returning year of the four. uh well well below average. I think you know there's some you know midterms and all that stuff that's coming up. So there's a lot
of stuff out there. I think you know we've been good with um uh being consistent and disciplined over time um uh and sticking to uh a long-term focus which we'll you know I'll certainly be a
proponent of continuing to do. Any questions about uh what's been going on generally speaking? Um if you flip to page four, just one thing I wanted to highlight because this is um you know it's early this quarter
obviously but it's it's continued this quarter as we you know we had a lot of talk about the magnificent seven and and growth stocks doing so much better than value stocks. Had a little bit of a breather for for the those magn magnificent seven stocks in the quarter. You can see in blue are the value
indices and in red are the growth indices. So, you know, small win for value last quarter and that's continued this quarter as well. Small win for value stocks as the kind of S&P 493 have done a little bit better than those Magnus and seven. So, we'll just
highlight that as well. Um, let's go to page. Uh, go to page 14 of the hard copy and that is 62 >> 62 of the tablet.
>> This shows you uh side by side left hand side is September 30th, right hand side is December 31st. So we went from 216 million to 21.44. And you can see the allocation below. Notice, you know, the real estate went
from 7.4 4 down to 5.3 as we got some of the proceeds from um uh you know our requested redemptions in note the uh the cash was a little high um um as we received those those funds now
it's a little bit lower it's it's more it's under 700,000 which is still above our target but I just wanted to know I was going to potentially make a recommendation when I saw that uh but I reached out to Troy And it sounds like we have a few lumpsum distributions
coming down the pike over the last next couple months. Um, which we'll have several hundred,000 being requested from drop or or members and and uh so I think it's prudent just to keep that a little bit above average so that we have cash available to pay those out.
If you flip to page 17 of the hard copy 65. This shows you our our current asset allocation percentages relative to our IPS targets. So we're within policy limits for all
asset classes. So we're not outside of policy. um maintain, you know, a little bit of an overweight to domestic equity and underweight obviously now to real estate. Now, um I'm not recommending a rebalance uh this quarter. Um I think
we're okay for now and we'll reevaluate that next quarter. And then next page 18 shows you all the activity. So you can see uh and that transfers we received that money from the real estate uh manager. So we got all 400,000
of uh the outstanding queue that we put in um uh in I guess in October last year. So we got that by the end of the year. Uh >> what was the rational behind that
discuss that principle? No, they just I don't think they they don't have as much in their queue. They they you know, as as you just to remind the board, right, we put back three years ago now, we asked for 150,000 from both of them. Um principal was much had much more
liquidity in their portfolio than Intercontinental. So, we had already received all that money. So I don't think they had much in their their uh redemption queue where they were able to just use the existing fund cash flows um to to pay out the the little bit was there. Um Intercontinental little bit
different story. I think they have about a 15% of their their their um NAV is in their their redemption queue and we kind of talked about you know their portfolio a little bit more in in office and and I think some of the the issues there that
they've had with you know they've only been paying out 5 to 7% of their redemption queue. Now they say uh their plan for this year is they believe they're going to be having they'll have more liquidity um as uh you know based upon the markets etc and they they
anticipate spending out more but we'll see um if that's actually the case um at least that's kind of what they stated in their letter that their plan is to to try to increase those amounts as you know the the real estate markets have kind of stabilized more over the last
year or so. So for uh principal we don't have any any further requests from them at this point. Truly. >> Okay. And then for intercontinental how much is outstanding? >> Uh we know that >> I'd have to go look. So, we asked for an additional 350
>> okay,000 >> um and then I think that we had um let's say we had somewhere between 50 and $75,000 outstanding of the original um
um 150 that we asked for a couple years ago. I think we got about you know between half and twothirds of that back so far. And anything in addition to that we're still waiting on. >> Yeah. So the 350 plus let's say 50 they owe us 400,000. >> Okay.
>> Yeah. Is any other questions on that? >> Not right now for me. Thanks. >> All right. So, uh you can see 219,000 and some change in contributions from uh members and the town. We paid out 271250
in benefits, about $6,000 in investment management fees and $36,400 in other expenses and then um you know uh income and dividends of 400,000. So that capital appreciation of of negative
26,000 um 21.44 the end of the year. Then page 20. So for the quarter we were up net of fees 1.74 was a little bit behind the
policy index in line 1.9. We don't uh when we ran this we didn't have the universe numbers but we got that subsequently I think the uh the median that I saw uh was 1.95 so a little bit under this quarter um largely due to our
equities and and specific the MFS growth fund down u 7% versus up one uh so underperformed again you know it's been a tough go here you know one of the things Um,
you know, I have a couple thoughts here. Uh, one, just for information, last quarter and last year was very, very hard for active managers. I saw Jeffrey's report that said it was the worst year for active managers in history as you had these kind of sharp
lowquality rallies, particularly post uh um liberation day, right? Um, you know, that being said, it's hard to keep justifying having this fund when it keeps underperforming and we're paying an active management fee, right? So, I understand conceptually, okay, you know,
it was hard for active managers to win last year. Uh, but at a certain point, and you can see over the long term, you know, uh, five years are about average, a little bit below average, but well under the index. So, you know,
I can't sit here and have very strong conviction that, you know, the the future is going to be better than the past here. Um, so there there's two things that I I think you should consider. One is um terminating that fund and just putting
the the Vanguard growth index VIG AX in there. You get cheap market exposure uh to to growth funds. you know downside there is that you know that's very concentrated index now uh uh you know the the top five holdings is 50 plus
percent but it's been incredibly hard over you know not just now if you remember a few years ago I did the um kind of educational piece on indexing active versus passive when we made the the large shift to put most of our money
into uh indexing and and not just in recent time but over it's very hard for the growth index managers to beat the the growth uh um uh index. So, so that's one thought. So, where we can have, you know, the core of our money, 80% of our
act our our domestic equity would be in the S&P 500 index fund and then you would have some money into a value index fund and some in a growth index fund. Um where you can kind of maybe potentially take tactical bets if you had a strong feeling one way or the other. The other
thing is that we can terminate Vanguard value index and terminate MFS growth and just put it all into Fidelity 500 index fund where uh that's what our policy indexes and we kind of just ride with that going forward. Um I can see an
argument for for either of them. I wanted to bring it up to the board for for discussion but I do think at this time you know it's hard to justify keeping that MFS growth given the continued underperformance that that we're seeing with that one. Why don't Why don't we come back to
that? Okay. Just like you want to go through this, finish this. >> Sounds good. >> Okay. >> Page 21. >> Yeah. Let's see the full picture, I guess. Right. >> So, page 21 just goes into our fixed income.
See, uh, Manny Pier was, you know, in line with the index up about 1%. Um, Aristotle and Py did a little bit better at 1.7 and 1.4 all in line with expectations.
Page 22 gets the performance of our real estate intercontinental um you know slightly negative. You can see the uh we don't we didn't at the time of of publishing we didn't have the index
uh data here. So that's zero. We'll add that when uh when that uh information uh gets finalized with the principal fund up 1%. Both of them you had slight capital depreciation in the valuation for uh intercontinental principal
basically flat from a capital um um appreciation depreciation valuation perspective and you kind of just got that income fund. That's what we've been doing over the last four quarters. you know, we had this 20 plus percent decline in in those commercial real
estate markets over the last, you know, four or five quarters or so. It's been pretty flat for valuations and you just been kind of collecting the coupon for the most part. >> So, just to dig into that just real quickly, um your one-year number, you
have the you have the um benchmark there, right? So that's not going to include the that that's carrying a zero for last quarter. >> Okay. >> Does that make sense? >> Right. But but the top but the top line the one-year number is is actually the
um so that ends that ends last quarter. Not not it's not current then. Right. >> Right. Right. So >> you have a lag effect there. >> Yeah. Yeah. Yes. Yes sir. >> It might be good if you footnote that in the future.
>> Okay. Right. So just because we're going to be coming around to this later um the inception the inception performance on a lagged basis this is that would be lagged also. Right. But from inception um >> it'll just be carrying a 0% return for
the last quarter. Right. >> Correct. >> Right. But it's 276 versus for intercontinental versus the bench which is 321 and principles 355 versus 342. Right. >> Correct. >> Yeah. Okay. And the one year. So the one-year number
you're showing for principal there is actually current is a current number not for the bench but for the for the number. >> So the principal and intercontinental both we had quarterly returns. So that those are the numbers for the one year and and all of those numbers will be is
not missing the last quarter. The only thing that's missing is the nyrief is holding last quarter as it year to zero. >> So those really aren't comparable numbers. You got apples and oranges mixed in there. >> Yeah. I would definitely footnote that. That's >> misleading.
>> You're better off looking at the bonded legs. >> Not always comparison. I'll make sure that we have that up there. What was the um because we don't have an
attribution. What was a problem with MFS last year? I think we discussed this the last meeting, didn't we? >> Yeah. Yeah. >> They had they had an underallocation of something a lot. >> Yeah. So, you know, if you looked at their overweight >> um I think they were underweight Apple
of the big ones, right? >> Um and they were overweight Amazon and and they were a little bit underweight Alphabet. particularly last quarter, Alphabet was like the only Magnificent 7 that was did well. Um, so that that that hurt them. So, it was it was it was
largely driven by that. They have exposure to all those names, but like for for instance, Apple, um, I think they're halfway. I think the index is at 12 or 13 and I think they have about a 6% waiting or so the last time I looked. Um, >> yeah. I mean, I don't I mean,
personally, I don't really have any skin in that game. I mean, I would I would say we just default to the, you know, to the bench. I would like to see us remain active, you know, just a slight active, you know, but I mean, we're basically
fully benched now at like 3/4. So, um, 3/4 to 80%. But, I mean, I think we I think we keep, you know, one foot in the value index and one foot in the growth index. And but we have we haven't had much luck, you know, with we made a good
decision to go to to index benching, you know, a long time ago. U I think we haven't had much luck with our growth managers. >> Yeah. >> Yeah. >> Yeah. Yeah. >> Yeah. Yeah. No one has. You can see what the where they rank in the universe,
right? It's just it's been the top decile performer over basically every time period. Yeah. >> Yeah. I mean, I think I think we just go like to the default there. That would be unless you guys I mean the the what are
we paying MFS? What's the what's the >> I think it's.5 >> what's the fee like >> 049 it's on page 27 >> 50 and what's what's the Vanguard like 11 or something? >> Let's see. >> I think it's less than that. I think it's eight but let me double check what
BGX is. Is that cheaper than the um than IWF, you know, which is the um I think State Street >> Russell 1000 >> 05% for um VIG AX, which is the Vanguard Growth Index.
>> And do they use Russell? Are they defaulting to Russell 1000 or they use >> Yeah, I think it's that's um total growth. So that's more of a >> um total growth as opposed to the Russell 1000 growth, >> right? What does that mean? What is what benchmark are they using?
Cuz if that were the case, I don't think we would have to um consider changing the benchmark. >> So they So Vanguard doesn't like to license from >> Nobody does. They charge too much money. >> So they're doing the crisp US large cap
growth index as the um as the the prospective index that they're basing it off of now. >> What's the correlation between those two? I mean, it's going to be really high, but there's going to be sometimes where there's slight differences, right? >> Um I I don't have I'd have to run the data for you if you >> I mean, my firm, we're not paying we're
not paying Russell anymore. I still use Russell, but Russell, but our firm doesn't because Russell's charging so much money now. So So I just I pick it up on a daily basis off the IWF, you know, which is the Russell 1000 growth
ETF. I wonder what that what does that cost versus um >> so I just I just uh so VRGWX which is the Vanguard Russell 1000 growth index fund Ishare >> right >> um
>> not share >> we won't be able to get access to that actually because that's a >> institutional share >> we maybe we can leverage that's that's six basis points let's see what the ETF is so I have VG G as the Vanguard Russell
1000 growth ETF and that expense ratio is 0 that's seven basis points 07% >> and that's versus the 10,00 growth. >> Yeah. >> Yeah. So I would say for right now just default to that. How much what what's
the assets in that you know >> like how much are they're managing in that ETF? >> Yeah, >> I don't >> that's just just for an indication of liquidity. >> Yeah, I would imagine. Just looking up my shares while you're
doing that. >> Eyesshar's fees are 18. I can't see on the the I' I'd have to dig into Morning Star to get you what's in there. >> Well, >> is there a c I'm curious. Is there a reason that you prefer the ETFs over the
institutional mutual funds? >> No, I just I'm just No, I would say no. I'm looking at but I'm just comparing. So, the total expense ratio of the of the uh eyeshare is 18 basis points.
So the the Vanguard comparable what's is that was that the management fee you gave us at seven basis points or >> yeah for VG which is the Vanguard Russell 1000 growth ETF that's >> the full expense ratio >> that's that's yeah that's the full it's
07 so it's cheaper than the iShares >> yes >> and then the the V and then but if you go into the Vanguard Russell 1000 growth index you get you Save one basis point >> if we can get into it. Right. >> If we can get into it and then B A GIX
is five and you save two basis points so you because you don't have to pay for the >> Russell licensing. >> Cheaper is better. >> All things being the same, right? >> I like VIX. It tracks the growth index. um it's the one I use in my clients because it's the cheapest and I don't
see much of a difference between um you know the returns for that relative to the Russell 1000 you know growth. Um so I've always defaulted to VIGX because it's the cheapest and you're getting the same structural exposures there. I I
mean since we haven't made a comparison I mean I'm just going to say like so um I mean at my own firm where you you know they're using the Bloomberg growth index but actually over time there's a lot of tracking error versus the Russell 1000
growth. So so if you I think that almost makes us technically have to go make an evaluation of that and we probably have to get back into guidelines and everything and and all. So, I guess I would I would motion that we just take, you know, the Russell 1000
comparable, the cheaper institutional share, the Vanguard share, and just default to that. >> Okay. >> Right. I mean, we're still and we're going to be saving 40 what 41 42 basis points in fee there. So,
>> and and you're talking about for replacing MFS growth. >> Yeah. and then >> just get the monkey off our back because we've been we've been fighting this battle now for like three years, you know, with these guys. >> Should we excuse me, gentlemen, I'm sorry, account manager. We're recording this public meeting and it's also being
live streamed to the greatest extent possible. When you speak, if you could bring the microphone forward and see the end of the microphone, it's just critical because we're listening to it and we're having a lot of trouble hearing it. So, uh, if you're talking, just please make sure the green's on and lean forward and and get into it. And if
not, that's fine. Um, we were just having trouble uh hearing it remotely. So, thank you. I apologize for interruption. Sorry about that. >> Nope, not a problem. So, I was just thinking that if we're going to be making that change, should we rebalance the total the total equity or
at least be aware what the allocations are? Because basically what it would be would be approximately 2/3 S&P 500 and then 16 well 16% so uh in growth and 16% in value. So the growth value
>> they're about equal >> allocation about equal. I mean or equal them up or just I don't know if we need to worry about that. It's a couple hundred,000 differential. >> I don't think so. >> I don't think so. Okay. I mean I don't know if that's true. >> And I looked and I looked at the um Brad
that last year's end of year December 24 commitment to equity was about where we finished this year. So just in terms of total allocation because we didn't kind of hit on that. I think um
we were around 65 a.5%. Yeah. December December 24 we were 65 7% in total equity allocation as a percentage of total plan assets and
we finished uh December 25 at 65 and a quarter. So we were actually net down. >> Mhm. >> So I mean I I don't think we need to propose Are you not proposing a change in allocation of equity, are you? >> No. No. If we're going to keep with
three funds and we want to keep a value fund and a growth fund and the core fund, then I'm not Yeah. I think we're like when I look at the, you know, the allocations, you know, I think we're, you know, you just did the math, right? That's kind of >> where we've been and I don't have an
issue with that. We haven't gotten too far over our skis in either growth or value to need to rebalance that at this point. >> So, going back, everybody ready to make a I'll I'll make a I'll make a motion that we just move the MFS money to the
Vanguard Institutional Large cap growth um Russell 1000 comparable if we can get into it. Otherwise, we go into the the other share, Brad, which was the seven basis point share as >> that would be the ETF,
>> right? >> V NG, right? >> Um, >> is that the Russell 1000 growth as well? >> Yes. >> Yeah. Okay, good. So, >> that's the motion then. >> And what was it? What was um the symbol for the first one?
>> Yeah. So that's uh so the the institutional mutual fund if we get into it is VRGWX >> VRGWX >> that's the Vanguard Russell 1000 growth index fund institutional share >> selling MFG growth R six and putting all
into the RGWX >> and the backup was again what the uh alternative >> the ETF >> and if we're not able to get into that the ETF is V O N G.
>> I'll second that motion. >> Bon. >> All in favor? >> Any discuss? >> You want more discussion? I'm sorry. >> I'm sorry. >> Uh, so so you're content in jettisoning the active management
uh structure. >> So, so just to be clear, right, this can always come back. >> True. No, you can always none of these are actively managed, right? So we're either >> Yeah, we have three index funds now. One the S&P 500 core.
>> One would be a growth index fund and one that we have already is the value index fund. Right. So just so everyone's clear. We're not we're getting out of act the active management business for our domestic >> Well, that's what Fred is asking. Fred's confirming that we are >> Yeah, exactly. >> bitting a due to active management.
>> Yeah. I'm voting against my entire career. So So am I. That's why >> I'm waving the I'm waving the wave side getting the monkey off my back. >> Or active manager. >> I've been on both sides of this table. >> Active managers bad or did we just
>> But I was outperforming. >> Choose the bad actor. >> Always. >> Yeah. >> Is it active managers or is our selection of active managers? >> Our selection. >> It's hard to do. It's hard to do. >> Exactly. >> It's hard to do.
>> I don't I mean it's hard to make a case. So I think the motion is still active. Um I mean right? >> Yeah. Yeah. Definitely. Yeah. >> Any more discussion or I guess we have we have the motion. >> We have the uh second.
>> Um no more discussion here. All right. All in favor? >> I >> I Okay. >> All right. Any other questions on the quarterly report? No. Yeah. Okay. Sure.
>> All right. Um All right. So, let's go to the real estate discussion. Um, so this is on a smaller presentation for the handout. It says Indian River Shores PSO Fire Private Real Estate
Review and it's 122 of your of your tablet. If you're on there, I I have All right. So, flip to page one. This is just the timeline uh and goes through all of the actions taken with this
starting um in January of 2017. Um so, at that meeting on January 31st, the the pension board at the time um reviewed an asset allocation study. We were retained I think at the end of uh
in December of 2016 when I looked at the the original agreement um to be the investment adviser. So we did an asset allocation study kind of reviewing what are the assumptions where we're at where where where things should be right. Um and we've done this uh it's been a
couple years but we've done it periodically for you all um uh since then as well. Um but you know among other things discussed in that is that basically at the time we kind of said you know
observed you know fixed income decent returns historically but given where interest rates were at the time going to be a struggle for fixed income in the future and and then um because of of you know your best guess for what you're going to get out of fixed income is your current yield in
the portfolio. And you can see the chart. I I kind of ran it here back in in 2017. Um this is the five-year Treasury bond. Um but you can see, you know, when when the decision made, you know, the 5-year was was basically under
2% for that entire time period for most of the couple years before that. Um and then we you know highlighted private real estate as you know given um the uh mostly income oriented return structure
as a as an alternative for potential consideration um uh for a you know a yield a yielding type of of uh fixed income alternative right so um c
can I say one thing there. I think some context would be helpful there. Now, we've changed our allocation guidelines since I've been on this, you know, in this board. Um, and we've kind of upped the range uh for equities, but at the at
the time at that time there was a lower assumed return, I think, but the 10-year and the 5year were, as you said, you know, 2% arena. So, so fix fixed income was not within an intermediate term
maturity and a long-term was not yielding was not even making you know you were you know after inflation of course we had low inflation then but the assumed the assumed return it made complex math uh Brad I think if you could give some context to how probably
I'm assuming that the board was that was what they were considering at that time. >> Yeah. So I don't have the numbers in front of me but right you know when you do an asset allocation you kind of plug in okay here's your return assumption and that time you're correct right we're at 6.25 25 at that point. But still, you
know, when you have 60% equities and and when you're using, you know, depending upon what your assumptions are that you're putting into the the model, you know, you're going to look at, you know, the return expectation for fixed income at that time over a 10-year period is
going to be in line with what the 10-year Treasury was was at when you're right. Right. It was around, you know, probably a little bit higher than the 5year, but still um uh below. So if you do just 04 right 40% of what that return expectation is you know you're getting
let's say a little less than one contribution from your um uh >> from your fixed income part and then if you do 6 and let's say at the time I don't know what the numbers were but maybe it was you know you would expect eight at the time um because uh you know
probably a little bit discount from the historical level um but you're you're you're not quite at your return assumptions. I was like, okay, how how can we fix this and and provide uh uh some sort of uh you know, is there a vehicle that we can invest in that you
can get a little bit better return, provide some diversification benefits, which we'll get into here further. Um and that's kind of where the the conversation was. Um so at this meeting, um u that decision was made. So, we'll
investigate this and we'll get some education on real estate. Well, this is the board at the time and and and you can see further along. Um, page two gets into the next kind of part of this.
So, the next meeting April 24th, 2017, um, we produced, you know, you've seen a a version of this where we do a manager analysis, right? We list out a couple alternatives. We you saw one last quarter that we didn't really get into that much with the global bonds, but it
would be funds that have been fully vetted by our research team that we think are are high quality funds that are out there. Um and um the board reviewed this analysis that went through, you know, firm and product
characteristics, uh the differentiators and how they're um allocating capital. all of the terms including liquidity characteristics um uh and the limited liquidity uh in terms of particularly relative to the other investments in the portfolio which
are daily liquid and then went through historical performance and risk stats etc. Um there was also in this meeting representatives from each of those firms. So the the the board at the time um interviewed
uh four private core real estate firms at that meeting after they reviewed the information from um us Anco at the time now Mariner and then um after that whole process
occurred the board voted to uh allocate 10% of the pension at the time to private real estate with the source coming from its fixed income core fixed income uh allocation and they selected uh
basically they split the allocation half to principal half to intercontinental after that process and then um in September 20th the board approved an updated investment policy statement that codified that decision
and added the 10% strategic target to uh private real estate with a corresponding reduction to the fixed income >> and and is that's still in the invested policy statement and is it 0 to 10%. Correct. >> Confirming that. That's what I thought.
Thank you. >> Then um and then January 2018 both of those investments were funded. Any questions about this so far? Okay, page three. Kind of fast forward to 2022 when things started to go south. But from 2018 to
2022, this was a really good investment for the pension. Um you could see from January inception up until 9:30 of 2022 and particularly relative to the the fixed income source of funding very good returns at that point. If you just took
a snapshot of the inception returns as of 9:30 2022 intercontinental um up 10.8% net of fees principal up 9.7% net of fees. Uh the Bloomberg US aggreate bond index returned negative.4% 4%
during that time period. Um and then particularly we've talked a little bit about this right that that really tough fiscal year 2022 which was the worst year for pension funds since the financial crisis as stocks were down
15% bonds were down double digits. the real estate really helped protect capital in that time period as private real estate prices increased during that time and you had you know roughly 20% returns for both of those funds during that period.
Um well I I would just add I guess my interpretation of that was you know the Fed the Fed was tightening you know very rapidly during that period of time. So that that collapsed the um I think the low on the 10-year was 50
basis points or something and you know and recently I don't know where we ended up but five or something. So um the the the benefit actually of the private real estate during that period of time it is kind of the you know the ying and yang
of its of its of its demise subsequently which was was that it wasn't getting marked to market necessarily properly. So um because because of a because of the lag you know effect of of the the value but you'll also recall we had not
just we had you know kind of twin headwinds then because we also had had you know the work from home craz start with you know in uh in the uh in early 2020 with co so um you know real real estate you know marktomarket real estate
you know was having a was it was choppy so I'm just2 kind of throwing that out because >> 2021 was was a great year. So I think the larger so it kind of you know you can get the the kind of appraisals right
for like the um the the companies um uh or the the properties during that time. I think if you looked at any um industry publication at that time, prices were good particularly industrial real estate and multif family during that time
because there was a shortage you know office was strugg not not doing well and getting much worse starting in 2022 23 but particularly industrial you know the Amazonification and you know you know all the boom with that that that the prices of those were going up a lot and
that was also reflective in reprices particularly in 2021. one. Um, but because of the the high correlation of REITs to publicly traded equities, you saw a disconnect between valuations of private real estate and REITs, particularly in 2022 market downturn,
right? >> Um, but your broader point is correct, right? You when you look at um a uh so why own real estate? you have um critically at the time of investment above above uh you know above
average yields uh that you're you're able to get from rents. Um and diversification benefits is is the next which we'll talk about in terms of the correlations to publicly traded uh stocks as well as fixed income. And then the third kind of leg of the stool is
inflation protection. This goes back historically. Real estate tends to do well in inflationary time periods and that's exactly what you saw in 2022 as inflation started roaring. Um you had this uh uh you know it did well in that time period. Um
so I think broadly speaking you know yeah I definitely agree with what what was going on like on the ground and what caused some of the these returns. Um, so proactively in July of 20 July of 2022, that that meeting on the 26th of
July prior to the uh kind of the high water mark in September, um, we got overallocated and I recommended it and you the board approved putting that redemption in that $150,000 redemption to try to get some capital out of that
that investment. Um uh and um unfortunately the timing was the market started to turn right as we kind of put that in. Um and then our money was basically you know we got you know drips and drabs out over the uh the the
next couple years. But um liquidity characteristics dried up and and we weren't able to get all of that money out ahead of time and it took some time to get that. Um and then other actions the board took January
20 20 January 24th 2023 that's when we um decided to turn off the dividend reinvestment features of those funds to get the the income um wired to us as opposed to reinvest it back into the funds.
Any questions about that? All right. page four. And we I kind of discussed some of this stuff, right? But just uh so real estate market peaked in September 2022 and then had basically
the um there's been three market downturns. you know, financial crisis of 2008 was was just, you know, an implosion where you had, you know, a 40 plus percent decline in the NIREF index, but you had the early 90 saving loans and that one
that was similar to what we experienced in 2022 23. You know, we had a um you know, basically a 20 20 25% decline in uh in real estate values for the the Nik Fund Odyssey index.
You know, one of the things that we talked about a lot is the liquidity characteristics, right? So, the state liquidity characteristics for private funds are quarterly withdrawals or additions. Uh, but they have the feature during
um times of trouble that they can limit the ability to pay out redemptions, right? And that's basically all funds have have did that is starting in 20 late 2022. Um, and you can see the the the the figures um of what we've
received uh as of 9:30 2025. And I should note that, right, I I didn't have all of the 1231 data when I put this together a couple weeks ago. So, I just everything is run through 9:30. I should uh highlight that. But you can see, you know, we while we got all of our money
from principal, um it wasn't all at once. It did take some time and we still do have um you know roughly about half of what we asked for initially from Intercontinental. And then last meeting uh the you know
October 28th um after that you know long discussion that we had we submitted those uh additional redemption requests to principal for 400,000 and intercontinental for 350,000. Does does anyone have any questions? So
that's kind of the historical backdrop of of all the actions the board have taken regarding these investments and at least somewhat of a of rationale of why it was taken back in 2017. Any any questions from the board on that >> only with
its history. I just want to u I guess ask about the most recent. So, so principal we put in what is now looks like a liquidation a full liquidation request $400,000 cuz there's 325 remaining.
>> No. So, we had 75 say the 400. Okay. I'm sorry. >> So, we put that in, you know, whatever a week or so after and then they they did their math and said, "Hey, we're going to pay out our entire queue including the money you just added to it." >> Okay. So, that was recent money as well,
the 420. set and so we don't have anything outstanding as you'd mentioned with principle >> and so we could I mean we don't know if we had requested more whether we would gotten more or do you know if the gates are just totally open at principal
>> I mean so I I so if you yeah I I think it's safe to say if you would have put a full redemption in last quarter that you would have gotten all that just curious going forward >> yeah I mean it's hard to say if like that additional 325 would have tipped
the scales for them not to pay out full like but I think I'm safe to say like that wouldn't have really moved the needle that much for their the redemption queue. So yes, I think um if I'm speculating you probably would have gotten all $700,000 out if you asked for
it last quarter. I'm just thinking about BIET and everyone knows BET Blackstones real estate trust and they faced the same thing. They put gates up, but I don't think there's any gates left. And they also borrowed money to make sure they could make redemptions, but it
seems like principal's doing the right thing, seeing liquidity, but I don't understand why Intercontinental just taken so long. >> Yeah. >> And why don't we even consider a full redemption request with them? >> Um, or I guess that's the bigger question.
What What do we want to have in terms of a uh allocation to real estate? Um, yeah. So, I think it's a fair question. One thing I didn't put in here is that we actually had Intercontinental come present to you all. Um, I'd have to get the date uh that that was not here, but
you did hear from um Tim Nash came and spoke to the board. I think uh sometime in 2024. Um I'd have to go back and see what exactly the date was, and I just remembered that. So, apologies for not including that um in the uh uh but yeah,
so I think basically you know their the you know um their official position is is that liquidity conditions do not warrant um and they don't believe it's in in current shareholder interest to go out and sell those buildings to raise
the liquidity to pay the redemption queue off. And that's basically what what they're communicating right now. >> Yep. But and I neglected to mention this this history is very helpful. Thank you >> for putting that tying that all together. No, >> it's my pleasure. Yeah.
>> Brad, do you know what what was the uh what was our uh position relative to the total position of the partnership? How big how big originally it was? >> I mean, it's it's it's very tiny. So, I know >> it's very tiny, right? Uh, I'd have to
get the updated numbers and I could probably find them for you if you give me a few minutes after I go. Um, but I'm going to say that Intercontinental has somewhere between 8 and10 billion in the fund that you're in. So, you're I'd have
to do the math, but you're that at one point you had a million dollars, right? So, you had 1 million divided by 9 billion. So, that's what percent of the fund you are. So, it's less than 1%. PS. Okay.
>> If you don't mind, board U, there's been a request for a guest speaker who's a former board member that wanted to just do a quick discussion of this real estate. Sir, >> Sam, can I just say one thing? Say one thing before you start. I just wanted to add because I think
>> Just get your mic. con context here um just because I've been in the business a long too long but um you know real real estate investments um for the rest of the board if you
haven't been familiar with with real estate investing institutional investments I mean number one I don't know what the institutional allocations were at the time in 2017 you know um AC across public real estate, you know, Florida real estate,
you know, um, you know, comparables, pensions, pensions, profits, all those things. But um but historically, you know, uh I talked to Brad about this um over the last 3 months and I think
the um I took issue with the article which was published by Jason Wag in the Wall Street Journal. um because it did not include what we would deem to be in the investment
business a full cycle. Um and and a full a full cycle generally includes you know a a bare market and a bull market or a bull market and a bare market. And in in real estate um we tend in in private
real estate you know this is these are not you know marketable securities that are secured by real estate um you know th those kinds of cycles if you think back I mean sometimes they run in 7-year
you know to 12 year time periods and we don't Brad you're I don't think you're presenting data on that that shows what real estate cycles are historically, but the the the the numbers that were presented in that Wall Street Journal article were like, you know, a a a time
period which was um which was certainly not complimentary to the the pension board, you know, and the selection, you know, because it was a 5-year cycle ended, I think, in December of 24. Um, so you know I think what what Brad has
presented at least in the first part before Mr. Carol speaks is basically that we had a really nice return you know relative and and that the that the allocation to real estate actually provided I think the objectives that
were were determined by the board at that time. Um and um and but even more than that they were kind of half a cycle. So so and you know we'll we'll come back to these numbers later but when we look
at the risk adjusted rates of return and uh those are really important numbers um because they they actually demonstrate that we've had you know a positive risk adjusted rate of return over the full cycle um which Brad has prepared. to
give up the floor. >> You stated it much more eloquently what I was going to say. My name is Sam Carroll, 91 Calvary Lane, Bureau Beach, Florida. I'm a current member of uh Indian River Shores Town
Council. And prior to being elected to the seat in 2018, I was a member of the pension board. And I sat in the seat where Mr. Van Deender Van Deerender is sitting now um
during the time that the decisions uh were made to invest in real estate and I can attest based on my general ability to recall pretty accurately what was said, how it was said, how it unfolded. Uh Brad, you
did a great job of uh of uh piecing it all together. The article in the Wall Street Journal is a classic hacket hatchet job. It's a hatchet job because the writer, Mr. wife took a short period
u uh of time um out of context in order to make whatever point he was trying to make uh about investing in private uh uh investing privately versus publicly
traded securities. Um Brad said today and the article stated that no one was around to comment on to justify
uh or to acknowledge why the decision were made. Well, um, all he had to do was look up, uh, the names of the members of the committee at the time, uh, look up the name of the consultant who made the recommendation, and had he
been interested in doing that, rather than providing material for what I will call again a hatchet job on the pension uh, committee in the town of Indian River Shores. he could have done
it, but he chose not to do it. So, um I looked up the return, the annualized return on the 10-year US government bond uh over the period 20, I
think I used 2017 uh to 2025. And the annualized return on the US government 10 year was around 2%. Uh the return that you show here Brad for a little bit higher risk portfolio
of the Bloomberg uh was about twice that around 4%. Is that right? >> No. It's actually lower than that from one 2018 if you go to page five Mr. Cairo. >> Okay. Okay. So it's it's the Bloomberg
is lower than that and the annualized return from the investments in real estate was what during that period >> uh intercontinental was uh 3.1 and principal were 3.7
>> point made. Thank you. >> Thank you. Thank you. >> It's a good segue to page five, which was exactly the point that I was going to make is uh the last three years have been tough for these investments. Um but we did pick up some nice returns prior
to that. So that over you know and to to talk about you know what Tom had said right the a full market cycle which includes a bull market and a bare market which we now are at. You could see on the right
hand side of this page we go from the 11 2018 inception of the private real estate investments and I just told you what the numbers were. This is again through 9:30. Um but over 3% and if you were in either the aggregate bond index
or the intermediate bond index which are on the bottom part of that you got you know 1.7 versus or 1.9. Um the aggregate bond has a little bit more duration. So you know more negatively impacted during that down market. But the net result is
that the pension is better off even despite this really tough three-year period over the entirety of its experience by having made that allocation into private real estate versus the alternative which would have been the fixed income markets. Does that
makes anyone have any questions about that? And then page six shows you the volatility. We've talked a little bit about this conceptually, but you can see some numbers here. Um, so standard deviation is a measure of risk, right?
How volatile your return stream is. Um, these are based on quarterly uh return series for all of the our investments. And also you can see I put the the Dow Jones reed index, the Nik private real estate index and then the two fixed
income um you know if you look over 10 years you could see um uh intercontinental principal both say roughly 6% standard deviation annualized over that time period. Um the NIRE a
little bit lower than that five and a half read index at 18% very much in line with where you would look at publicly traded equities and three times the amount that you volatility that you get in in the private real estate. And then you could see the fixed income at at you
know uh let's say five and a half for the aggregate bond index and a little bit lower for the less risky intermediate bond index. Um, and then you can see what those numbers look like for the fund the pension funds experience on in the since 1118
um, which are in line with that 10-year number. And then page seven shows you riskadjusted returns. Sharp ratio is something that we use that takes your your return, it subtracts out the
risk-free rate and then it it divides by that standard deviation number. So it gives you kind of a a volatility adjusted return measure that you can compare investments. So obviously the last couple years not great for the real estate funds as negative numbers there for the three and 5year uh but you know
since 2018 inception you can see uh intercontinental at 0.1 principal at 02 the read index at 0.12 um and then again the bond index at negative 0.1 during that time period. So
again both from an absolute perspective and a riskadjusted perspective these investments have done better than the source and on a riskadjusted basis while while the returns are a little bit better from risk perspective for REITs when you look at it on a riskadjusted
basis you know if you just blended the principal 50% of that u that sharp ratio and 50% of the intercontinental we would have done better than the read index during that time. Does that make sense? Does anyone have questions of how that's calculated or
anything about conceptually about that? Yeah, I just I just wanted to add because we spoke about this Brad that you know I wanted to see the sharp ratios and the and the risk adjusted the volatility because we we discussed this at the last meeting when we were discussing kind of the the pros and cons
of of private real estate versus um you know versus REITs which are you know actually a sector you know within the S&P 500 again they're classified as market marketable securities. Um, so you
know, lot I mean really and truly like you can you can see from these numbers they're apples and oranges, right? So so by by risk adjusting them Kyle probably for your benefit benefit because you didn't maybe I don't know if you studied statistics and all those things but but
>> no I appreciate your insight. Thank Yeah. But but but ba basically the um the the concept the concept here is when we in our in in this business that we're looking kind of at you know when we look at just an annualized return you know
over a long period of time that ends up being like a line right because we're looking at 10 years annualized returns quarterly numbers whatever but when when we actually look at the variability of that return you know it's there's kind of a snake going going through around
that that that single line and that measures the volatility and we use a term called you know variance or standard deviation square root of that to actually proportion that volatility. And so what what these
numbers actually show which I I think was very interesting is that over a longer period of time is is that um that due due to the the high volatility of the marketable securities of REITs and
this is something you know we have to address still because we haven't come up with the answers where we're going to allocate our money. um is is that you know on a risk adjusted basis they kind of come out at the same at least for the last 10 years because that can be different the next 5 years and next 10
years but they kind of come out at the same place um in terms of the the um the what we call the the risk adjusted return of those two they're two so I would argue they're two different asset classes
um we can we can come back to that but private real estate and you know the marketable secure securitized version of of real estate are different asset classes in terms of the way they act um in terms of their return profile and
their risk profile. >> Yeah, thank you. And and that kind of leads right into eight and nine, right? So when you're building a portfolio, a total portfolio, um the old adage is you don't want all
of your eggs in one basket, right? So diversification is a key tenant of of trying to build a portfolio. It's why we have some value stocks, growth stocks, we have bonds and we have real estate and within our bonds we have different types of bonds, right? Because they all
tend to move in different directions at different times and that's a good thing to limit the overall volatility. You you limit your potential gains by doing that, right? You would have been better off having all of your money in you Tesla, right? But that's very very
risky. Having a diversified portfolio is an important kind of investment concept that we try to apply to the pension. Um so I wanted to talk a little bit about private real estate and the diversification benefits that the pensions received by having that. Um and
you can see here so this page eight just shows you annual what the returns are each year for I just did index funds in this this exhibit. So it's just the the private real estate ODCE index. I did the REIT index, the S&P 500 and the two
bond index. So you could see um you know that's I think it's probably best 20 starting 2020 is the best useful example. So you see 2020 year of COVID, right? Um it still is crazy to me that we the S&P 500 returned 18% that year
when it was down 33% in a month. Um but so very strong year for the S&P 500. Um decent returns for bonds around 7%ish. Um the ODCE private real estate flat during that period but the REITs were
down 11% as you had a pretty sharp selloff um you know through half of the year but the big recovery for general equities during the second half of the year. you know, kind of the REITs were left behind and it was more like, you know, the the growth stocks that did really well. Um,
but they came back with the Vengeance publicly traded REITs in 2021. You could see where the Odyssey index up 22%. The Read Index was up 46%. So, a tremendous result that year when the S&P 500 was up
about 29%. But this is when the the fixed income market started to go down where you had some slight negative results in 2021 for the aggregate and intermediate bond index. And then 2022 is the real kind of
I think uh and I've talked about this so I apologize for beating a dead dead horse here but that was the kind of the the the proof statement of real estate right um reach down 26% S&P 500 down 18% that year aggra bond index down 13 but
you got a positive result in uh the the Odyssey index so helping to stem you know protect capital in that year but then the market turned obviously private real estate sold off in 2023 2024 although REITs did well in those years even though um the fundamentals behind
it did not do I I would argue wouldn't support those types of returns um but they still because the the general market went up and that's what you'll see is generally speaking REITs tend to have a high correlation I'll show you this in the next exhibit with publicly
traded equities and and not so much with actual private real estate and the kind of you know, which more tied to economic realities or I would argue that. Um, any questions about this exhibit?
Um, so page n gets into that again and shows you those numbers for what the this is going back 20 years. Uh, so it's definitely a full market cycle going back from 2005 to 2025. So includes the financial
crisis. um uh includes you know it's a it's a very representative sample. So um you can see so the the way to read this is is um reading down basically so where you see
the column that says Nik OCE reading down you see what that 20-year correlation and again correlation is what is the strength of the relationship between two variables in this term in this case it's returns right so how
strongly positive a plus one correlation basically says it moves exactly the same. Minus one means it moves exactly the opposite. Zero means there's no rel statistical there's no relationship between them. Um so the more you're at
zero from a portfolio perspective that that's good and potentially negative could be good but zero is is good. it means there's no relationship and then you have like pure kind of um uh benefits right so you can see the Nik Odyssey index you know to reats.14
so that was much lower than I antic I thought going into this um but so there's not much of a relationship between private real estate and publicly traded real estate the Nik Odyssey publicly or private real estate index has a 03 correlation to the
S&P 500 so no relationship, good diversification benefits. And then to bonds, it's actually been negative over this time period again. So when bonds zag, real estate zigs, so you have a negative relationship there, which again provides some some diversification
benefits for the pension. Um, so publicly traded because we're talking about REITs is what is this kind of statistically talks shows you one of the reasons that I said I would rather just take that allocation and put it in equities because you don't get much
benefit from a diversification perspective by by investing in RE where you get that with private real estate and that's because you can see if you go to the the Dow Jones US select read index the correlation to the S&P 500 is 74. So a strong positive relationship
between those two. So they tend to move in the same direction at the same time. Any questions about that? Does that make sense? >> Yes. >> And then if I was sitt in your shoes also in this kind of
>> just I'm just curious because sometimes the correlations change over time. How did I mean I would think in the last 5 years that those correlations that the correlation increased quite a bit cuz and because lots of asset classes have
been moving have been more correlated over the last 5 years because we've been through an unusual period. >> Yeah. Well, I mean >> I mean the when the Fed wrote raised, you know, raised rates so rapidly in 2022, I mean everything like went to
actually correlated you fixed income assets, equity assets, real, you know, everything started moving together. >> Um, so so the the markets, you know, various asset classes like those correlations do change over time. So I just point out we're looking at a
at a snapshot of 20 years. Absolutely. So what I could do is is for next time is I could do a rolling correlation where you can see that over time and see what the changes have been if that would be helpful. I think I think the I think the message the message the message here
is that they is probably holds pretty pretty firmly that however that that there's this anti-correlation between private real estate and all these other these other >> the only the only I wish private real estate was correlated more over the last three years with publicly traded
equities. Right? That's the only thing I would say is that they certainly aren't correlated over the last three years because we got negative results, right, >> for private real estate and it obviously the the stock market has been going gang busters >> for the last three years. >> Okay. >> Um but we can I I'd be happy to run that. That's that's not hard to to run
in. I can run some charts in Excel or in our software system. >> Um but you're right, those things they do change over time. Um it's useful to look at but it's also useful to look at what are the trends as well.
And the last page here just shows you um this is uh based on our our performance reporting software Paris investment metric database where we get those numbers where you see the total plan universe where we compare your return
versus a national survey. Um, you know, when I ran this, as of 9:30, there was 832 public plans in this sample at this time. And you can see, you know, about 75% of those plans have an allocation to
private real estate in their in their pension. Um, I have additional um information that I didn't bring with me. if you wanted to get more like what is the total amount of money that pensions invest I I can have our research team if that would be
useful but I just thought having one page to show you're not an outlier or doing something that is outside of the um the normal right I think this shows you know vast the the majority of public pensions have some sort of allocation as
of 9:30 you can see the um the median allocation is 6.2% 2% for those funds um at as as of that date, right? >> Um so we're currently now underweight relative to other pensions given that we're less than 5% now for us. Right.
The the other the other key point here is cuz we've discussed this, you know, to the other trustees here. Um there's we've u been beating ourselves up so to speak because of the illquidity the
illquid nature of the of this. But when uh you know I had asked you know Brad to to to look at this chart because when if you add up the the you know by its nature private real estate is is inherently illquid right I mean it's a
long it's a long and it's a longer term investment um the but so when we look at this chart when we consider alternative investments um and Brad can you know illuminate us with you know other types
of alternatives but you know hedge funds etc. um you know priv private equities here. So, so alternatives, you know, might be direct investments could be forestry, things like that. You know, um private equity is 7 and a half%, alternatives
are 9 12% and real estate at the medians is 6 1/2. So, so when we look at the universe of 832 public plans that are in this universe, um the median allocation to illquid investments is 24%.
um in that arena, you know, for the edification of everybody sitting here today, I mean, we have about a 6% 6 and a half%. So, so we're basically at a third of what, you know, the illquid nature or our asset classes are in our
plan. So you know this again you know kick the can down the road here when we get to a discussion about what we do next but but you know we don't have a a high allocation to illquid instve investments relative to the university which you
know we would be comparable >> yes thanks I I I agree it it's it's pretty clear was it made a lot of sense. It's sort of a bond alternative viewed as a long duration asset and in fact it's got some um real
estate private real estate like that has some uh inflation hedging component to it as well. Real assets uh unlike uh uh you know paper assets
um diversification cash on cash yields probably pretty high. So some of these total returns they mark them violently down. Had you been buying long bonds at the time we just saw what what they did. So I mean it seems perfectly appropriate
in the context of what your alternative choices were then and and right sized in terms of balance in an overall pension investment program. So that's how I that's how I view it
and and then the discussion will come what you do with the you know what kind of things you want to do um alternatively with the cash. Well, we went through the the real estate presentation. So um any other
question any questions about anything that I just went through? Oh, well done. >> Yes. Thank you. I I would just like to say um uh Councilman Carol and uh Vice Mayor, I appreciate uh everybody's
um passion for this matter in this room. Um I believe that everybody at the end of the day wants the same thing. I believe we all want uh a successful pension plan for the people that serve the town of Indian River Shores. Um, I
appreciate both sides of the argument because I believe that it gives us a a well-rounded view and it helps us um try to figure out what the best decision is. And I truly believe that everyone's decisions have been made uh with the best intentions and and um moving
forward. Um I just wanted to say regardless of what anybody says on the outside, I appreciate uh everybody's work that's that's sitting in this room today. Thank you. I also think we should hold off on the primer for institutional clients for the
next meeting. >> All right. Anything else for me from the board? >> Thanks. >> Thank you, Brad. >> All right. Thank you for your time. All right, moving on. Uh we'll go back to uh Foster and Foster. Doug Lowe's and I appreciate you uh coming in making it
here today. We held you uh and we'll go over the experience study review October one actuarial valuation and the quarterly member statement costs. Okay, first apologies for running late,
but probably worked out just as well for you to get the important stuff out front. Um, so I've got a couple of items on the agenda. Uh, I think we'll first go over the valuation report.
And on your tablets, that would be page 11 of 149. I assume maybe the tablets are still working or lit up so to speak, didn't power down and so on. >> Yeah. A second pass.
>> So I think you're all familiar with the way I like to present. You know, I'm an actuary. There's a lot of details. I'm cognizant that you don't need all of the weeds. So I give you the moving parts. So I I like to start with words and then
draw you into the numbers when you've been prepped for that. There was really and it's been ongoing for a number of years with this plan that there's not a big change in the contribution requirement from one year to the next either measured as total from all
sources or whether it's from the members and the town when we split it up. And the reason being the plan remains over 100% funded. And so while pension plans can be complex with all the moving parts, the
state of Florida's in this regard made it a little simpler that when a plan is over 100% funded and it's governmental pension in Florida, we cannot take a credit from the unfunded liability. So if you you're
over 100% funded and the the unfunded liability is negative, it's a credit. Uh we cannot take that amortization payment as a credit. So really the moving parts from year to year is how does the normal cost change
uh and how do the administrative expenses change? That that's really how we measure the change in what the town has to put in for the upcoming year and how much the members have to put in. So again, you're over 100% funded
because your investment return was over 11%, we use no smoothing here, so it's fair market value. The bogey was 6.75. So again, uh still remains over 100%
funded. So with that preparation for you to hear numbers, if you go to page 11 of 149 of the tablets, the summary page, you can see that look looking at the two columns there, the minimum required is
increasing modestly from 18.84% of pay to 19.52% of pay. I say modest, I mean I know that's subject to interpretation, but it's it's less than 1% of payroll. The primary reason for that increase is due
to the mortality change. Uh when we went over the experience study last year, I advised of out of all the assumption changes I was recommending, one you had no discretion on and that was the life expectancy because we have to adopt
whatever Florida retirement system adopts. That's the primary reason for the almost 1% of payroll increase. So, as you're also aware, there's a cost sharing. If the minimum required goes up or down, then there's a there's a
sharing. I'm not going to belabor the the formula for it. It's in the ordinance, but the town's piece goes up or down a bit and the member contribution goes up or down a bit. And so, you can see that the member contribution requirement will be increasing
from 5.89% to 6.10% 10% of pay, meaning that's the individual checks from the members in the pension plan will be increasing to 6.1%. As a reminder, going back a couple years ago, it won't happen this current fiscal
year. We we introduced a projection method. So, this is for budgeting for 2627. So the town upon approval of this report today can put in 6.1% coming out of the individual member
paychecks beginning with 10126 fiscal year. So when the dust settles if you go down to the town required we'll be increasing modestly from fiscal 26 to 27 of 12.95% of paid to 13.42%.
42%. I'm estimating dollar amounts there just based on currently known pensionable pay. Those are just estimates. The town should actually just plug in the percent and apply it to whatever payroll there
is in the applicable fiscal year. So questions, comments on this page. And this is just not changing the assumed rate of return. This is leaving basically everything the same. >> Everything the same except mortality. >> The mortality. Correct.
>> Correct. >> And the mortality, the increase. I mean, is that still from coming back from CO? That didn't the mortality rate go down >> and it's it's no more complicated than the Florida retirement system recommended.
>> That's their number. >> New tables >> uh to the state of Florida. the state of Florida, the legislators, they're the pension board for the Florida retirement system. They're actually met a recommendation. They adopted it. So, we have to adopt
it. Now, I will tell you that it has nothing to do with CO. This is precoid numbers. It's always a look back. Every 5 years, give or take, Florida retirement systems actuaries going to go through the same thing we do here, an experience study, and they'll make recommendations.
It is from a national study of public sector pension plans that are comprised of police and fire. That is the table that we're adopting here. So I would consider it accurate, but we'll never know. You know, if I could get
into a time machine and jump forward a 100 years and look back at the mortality experience for this pension plan, then I could say today, oh, I you know, it's correct or not. But we'll never know. I I think largely it's it's a reasonable rate of you know people always ask me
what is the age and there is no one age but on average I would say it's mid to high 80s for for a member in their midcareer police and fire here in Indian River this table would say about mid to late
80s is the future life expectancy or age of death on average. I I hear a lot. It's like that's not you know not realistic but you know that's a that's a moot discussion to have. It's so anyway I
kind of belvered that point a bit. Uh so that is the only assumption change built into this. I know there's another agenda item we'll get we'll swing back to the other assumption items um to discuss but they're not built into this report. to to the extent that the
board adopts those other recommendations, they'll be built into next year's report. So, remaining on this page, any questions or comments on the contribution rates. Going once, going twice.
We can always swing back if needed. Um, I mean, I I'm going to say I've covered largely what I intend. I I said I I'm not an actuary to abuse the uh captive audience, but I I will give you some interesting pull out pieces of
information that are I think kind of interesting. If you go to page 17 of 149, just uh a a brief history, the last five years of a couple of important assumptions, what the reality versus the
assumption. So on this page, if you look at the actual and assumed salary increases this last year, the average salary increase for the participants in the plan was 6.02%. We assumed eight 8.27.
27 and you can just go down the line there. Um, this was the first year in a while that the actual salary increase came in below the assumption. And then of course I I don't need to
tell you all what your investment performance has been. Uh, but there's a 5-year history. Um, fairly decent. Um, but it's you most of my plans use a smoothing. We've gone over that here before. or you're not you don't have any interest in the smoothing
it which is fine. Um so you can see the the assumption has been and remained at least now for 5 years 6.75% net of fees. So I think maybe where we can finish up before a couple of the other items for
the actuary is just keep scrolling down and funded ratio history page 22 of 149 just uh a snapshot a rolling 10-year history
uh you know another way of looking at funded ratio is how much money in the bank as a percentage of liabilities and liabilities meaning how much do you need to invest today to pay for every
future check that we expect to be cashed out. So just take that fraction that ratio. The higher the number the better. So you can see it's there's been some volatility here which reflects really that you're not using any smoothing. The market goes way up the funded ratio goes
up. If if the market goes down, the funded ratio goes down largely. It's there's other moving parts. But you can see uh for the last 10 years, let's look at the extremes. The low in the last 10 years was about 85%.
And there have been a number of years when you've been above 100%. Out of the last 10, just eyeballing this chart, it looks like six out of the last 10 you've been above 100%. So take that for for what it means. Um
even on a I will say this, you're so well funded at this point that the actuar's opinion of what do you need today to invest until every future check ever to be cash. That includes for the the youngest member in the plan to
the oldest retiree. How does that compare to the money in the bank market assets? And you're you're at about 100% right now. Exactly. Meaning you're this over 100% is on an actuarial acred
liability basis. But on your present value future benefits for every check to be cashed including future service acrals, future pay increase based on the assumption, you're right at the threshold of being 100% funded on that basis, which is very very good.
If that remains for any length of time, I might there there's a little bit of a risk there regarding the chapter 1751 185 premium tax monies. I'm I'm not going to go down that rabbit hole today because the
volatility here is such that I can't predict from one year to the next whether you're going to remain above 100 on the present value basis or not. But to the extent that if you would for any length of time say multiple consecutive valuations remain above that to some
significance I'm want to put the board on notice that the state of Florida might take note and say uh you've got to do something here or your chapter 1751 185 monies might be at risk.
you're barely at the cusp right now and any kind of an actuarial loss this upcoming year, you would fall just short of the 100%. So I I don't have any particular concerns at this point. I'm just I want to put you on notice for it. >> And I probably confused everybody right
now, but >> Well, when you say the state might say that we need to do something about that, what does that look like? >> Any number of things. uh the the primary goal is to get the that funded ratio
below 100%. I I don't have the full back me and I'm not not going to put Lindsay on the spot. I don't have the full background as far as the rationale behind it other than I'm thinking of like an extreme example. Let's pretend that
some pension fund is it's been like 150% funded on present value basis for many many years, but they keep getting premium tax monies from the local constituents by way of taxes on the h on insurance premiums, hazard insurance and
auto insurance. The state might say, "Look, you you've got all this extra money you've been getting. Do something with it. Improve benefits. You can afford to improve benefits. you're 150% funded for many years. I think that's the concept. I I can't
imagine there's a trigger that when you're just barely on the cusp of 100% being invoked, but I have to make you all aware of it because it's it's kind of a rare thing and not everybody understands that. Most trustees aren't aware of it from year to year that
there's this possible trigger. So, I'll bring it up to the extent that I need to each year if you're around the 100% just as a reminder. But right now, there's there's no action. There's nothing needed. So, again, I hope I didn't confuse.
>> Vice Mayor, may I ask a question, please? Uh for the record, uh Bob Aer, vice mayor of the town of Indian River Shores. I think the actuary should be aware that back in 2018,
we had a piece of surplus property along the ocean. And when we sold that, we had a fair amount of cash that resulted. and I and other members of council at that time saw that the pension fund was underfunded both at the at the public
safety level and the OPED was underfunded. We put the money in there. So, I'm really sort of disturbed. Council did the right thing in terms of fully funding those pension funds. They were underfunded. Now, now you're saying that the state can penalize us for that.
>> Yeah, it's a it's a valid point. I mean, I appreciate it. Um, you know, I'm I'm the messenger. >> No, I I understand. >> No, I if >> I mean, this is this is this is really important. >> I have to imagine that if we get to a
point where if you know there's that 150% scenario, kind of an extreme scenario I came up with. I fully imagine that if the state decides, oh, it's time to write a letter, that this conversation will resume at that level. I have to imagine. But >> okay,
>> right now we're you know right now it's informationational >> but point point well made of it. >> Councilman here. >> Sure please.
One surefire way of solving the problem is to reduce the assumed rate of return which was increased by 50 basis points. I think it was four years ago
uh by the investment committee. What is the current assumed rate of return? >> Probably 2018. >> Yeah, I think it was 2018. >> What what's the current rate assumed rate of return? 6.75 net
>> 675 I think that the committee at that time raised it from 6 and a4 you're >> correct >> to 675 so u and then there was that was very controversial raising it
so if you want to get back in the good graces of the state lower the assumed rate of return back to 6 and a quarter from 675. That'd take care of it. I think >> it it that or improved benefits.
Either one. Yes. >> Or both. >> I'm I'm stopping at it now. I know that. >> A COLA would go a long way to it. You know, postretirement cola >> is reducing contributions. Is that
similar to increasing benefits? Uh, no. Because changing contributions change who's paying who's funding the plan. If you lower the if you lower the members, then you increase the towns. That's just deciding who pays for the
the plan. >> But that's not that doesn't go into to what degree it's funded going forward. >> That won't help your funded status by changing the contribution rate of the members. So Doug, maybe you can repeat where where we are on that timeline before we
would be that we would be receiving a letter or you would you have to report to the state? You have to be proactive in that or is that >> who initiate who initiates that? >> I think the state you know call it the state the division of retirement.
There's a coupler reviewing actuaries, look through the valuation reports, but then there's a head of the police and fire wing of the Department of Management Services. I think the trigger might come from him. Right now, the the seat is currently
Steve Bon. You know, again, I'm not trying to put Lindsay on the spot. She's familiar with this this topic as well, and perhaps she has some input. >> You know, I've never seen it happen with any of our plans. we've come close. Um, but I agree with everything Doug said. I
think if you get to that point, and it has to be over a consistent couple of years, several years, the state will say something to you, right? The state writes a letter to you almost every year saying what they think the assumed rate of return should be. Doesn't mean you have to adopt it, right? But they say, "This is what we think it should be." And I think they would write a similar
letter and then it would be talked about, but you guys don't negotiate benefits, right? that's between the union and the city and that would be a conversation if there are benefit improvements or like the council member said lowering the student rate of return, right? That's going to make that's going to change the funding. So,
it I don't think you're at that point right now. So, I don't think you should be concerned. Um, if you'd like Bonnie to come at the next meeting with some additional background to see if she's had it, I can certainly tell her to and ask her to. >> Where where what is the state's
recommended return? Now, we we discussed this a couple of meetings ago. I I think we've been they've been coming down. >> They It's all of our all of our plans, right? They usually say they want you to be between five and six, right? All of our plans get that same standard letter. It
>> Right. But in uh Brad Brad left, but um >> you want to know what FRS is? Is that what you're asking? >> Pardon? >> What FRS is right now? >> They're 6.7. >> They're 6.7. Okay. >> So, you're you're good, right? If the state ever says, "We want you to do the
same thing as FRS," you're in a good position, right? We have some boards that are in the 7.25s, right? But at that point, at this point, the state has not mandated that you have to have an assumed rate of return for that. >> See what happens when you invite the actuary.
troublemaker. Yeah. Right. I um I um Mr. Carol, I think that that the change in the act and the assumption was done back in 2018 or something.
>> Okay. >> Yeah. Like maybe in this in the mid midsummer. All I know is it hap it happened at like my first meeting >> with as a trustee. Yeah. Shanghide. >> So, it seems like it seems like this
might be something to put on the agenda to discuss with Bonnie at the next meeting. >> Oh, I know. >> Maybe we can get Mr. Zwag at the Wall Street Journal to write an article about how we're overfunded. So, we've done such a good job.
>> Right. Right. In the meantime. Okay. All right. Do you need a motion for that or are you going to continue to your next uh >> uh let's do this. And if you don't have any other questions on the valuation
report, I'm I'm happy to answer, but if you don't, let's do two things simultaneously or back to back. We're going to approve this report and then we need to go through the declaration of returns annual exercise. I'll do the first part, then I'll help you with the
second. >> Okay. So, first motion is to approve. >> Can I ask one question? >> One quick question. It's kind of down in the weeds, but I was reading a lot. >> There's a footnote. It's called low default risk obligation measure. >> Yes.
>> And it says it that you use a uh municipal bond high index. >> Yes. >> How do you why would you use a tax-free instrument that why wouldn't you use a US Treasury
obligation >> um or a taxable? >> We're for this purpose. This is a a an actuial requirement kind of like what's the liability
assuming you know no risk we try to use a proxy for what no risk looks like on September 30th of each year and we used the high quality bond rate and we came up with 4 and a.5% as a proxy. >> Okay. I I was just kind it's just
>> anything in that four range four four and a half I think would suffice. It's unusual to see, you know, a taxexempt index. >> Yeah. >> Integrated into a >> you know, non- tax,
you know, >> there may not been that specifics, you know, of direction. So, internally, we just said, you know, what sounds what smells right for risk-free. Okay. And >> then we disclosed it. Glad >> to hear that. I was just reading it. It
was kind of interesting. >> Sure. Thank you. >> Okay. So, if we could start first with a motion to approve the valuation. There's no further questions. >> All right. Do we have a motion to approve? >> I'll make that motion. >> Second.
>> All right. All in favor? >> I I >> Okay. Now, the declaration of returns. Um, and any one of us could handle that. So, I usually guide on this just because I've been the one talking. Uh, this is something the state of Florida's
required for about the last two decades. There there's no there's there there's no penalty for being wrong. You simply have to declare what you expect the return to be. There's very specific language. So I just usually give it and
then somebody says so moved and it's for the next year the next several years and the long term thereafter the board expects a 6.75% net of fees investment return. I I plugged in the 6.75 because that's our
recommendation that you link it to your actual assumption. So now with all that verbose language, somebody can say so moved and then you vote. >> So moved. >> So can I get a first for approval of the
declaration of returns at 6.75%. >> I'll make that and a second. >> Second. >> Okay. >> Okay. All in favor? Hi
>> thank you. >> Um so I guess next item for the actuary is are are you all prepared today? There's just so you understand this is swinging back to the experience study this the assumptions I recommended back at the October meet or July meeting that
was pushed off a couple meetings. Um because the decision wasn't made for this report, I just built in only the mortality piece because that's required. You don't have to make a decision today on the other assumptions, but I would like and you can
um but I would need I would recommend that you do so before I do the 26 valuation a year from now and build it in. The mortality was the biggest piece. I understand that if you still want to stay at the 675, then the other pieces that were recommending there was
retirement rates and salary increase. They were very modest. Um they barely moved the needle. But nevertheless, we still recommend that you adopt the other assumptions from that study just so it can prove to the
world, the auditors, the taxpayers, the state and so on that we are going through this exercise periodically about every 5 years. Um so that you can say you can give an answer when when I give you the summary report and say fund this
contribution rate. If somebody asks you on what basis are you using that you could say well we we do these assumption studies every five years or so that's the purpose but again you don't have to make that decision today especially if
you're still kicking around the idea of the 675 that then that's that's a whole different story. So what's the board's pleasure? Did you want to resume this discussion again or do we want to wait till a meeting or two
from now and resume it in the context of the investment return assumption as well? >> Well, I know uh we we postponed it to this one we had sent out because not everybody was here for the meeting prior. Um did you all have a chance to
come to a place where you felt like you need were ready to make a decision on changing the other um things were that were proposed from the actuarial study. Kyle, I guess my view would be if we're going to if we know we're going to
discuss the assumption further uh at the next meeting with and Bonnie will be here for that, right? >> I believe so. >> That that we and we can move it if we can move it down the road, we should
because we'll have more information at that point. >> I'm happy attending. I can um I'll have Troy redeliver the experience study to you and we can resume that discussion and go back over the results again. I I think that's a good idea.
>> Right. Yeah. I mean that's just my opinion. I don't know how everybody else how everybody else feels about that >> to doing it right. So that cost >> his has his me showing up and >> for the extra meeting. >> That's I mean other than that there's no
>> not going to cost us anything to wait. Right. >> I mean, what's the what's the downside of going ahead and approving it today? I mean, other than even if we revise the assumption later, there's not there's no claw claw back or anything. >> That the downside actuarally there
isn't. It's more of the the administrative the the flow of things, the efficiency of dealing with changes. Seems to me that you'd probably want to encapsulate that discussion on assumptions in conjunction with Bonnie's
input on this funded status issue all in one like a standalone. And here we are a couple hours into this meeting. You've dealt with a lot today. So maybe it's we we we freshen up, come back to the following meeting and say that's a a better approach.
That just my thought. >> Okay, >> I agree. Yeah, sounds good. >> All right, so we'll table the vote for the other items on the uh benefit study or the um
>> experience >> experience study uh till Bonnie until we can discuss with Bonnie next meeting. >> Yep. So Bonnie and I will both be here and we can tag off each other on on the whole the whole big picture. >> Yeah, actually that's a good idea.
>> Great. Thank you, sir. You have anything else for us? Uh I think with the only other thing that you had for me is uh you were perhaps interested in you know you get these annual member statements >> right >> annual meeting once a year that uh greater frequency and I wanted to have a
discussion on that before I I gave some thoughts. >> Yes go ahead. >> Uh so did I summarize that right that there was a request for perhaps quarterly was cut. So yeah, so um a few of the I believe it was in relation to
the drop statements uh were coming out uh at the end of the year and showing all four quarters in the one statement. So it looked like the work was being done throughout the year but then just kind of held until the end. So we looked
at instead of holding it all, what would be the cost associated with getting out those quarterly numbers at the end of the quarter rather than rather than holding them to the end? >> This is just for the drop. >> Yes. >> Oh, okay. Yeah, that's that's standard.
U most of our plans when there's a when it's based on planned returns, it is done quarterly. Um the the billing you see >> um our billing for dropped I don't know the exact I think it's around $100 per statement.
>> Yeah, that's what I was just looking at. >> So if you wanted to do a quarterly, you know, instead of $100, it'd be 400 per member, give or take. I I have to look up the exact number, but it's right around 100. So it' be an extra $100 per member per
quarter to get that done. >> 300 a year, right? >> Additional. Yes. Per member. >> How many members? >> Well, it would only it would only apply to the ones that are going into the drop. So, I think we've only had one or
two in the drop at one time. Um, the one just retired, so technically we've got one now. And then I don't know that we have anybody that's actually going into the drop anytime soon. Um,
So, what would we need to do if we wanted to implement something like that? Um, would that be some sort of emotion? Would something need to be drawn up? Uh, would verbiage need to be changed in order to to include that? And then we would vote on it.
>> Um, well, I'll let Lindsay kind of carry the weight on this one. you can vote on it now and we would draft an addendum to the contract to account for those extra benefit statements. >> Okay. Um yeah, so just to u refresh you guys,
the when the members retire and go into the drop, um the retirement check gets placed into the fund and it um they get a a statement. Now the statements that I've seen the member gets a statement at the end of the year and it shows the
yearly performance and it shows the quarterly breakdown. Um so what they were asking for is rather than getting all four quarters at the end of the year to get them at the end of each quarter to maintain you know to see the progress and um have a better idea of what's
actually in that. uh because there's no there's no uh access you there's no portal or you can't log into like your bank account to to check the balance or anything. The only time you can see is is my understanding is when that statement goes out. So instead of
getting a yearly statement um they were requesting a quarterly statement because the work had already been done. It wasn't like um it looked like the calculation had already been done during that quarter. It just wasn't sent out in a physical statement.
So, just to give a little upstart, >> I I'm looking at your guys's agreement with Foster and Foster, and it already provides provide updates of quarterly drop balances, if any, for $104 per member per quarter. So, it's already in here.
>> Okay. So, so to my knowledge, I don't believe that that has come to fruition. >> Okay. It's it's contracted for from the April. It was signed April 2024. >> I I think the connection here might be
that the or that the the ordinance probably says annual updates. >> Let me go check. >> I'm thinking but if if Lindsay agrees that we the board can just make an administrative policy to increase the frequency. I can't
there's no cost. I mean other than the the extra 104 the language she just read is you know we we build it in in anticipation that it might want to it might be requested meaning quarterly. >> So what's the what would be the total cost expense?
>> No depends on right now I don't think anybody's in the drop but we have we have one left >> one. >> Okay. So annually instead of 104 then it's >> 304. So >> 304. >> I guess what I'm saying is I don't have to amend the agreement because the
agreement has been amended for it. So what I said earlier that we'd have to do that. We don't. It is already contracted for >> seems seems seems like a pretty reasonable request. >> Sounds like a a benefit. We can start
horse trading benefits >> for actuarials. you you bless it and I'll Troy and I'll just take a note that starting now we'll start providing quarterly. >> Yeah. >> Well, as you as Lindsay saying though it's supposedly that's >> you just have to execute it. It's
already provided. >> It's in there. It just hasn't been approved for the financial part of it the 104. So that's all you'd be doing. >> Okay. I think >> correct know what the value of their retirement. I don't know the history of when you guys what the conversations were around
2024. If you contract for something that means you agreed to it. >> It's been a it's been a conversation that I've had several times over the years. And like I said, I I know that we've talked about it, but like I said, it just hasn't actually come to fruition
since I've been on the board here. >> It appears that everyone's in agreement. Did the motion require to be able to But she's suggested. >> I don't think it's required. I think you've already agreed to it. >> I'm just going to update it. Doug and I will coordinate together and we will make sure that it gets read the uh
>> perfect for the for what the contract is. >> Don't have to do anything. >> Okay. So, that's it. >> Great. Thank you. Anything else, Doug? >> No, unless you got something else for me. I think we've covered everything at the actuary.
>> Great. Thank you, sir. I appreciate it. All right. And uh from Clawner, Coffman, Jensen, and Levenson uh in for Bonnie, we have uh going over the review of the article written about the fund and the 2026 IRS milit rate.
>> Is there anything else you guys want to talk about with regards to the article? >> No. >> No. >> Okay. I'll go over the IRS mileage rate. Uh so uh starting for January 1st, 2026, any business um where you're traveling
on behalf of the board, you now get 72.5 cents on the dollar. So that's 2.5 cents more than you got last year. So we'll let you know. Sometimes that changes throughout the year. We'll let you know if it does. >> I have a second memo for you all. It's not in your packet. It It just got sent
out. >> Actually, it did get it in there. >> Oh, it got in there. I'm sorry. >> So next page 136. >> 136 of your your iPad. So, this is just uh moreformational, not necessarily for you all, really for your plan sponsor um and for foster and foster. Uh there's
several different documents and reports that needs to be publicly displayed on the plan sponsor's website. Um and if the plan has a a website, then there is some contact information. I'm sorry. Um there is some contact information
that you also need to include. So, this is really just an FYI. We're recommending that Troy sends this to the clerk um just to let her know if these are the things that should be displayed on the plan sponsor's website. Any questions on that?
>> Got to get to the page first. >> So, you're saying this would be posted on the town's Yes. website. The only thing that you need to if you you if you have a website, it's helpful to have these documents on there, but the only thing that you would need to post is the public records custodian, which is Troy. But this is really for your plan
sponsor. I just think with over the years when people move in and out, not everyone knows the information that must be posted. So, it's really just our office just trying to be helpful. Any questions on that?
>> So So would this be on the uh this would be on the town's website? >> Correct. Okay. Plan sponsor. Correct. >> Okay. Plan sponsor. >> And who coordinates with them to make sure that this information gets posted? >> So Troy >> Okay.
Well, not specifically by me, but part one. >> Okay. Okay. >> And do you need a a motion here to approve this? No. >> You might already be doing this, and I think that's what she's going to speak to right now. >> All this information is located, if you go to the town's website, it's under the
finance department's website. >> Okay. >> Thank you. >> Thank you. >> That's all I had for you all. Great. Thank you. Um, all right, Troy, Foster and Foster, uh, educational opportunities and the annual conference. Okay, so just the FBA 2BTA, uh,
conference is coming up June 28th through July 1st in Orlando. Um, if you're interested, this is the big one. So, this is one that fills up the fastest, has the most people attend. Um, this is where the vendors have uh, displays inside the big auditorium. you can go up, talk to them, ask questions.
We're there. Attorneys are there, consultants are there, other vendors are there. Um, so if you haven't been to that, I'd recommend, you know, going to one of those. And if you want to go to that, uh, send me an email. I'll put you in touch with our analyst. The analyst is then going to send you a survey form
um, so that we can help get you registered um, and track uh, as you do things. And so once you do that, they're going to then sign you up. They're going to send you a confirmation that you've been uh signed up and they'll send you your hotel registration information. That's al also a way to track all of
your expenses. So, if you're interested, do it ahead of time. I'd recommend letting me know at least 60 days ahead of time. Uh because like I said, uh once it opens, it gets filled fairly quickly. Uh we want to make sure you get registered and get a hotel uh room in
where the uh meeting is at. So, just send me an email within 60 days of the meeting. That's my recommendation. And that's it for that. And we can uh kind of move straight down into the consent agenda if that's okay. And the consent agenda starts with a
summary that's on page 137. Do I need to just if there's any questions about the um summary or any of the warrants that are all included in the overall consent agenda or the fund activity report be happy to answer otherwise if there's
none I'd be looking for a motion to approve the consent agenda as a whole. Move to approve the consent agenda as presented. >> Okay. And a second. >> Second. >> Okay. >> All right. All in favor?
>> I >> I >> Okay. Thank you. And so that's it. We're down to trustee reports, discussion, action. >> All right. Any anything further to discuss? >> All right. Our next meeting scheduled for Tuesday, April 28th, 2026 at 2 p.m.
At this time, 4:15, meeting adjourned. All right. Thank you. >> Thank you. >> Thank you.