--------- Welcome everyone online. This is the beginning of the police and fire workshop for blocka retirees. I wanted to welcome you. Currently, we only have the one item for agenda is we're discussing the
fixing the multiplier to make it static rather than have it fluctuating. We have Patrick Donlin on line with us. I've got your handouts from the previous meetings, Patrick, if anyone is
interested in helping themsel to that. Well, um I don't know if you want me to kick this off or or how would you like to handle it? >> You turn it off. Can you turn you off or no? >> Yeah, she said yes. Patrick Kyle says
yes. >> Okay. Well, basically um your plan gets state monies, both the police and the fire plan. And the idea of the state monies is to provide additional benefits for the
firefighters and police officers. And uh basically a long time ago it was determined that that means over and above the general employees in general. And so your plan put into
effect that all the police and fire get the same >> I can go. >> Patrick, can you turn your volume up some please? >> Yeah, I don't understand. They had a hard time in the other meeting.
I don't know if I can do anything. Let me check. Sorry. >> Is that No. >> Just get up closer to your microphone. >> Yeah. I mean, I'm in I'm on a laptop. >> Is that any different?
It's pretty low. I don't think it has anything to do with Patrick. I think it's on our system. >> We've got some remotes here. We're going to try that to raise it on the TV here. >> Well, is there a call-in number? Maybe
that would help me. I don't know. >> You turn it up. >> How's that? Do you want to try again to say something, Patrick? >> Sure. The whole idea with the state monies is to provide additional benefits. >> That's better. Thank you.
>> Okay. So, yeah, the general employees have a 2.5% benefit acral rate and the idea is that the police and fire will get an extra multiplier on top of that.
And what we do is we accumulate the state monies and we say how much can that provide to the police officers and firefighters both the active employees and the retirees.
And so we do that calculation every year and it goes up or down based mainly on how well the in the investments do in the plan because we're accumulating those state monies with earnings. So if
the earnings are high then we have more accumulated state monies to work with. If the earnings are low we have less accumulated state monies to work with. And so I think, you know, you're the only plan in the state that I know of
that has this arrangement. And and so, you know, we're proposing, you know, that the unions negotiate with the city and go to just a fixed multiplier for the activives and the retirees. That's
the way most plans work. If you retire and the multiplier is 3.2% 2% and you get your benefit, you know, of $1,000 a month, that benefit stays constant unless there's cost of living adjustments.
And so, I mean, that was a really quick version of the events, but I'd be happy to answer questions or I don't know how much detail you guys want to go into. Hey Patrick, it's Chad. Just for
clarification, these fixed rate multipliers will be set via union negotiations and then the city commission will vote to ratify that contract. Is that correct? >> Yeah. Well, right now in your pension ordinance, you know, the city's code of
ordinances, it specifically states that the actuary re-evaluates it every year. Um, so a new ordinance would have to be adopted by the city. Um, it's separate from
negotiations, but you know, it's still part of it because any pension changes are subject to bargaining. Does that make sense? >> So, so in other words, the city commission will set the set the multiplier as recommended by whomever.
>> Correct. So >> and then it would stay fixed and then the only time it would be changed is if you know some ordinance were adopted in the future to change it. But generally retirees benefits aren't changed only
activives like if 10 years from now you know the union and the city agree that for active firefighters and police officers we're going to change the multiplier. you know that that happens but generally not for the retirees.
>> So I guess I just had a question uh leading into what uh Chief Brford just spoke spoke on and as far as the union is concerned does it have to go through the union negotiations or union vote? Because I think the last meeting we we talked
about we talked about uh presenting it to the union and allowing the union union members to vote and it moves from the vote opposed to the negotiation portion because are we providing it an opportunity for when we speak on
negotiations negotiations basically states that they're uh can can negotiate the number the fixed number that they're looking at. Um, so I guess I think the term I guess we need to clear up or we need to clarify um if that is is actually the case where they can
negotiate the the rate. Well, right now, like I said, as the actuary, I have to use the city's laws, you know, their code of ordinances, and that specifically states that the multiplier changes every year
based on the amount of state monies in the accumulation. And so, as Chad just alluded to, it the only way that can be changed is by the city council adopting a new ordinance.
And so, you know, whether they're going to do that or not, you know, is up to them. But in Florida, you know, the if the it's subject
pension benefits are subject to collective bargaining unless waved by both sides. So if the city, you know, agrees to something without bargaining it, that's perfectly fine.
But they have the right to bargain it. So I think the idea of presenting it to the union members is so that the union itself would know what the members wanted you know in order to present that to the city. That's my understanding.
But you you know does that answer the question? >> Yes. Yes it did. Thank you very much. And you know, as far as you know, we're we're calculating the new benefit for each person right now. We'll have that
done this week because, you know, for both the police and the fire, the benefits are going to go up as of October 1, 2025. Um, you know, they just recently went down, and now they're going to go back up, not all the way to the amount they
were before, uh, but to a different amount. Um, and then yeah, I guess I just wanted you guys to be aware of that. >> Thank you, Patrick. That's helpful.
>> Does anyone have any questions for Patrick? or what are your feelings about in encouraging the the union to accept a um a fixed multiplier rather than the
fluctuating one. Oh, I know. The other thing I was going to say is that, you know, in the previous meeting, the investment consultant stated that, you know, we're probably going to get about our expected return for the current fiscal year from
October, 124 through 9:30, 2025. And so based on that, my guess is is that the multiplier would stay the about the same next year as it is going to change to October 1, 2025.
I don't have another question about the fixed rate, Patrick, but if you have a moment, can you take us through the plop and help me understand how that works and what we do with it? >> This would not be for >> retirees. This would be for activives.
>> So, so when somebody retires, they have different options of how they can draw that monthly benefit. And the normal form is a 10ear certain in life. I think with with um a certain
amount continued to your joint annuitant. So that there's a normal form of benefit, a monthly lifetime benefit and but we have options where they can choose to get say a life only benefit
and then they could get a higher amount but it's all actuarily calculated so that it has the same actuarial present value so that the plan isn't supposed to lose money or gain money if you choose an optional form of
payment. And now what the proposal is that you could draw like um 5 10 15 and 20% I believe of your benefit as a lump sum.
So if the total value of your benefit is $400,000 and you choose the 20% lump sum then you would get $80,000 as a lump sum. But then you would only get 80% of your
monthly benefit the rest of your life. So it's just providing another option of how to draw your retirement benefit, but it doesn't have any negative or positive long-term impacts on the plan because
we're actuarily calculating based on your age um and your joint annuitance age. you know what what we could give you as a lump sum and a reduced lifetime benefit that has the same value as if we didn't
give you a lump sum. Does that make sense? It makes sense to me Patrick. The other question I had is is that would be based on your average final compensation and then all the life expectancy things. Correct.
>> Yeah. I mean the first step is we calculate you know this new multiplier let's say for fire right now after 10125 it's going to be 3.22%. Um so we would calculate your average
final compensation multiply it by your years of service multiply by 3.2 22% and get your base monthly lifetime retirement benefit. So if that in my example is well let's say it's $4,000 a
month and you know that might have a value in today's dollars of $500,000. You know the total value of that $4,000 a month payable for your lifetime. Well, the option then would be we could
give you um $80,000 right now as a lump sum, but then you would only get $3,200 a month for the rest of your life rather than the $4,000 that you would have gotten had you not chosen that partial
lump sum option. >> Thank you, sir. >> Sure. My question is do retirees attend the union meeting or is it just active union members? >> Yes, only active members. Are you getting a
sense from them or have this has this been discussed at all to fix the multiplier for retirees during the union meeting? >> I believe and I will have to check how we we sent it to them, but I believe we said that for the multiplier to be
increased with the state monies going to the city and then the request for the multiplier to be increased across the board. >> The idea here isn't just to take care of future retirees. It's to lock things in
for the current retirees as well as the future retirees as >> Okay. Okay. Thank you. I appreciate the update. Yes. What? And I've had a couple of retirees tell
me that they've seen as much as a reduction of two to $250 a month um as the multiplier has been gone from 3.15 to 3.0 or to uh 3.05 5 right now. So the
whole idea behind this was to have um Foster and Foster run this report for us so that we could see what we needed to present as the police department pension board when we have an
actual meeting to vote on it so that we can then send it to the city commission to see if the commission will approve the the change in ordinance because then it locks them into the current retirees into a
it locks them into a multiplier as well as the current employees and future retirees. Then there's no fluctuation whether it's plus or minus. It's just there >> which is honestly based on what I've seen over the years is a positive thing
um for for both parties because it does fluctuate. It goes up and down at different times. >> And the police is still currently in negotiations or or it's on a a voting level. Where where do where they stand?
Well, I think the last time we talked about it, it was talked and discussed that we were presented to the union and the union members would then in turn vote and provide their decision to um I believe it was decided to provide a
decision to HR and from there we would move on and whether they were in favor or against. Um and that that was provided to the union and uh I believe it was delivered it was voted on and the um decision was delivered on as in favor. Um the reason why I asked that
question if it needed to be done in a union negotiations because we are in the union negotiations at at this current time and been presented the uh final request from the union and their uh representative and none of uh this has
been mentioned in the union negotiations at all. So, it it needs to be part of the new negotiations or I'm I'm trying to it it's just done. You you've done you've put it forward and they they have agreed
to it or they haven't agreed. >> They have. That's what I just spoke on just previously. We put it forward to them. They have agreed to it. They put it to a vote of of their body and they have agreed to it. Um and again ne neither um in any of the discussions as
part of the negotiations has it come up as part of the negotiations um with between the union and the city. >> I see. Thank you. >> Chief, you can correct me if I'm wrong. They can hold silent. You can propose anything you want. They can hold silent and then it would just take effect.
>> Correct. >> Wait a second. May maybe I don't understand that last comment. What do you mean if you hold silent it goes into effect? >> So the union has the right to negotiate or
bargain impacts in wage an hour. If the city were to propose a fixed rate multiplier and the union stayed silent, it would just take effect. No different than any other rule change. Oh, I thought you were talking the other way that the if
the union proposed something and the city stays silent. >> Okay. >> No, city is unable to stay silent. >> So, if if all this passes, then what we need is an ordinance change to present to the city commission to have them vote
on that. >> That's correct. That's my understanding from what our last actual meeting was. um was for us to request Patrick run this report for us >> so that we could then in turn later vote
as a as the pension board to then have it sent to the commission for the commission's review and approval to change the ordinance to um reflect option two the fixed rate for retirees and um future retirees or or
the current employees. And I thought that the process that we're discussing right now is exactly what the u our attorney that represents the pension board um told us that that's how it would have to go.
>> Okay. So when we convene at 1:30, we can add that as the other item to present it to the attorney that the union is in agreement. the union members would like this to go through so she can draft an
ordinance to present to city council. >> Does that sound good? >> Sounds appropriate to me or the right way to me, but I believe we're going to have to vote on that. I wish the attorney was on on with us here. >> He'll be in at the 1:30 meeting. >> I mean, this is the workshop, so we're just discussing things.
>> Absolutely. But that sounds appropriate. Very good. Thank you. So for for police, I did this study to do 3.2%. Is that the what the police decided was okay then? >> That's what we requested.
>> Yes, sir. I believe that's what we requested. >> Okay. Well, then yeah, she has we have the study done so it could go forward, you know, with an ordinance to the city. Then I will add that as an additional
item on the next agenda. Thank you, Patrick. >> But now we How about the firefighters since they're in the room and we already had the meeting for them? >> Yes. So we're current >> we're currently in negotiations now. The
there's a proposal of a 3.27 fixed rate multiplier. >> Okay. That contract will hopefully go before the commission next month for ratification and that will determine where we go from there.
>> Okay, sounds good. Thank you. >> Anyone else have any questions or >> Oh, it depends. It depends on when each item gets put on the agenda. So depending on when it's resolved between um whether or not the fire department's negotiations and where are when our
ordinance is completed and ready to go before the commission. It would depend on on which meeting it came u before them. So it could go as uh two separate items at the same meeting or it can go as two separate items at different meetings. Would
the chief would this fall under a during the time of budget prep and budget workshops for this to be added >> w with all intents and purposes I would say yes but depending on and it what has happened in in uh other instances it
would basically depend on negotiations and it could fall after um uh our budget prep time frame. So, >> Patrick, when does the um state monies um get calculated? At what point in the
year? >> Well, it's not in until at least December. Um because we have to get the returns and everything for the September 30 quarter and we have to reconcile the membership.
So, it it would be at least December. We just got the current money in for 2024. So, we just got the notification from the state of how much each uh police and fire departments going to get. If that
helps any, >> right? But that's only one piece of the calculation. You know, the amount of state monies is one piece, but then the other is the accumulation. So, we need to know the earnings for the plan
through September 30th, you know, which hasn't happened yet. And then we also calculate the extra benefits we've paid all the retirees. So, we can't do that until,
you know, after September 30th also. So, do we need to wait until December to be able to present this to the commission if the board >> No, no, you do not because we've done the study already to go to
3.2 for police and it shows, you know, what the current cost of the city are and what the proposed cost of the city is. And that tells them, you know, at this point in time what the effect would be. You know, the effect might
change next year or the year after, but you know, they need to make a decision as a council based on the most recent valuation and they have that information. You know, if we wait until after December, then we would have updated
numbers after we do the new valuation report. Uh but there's no reason that that has to be there's no reason you have to wait until then to propose this and the report that you gave us. The state monies are calculated within this
specific report just as a a screenshot I guess you could say. Uh I don't I know I don't know if I understand the question. >> So in in the report that you gave us for scenario two or one and two,
does it include what the state funding was or the monies that came into the state for the the plan? >> Uh let me just find what you're looking at real quick. >> M ask a quick question. Patrick, did you provide them with that history like you
did for us over the the years? So, we have a 22year history essentially of what the multipliers done, right? And we based our average on that averaging of 20 plus years. So, we didn't take the highest of the high
or the lowest of the low. We averaged it out. That's where we came to that fixed rate number. Oh, but I I I provided that, you know, like a six-page document that explained the scenarios. I believe that's what you're talking
about. And and so you know that was updated through the um 2023 and then um you know based on the new valuation done as of October 1, 2024
the multiplier was rising to 63 or or 3.13 and like I said the and then I did the study to show show you well what if we go to 3.20 20 instead of 3.13.
So the city can see the effect that would have. And like I said earlier, my guess is is that when we do the 1012025 valuation, the state monies are going to stay about the same. So in your case, it would be about 3.13.
There would be very little change in that. Does that answer the question? >> Yes, sir. And so Patrick, can you clarify something for me? When the state monies go up, does that drive the multiplier
up? Not very much because the the calculation accumulates all of the state monies that we've ever gotten with earnings because they've been in the plan, right? And
they're earning money. And so it helps, you know, that the state money went up. But well, let me pull up the calculation real quick. So for FIRE, let's say the accumulated state monies with
earnings as of September 30, 2024 was 8,956,000 and we had paid, you know, benefits to retirees of 5.7 million
and so that 8.9 9 million in state monies that gets earnings. So the effect of the earnings on the 8.9 million is more significant than okay, we're going to add another 87,000 this
year. Does that make sense? So it does help, but it's not the biggest component of the calculation. >> It's based on investment returns, >> right? But Patrick, just to to make sure that I'm correct and so that the retirees
that are here and that are online understand, we're looking at going at the possibility of going to this fixed rate which will increase the rate in which we have that's the variable right now.
And the way we're going to do that is by allowing the city to have the state fundings that come in. And if it's in excess of what it would be to anything in excess of what it would take to keep the multiplier where it is, they
can use for basically the general fund. But then if the if the state monies are low the following year or if there's any fluctuation that would be a negative impact to the city then the city would have to pick up the difference.
Yes, that's exactly correct. I mean, right now, yeah, we would right now we do evaluation every year and we say here's the total required contributions that are supposed to go into the plan, right? And they would be able to offset
that required contribution with the state monies, which is what they're doing now. Um, it's just that we used excess or shortfall accumulated state monies to change the multiplier. Now, it wouldn't change the
multiplier. It would just affect the city's bottom line cost. Like you said, if if the state monies go up, that helps bring down the city's requirement. If the state monies go down, that brings up the city's requirement. So yes, they
would be, you know, in good years that would help them, in bad years it would hurt them, but it would no longer affect the retirees or the active firefighters or police officers. That's correct.
And based on prior meetings um when we've had discussion on on this particular topic, it's your experience that a lot of municipalities have adopted an ordinance
for a fixed multiplier. Is that correct? >> Correct. I mean, I think, you know, I'm pretty darn sure that of my 85 or so plans, you're the only two that have this arrangement. Everybody else when the retirees retire, their benefit is
fixed, unless the plan has an automatic cost of living adjustment, you know, in the plan, then then then their benefits go up each year. But no, none of my plans the benefit goes down for the retirees,
you know, on a regular basis. >> And my office has 66 plan plus plans and they're all fixed multiplier except for Vodka >> for for the retirees and the current correct future retirees. >> Correct. >> Okay.
>> Does that make sense to you guys in the audience? So I feel like we're on the right tracks. The effort to get this fixed for the retirees and is also good for the current employees for their future
retirement. Everyone seems to be on the same wavelength and um the negotiations have been very helpful and moving forward. We can bring this to the attorney at the next this coming meeting today and ask her to draft something up
for us. Does anyone have any other questions? Any any other items you'd like clarified or while we have the experts here? That's you, Patrick. >> Maybe on this topic.
>> That's it. That's it. Chief, anything else you? >> No. No, ma'am. Not for me. >> Okay. Chief, anything? >> No, ma'am. Thank you. >> All right. Thank you everyone for joining remotely and coming to the meeting. I appreciate it. Thank you.
>> Bye, guys. See you at one o'clock. Part: 2
over here. >> All muted, >> huh? >> Aren't they all muted? >> It doesn't matter. We can still hear whatever's going on in their background. It happened the other night, too, cuz we heard little chirping birds and then that person left and it was gone.
So, it's either Anna or Anessa. >> Yeah, we're all here for our screen. Just >> What about the echo? >> And then ask one of them to speak. >> I >> Patrick just came on. >> Okay. Something is going on in this
background. Then >> I can't hear you all. Well, with no echo. >> No background. No, >> those are coming. Yeah. Did you close YouTube down the microphone?
>> She said, >> but the echo was still there right before the music. >> There you go. It was YouTube. >> Okay. >> Okay. Well, thank you YouTube for going away. Um, we'll keep going. Um, fifth
trustee nominations. than anybody. I said I didn't know of anybody else. And we know that Mr. Norwood was reappointed and I don't know if he had an excused absence today. I have no idea. >> I was not notified. He was reelected. Okay. So,
>> he was at the last commission meeting he was reappointed and hopefully he was notified as well. Um I he I believe he is aware he was reappointed. Okay. But I don't know if he knows about the meeting though. >> He he was not invited. I >> Okay. So they therefore that makes
sense. That's why not here. So Mr. Norwood's going to remain on the board. Thank you. >> You're welcome. >> Approval of prior meetings minutes. Do we have a motion to approve? >> Motion to approve. A second. >> We have a motion and second. All in
favor? >> I. Any opposition? Thank you. On to Capitol City Trust report. Mr. Madrin. >> Good afternoon. Dwayne Madrin, Capitol City Trust, and the report is up on the screen and we can go to the policy
review. So, for compliance purposes, the policy the the fund is within the operating range called out by the policy. There are ranges that I'm allowed to float or roam around in and um everything is within the range. The
maximum equity that can be um held is 75% and I'm at 72%. So if you'll notice um large cap equities are at 40.2% right at the top of the range and that's
at the expense of being underweight small cap and underweight international. That's because the growth is in large US companies like Microsoft, Apple, Google, um Nvidia, um Walmart even. And the rest
of the plan is pretty much neutral. Um any questions? >> Anyone have any questions? >> So if we go on to the next part of the report, which is the performance. So for the second quarter the
performance for the equity side was 9% outstanding. Um the first quarter was sort of disappointing because that was when the liberation day happened and the tariffs were announced and the market went down but then earnings were better than expected and the negotiations for
tariffs began and the reprieves began and then the market loved that and snapped right back. So year to date it's up 9%. the equity equities themselves are up 10.2 the high yield bonds are up 3.5 so
things are better much much better than they were um you know back in March um and then July was a good month if you page down to page five you can see we're calendar year to date the equity side is
up 7.6 six. So, still have August and September to go, but fiscal through through June, the equity side has produced 6% um excuse me, 6.95%
on the fiscal year. So, maybe we'll break seven. I think Burgess has a number for you later on. I won't get into that. I'll let him tell you the total return, but the equity side is looking decent to beat the actuarial rate and then if we keep going, I'd like
to share two or three charts with you and then I'll be done. So, the market overview for equities um equities are driven by economic growth. Our partners at Goldman Sachs on inauguration day had
growth at 2.4 4 and then the tariffs hit and it brought growth down to 1.3 and but next year um growth is forecasted to come back up to about trend at 2.2. So um growth is still there although
it's slowing down the second half of this year. Um part of that's tariffs part of its uh cost of living um health care um housing uh slowing down. The next chart, if you page down, page um
eight, shows tariffs. Historically, they're high as we all know, but they've been higher. Back in 1930 and even in 1900, tariffs were even higher back when tariffs were more uh popular for various reasons. And then page nine
shows earnings per share growth, actuals versus consensus. So the dots are the actuals. So you can see historically where the market usually beats the forecast and it did in the first quarter 12% and that's a big reason why stocks
snap back. And then page 10 is uh important because 33% of the S&P 500 is being driven by seven companies. They call them the magnificent seven. And if you go down to the top 15 largest
companies by market cap, not by employees or stores, but by market cap, um 40% of the stock market is being driven by 15 companies. And for instance, Netflix is now the 15th largest company in America. Um so that's
important because a large part of your plan is invested in large companies. So Apple, Nvidia, Microsoft, Google, that's what's doing it. It's not the small companies like Dollar Tree. Um, page 11
talks about artificial intelligence and the contribution that it's making to earnings per share growth. On the left hand side, it was the growth rate before AI came along and on the right hand side is the growth rate after. So, it's
making a big difference. A lot of the the news you hear about today, artificial intelligence, you know, chat, GPT, driverless cars, robots, I mean, that's that's AI. Um, and then, um, just a few bullet points on, uh,
page 12, chart 12, just summarizes capital city's um, main points we share with clients. There's probably going to be two cuts this year. Of course that always that forecast always changes. The tariff concerns have brought growth down.
Equity valuations are expensive but that's being driven by the very large companies and artificial intelligence is causing profit growth to create tailwinds. And then we can look at the asset allocation on page 14.
This is a snapshot of a few days ago uh actually a couple weeks ago. So it's a 13,220 185 that does not include the private real estate and the private infrastructure. And so 65% in equities and so that's a
moderate growth stance. It's not aggressive but it is moderate. And then page 15 are the uh index funds by Vanguard and Fidelity. A very cost-effective low fee way to get access to all the stocks and bonds out there.
Um, that concludes my comments. I'll let Burgess cover the macro stuff and the total plan information. Any questions for me. >> Any questions? >> No. Thank you. Apparently, >> thank you. >> Okay. Thanks. Thank you, Madam Chair.
And and >> I was going to first let's entertain a motion to approve the report as written. That's okay. I'll make a motion to approve the report as provided. >> Second. Have
>> a motion and second. All in favor? >> I. Any opposition? Thank you. >> Go ahead. >> Thank you very much. One of one of the slides that Dwayne just showed um was that S&P slide that showed um
how few of the stocks in the S&P 500 represent by by weight by capitalization was such a large piece of it. So we have a concentrated market which is somewhat uh it concerns all of us professionals
in the market. You think about how we live, what we do with ourselves. We watch too much television. We watch too much Netflix. How big how big is Netflix now? >> Um, about 800 billion.
>> It's it's such a big company. It it it moves the whole market. >> Just one company. Um, we use all the social media stuff which I'm not into but you know Meta, Google, all these companies are being
driven by social media search engines and now Nvidia which makes these super these chips these processors that that allow gathering information uh chat GPTs. Do you guys use it yet? Have you
accessed it yet? I know what you're referring to. I haven't used it. >> I haven't used it. I think we we're on the other side of that age group to some degree. >> No. Well, I mean, I like it. I >> I know what's going on, but I >> I'm using it. It It will
you if you put in restaurants in Athens, Greece, and it'll it'll give you >> hotels in Greece. I mean, you can do so much so quickly. And this is where we're all headed now. And so that's when you
look at the concentration of the market, it's reflects who we are and what we do. This phone, which I just dropped on the floor, Apple, most people have Apple phones, but but but then they have other Apple applications.
Microsoft, we all have Microsoft in our offices. It dominates the uh the office work environment. Probably they probably have office here at the city. But the rest of the companies in the market are just chugging along and don't get much attention. All the attention is
about 7, 10, 12, 15 companies and that's it. It's a little concerning because if there is a a technological shift, quantum shift that makes these companies um less important, obsolete,
then that would be a big uh earthquake, a big tectonic event in the stock market. I don't see that coming, but that's what I think we all fear when we have so much money in so few companies.
All right. Uh, I wanted to talk about pages one and two. These are This is something I put together for you guys. Um, it was my turn to do one of these. U, it doesn't really affect you directly.
Uh, but the I just want you to be aware of this because our industry is is more and more being impacted by private equity. private equity with with the exception of of the private real estate here which makes up a very small amount of your
program. All the other equities in the program in the in the plan uh are liquid. They're marked to market. There's a buyer and a seller every moment of the day for these securities. And with that there's transparency
and and there's a knowledge of valuation throughout the day, throughout the week, throughout the month, throughout the quarter. So at the end of each month, each quarter, we have the bank has capital city has a good understanding of what
the portfolio what your assets are worth in the private world really got going about I'd say 15 years ago got a some really good speed on it where a lot of big money college foundations and institutions large state
plans investment plans state funds were convinced by their consultants that, you know, you can put you can take money out of these publicly traded stocks that move around and put them into a private sleeve and you don't have
to worry about volatility anymore. You can rest back and relax and and just enjoy the ride because there's not going to be any volatility. But something nefarious has been occurring and that is when you put your money with
a private company in a private portfolio of private companies, everything's private. There's a a decision maker, the general partner that decides what these companies are worth. It's like you taking an examin an
exam and writting your own paper. Would you give yourself a hundred on the test? >> Probably. Okay. >> Well, now we know. >> Well, that's what's happening. And and so I I have suspected for quite some
time now, about the last four years, that the disparity in returns between the private and the S&P 500 as a proxy of which you invest in now for the market, stock market, showed that private was just killing it. that the
that the that the days of being able to prosper with the S&P 500 type of exposure were over. And I thought to myself, that can't be. And it turns out I was right. This graph shows going back to 2009,
the the fact that the S&P 500 has has performed better. And when you take the fees into account that these private companies charge, which are egregious, the disparity is even larger. It's such
a big problem that even Harvard University's foundation, which endowment, it's 53 billion, less just under half of its invested in private equity. And with all these government cuts underway
to to you know these institutions are being cut back with federal money they don't have the liquidity to to pay their bills. So they're having to actually Harvard and Yale too are actually borrowing money from local banks to be
able to make payroll in some cases because the money that they have in the this private stuff is illquid. But this point u the article here's article is is that Harvard overstated the value of its foundation to get better underwriting
terms u when the these bond issues were done conclusion here on page two what we're asking is that the industry tighten up and and try to enforce a some honesty here and integrity and and
have third party uh firms uh hire them to to come in and independently judge the value of these private products. That's our recommendation to the industry. We're supposed to self police ourselves, right?
This is an example of of that. Will it go very far? I don't know, but I'm trying. Um, is Patrick on the line or not? >> He was. >> He looks like it. >> Is he out there somewhere? Uh, let's go
to page eight. There was a question about uh >> fiscal year-to- date performance to the end of June, it was 5.4% net of fees. But since June 30th, the
stock market has moved upwards enough to I would I'm just going to take a guess here, but you're probably somewhere around 7%, maybe a little over 7%. Uh cumulative, we have another
five weeks or so left in in your fiscal year, the end of September, it's over. And uh it's quite possible that we could see a uh are you at 7.4%. Does that sound
right? Is that your expected rate of return? >> 7.5. >> 7.5. >> 75. Patrick, are you moving to 74? Are you still at 75? >> Uh I think we're keeping it at 7.5.
>> Okay. But uh the only reason I asked mentioned that is I think it's quite it's likely you're going to get 75 this year. Now since I have you all here and your esteemed trustees, I'm going to ask you
this question. What what would be a couple of catalysts that might help you get to that 75 to push this thing up even more in value? What would be some events that might push that? >> The mayor knows because
she follows financing >> for her clients when they need to borrow millions of dollars to buy this land around here. >> Um, if the Fed Federal Reserve Yes. reduces the rates, >> that would help. >> Absolutely help. That would be a People
would be ecstatic about that. um because for obvious reasons. Um which would be another another factor you think that might drive prices up for equities >> back on tariffs again. >> What's that >> tariffs again? That would drive it in
the wrong way. Um I'm thinking out loud. And nuts. >> Well, I would say earnings um earnings surprises and and Dwayne showed uh Goldman Sachs illustration of how a lot of the earnings estimates on the street
uh undersshoot the actual outcome. If we get a better outcomes on the earnings growth rates in the economy, that would drive equities up further. There's a cloud hovering over that tariffs are going to hinder uh earnings.
So far they haven't uh economists and uh specialists in the area are scratching their heads but I think the conclusion is it takes a while for these things to kind of work their way into the system. So that's why uh we haven't really seen
an adverse impact on uh on earnings yet. So those those are two big ones. interest rates, the Fed. Oh, and the third one would be inflation, which is kind of tied to the first one. If inflation numbers become
u disturbingly high, if they start to move back up, then all bets are off that the Fed's going to cut rates. All right, page five, here are the summary remarks. quarter year to date one year. I'll just
just point out these are really good numbers. The third bullet, the one year plan earned 1.5 million 11.6%. Net just a little behind the model
rankings very good top third. That means that 69% of your peers, these are public plans, police and fire, public service plans around the country, didn't do as well as you did nationally.
Uh then the three-year number, 3.8 million, average 10.4, our bogey is 75. >> What was the reason why um Somebody didn't do as well.
>> I mean, why is your ranking better than others? Is that your question? >> They Well, it's the asset allocation. Uh, a lot of these plans are are are muddied up with private equity, for example,
which is struggling right now. Uh, and so we just you've just been able to keep away from a lot of these asset classes that have underperformed. You've been in better asset classes overall and you've kept your expenses down.
Dwayne mentioned it uh but I'll mention it again. Um, when you have so much indexed, you you are eliminating a huge component of fees and that's a big part of your ranking. three-year number 10.7 10.4 net
um you see the seven 107 versus 104 the the difference is.3 so your expense ratio is.3%. Uh I think your peers in this size plan is probably closer to I don't know 70 basis points something
like that maybe. What do you think? So you're uh you're getting a good deal here. Costwise you're less than half of your peer group. Um the 10-year number I've gone in here for you. Uh 8.3 million
7.2 to net our target 75. That's pretty good. I mean, a bullseye would have been 75. We're pretty close to bullseye, I'd say. Uh, Florida retirement systems at 6.7.
They have a lower, let's say, they have an easier job hitting the bullseye than we do. We have a higher standard of performance standard than they do. Um just a a few comments here. Conan
Steers is one of your equity managers but in a in a very specialized area what we call infrastructure. These tend to be more valueoriented assets. Utilities make up a big part of
that asset class. Um, and this area is getting a tremendous amount of interest because of AI and the building out of these energy producing systems. Utility companies are
are going crazy right now try to build out their capacity. So I know you got the seinal coal plant out here. It's all coal, right? There's no there's no
It's not gas end or and uh is it so it switched over completely? It's all gas now half time. So the current administration has put the gibash on the EPA
on the clean air standards actually began those standards began after this all the smog problems in in LA back many many back in the 70s I think. Uh but because the administration and planners are so fearful that we may
not have enough energy to keep up with this demand telling everybody the industry you can burn all the coal you want. You can mine all the coal you want out of West Virginia. It's filthy coal.
Uh mine it burn it. We need the power. That's the current program right now. I as a fisherman, I don't like coal cuz I don't like what it does to the water. All that all the s rains down into the
water and and it it just bad bad for the fish, bad for everything, bad for us. Um, so on page eight, uh, you can see the numbers in a different way. 10 years ago, the program was at 10.3 million,
>> excuse me. and um you earned 8.3 million during that period and the net flows uh during that period was negative4.4 million. Now that number is compile
comprised of a number of things. It starts with the we'll call it the 185 money that comes in from the state insurance premium money. It includes the minimum city contribution. It includes the payroll money that you guys put in. So
those are the three pieces that go into it. And then the negative part is um is primarily the uh retirey expenses. But the good news is that the you earned almost twice
what went out. So, actuarily, I mean, Patrick knows more about that than I do, but it looks pretty healthy to me. Nice. 14.3 million rounded. I'm sorry, 8.3 million earned over the last 10 years.
Notably on bottom page nine, uh there's a a underweight to fixed income and an overweight to cash. I would say because we're getting we're getting over
4% on earnings on the cash. You're really not it's not hurting you right now because essentially we're substituting the a portion of the fixed income for cash. Uh and right now there's no I don't have
any problem with that. If rates do go down considerably, having the the bonds at par would would be beneficial. Anyway, those are my uh remarks. Good good solid program, competitive uh cost
structure. Um, I guess the only last thing I'd mention would be on page 14, private real estate, which um kind of stumbled along uh beginning
in 2022 when interest rates were taken up quickly. All real estate stumbled. Um, we've had four consecutive quarters of positive returns. So we have a you know 3.6%
return now for the last 12 months. That's good. That's all I have today. >> 24 >> 20 >> sir. Well, this is a good good history because
it shows the fiscal year-to- date returns going all the way back to 2006. These are net returns, net of fees. And by and large, you've had some good positive years.
Uh the the first drop that got everybody scared was the the great recession collapse in 2000. Actually, this is a fiscal year ending 2000
September 30th um 2008, but but the collapse continued on for another two quarters ended in uh in March of 20 of 09.
Excuse me. And um probably notice 2022. This is interesting. In 2008, we had fundamental problems in the financial system. We had
uh fraud in the in the mortgage market uh that was so big that I mean it took down banks, it took down insurance companies. It was a major problem. But in 2022, there was nothing broken.
Why did it go down so much? When the Fed began to raise rates in January of 22, first thing it did was it be it pushed the stock market over and it pushed the bond market over. It pushed them both. Bonds are sensitive to
interest rates. Interest rates go up, bond prices go down. What happened in 22 is both stocks and bonds went down a lot. In 2008, bond prices actually went up. People
people went into put their money into bonds, moving money out of equities during this period of duress. Very strange phenomenon happened 22 Motion to accept the Burges report as
presented. >> Second motion to second. All in favor? Thank you. Next on to Jen Levenson. Hi, good afternoon everyone. Um, just a
couple items for you. The first is the entities that boycott Israel memo. This is a bill that was passed um in the Florida House that effective July 1 of 2025. Um, public funds can no longer
invest with companies that um are found to have boycotted Israel and have been put on this list that the State Department um keeps track of. Uh um sorry the department of management services keeps track of this really will fall to the consultant. Um Burgess has
previously mentioned that he has sent this memo um to all of his investment managers so that they are aware. Um if any of the investment managers are found to be making these investments um we would need to divest from those. Um,
again, nothing really for the fund or the trustee specifically to worry about, but we are doing everything that we can to comply with this. Um, the statute also requires us to add in language to any agreements after July 1 that would
allow for termination um if the entity that we are investing with is found to be on this list. So, similar to the scrutinized companies list um that you already are not able to invest in, this just sort of adds another um element to that list. I doubt you are currently
investing with any companies that do boycott Israel, but again, that would be um Burgess's area of of expertise. >> Any questions? >> Thank you. Um, I did have for you the SPD update.
Um, we did talk in the fire meeting about holding off on the SPD until we know what the resolution of the fixed multiplier will be. So, my recommendation would be to put that on the next agenda um and hopefully have it updated with um whatever the outcome of
those negotiations are. >> Thank you. Okay. So, that will be added to our next agenda. Okay. Thank you. >> And I don't know if it was discussed um in the pension workshop, but we did get a um letter from Patrick that basically
says that the PLOP ordinance that had been previously discussed, the partial lumpsum option payment um would not cause any um fees or anything to the fund. Um it's not going to cost the fund any money to implement. I don't know if
that was discussed and if um we are ready to move forward with that but when we are we have everything now that we need to do that. >> Okay. Any questions? >> No. >> Okay. Thank you. Anything else?
>> Um there is just one other thing. Um you will see you have a sample of um operating rules that it's a little confusing is for Okaloosa Island. These were recently created by our office. Um
we realized that none of the funds have any operating rules or policies and procedures. We can easily tailor this to the fund. the fire board did decide to move forward with this so that all of our policies um and procedures are
streamlined to make sure that all members are being um treated exactly the same so we don't open open up the board to any problems um certainly good practice to have would be my high recommendation that the board move forward with this um whether or not we
are the ones to create it but certainly should have something in place um as I mentioned to the fireboard any information or work that applies to the three or two funds would be split cost. Um you you know you all have some minor differences
but we did decide to move forward. Um so I will be creating this for the fireboard. >> As a question as a planned administrator I also recommend that you adopt this um policy.
Other pension plans around the state have it and it is very helpful as a reference guide when their issues arise. Currently, we don't have anything for this plan. The operating rules and procedures are critical. They're based
off of what the state requires, >> right? So, a lot of this information um that you're seeing in here, it's going to stay the same across the funds. Obviously, the funds have um things that differ and all of those will be changed
over um but it's not something that would change the plan document. Sort of we would look at it um in conjunction with that document. So, if something isn't specifically spelled out in the ordinance, we can look here and have that information. And then if we need to
make changes, it's much easier to make a change to an operating rule instead of going through the procedure of updating the plan. >> Any questions? >> I have a question. Miss Virginia, being that we do have um
or usually any procedures that we have in relation to the city go before HR, um is there anything that we would need to do as far as the city's policy in relation to this prior to adoption? >> Um no, because well fire is already
getting this and it's um for the pin the plan itself. So it's operating how you would um move forward. So I don't see that being a part in our policy and procedures as pertaining to the pension. >> Correct. >> That make sense. So this is strictly for
the pension plan to how to operate under certain conditions. Um that would just be really a guidance more of a guidance than anything. The goal would more so be that when issues arise, all members are being
treated and handled the exact same way. >> So if somebody has a disability application, you know, and one we say you have 30 days to complete it and the other we say we have 60, you know, we have a problem moving forward. So it's just really to keep us um streamlined in
how we do things. there's just not enough information sometimes in the plan um to answer all the questions that will arise. So that is really the purpose um of this and the plan does authorize you to um enact these policies and
procedures to carry out the facilitation of the plan. >> Okay. Thank you. >> Any additional questions? >> Okay. How would we like to proceed? Do you want to make a motion to >> Oops.
Turn the mic off. Um, I'd like to make a motion that uh the board adopts uh the um operating rules and procedures uh as presented after the corrections or um
lack of significance. So the city significant is attached to it. Second. We have >> a motion and second. All in favor? >> I >> I. Any opposition? Thank you. >> Thank you. >> I have a question. Would you like to
move forward on the ordinance to present it to city council for the um PLOP benefit? This is the benefit that um it's where at the end when somebody retires they can have a
basically a withdrawal return percentage the one that we have in our packet. >> That's correct. It's the lumpsum option that it does and the letter from Patrick is no impact to the plan actuarily. So whatever the person is getting that's
what they're getting it this just splits it up in different manners. Alice uh per during the monthly, >> right? >> Okay. Do we have a motion to recommend? >> So, I'll make a motion that we recommend the ordinance to move forward to the
city commission for approval. >> A second. >> A motion to second. All in favor? >> I. Any opposition? Okay. Thank you. >> Move unanimous. Thank you, >> Mr. Do Mr. Mr. Don, do you have anything you want to share besides what we've
already discussed? >> Uh, no. >> Thank you. Um, Miss Tintel, resource centers is next on the agenda. >> Thank you. I've got two handouts in your packet about upcoming uh conferences.
One is specifically the annual police and fire specific conference. It's going to be in Daytona Beach Shores on September 8th. If anyone is interested in attending, please let me know as soon as possible so we can get the hotel
prepaid for you. >> It's It's free. >> Free to attend. Only the hotel is a cost affordable compared to the other and it's not very far from here. >> The second sheet lists FPPPTA, which is
the one Flurges were just speaking to. It's a twosided sheet letting you know of courses. FPPPTA has a cost to join um the membership and then their courses are pricey or there's a cost to them. So
um they do have certification programs however that some of the other programs do not have where you can take a first second and third level and become a certified um pension trust day. Then
there's credits involved in that. So if you're interested in that I could bring additional information on the membership and the cost. >> Thank you. Anybody have any interest or you just have to contact us too? >> Okay. Thank you. >> Thank
um I have the proposed meeting dates in your packet. It's following the same schedule as we have this year. The only uh change is that the Thanksgiving meeting um has been pushed to the first week of December. So we're not asking
anyone to come the week of Thanksgiving. >> Okay. It seems reasonable. So, next couple of pages are from my company. Um, the owner, my boss, Scott Fowler, has put these together. We don't really ever put out marketing pieces,
but he's been in the business now 30 years. And pensions is what we do for um we have 70 plans around the state and also now in Georgia. And we've got some backup information of whose job is it.
Um, I'm the only one who comes to the meeting, but there's a whole team behind us. The following sheet on that actually has our management hotline. If there's any issues that come up that you'd like to
speak to one of the owners of the company, there are three different people that man that hotline that you can reach out to them and have someone get back to you. For sure. We have a dedicated client service representative. His name is Rumid Feres and he's the one
who's in the office as I do a lot of traveling for different plans. So if anyone ever calls up, he's the gentleman who works closely with Virginia here in the city and processing refunds and getting people all set for their
retirement. There's a single sheet page in there that lists the premium tax distribution and it lists last year's distribution and the current year's distribution. And you could see there's a healthy increase
in that. So that was nice. And I also handed out to you the ones for the state so you can compare what Paka has compared to other cities and towns. And that's all I have, mayor, before the >> Thank you.
>> benefit approval. >> Thank you. On to benefit approvals. Do you want us to motion to accept your report as presented? >> Yes, please. A motion to accept Miss Tindle's report. >> Make a motion to accept the report
presented by the resource center. A second. >> All in favor? >> I I Any opposition? Thank you. Approved unanimously. >> On to um benefit approvals. They can all be done at one time.
>> Okay. >> One motion. >> Approval of everything >> of the benefit approvals. Yes. >> Okay. >> Do we need to name the individuals that are here that are on here or just >> just collectively? >> Collectively is fine. Thank you. I make
a motion that we accept the benefit approvals for the meeting August 26, 2025 collectively. >> A second. >> Motion is second. All in favor? >> I >> I. Any opposition approved unanimously.
Thank you. >> Financials. >> The next um pieces in the packet are the financials. for you to receive and file. Then we have the distributions presented
from Capitol City showing the payments to the various retirees and that is file followed by the warrant for August 26, 2025. >> Okay. Do we have a motion to approve?
>> Make a motion we accept the distribution and report. >> Second. >> Have a motion, a second. All in favor? >> I. Any opposition? Thank you. I'm going to open up the floor of public
comments. We had a request from the workshop that um the board request the attorney draft an ordinance um in reference to the fixed multiplier.
>> Okay. >> That the um union has supported it. And uh Matt, if you'd like to speak to it for Anna's purpose. >> Anna, can you hear me? Um so during the workshop uh we
discussed the report that was provided by um Foster and Foster that outlined the options that we have for requesting an ordinance to be drafted
for the fixed benefit rate um to go to 3.20. >> Okay. And um I don't know if you get the foster and foster report or not um but we would like to see about drafting
an ordinance to then be able to review and vote on um for scenario two in his report which would be for current and future retirees
for a fixed multiplier of the 3.20 two. >> Okay. >> And then I believe, and Patrick, I don't know if you need to speak into this or not, but I believe what that's going to do is
give the city the state funds annually that we would normally put toward the retirement from from the from the state and then the city get that and then we uh just have the fixed multiplier. Did I say that right, Patrick?
>> That's correct. Yes. >> Okay. >> And you can talk to me offline, Anna, if you want about how to do the ordinance. >> Okay, no problem. And what did you discuss an effective date or just once
the ordinance becomes effective? >> That we did not. >> Okay. Okay. Not a problem. If I need anything, I will reach out to Patrick. >> Thank you. >> Thank you. >> And was this just for police?
>> Just for police. Um in the workshop the fire >> uh was had a representative, but I believe that they are going to be doing their own their own thing through you guys. >> Okay. So, this is now just for police. Okay. Got it.
Anything else, Miss Tendo? >> No, mayor. Thank you. Okay. And I would open the floor to public comments, but there is nobody here to comment. Sir, >> do you want Patrick to stay on the line? Do you have any more questions for Patrick? >> No, sir.
>> Okay. >> Okay. With that said, we have a motion to adjurnn. >> Motion to adjurnn. Second. >> Thank you, everyone. Take care