HomeMy WebLinkAboutMinutes Police Pension 090822Palm Beach Gardens Police Officers' Pension Fund
Minutes of the Meeting Held: September 8, 2022
1. Chair Jay Spencer called the regular Quarterly Meeting of the Board of Trustees of the City of Palm Beach Gardens
Police Officers' Pension Fund to order at 9:02 AM in the Council Chambers and called roll. Those persons present
included:
TRUSTEES PRESENT
Brad Seidensticker, Secretary
Marc Glass, Trustee
Greg Mull, Trustee
3. REPORTS
OTHERS PRESENT
Scott Baur & A.C. Lovingood (Resource Centers)
Bonni Jensen (Klausner Kaufman Jensen & Levinson)
Jennifer Gainfort, Consultant (AndCo Consulting)
Steve Stack, Investment Manager (Highland Capital)
Karen Russo, Custodian (Salem Trust)
Highland Capital Investment Manager (Steve Stack, Highland Capital)
Steven Stack reported that fixed income assets held up well through the quarter, noting that Highland Capital has
been avoiding treasuries and takes less risk when it comes to investing in the fixed income sector. Fixed income
assets were down 17% over 25 months, noting that this is the worst fixed income performances in 40 years.
Pension Plans, meanwhile, have rebalanced very little into fixed income assets during the period. The yield curve
now remains inverted, which is a recession indicator. Mr. Stack then informed the Board that the Fund has
modestly increased duration but expects Federal Reserve rate increases to continue. Mr. Stack stated that his firm
also expects value to continue to outperform growth except for the month of July. It was reported that United
Healthcare went from value to growth and Meta went from growth to value. The portfolio has regained about 3%
on the fixed income assets for the current quarter. Mr. Stack concluded his presentation with sating that even with
the Board's decision to allow Highland Capital to hold lower credit quality of fixed income holdings, the Highland
Capital Fixed Income Fund currently has a very high -quality tilt.
Investment Consultant (Jennifer Gainfort. AnclCo
Jennifer Gainfort reported that the investment managers had a difficult quarter with all of the asset classes with the
exception of Real Estate posting losses for the quarter ending June 30, 2022. The Plan's Total Fund Composite from
March 31, 2022 through June 30, 2022 was reviewed with the Board. For the quarter ending June 30, 2022, the net
returns were -9.66% compared to the benchmark of-10.09%. The Fiscal -Year -To -Date returns were -8.35%
compared to the benchmark rate of-7.53%. The Three -Year trailing returns were 6.81% compared to the
benchmark of 7.26%. The Five -Year returns were 7.27%, compared to the benchmark rate of 7.73%, and since
inception the Plan has an 7.55% net return on investments compared to the benchmark rate of 8.44%. Miss.
Gainfort then reviewed each investment manager in detail, noting that ARA Core Property Fund had net earnings of
4.55% and American Strategic Value Realty earned 2.75% for the quarter. Mrs. Gainfort then reviewed the asset
allocation of the Plan with the Board and recommended investing and additional $2.5 million in the IFM
Infrastructure fund.
Brad Seidensticker made a motion to allocate $2,500,000.00 to FIM Global with $2,000,000.00 coming from Short
Term Fixed Income and $500,000.00 from the Rhumbline S&P 600. The Motion received a second from Greg Mull,
approved by the Board 3-0.
Mrs. Gainfort then presented the Board with an updated Investment Policy Statement and reviewed the changes to
increase infrastructure to 7.5%.
Marc Glass made a motion to approve the Investment Policy Statement as Presented. The Motion received a second
from Brad Seidensticker, approved by the Board 3-0.
Salem Trust (Karen Russo, Salem Trust
Karent Russo with Salem Trust provided the board with a recap on the accounts that Salem Trust has for the Plan
and the sundry assets. Mrs. Russo stated that Salem Trust does not make payments for the Plan; however, the
custodian does receive and transfer assets by wire. Mrs. Russo then reviewed some housekeeping items for the
Board, which included the confirmation of what individuals should be receiving statements and requested that the
Board submit an updated Authorized Signature Form to ensure that Salem Trust has all the current Trustees and
authorized users on the accounts.
Attorney Report (Bonni Jensen, Klausner Kaufman Jensen & Levinson)
Jensen Memo — IRS Milage Rate for Mid -Year 2022: Mrs. Jensen informed the Board that the Internal Revenue
Service released its updated Standard Milage Rate for the remainder of the 2022 Calendar Year. The new rate is
62.5 cents per mile for miles driven on or after July 1, 2022. This is up 4 cents from the rate effective at the start of
the year.
Chapter 185 Premium Tax Dollars: Mrs. Jensen informed the Board that the State of Florida has released the 2021
Chapter 185 Premium Tax Dollar Distribution Amounts. The Palm Beach Gardens Police Officers' Pension Fund will
receive $856,513.45, this is up $110,350.46 from the 2020 Chapter 185 amount of $746,162.99.
American Realty: Mrs. Jensen reviewed the changes to the American Realty mandate increasing holdings to sing
family units, but the manager does not perceive a headline risk. Mrs. Jensen reported that American Realty
develops entire new communities for family housing. The Board of Trustees considered timing of having
investments by American Realty, noting that transactions have slowed, but pricing remains firm.
Collective Bargaining Agreement: Mrs. Jensen inquired on the status of the Collective Bargaining Agreement with
the City, noting that the new agreement does have COLA increased for pensions, which will also require the Pension
Ordinance to be updated. Mrs. Jensen noted that Police Officers leaving will get small increases, depending on
when they separate from service. Mrs. Jensen also reminded the Board that the 13t" Check still requires clarification
since the Collective Bargaining Agreement died not include any clarification regarding the rate of return, therefore,
the Board will continue to rely on the current ordinance language. The Board and Mrs. Jensen discussed the
Supplemental Benefit, noting that it has remained unchanged since 1992.
Administrator Report (Scott Baur & AC Lovingood, Resource Centers)
Share Account Distributions: Albert Lovingood provided the Board with an update regarding the Share Distributions
for those members who have since retired. Mr. Lovingood also informed the Board that the Plan has not received
the 2021 Chapter 185 Premium Tax Dollars yet and will notify the Board once those funds are received.
2022-2023 Plan Budget Draft: Scott Baur and Albert Lovingood presented the Board with the 2022-2023 Plan
Budget for review and approval by the Board of Trustees. Mr. Baur reviewed the annual Plan Budget requirements
per Florida State Statute.
Brad Seidensticker made a motion to approve the 2022-2023 Plan Budget as presented. The Motion received a
second from Greg Mull, approved by the Board 3-0.
2023 Board Meeting Schedule: Mr. Lovingood provided the Board with the 2023 Board Meeting Schedule. Mr.
Lovingood reported that the 2023 schedule follows the historical meeting dates of the Plan.
Cherry Bekaert Audit Planning Letter and Audit Engagement Letter: Mr. Baur and Mr. Lovingood presented the
Board with the Cherry Bekaert Audit Engagement Letter along with the Audit Planning Letter for review and
approval. Mr. Baur stated that this year's audit will cost the Plan $17,950, this is up $1,300.00 from last year's audit
cost of $16,650.00.
Minutes: September 8, 2022
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Greg Mull made a motion to approve the Cherry Bekaert 2022 Audit Engagement Letter as presented. The Motion
received a second from Greg Mull, approved by the Board 3-0.
Fee Increase Letter: Mr. Baur presented the Board with the requested supplemental information to consider The
Resource Centers proposed Fee Increase.
Marc Glass made a motion to approve the $1,000.00 Resource Centers Fee Increase with an Annual COLA tied to
The Consumer Price Index and not to exceed 3% effective October 1, 2022. The Motion received a second from
Greg Mull, approved by the Board 3-0.
4. MINUTES
The Trustees reviewed the draft Minutes for the June 9, 2022, Board Meeting.
Greg Mull made a motion to approve the Minutes for the June 9, 2022, Quarterly Meeting as amended, The Motion
received a second from Brad Seidensticker, approved by the Board 3-0.
DISBURSEMENTS AND FINANCIAL STATEMENTS
The Board reviewed the Warrant dated September 8, 2022, for payment of expenses.
Greg Mull made a motion to approve the expenses on the Warrant dated September 8, 2022, as presented. The
Motion received a second from Brad Seidensticker, approved by the Board 3-0.
The Board received, reviewed, and filed the interim financial statement through July 31, 2022.
6. BENEFIT APPROVALS
The Benefit Approvals Dated September 8, 2022 were presented for review. The Board discussed the small account
balances of some DROP Accounts and the risks of possible overpayments. Mr. Lovingood stated that he would
reach out to GRS for final interest calculations so that closeout distributions can be processed
Greg Mull made a motion to approve the Benefit Approvals dated September 8, 2022. The Motion received a
second from Brad Seidensticker, approved by the Board 3-0.
The Board questioned the DROP Distribution for Jack Schnur as the distribution amount was over the $35,000.00
threshold that requires prior Board Approval before disbursement. Mr. Lovingood stated that he will investigate the
matter to see how this occurred.
7. OTHER BUSINESS
Brad Seidensticker mentioned the possibility of using additional Securities Litigation Firms. The Board had a detailed
discussion regarding the possibility to add additional Securities Litigation Firms and it was noted that the Plan has a
relatively small allocation to separately managed accounts.
The Board discussed the possible need to send a letter to the City regarding the 13th check due to the likelihood that
the Plan will need to pay a supplemental distribution in the near future.
8. PUBLIC COMMENTS
No members of the public had any comment.
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9. ADJOURN
There being no further business, Trustee Marc Glass adjourned the meeting at 11:18 AM.
Respectfully submitted,
Brad Seidensticker, Secretary
Minutes: September 8, 2022
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