Police and Fire Retirement Board

qx.[ CENTER LINE POLICE & FIRE RETIREMENT COMMISSION iz/io/iy MINUTES REGULAR MEETING November 12, 2019 Page I of 5 The regular meeting of the Center Line Police and Fire Pension Board was called to order at 2:32 p.m. by Danny Petroff. Members Present: Danny Petroff, Bernadette Helkowski, Deputy Treasurer Gregory Suma and Michael Gerald. Members Absent: Richard Stys. Also, Present: Tim Brice from Morgan Stanley's Graystone Consulting. AGENDA ITEM 2 A. - Approval of the Agenda Motion by Trustee Suma to approve the agenda was seconded by Trustee Helkowski. AYES:4 NAYS: None Motion carried 4 - 0. ABSENT: Richard Stys AGENDA ITEM 3 - Public Comment Seeing there was no one in the audience this item was closed. AGENDA ITEM 4 - Approval of the minutes A. Approval of the Regular Meeting Minutes held on September 10, 2019. A motion by Trustee Helkowski to approve the minutes was seconded by Trustee Gerald. AYES:4 NAYS: None Motion carried 4 - 0. ABSENT: Richard Stys B. Approval of the Special Meeting Minutes held on October 18, 2019. A motion by Trustee Gerald to approve the minutes was seconded by Trustee Helkowski. AGENDA ITEM 5 - Remembrances A. None AGENDA ITEM 6 - Presentations: A. Tim Brice from the Graystone Group of Morgan Stanley. i. On The Markets - Sticking With It dated: November 2019. ii. Money Manager performances through September 30, 2019. Mr. Brice first addressed the On The Markets handout. He said he will be addressing our index  CENTER LINE POLICE & FIRE RETIREMENT COMMISSION MINUTES REGULAR MEETING November 12, 2019 Page 2 of 5 managers a little bit later in the presentation. The CIO believes all things are good with the markets for the long-term. Liquidity is still there as the FED has lowered interest rates. There is positive sentiment on the markets as there be some resolution to the trade and tariff issues still pending. The CIO feels that this positive information with the markets are driving passive investors to be active in the markets. The CIO believes the passive benchmark is now overweight by ten percent. The CIO goes on to say to stick to a defensive strategy as it applies to indexing as there is a risk of a correction which is the highest since July 2019. Mr. Brice then asked the Board to open the money manager performance book to tab 2 page 1. We have made withdrawals from the system of nearly $ 700,000.00 to pay benefits but have added $ 1,627,979.00 in growth for over a $ 900,000.00 net gain to the portfolio through September 30, 2019. As of the close of the markets on November 11, 2019, our portfolio is up 1 8.98% gross year to date. Through September 30, 2019 the Portfolio is up 15.94% while our Policy Index is up 14.28%. Our fixed income managers have beat the Barclays Aggregate index which is up 8.52% year to date while Boyd up 1 0.28% and Western up 1 0.99% over the same time period as the index. Interest rates have dropped significantly since last year so there may be not as much appreciation in bond returns going forward. Mr. Brice addressed the value managers next. The Russell 1000 Value Index is up through September 30, 2019 at 17.81% and Confluence is up 28.145, Delaware is up 14.16% and our IShares Russell 1000 Value ETF is up 17.27%. Trustee Suma asked what attributed to the growth in the Confluence portfolio. Mr. Brice said they are a relative value manager meaning they made choices against sectors that did not perform well like healthcare, energy etc. They made wise choices on sectors. Trustee Petroff asked Mr. Brice about the negative 7.54% return for 2018 and asked if it was for a quarter or for the year. Mr. Brice said for the year. As you remember, 2018 for the most part was a good year but was all sold off in the last quarter. Mr. Brice addressed the two Index Funds run by Blackrock. We currently pay 20 basis points on the value and growth index. Morgan Stanley's platform now offers the Vanguard Index funds at a management fee basis of 14 points. Mr. Brice is recommending we make the swap of the two index funds to pay lower management fees. Trustee Suma asked if Mr. Brice has the performance numbers on the Vanguard index funds. He said he did not but can have Stephanie retrieve them. Mr. Suma said if we could have the performance numbers now versus Blackrock's numbers, we could make the change today. Trustee said any little appreciation to the bottom line saves us money. Mr. Brice is texting Stephanie and Rebecca for those numbers now. Trustee Suma asked if his office could be emailed a hard copy for the files too. Mr. Brice said value, international and emerging markets are now starting to pick up some steam with the talks of some trade and tariffs issues probably getting some agreements in place. If that happens, then it may render the fears of a recession globally less possible. Also, some of the countries globally are starting to phase in economic trends now that the USA implemented years ago like easing monetary policy to expand growth. Are international and emerging market managers all beat their benchmarks year to date. Our MLP Manager, Cushing beat their respective benchmark 12.48% vs. 41.09% year to date.  CENTER LINE POLICE & FIRE RETIREMENT COMMISSION MINUTES REGULAR MEETING November 12, 2019 Page 3 of 5 Mr. Brice the addressed asset allocation under tab 3. The portfolio value as of November 4, 2012 is at $12,245,071.32. All asset classes were within the target asset allocations. If a trade and tariff deal is reached then we may pull some of the funds from the Large Cap equity portfolios and realign the international and emerging market classes. The (Blackrock) Growth ISHAREs Index fund is up 3.53% for 4 year, 16.78% for 3 years and 13.19% for 5 years. The Vanguard Russell 1000Growth ETF is up 3.64% for 1 year, 16.78% for 3 years and 13.27% for 5 years. The (Blackrock) Value ISHAREs Index fund is up 3.85% for 1 year, 9.25% for 3 years and 7.62% for 5 years. The Vanguard Russell 1000Growth ETF is up 4.00% for 1 year, 9.35% for 3 years and 7.67% for 5 years. Motion by Suma to swap the Blackrock IShare index funds for both the Growth and Value styles to the Vanguard Russell 1000 Growth and Value ETF. All passive managed index funds. AYES:4 NAYS: None Motion carried 4 - 0. ABSENT: Richard Stys AGENDA ITEM 7 - For Your Information: A. Correspondence from Gregory T. Suma to City Manager, Dennis Champine dated: September 11, 2019 Re: Commission action adopting the Actuarial Valuation recommendations as of December 3'l, 2018. Motion by Trustee Suma to receive and file was seconded by Trustee Gerald. AYES:4 NAYS: None Motion carried 4 - 0. ABSENT: Richard Stys B. NASRA Issue Brief: Employee Contributions to Public Pension Plans Dated: September 20'l9. Trustee Suma briefly touch on the article. It indicated most Public Sector employees with Defined Benefit plans are required to make employee contributions and compared contributory plans to private sector employees. There was information about State plans too. Motion by Trustee Suma to receive and file was seconded by Trustee Gerald. AYES:4 NAYS: None Motion carried 4 - 0. ABSENT: Richard Stys AGENDA ITEM 8 - Old Business A. None  CENTER LINE POLICE & FIRE RETIREMENT COMMISSION MINUTES REGULAR MEETING November 12, 2019 Page 4 of 5 AGENDA ITEM 9 - New Business A. None AGENDA ITEM 10 - Retirements A. None AGENDA ITEM 11- Annuity Withdrawals A. None AGENDA ITEM 12 - Approval of Pension Fiqures A. None AGENDA ITEM 13 - Vouchers A. September 25, 20'l9 pensions paid: Pay Report 335 - $111,788.94. Motion by Trustee Suma supported by Trustee Helkowski to approve the September 25, 2019 pension Pay Report 335 for $141,784.94. AYES:4 NAYS: None Motion carried 4 - 0. ABSENT: Richard Stys B. October 25, 20'l9 pensions paid: Pay Report 339 - $110,762.76. Motion by Trustee Helkowski supported by Trustee Suma to approve the October 25, 2019 pension Pay Report 339 for $110,762.76. AYES:4 NAYS: None Motion carried 4 - 0. ABSENT: Richard Stys C. VanOverbeke, Michaud & Timmony, P.C. Legal services from July 1, 2018 through June 30, 2019. Invoice dated: October 14, 2019 - $ 3,078.00. Motion by Trustee Gerald supported by Trustee Helkowski to approve the invoice for legal services to VanOverbeke, Michaud & Timmony for $ 3,078.00. AYES:4 NAYS: None Motion carried 4 - 0. ABSENT: Richard Stys D. Morgan Stanley - Graystone Consulting Investment Management Fees for the  CENTER LINE POLICE & FIRE RETIREMENT COMMISSION MINUTES REGULAR MEETING November 12, 2019 Page 5 of 5 3rd Quarter 2019 period ending September 30, 2019 Invoice # 10062019287 - $ 24,053.6'l. Motion by Trustee Helkowski supported by Trustee Gerald to approve the invoice to Morgan Stanley for $ 24,053.61. AYES:4 NAYS: None Motion carried 4 - 0. ABSENT: Richard Stys E. 2020 MAPERS Registration - $ 200.00. Motion by Trustee Suma supported by Trustee Gerald to approve the MAPERS annual dues of $ 200.00. AYES:4 NAYS: None Motion carried 4 - 0. ABSENT: Richard Stys AGENDA ITEM 14 - Commission Members Comments Trustee Helkowski gave a report about her attendance at the 2019 Fall MAPERS conference. She also turned in her certificate for attendance requirements. Over 400 attended the conference. Individuals are living longer putting a burden on defined benefit plans. The Ml economy is slowing down slightly. Life expectancy for women is eighty-six and for men it is eighty-four. Half of the population is expected to out live their life expectancy. The baby boomer generation between 1945 and 1964 have a population of 75,000,000. Real Estate is still considered an attractive investment. MAPERS is really appealing to their members to attend the 2020 MAPERS Spring conference at Detroit's Motor City casino. They spent a lot of energy attracting vendors and presenters to attend. AGENDA ITEM 15 - Adiournment As there was no further business to discuss, a motion by Trustee Helkowski and supported by Trustee Gerald that the meeting be adjourned at 3:24 p.m. AYES:4 NAYS: None Motion carried 4 - 0. ABSENT: Richard Stys MinutesApprov At M Via((5. Date sr}t(Aol lc. 2f)/ ? Date