Police and Fire Retirement Board

CENTER LINE POLICE & FIRE RETIREMENT COMMISSION MINUTES REGULAR MEETING August 11, 2020 Conducted via teleconference do to Covid-19 Pandemic Page 1 of 5 The regular meeting of the Center Line Police and Fire Pension Board was called to order at 2:30 p.m. by Secretary Gregory Suma and conducted by teleconference. Members Present: Gregory Suma, Michael, Gerald, Richard Stys and Bernadette Helkowski. Members Absent: Danny Petroff. Also, Present: Tim Brice of Morgan Stanley. AGENDA ITEM 2. – Approval of the Agenda Motion by Trustee Stys to approve the agenda with was seconded by Trustee Helkowski. AYES: 4 NAYS: None Motion carried 4 - 0. ABSENT: Petroff. 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 July 14, 2020. Motion by Trustee Helkowski to approve the July 14, 2020 minutes with was seconded by Trustee Gerald. AYES: 4 NAYS: None Motion carried 4 - 0. ABSENT: Petroff. AGENDA ITEM 5 – Remembrances A. None. AGENDA ITEM 6 – Presentations: A. Shana Neeson from GRS Retirement Consulting to discuss the Fifty-Eighth Annual Actuarial Valuation for the City of Center Line P & F Retirement System for the period  CENTER LINE POLICE & FIRE RETIREMENT COMMISSION MINUTES REGULAR MEETING August 11, 2020 Conducted via teleconference do to Covid-19 Pandemic Page 2 of 5 Ending December 31, 2019. Trustee Suma conveyed that Mrs. Neeson had something come up that caused a conflict but be able to present at the September 8, 2020 meeting. Trustee Stys said he unable to open the pdf report that was emailed to him. Trustee Suma said that he mailed a hard copy to Trustee Stys and Trustee Helkowski over a week ago. Neither have received it in the mail as of today. Motion by Trustee Stys to table the presentation by Shana Neeson from Gabriel, Roeder, Smith & Co. with was seconded by Trustee Helkowski. AYES: 4 NAYS: None Motion carried 4 - 0. ABSENT: Petroff. B. Tim Brice from Morgan Stanley Graystone Consulting: Discussion: On The Markets July 2020, August 2020 and Money Manager performances through 2nd Quarter June 30, 2020. Mr. Brice addressed the On The Markets document for August. The market has been doing very well since March 2020 and one area in particular that is doing very well is Large-cap Growth. Mr. Brice quoted the CIO of Morgan Stanley, “From my vantage point, such valuations have reached extreme levels that are very hard to justify using any reasonable assumption on the growth these companies can deliver. Secondly, the perceived resilience of certain business models during these past few months may be challenged in the second half of the year when it becomes clear that such businesses were simply beneficiaries of a pull-forward of demand as people worked from and stayed at home”. This recovery is a “V” shaped recovery which is different from the 2008-2009 recovery which took much longer for markets to recover. Morgan Stanley believes that growth stocks may have begun to peak and with the possibility of inflation in the future, value stocks are where you may want to be. Mr. Brice asked the trustees to turn to tab 1 of the 2nd quarter 2020 performance document. Trustee Stys said he cannot open the document. Trustee Helkowski and trustee Gerald were able to open their document. Mr. Brice addressed the Russel Large-cap, Mid-cap and small-cap indices for growth and values. There were significant differences between growth and value. Growth has seen significant returns while value has been negative. Price to earnings ratios are very high on growth stocks currently. Then Mr. Brice addressed returns by sectors of the market. Energy, industrial, financials have been some of the worse performers up until recently. Consumer discretionary and technology stocks are sectors which are  CENTER LINE POLICE & FIRE RETIREMENT COMMISSION MINUTES REGULAR MEETING August 11, 2020 Conducted via teleconference do to Covid-19 Pandemic Page 3 of 5 performing poorly now. This is showing signs that growth stocks may have peaked and value stocks may be the outperformers going forward. Eighty-five percent of companies in the S & P 500 have been outperforming their earnings forecasts. Mr. Brice addressed money manager performances. The portfolio was valued at $ 10,106,993.00 at the beginning of April 1st and as of June 30th the portfolio had a value of $ 11,589,895.00. As of August 10th, the portfolio closed at $ 12,252,112.00. For the 2nd quarter of 2020, the portfolio returned 16.50% although we are down slightly for the year. As of August 10th, the portfolio is up 2.00% for the month, 6.31% for the quarter and a positive 1.25% year-to-date. Mr. Brice addressed the asset allocation and broke down the portfolio by asset classes. He said because we have had a significant increase in the portfolio, we have moved outside of our range in some asset classes. He said that is okay for the short-term but will be addressed by a reallocation. He discussed the documentation for the custom asset allocation. Strategic returns are based upon returns up to seven years and secular return projections are for longer term up to 20 years. The dollar is falling against other currencies, and it is for that reason the international and emerging markets will be an area we should be investing in. The strategic projection has domestic equities will only return 5.80% over the next seven years and international is at 8.00% and emerging markets at 9.70%. In growth stocks, the projection is 4.70% while value should return 7.40%. The CIO of Morgan Stanley says we are in a bear market for bonds now and the strategic projection for domestic bonds is 1.70%. On page 4 of 44, Mr. Brice went over three possible reallocations. He will bring to the next meeting a more specific asset reallocation that the Board can review and possibly take some action. AGENDA ITEM 7 - For Your Information: A. Correspondence from VanOverbeke, Michaud, & Timmony, P.C. Dated: July 24, 2020 Re: Remote Public Meetings – Governor’s Executive Order 2020-154 providing guidance for remote public meetings through August 11, 2020. A motion to receive and file was entertained by Trustee Stys was seconded by Trustee Helkowski. AYES: 4 NAYS: None Motion carried 4 - 0. ABSENT: Petroff.  CENTER LINE POLICE & FIRE RETIREMENT COMMISSION MINUTES REGULAR MEETING August 11, 2020 Conducted via teleconference do to Covid-19 Pandemic Page 4 of 5 B. Correspondence from VanOverbeke, Michaud, & Timmony, P.C. Dated: July 29, 2020 Re: Remote Public Meetings – Governor’s Executive Order 2020-158 Electronic signatures guidance extended through August 31, 2020. A motion to receive and file was entertained by Trustee Helkowski was seconded By Trustee Stys. AYES: 4 NAYS: None Motion carried 4 - 0. ABSENT: Petroff. AGENDA ITEM 8 – Old Business A. None 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 Figures A. None AGENDA ITEM 13 – Vouchers A. July 24, 2020 pensions paid: Pay Report 374 ~ $ 108,286.76. A motion to pay the pensions was motioned by Trustee Stys and seconded by Trustee Helkowski. AYES: 4 NAYS: None Motion carried 4 - 0. ABSENT: Petroff.  CENTER LINE POLICE & FIRE RETIREMENT COMMISSION MINUTES REGULAR MEETING August 11, 2020 Conducted via teleconference do to Covid-19 Pandemic Page 5 of 5 B. Morgan Stanley – Graystone Consulting Investment Management Fees for the 2nd Quarter 2020 period ending June 30, 2020 Invoice # 10062020190 ~ $ 15.403.49. A motion to pay Morgan Stanley was motioned by Trustee Stys and seconded by Trustee Helkowski. AYES: 4 NAYS: None Motion carried 4 - 0. ABSENT: Petroff. 14. Commission Members Comments: Trustee Stys said he was still having trouble opening Tim’s money manager performance booklet. Stephanie from Tim’s office will try to resend it to Trustee Stys. Trustee Helkowski said she was disappointed that MAPERS was cancelled but it is understandable with the current pandemic. AGENDA ITEM 15 – Adjournment As there was no further business to discuss, a motion by Trustee Helkowski and supported by Trustee Gerald that the meeting be adjourned at 3:20 p.m. Minutes Approved At _______________________ Meeting: ______________________________________ _____________________ Chairman Date ______________________________________ _____________________ Secretary Date