Police and Fire Retirement Board

Item 4 A. September 12, 2024 CENTER LINE POLICE & FIRE RETIREMENT COMMISSION MINUTES REGULAR MEETING August 13, 2024 Page 1 of 5 The regular meeting of the Center Line Police and Fire Retirement Commission was called to order at 3:00 p.m. by Chairman Allen. Members Present: David Allen, Richard Stys, Gregory Suma, and Jorge Bermudez. Members Absent: Gregory Pearl. Also Present: None. AGENDA ITEM 2. – Approval of the Agenda: A. Approval of Agenda: August 13, 2024. A motion by Trustee Stys to approve the August 13, 2024 agenda was seconded by Trustee Bermudez. AYES: 4 NAYS: None Motion carried 4 - 0. ABSENT: Gregory Pearl. 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 9, 2024. A motion by Trustee Stys to approve the minutes was seconded by Trustee Suma. AYES: 4 NAYS: None Motion carried 4 - 0. ABSENT: Gregory Pearl. AGENDA ITEM 5 – Remembrances of deceased Members and Beneficiaries: A. None. AGENDA ITEM 6 – Presentations: A. Timothy Brice from Graystone Consulting a division of Morgan Stanley.  Item 4 A. September 12, 2024 CENTER LINE POLICE & FIRE RETIREMENT COMMISSION MINUTES REGULAR MEETING August 13, 2024 Page 2 of 5 i. On The Markets – Beware Slow and Shallow – August, 2024. ii. Second Quarter 2024 Money Manager performances. iii. Portfolio asset allocation and Market value as of August 5, 2024 ~ $ 13,286,168.79. Mr. Brice addressed the On The Markets document. The FED still has the key interest rate at 5.50%. The FED has taken about $ 1 trillion out of liquidity out of the economy. The FED is still cautious about lowering interest rates. It is a general feeling three cuts could happen by the end of 2024. The FED is wanting to see a slowing in the labor market and that just happened in the latest labor report. The “magnificent seven” stocks have started to go into a correction period. A correction is considered a ten percent or more decrease in the stock price. Morgan Stanley believes the markets will have a soft landing the rest of the year with no recession. Even though as the FED lowers rates, we will still see bumps in the markets. Chairman Allen asked if the FED will become political with rates in this election cycle. Mr. Brice said they will play a neutrality role. Historically the FED has been neutral in election cycles. Mr. Brice addressed under tab one page 12 of 36 of the performance booklet. The chart shows the rally of the S & P 500 since October 2022 and the earnings chart movement. Earnings for the S & P 500 stocks have gone sideways. The price to earnings on the S & P 500 is 22 times earnings. The normal range of price to earnings is around sixteen to seventeen times. The S & P 500 portfolio is expensive currently. Mr. Brice said the top ten stocks of the portfolio represent thirty-seven percent of the value of the S & P 500. Morgan Stanley is concerned with that. Could all this artificial intelligence hype in stocks shadow a bubble like the kind of the internet .com burst in the 1990’s? Morgan Stanley is cautious about that. The “magnificent seven” stocks are trading at thirty- seven times its earnings which is very expensive. Mr. Brice addressed the portfolio performance. For the second quarter of 2024 the portfolio was -.08% and our benchmark was up .59%. Over time we have been trimming our portfolio that has had a nice run and are investing in better quality stocks that are not as expensive. Bonds are up 6.00% since the end of quarter two. Earnest Partners was down – 4.57% in quarter two while its benchmark was down - 3.55%. They do not own expensive stocks like the “magnificent seven” stocks. Since the end of quarter two they are up 3.25% while its benchmark is up .96%. Clearbridge was up 4.06% in the second quarter while their benchmark was up 8.33%. They buy stocks with value at a reasonable price so they sold off some of their higher priced stocks. Since the end of the second quarter they are down – 2.50% while its benchmark is down – 5.25%.  Item 4 A. September 12, 2024 CENTER LINE POLICE & FIRE RETIREMENT COMMISSION MINUTES REGULAR MEETING August 13, 2024 Page 3 of 5 Since the end of the second quarter Pioneer is down – 4.00% and its benchmark is down – 5.25%. Confluence are Aristotle are ahead of their benchmarks. Year-to-date Clearbridge international is up 7.52% while its benchmark is up 5.34%. Our fixed income managers are doing very well since the end of the second quarter as interest rates are falling. Cohen & Steers REITS are up 8.80% since the end of quarter two and its benchmark is up 8.40%. Mr. Brice covered are asset allocation as of August 5, 2024. Our portfolio is in sixty-five percent stocks. We have trimmed down our large-caps closer to our target. Our small caps and internationals are a little above the targets as they have had nice performances recently. Our portfolio is not overly aggressive. Our REITS have spiked up and are getting closer to the high target mark. Earnest Partners was discussed further on performance. It was decided to have Mr. Brice scrutinize their portfolio to see if they have drifted from their style of investing and if they have had any personnel changes. Over the long haul they have performed with over an annual 10.00% positive return. They are a small to mid-cap core manager who does not buy expensive stocks. Morgan Stanley and the Brice Group both have analysts who monitor the money managers on their platform through a due diligence process. AGENDA ITEM 7 - For Your Information: A. None. AGENDA ITEM 8 – Old Business: A. None. Chairman Allen left the meeting at 4:06 p.m. and returned at 4:10 p.m. Vice-chairman Bermudez assumed the Chairmanship. AGENDA ITEM 9 – New Business: A. Fall MAPERS conference from September 21, 2024 through September 24, 2024 at the Grand Traverse Resort, Acme MI. A motion by Trustee Suma to allow any commission member who wants to attend the conference be allowed to attend and to register for the conference was seconded by Trustee Stys.  Item 4 A. September 12, 2024 CENTER LINE POLICE & FIRE RETIREMENT COMMISSION MINUTES REGULAR MEETING August 13, 2024 Page 4 of 5 AYES: 3 NAYS: None Motion carried 3 - 0. ABSENT: David Allen and Gregory Pearl. 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 25, 2024, pensions paid: Pay Report 553 ~ $ 127,233.98. A motion by Trustee Stys to pay the July 25, 2024 pensions was seconded by Trustee Suma. AYES: 3 NAYS: None Motion carried 3 - 0. ABSENT: David Allen and Gregory Pearl. B. Second Quarter 2024 Money manager fees: April 30, 2024 $ 2,563.96, May 2024 $ 2,742.55, June 2024 $ 2,632.71. Total: $ 7,939.22. A motion by Trustee Stys to pay the second quarter money manager fees was seconded by Trustee Suma. AYES: 3 NAYS: None Motion carried 3 - 0. ABSENT: David Allen and Gregory Pearl. C. Second Quarter 2024 Graystone Consulting fees, Invoice # 10062024194, Dated: July 12, 2024 ~ $ 15,926.19.  Item 4 A. September 12, 2024 CENTER LINE POLICE & FIRE RETIREMENT COMMISSION MINUTES REGULAR MEETING August 13, 2024 Page 5 of 5 A motion by Trustee Stys to pay the second quarter Graystone Consulting fees was seconded by Trustee Suma. AYES: 4 NAYS: None Motion carried 4 - 0. ABSENT: Gregory Pearl. AGENDA ITEM 14. - Commission Members Comments: The commission moved the October meeting to October 15, 2024 at 3:00 p.m. Trustee Stys asked if he could be sent a release letter to turn in his tablet. AGENDA ITEM 15 – Adjournment: As there was no further business to discuss, a motion by Trustee Suma and supported by Trustee Stys that the meeting be adjourned at 4:15 p.m. AYES: 4 NAYS: None Motion carried 4 - 0. ABSENT: Gregory Pearl.