Trustees of the Trust Fund

City of Laconia Trust Fund Trustees Meeting Minutes April 11, 2022 In attendance: Randy Haas, Peggy Selig, Michael Fogarty, trustees, and Glenn Smith, City Finance Director, Charlie Nason, Clarfeld Securities, Laurie Leduc, Citizen’s Bank. Call to Order Randy Haas called the meeting to order at 2 PM. Investment Review Charlie Nason began our meeting by reviewing investment performance of the trust for the period ending March 31, 2022. In the first quarter, the fund lost -5.3% net of fees. The benchmark performance was -5.2%. The markets were down broadly, and the Barclays Aggregate Bond Index actually underperformed the S&P 500 Index. Over the past 12 months, the fund is up 4.6% versus the benchmark performance at 4.1%. Economic commentary: According to Mr. Nason, the Fed has been sending more hawkish signals to the markets. Also, Russia’s invasion of the Ukraine has had a significant impact on energy and food prices. Inflation has been amplified by these events and the Fed funds rate affecting short-term rates is expected to rise significantly over the coming 12 months. Charlie said that the Fed rate is expected to be between 2.5 and 3.25% by the end of the year. Though the yield curve has been slightly inverted, a Bearish signal and a potential sign of a coming recession over the next 12 months, Mr. Nason noted that the back-end of the yield curve has been kept artificially low by quantitative easing. Moving through these headwinds and into earning season and midterm elections, he said that he expects this to be a more challenging year for stocks. Still, the fund is overweight stocks versus cash and fixed income. The portfolio benchmark is 50% equities and 50% fixed income and cash. The current allocation weight is 54% equities and 46% bonds and cash. In the first quarter, the large-cap strategy was overweight technology stocks and underweight energy stocks. These portfolio weights detracted from performance in the first quarter. Mr. Nason noted that in the last week of the quarter, the portfolio added Exxon Mobile. Clarfeld continued to be underweight in bonds to reduce their exposure to interest rate risk. Mr. Nason explained that the decision making for the portfolio is made by the investment policy committee. The committee is made up of eight professionals. Generally, the committee only makes small tactical adjustments and few bigger bets. Approval of Minutes Peggy Selig made a motion to approve the minutes of the January 18, 2022 board meeting. Michael Fogarty seconded the motion. The motion passed unanimously. Account Review Randy Haas reviewed activity in the trust accounts (see attached). Michael Fogarty asked why some of the Bank of New Hampshire cash accounts carry higher interest rates than others. Glenn Smith told the board that the rates are a result of a request for a proposal performed in January 2022. Each separate account is looked at individually. The accounts with smaller balances will earn a lower interest rate. We compared the BNH current interest rates with the rates currently paid by NH Public Deposit Investment Pool. Those accounts currently have a seven-day yield of .3135%. We asked Glenn if he could speak with Bank of New Hampshire to request that all cash accounts be paid at the .3% rate. Glenn said that he will call the bank to have the discussion. Randy Hass said that the Putnam fund has spent $79,160 so far this fiscal year. They have also committed $29,805 for the coming year. The checks for the DARE fund approved at the last Board meeting have been delivered to the police department. Scholarship Review The board discussed allocation of funds for student scholarships. Randy Hass reviewed the amount of income the portfolio has generated for the Perkins, Denmark, and Priest scholarships. For the Perkins scholarship, Michael Fogarty made a motion to allocate funds for two scholarships for $1000 each. The motion passed unanimously. For the Denmark scholarship, Michael Fogarty made a motion to allocate $1000. Peggy Selig seconded the motion. The motion passed unanimously. For the Priest scholarship, Michael Fogarty made a motion to allocate funds for four scholarships of $2500 each. Peggy Selig seconded the motion. The motion passed unanimously. Trust Fund Purposes There were no updates regarding the purpose of trust funds. Investment Policy Statement The Investment policy statement has been forwarded to Clarfeld Securities and Citizen’s Bank. Charlie Nason has indicated that he will sign the updated IPS and return it to the board. Once received, we will submit it to the NH Secretary of State. Trustee Education The state of New Hampshire will be offering trustee education again this year. It is scheduled for Thursday, June 9 from 9 AM to 3 PM. Trustee Term Peggy Selig informed the board that she has been appointed and sworn in to another term as trustee. Next Meeting The Next meeting of the board was scheduled for July 18 at 2 PM. At that meeting, officers will be elected for the coming year. Adjournment Peggy Selig made a motion to adjourn the meeting. The motion was seconded by Michael Fogarty. The meeting was adjourned at 3:15 PM.