Financial Advisory Board

400 S. Eagle Street City of Naperville Naperville, IL 60540 Meeting Minutes - Final Financial Advisory Board Monday, October 30, 2023 6:00 PM Naperville Employee University (NEU) Room A. CALL TO ORDER: Chairman Soenke called the meeting to order at 6:00 p.m. B. ROLL CALL: Also present: Raymond Munch, Deputy Finance Director; Melanie Smith, Accountant; Mike Piotrowski, Marquette Associates; Jesus Jimenez, Marquette Associates; Avyay Parmeswaran, Student Representative; Soohyun Cho, Student Representative Present 6- Mark Gizzo, Gautan Grover, Edward Harvey, Michael Soenke, Curtis Williams, and Jeff Walker Excused 1- Josh McBroom C. PUBLIC FORUM: No speakers D. REPORTS: Welcome new student representatives Soohyun Cho and Avyay Parmeswaran Chairman Soenke welcomed two new Student Representatives to the Financial Advisory Board - Soohyun Cho and Avysy Parmeswaran. Receive the 2023 3rd quarter investment report Mr. Piotrowski and Mr. Jimenez presented the third quarter (Q3) investment report. Mr. Piotrowski provided a summary of financial markets and the economy during the third quarter. Mr. Piotrowski noted that markets were down by about 3% across all sectors of the market. He also noted that the economy continues to be more resilient than anticipated, and is being propped up by a strong consumer that contributed to a 4.9% increase in GDP for Q3. Mr. Jimenez reviewed the investment portfolio, noting a market value of $229.5 million as of Sept. 30, 2023. Year to date, the City has positive cash flow of $21.5 million. In Q3, the fixed income composite returned -0.7% (net of fees), a slight out performance to the benchmark of -0.8%. PFM performed better than Loop Capital in Q3, with returns of -0.6% and -0.9% respectively. Deputy Director Munch noted that the City continues to earn high interest on cash held in Wintrust Bank accounts, with current interest rates above 5%. City of Naperville Page 1 Printed on 2/2/2024 Financial Advisory Board Meeting Minutes - Final October 30, 2023 Receive the 2023 3rd quarter budget report Deputy Director Munch summarized the budget through Q3 of 2023. Review the proposed 2024 Annual Budget and Capital Improvement Program Deputy Director Munch provided an overview of the proposed 2024 Annual Budget. E. NEW BUSINESS: Approve the minutes of the July 24, 2023 meeting Chairman Soenke called for a motion to approve the minute. Motion made by Williams, seconded by Gizzo. Motion approved by voice vote. Approve the tentative 2024 meeting schedule Chairman Soenke called for a motion to approve the tentative schedule. Motion made by Walker, seconded by Grover. Motion approved by voice vote. F. OLD BUSINESS: Receive the update on the Fixed Income Money Manager selection process and discuss the recommendation to award services to the high scoring vendor(s) Deputy Director Munch provided a status update on the Fixed Income Money Manager request for proposals process. The City received proposals from 15 qualified vendors. The top five vendors were interviewed. After the interview phase concluded, the RFP scoring committee ranked the vendors with the top two being Mesirow and PFM Asset Management. Loop Capital ranked third and would not retain a portion of the City's portfolio unless the manager relationship was expanded. The board discussed the merits of maintaining two money managers versus one or even three managers. There was consensus that keeping two managers is the best course. Moving to a one manager relationship is not preferred from a security perspective and a three manager relationship has no definitive benefits and results in higher costs. The board agreed that moving forward with Mesirow and PFM is recommended. The Board also concurred that the entire Loop Capital portfolio can be transitioned to Mesirow, with the understanding that City staff will evaluate cash flow needs for 2024 and may direct a higher amount be held in cash. G. ADJOURNMENT: Chairman Soenke called for a motion to adjourn the meeting at 7:35 p.m. Motion made by Harvey, seconded by Walker. Motion approved by voice vote. /S/Raymond Munch Raymond Munch Deputy Finance Director City of Naperville Page 2 Printed on 2/2/2024 Financial Advisory Board Meeting Minutes - Final October 30, 2023 City of Naperville Page 3 Printed on 2/2/2024