Firemen’s Pension Fund Board of Trustees

January 24, 2022 Peoria, Illinois PROCEEDINGS OF A REGULAR MEETING OF THE BOARD OF TRUSTEES OF THE FIREMEN’S PENSION FUND OF PEORIA, ILLINOIS A Regular Meeting of the Board of Trustees of the Firemen’s Pension Fund of Peoria, Illinois, will be held this date at City Hall, Room 404, Peoria, Illinois at 9:30 A.M. with proper notice having been given, for the purpose of conducting regular Firemen’s Pension Fund business. ROLL CALL Roll Call showed the following Board members present: Higgins, Smith, Tarr, Tomblin, President Troglio – 5. Others present: Mr. Patrick Donnelly, Institutional Consulting Director, Financial Advisor with Graystone Consulting in Peoria; City Treasurer Stephen Morris; and Chief Deputy City Clerk Trina Bonds. INVOCATION A moment of silence was held in remembrance of those Firefighters who have served our community. MINUTES Recommendation to Approve the Minutes of the Rescheduled Regular Board Meeting held on December 13, 2021, as printed. Trustee Tomblin moved to approve the minutes of the Rescheduled Regular Board Meeting held on December 13, 2021; seconded by President Troglio. Approved by viva voce vote. REGULAR BUSINESS ITEM NO. 1 MONTHLY PORTFOLIO PERFORMANCE REVIEW by PATRICK DONNELLY GRAYSTONE CONSULTING (A business of Morgan/Stanley Smith-Barney), and Discussion Regarding Recommendations, Possible Action Regarding the Firemen’s Pension Fund Portfolio Performance, and Discussion and Review of the Asset Allocations, with Request to Receive and File Reports or Take Other Action. A copy of the Performance Update for the period ending December 31, 2021, was distributed to all members of the Board. The Performance Update showed the portfolio valued at $173,111,726. Since its inception, the total portfolio performance returned 6.84% versus the custom benchmark of 6.52%. Mr. Donnelly gave a recap of the actions taken by the Board at the December 2021 meeting. He reviewed the details for the transfer on January 4t, 2022. He noted Graystone Consulting would help make sure everything was audited and transferred correctly. PROCEEDINGS – FIREMEN’S PENSION MEETING JANUARY 24, 2022 PAGE 2 Mr. Donnelly reviewed the S&P Index, and he noted the stock markets had declined. He explained much of it was because the fiscal stimulus was coming to an end and rates were going up. He said as interest rates go up, Bond prices go down. He reviewed the Capital Markets Overview and the Asset Class Index Performance. He gave a quick summary and he said about 50% of the tech stocks were currently down close to 50%. Mr. Donnelly reviewed the portfolio allocations as of December 31, 2021, as follows: Target Allocation Asset Allocation Cash & Cash Equivalents 6.00% 5.88% Fixed Income 34.00% 29.90% Equity 60.00% 64.22% Target Allocation Asset Allocation Cash & Cash Equivalents 6.00% 5.88% Alternatives 3.00% .95% Mid Cap Equity 3.00% 3.43% Small Cap Equity 3.00% 5.42% Emerging Markets 8.00% 0.00% International Equity 16.00% 26.94% Large Cap Equity 27.00% 27.47% Fixed Income 34.00% 29.90% Mr. Donnelly noted the Fund was heavy in cash and close to the target with an allocation of 5.88% versus the target allocation of 6%. He said Emerging Markets was unfunded but was included in International Equity. He said Large Cap Equity was right in line with the target allocation of 27%. He said Fixed Income was a little under-allocated at 29.90% versus the target allocation of 34%. Mr. Donnelly reviewed the year-to-date return of the Fund at 7.97% versus the custom benchmark of 10.36%, noting the same one-year return of 7.97% versus the custom benchmark of 10.36%. He said there was a great three-year return of 14.71% versus the custom benchmark of 12.82%. He noted a great 10-year run, and he said since inception, the Fund was up 6.84% versus the custom benchmark of 6.52%. He said the Fund beat their assumed rate of return, which was the goal. He reported the US Equity benchmark had averaged 15% over the past ten years. He noted the biggest disappointment was the one-year performance for Thornburg, which was down 4.23% versus 5.10%. He said there was an under-performance with American EuroPacific. He remarked the year-to-date return for the bond manager Segall Fixed Income was down 1.4%. He noted the returns for Aristotle had been outstanding, along with Vanguard S & P 500 and Kayne Anderson. Mr. Donnelly concluded his report by reviewing the portfolio’s current-quarter activity as follows: Beginning Market Value $172,897 million Net contributions -$3,885 million Fee/Expenses -$144 thousand Income $3,306 million Gain/Loss $938 thousand PROCEEDINGS – FIREMEN’S PENSION MEETING JANUARY 24, 2022 PAGE 3 Ending Market Value $173,112 million Mr. Donnelly noted the following Since Inception on 01/01/2003: Beginning Market Value $76,020 million Net contributions -$49,818 million Fee/Expenses -$4,048 million Income $55,685 million Gain/Loss $95,272 million Ending Market Value $173,112 million After a brief discussion, Trustee Smith moved to receive and file the Performance Update Report for period ending December 31, 2021; seconded by Trustee Higgins. Approved by viva voce vote. Mr. Donnelly left the meeting at 9:54 a.m. ITEM NO. 2 Report from Fire Marshal James Bachman of Pension Fund Contributions, which were made by payroll deductions during the MONTH of DECEMBER 2021, from the active members of the Peoria Fire Department and which checks were turned in to the City Treasurer’s Office by Director of Finance/Comptroller, with Recommendation to Concur and Receive and File. Payroll Period When Deducted Amount November 21, 2021 – December 5, 2021 December 15, 2021 $ 62,521.63 December 6, 2021 – December 25, 2021 December 30, 2021 $ 62,689.63 TOTAL $125,211.26 Trustee Smith moved to concur and place on file the Fire Marshal’s Report for December 2021; seconded by Trustee Tomblin. Approved by viva voce vote. ITEM NO. 3 Discussion Regarding PENSION BENEFIT INCREASES for 2022, with a Request to APPROVE. President Troglio reported the contract with Local 50 and the City of Peoria had expired on December 31, 2021. He said anyone retiring would not receive any raises until there was a new contract. Trustee Tarr clarified once a new contract was approved, the raises would become retroactive. President Troglio moved to approve the pension benefit increases for 2022; seconded by Trustee Smith. Approved by roll call vote. Yeas: Higgins, Smith, Tarr, Tomblin, President Troglio – 5; Nays: None. PROCEEDINGS – FIREMEN’S PENSION MEETING JANUARY 24, 2022 PAGE 4 ITEM NO. 4 Request to APPROVE the following BILLS: Pensions for January 2022 (dated January 31, 2022) ........................................ $1,489,098.96 Lauterbach & Amen, LLP – Prof Svcs Nov 2021 ........................................ 3,445.00 Reimer, Dobrovolny & LaBardi – Legal Services ........................................ 873.96 Lauterbach & Amen, LLP – Municipal Compliance Report 12/31/20 ........... 600.00 SUB-TOTAL FOR JANUARY……………………………………………… $1,494,017.92 GRAND TOTAL FOR JANUARY..…….………………………………….. $1,494,017.92 Trustee Tomblin moved to approve the bills for January 2022, in the amount of $1,494,017.92; seconded by Trustee Smith. Approved by roll call vote. Yeas: Higgins, Smith, Tarr, Tomblin, President Troglio – 5; Nays: None. ITEM NO. 5 APPLICATION for REGULAR RETIREMENT PENSION for FIRE CAPTAIN TODD DOSEMAGEN to become effective January 5, 2022, (last day paid by the City January 4, 2022) based on 63.5417% of his Annual Salary of $107,290.79. Pension to be paid for the remaining 27 days of January, in the Amount of $4,948.15 ($4,355.61 for Peoria Firefighter’s Pension Fund and $592.54 for the Pontiac Firefighter’s Pension Fund) and $5,681.20 ($5,000.88 for Peoria Firefighter’s Pension Fund and $680.32 for the Pontiac Firefighter’s Pension Fund) for every month thereafter with recommendation for the Board to APPROVE. Trustee Tomblin moved to approve the Application for Regular Retirement Pension for Fire Captain Todd Dosemagen to become effective January 5, 2022, (last day paid by the City January 4, 2022) based on 63.5417% of his annual salary of $107,290.79 with pension to be paid for the remaining 27 days of January, in the amount of $4,948.15 ($4,355.61 for Peoria Firefighter’s Pension Fund and $592.54 for the Pontiac Firefighter’s Pension Fund) and $5,681.20 ($5,000.88 for Peoria Firefighter’s Pension Fund and $680.32 for the Pontiac Firefighter’s Pension Fund) for every month thereafter; seconded by Trustee Higgins. Approved by roll call vote. Yeas: Higgins, Smith, Tarr, Tomblin, President Troglio – 5; Nays: None. ITEM NO. 6 REQUEST to APPROVE the REMOVAL from the PENSION ROLLS of PATRICIA M. SIMPSON Due to Her Death on JANUARY 17, 2022, and to Make Payments to the Patricia M. Simpson Estate, in the Amount of $5,276.46, for 17 Days of January 2022. Recommendation: To RECEIVE and FILE the Death Certificate Upon Receipt and to APPROVE the Payment of $5,276.46 for 17 days of January. Trustee Tomblin moved to approve the removal from the pension rolls of Patricia M. Simpson due to her death on January 17, 2022, and to make payment to the Patricia M. Simpson Estate, PROCEEDINGS – FIREMEN’S PENSION MEETING JANUARY 24, 2022 PAGE 5 in the amount of $5,276.46 for 17 days of January 2022, and to receive and file the Death Certificate Upon Receipt; seconded by Trustee Smith. Approved by roll call vote. Yeas: Higgins, Smith, Tarr, Tomblin, President Troglio – 5; Nays: None. ITEM NO. 7 QUALIFIED ILLINOIS DOMESTIC RELATIONS ORDER for Vicki Sue Cooksey, Previously Married to Firefighter KENT M. TOMBLIN, with Request to APPROVE. Trustee Higgins moved to approve the Qualified Illinois Domestic Relations Order for Vicki Sue Cooksey, previously married to Firefighter Kent M. Tomblin; seconded by President Troglio. Approved by roll call vote. Yeas: Higgins, Smith, Tarr, President Troglio – 4; Nays: None. Abstention: Tomblin – 1. ITEM NO. 8 QUALIFIED ILLINOIS DOMESTIC RELATIONS ORDER for Andrea L. Dean, Previously Married to Firefighter STANLEY N. TAYLOR, with Request to APPROVE. Trustee Higgins moved to approve the Qualified Illinois Domestic Relations Order for Andrea L. Dean, previously married to Firefighter Stanley N. Taylor; seconded by President Troglio. Approved by roll call vote. Yeas: Higgins, Smith, Tarr, Tomblin, President Troglio – 5; Nays: None. ITEM NO. 9 REQUEST to APPROVE & AUTHORIZE MORGAN STANLEY to Move the FUND’S REMAINING CASH BALANCE from MORGAN STANLEY to the MORTON COMMUNITY BANK ACCOUNT. After brief comments, President Troglio moved to approve and authorize Morgan Stanley to move the Fund’s Remaining Cash Balance from Morgan Stanley to the Morton Community Bank Account; seconded by Trustee Smith. Approved by roll call vote. Yeas: Higgins, Smith, Tarr, Tomblin, President Troglio – 5; Nays: None. ITEM NO. 10 DISCUSSION Regarding a Letter from the FIREFIGHTERS’ PENSION INVESTMENT FUND (FPIF) Regarding their CASH MANAGEMENT POLICY, with Request to RECEIVE and FILE or to Take Appropriate Action. In discussion, City Treasurer Stephen Morris said he would investigate the Cash Management Policy further. Trustee Tarr said for clarification, she wanted to know if this would be something the Board needed to provide annually. PROCEEDINGS – FIREMEN’S PENSION MEETING JANUARY 24, 2022 PAGE 6 After brief comments, Trustee Tarr moved to defer discussion regarding a letter from the Firefighters’ Pension Investment Fund (FPIF) regarding their Cash Management Policy to the Regular February 28, 2022 Fire Pension Meeting; seconded by President Troglio. Approved by viva voce vote. ITEM NO. 11 MONTHLY FINANCIAL REPORT from LAUTERBACH & AMEN, LLP for the Month of DECEMBER 2021, which Includes the STATEMENT OF PLAN NET ASSETS, STATEMENT OF CHANGES IN PLAN NET ASSETS, SUMMARY of CASH AND INVESTMENTS, BALANCE SHEET, REVENUES and REVENUE REPORT, EXPENSES and EXPENSE REPORT, PAYROLL JOURNAL, and VENDOR CHECKS REPORT, with Recommendation to APPROVE. Trustee Tomblin moved to approve the monthly financial reports from Lauterbach & Amen, LLP for the month of December 2021, which includes the Statement of Plan Net Assets, Statement of Changes in Plan Net Assets, Summary of Cash and Investments, Balance Sheet, Revenues and Revenue Report, Expenses and Expense Report, Payroll Journal, and Vendor Checks Report; seconded by Trustee Smith. Approved by roll call vote. Yeas: Higgins, Smith, Tarr, Tomblin, President Troglio – 5; Nays: None. ITEM NO. 12 REQUEST for APPROVAL of a RESOLUTION Authorizing City Treasurer Stephen Morris the POWER TO INVEST, and Authorize City Treasurer Morris to Maintain a Minimum of $10,000.00 in the HARRIS BANK ACCOUNT. Trustee Tomblin moved to approve a Resolution authorizing City Treasurer Stephen Morris the power to invest and authorize City Treasurer Morris to maintain a minimum of $10,000.00 in the Harris Bank Account; seconded by Trustee Higgins. Approved by roll call vote. Yeas: Higgins, Smith, Tarr, Tomblin, President Troglio – 5; Nays: None. ITEM NO. 13 UPDATE Regarding Annual Affidavit of Continued Eligibility, with Request to Receive and File. Trustee Tarr reported we had received all of the Annual Affidavits of Continued Eligibility, with the exception of one, widow Sarah Riordan-Vice. After a brief discussion, President Troglio moved to direct Lauterbach and Amen to send the February pension check of Sarah Riordan-Vice to the City Treasurer Stephen Morris with direction to hold until receipt of an Annual Affidavit of Continued Eligibility; seconded by Trustee Tarr. Approved by roll call vote. Yeas: Higgins, Smith, Tarr, Tomblin, President Troglio – 5; Nays: None. PROCEEDINGS – FIREMEN’S PENSION MEETING JANUARY 24, 2022 PAGE 7 ITEM NO. 14 DISCUSSION Regarding the 2022 IPPFA ILLINOIS PENSION CONFERENCE, to be Held April 27-29, 2022 in East Peoria, Illinois. RECOMMENDATION: To Allow Board Members to Attend, and to Receive a Per Diem, and Reimbursement for Hotel and Travel Expenses or to Receive and File or to Take Appropriate Action. In discussion, President Troglio said he would look into the number of training hours needed by the Board. Trustee Tomblin moved to allow the Board Members to attend the 2022 IPPFA Illinois Pension Conference, to be held April 27-29, 2022, in East Peoria, Illinois; seconded by President Troglio. Approved by roll call vote. Yeas: Higgins, Smith, Tarr, Tomblin, President Troglio – 5; Nays: None. UNFINISHED BUSINESS ITEM NO. 15 MONTHLY FINANCIAL REPORT from LAUTERBACH & AMEN, LLP for the Month of NOVEMBER 2021, which Includes the STATEMENT OF PLAN NET ASSETS, STATEMENT OF CHANGES IN PLAN NET ASSETS, SUMMARY of CASH AND INVESTMENTS, BALANCE SHEET, REVENUES and REVENUE REPORT, EXPENSES and EXPENSE REPORT, PAYROLL JOURNAL, and VENDOR CHECKS REPORT, with Recommendation to APPROVE. Trustee Tarr moved to approve the monthly financial reports from Lauterbach & Amen, LLP for the month of November 2021, which includes the Statement of Plan Net Assets, Statement of Changes in Plan Net Assets, Summary of Cash and Investments, Balance Sheet, Revenues and Revenue Report, Expenses and Expense Report, Payroll Journal, and Vendor Checks Report; seconded by Trustee Tomblin. Approved by roll call vote. Yeas: Higgins, Smith, Tarr, Tomblin, President Troglio – 5; Nays: None. ITEM NO. 16 CONTINUED DISCUSSION Regarding ROLLING AMORTIZATION with request to RECEIVE and FILE or to Take Appropriate Action. President Troglio reported he had not had any official conversations regarding rolling amortizations. In discussion regarding a rolling amortization, City Treasurer Morris complimented the Board for conducting their business in public. He said the Board had a fiduciary obligation to the Fund and he said he felt they were meeting that obligation in the eyes of the public. President Troglio remarked the Board should approach the City Council regarding a suggestion of looking into a rolling amortization with the understanding that it would cost more money, but it would make sense and help in the long run. PROCEEDINGS – FIREMEN’S PENSION MEETING JANUARY 24, 2022 PAGE 8 There was discussion regarding developing a one to two-page educational marketing tool for Peoria Firefighters. Another suggestion was to hire a professional marketing agency or public relations firm to discuss strategic planning. The Board discussed working with Jason Franken of Foster & Foster to come up with numbers and a one-page study regarding a rolling amortization to be presented one-on-one or two at a time with City Council members. Trustee Smith moved to direct Jason Franken of Foster & Foster to do a study of the parameters set by the Board regarding a rolling amortization; seconded by Trustee Tomblin. Approved by roll call vote. Yeas: Higgins, Smith, Tarr, Tomblin, President Troglio – 5; Nays: None NEW BUSINESS ELECTIONS Trustee Tarr reported the Notice of Election will go out on February 16, 2022. She said the actual election will be on the third Monday in April. FIRE PENSION BOARD MEETING DATES Trustee Tarr mentioned the Board would need to discuss upcoming meeting dates once the investment portions were done. JOHN SCHNIBBEN UPDATE Trustee Tarr reported all reports were in and she said the Board needed to schedule a virtual or in-person meeting date in February or March. She said she would reach out to Attorney Reimer’s Office for dates. EXECUTIVE SESSION MINUTES In discussion with President Troglio, Trustee Tarr confirmed Executive Session Minutes would be discussed at the Regular February 28, 2022 Fire Pension Meeting. CITIZENS' OPPORTUNITY TO ADDRESS THE BOARD OF TRUSTEES It was determined that there were no citizens to address the Board of Trustees. ADJOURNMENT Trustee Tomblin moved to adjourn the Regular Firemen's Pension Board Meeting; seconded by Trustee Tarr. Approved by roll call vote. Yeas: Higgins, Smith, Tarr, Tomblin, President Troglio - 5; Nays: None. PROCEEDINGS – FIREMEN’S PENSION MEETING JANUARY 24, 2022 PAGE 9 The Regular Firemen's Pension Board meeting adjourned at 10:57 A.M. ___________________________________ Stefanie Tarr, RMC, CMC, City Clerk Trustee and Board Secretary, Firemen’s Pension Fund of Peoria, Illinois /tb