Firemen’s Pension Fund Board of Trustees

July 25, 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 AM . 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: Smith, Tarr, Tomblin , President Troglio - 4. Absent: Higgins - 1. Others present: Chad Lucas, CPA and Partner of Sikich; Ali Wilson , CPA, CFE and Senior Accountant of Sikich; 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 Regular Board Meeting held on May 23, 2022 and June 27, 2022, and the Minutes of the Special Meeting held on April 20, 2022, as printed. Trustee Smith moved to approve the minutes of the Regular Board Meeting held on May 23, 2022 and June 27, 2022, and the Special Meeting Minutes from April 20, 2022; seconded_py Trustee Tomblin . Approved by viva voce vote . REGULAR BUSINESS ITEM NO. 1 REVIEW of the FINANCIAL STATEMENTS AND INDEPENDENT AUDITOR'S REPORT for the Year Ended December 31, 2021, with Request to APPROVE. Mr. Chad Lucas, a partner at Sikich LLP, provided a presentation on the Financial Statements and Independent Auditor's Report for the year ended December 31 , 2021 . He expressed his appreciation for having the opportunity to work with the Pension Fund and he distributed reports to the Board for review. Mr. Lucas reviewed the financial statement with asset balances, receivables including interest and dividends, and liability, reporting that the Fund's net position was $177,080,526. He reviewed the statement of plan net position that included total assets of cash investments in the amount of $159,597,014. He noted there were receivables, in the amount of $3,896,675, · participant contributions in the amount of $45,898, interest and dividends, in the amount of PROCEEDINGS - FIREMEN'S PENSION MEETING JULY 25, 2022 PAGE2 $281 ,693, and total liabilities in the amount of $24,934. He reviewed the statement of changes in fiduciary net position that included additions, such as the employer's contributions, in the amount of $12,328,359, participant's contributions , in the amount of $1 ,587,671 , which totaled $13,916,030. He reviewed the investment income and reported the total net investment income was approximately $26,941 ,238 million for the year. He reviewed deductions that included pension benefits and refunds for retired , disabled, widows and dependents as well as administrative expenses. He said the deductions totaled approximately $17,437,218 million, with a $152,966 in administrative expenses totaling $17,590,184. He reported that the overall net increase for the year was $9,351,054 million . He reviewed the notes to the financial statements such as the summary of significant accounting policies, which included the plan description, deposits and investments, fair value measurements, pension liability of the City, and contingent liabilities. Mr. Lucas reviewed the City's net pension liability for the Fund, in the amount of $181 ,557,754, with a funded position of 49.38%. He reviewed the actuarial assumptions used for the mortality rates, termination rates, disability rates, retirement rates, salary progression, inflation rate, with a decrease of the discount rate from 6.75% to 5.80%. Mr. Lucas reviewed the last fiscal eight years of unfunded liabilities that had been created. He reported the actuarial calculations considered that information in their evaluation . He reviewed the Schedule of Employer Contributions for the last ten fiscal years. He noted in 2021 , employer contributions exceeded the actuarially determined contribution by approximately $2,632. He reviewed the Schedule of Investment Returns for the last eight fiscal years, and he noted the 4.83% for the schedule of investments returns for 2021 . He commented the schedule would continue to build until it reflected the last ten fiscal years. He reviewed the Independent Auditor's Report on Internal Controls noting that there were a couple of material adjustments relating to financial reporting . Discussion was held regarding the determination of vested employees vs. nonvested . Senior Accountant Ali Wilson explained the definition depended upon which tier the member was at to determine who was vested . Mr. Lucas briefly reviewed the auditor's communication to the Board of Trustees. He noted professional standards required communication of significant audit matters. He remarked on the two adjusting journal entries that were determined to be material and were corrected by management. He noted during the testing of employer contributions certain transfers for employer contributions were not made and recorded as revenue. He said as a result, they noted employer contributions were understated by $3,896,675. Senior Accountant Wilson noted an adjustment was immediately made to correct the understatement. At the conclusion of the report, Trustee Smith moved to approve the Financial Statement and Independent Auditor's Report for the year ended December 31, 2021; seconded by President Troglio. Approved by roll call vote. Yeas : Smith, Tarr, Tomblin , President Troglio - 4; Nays: None. PROCEEDINGS - FIREMEN'S PENSION MEETING JULY 25, 2022 PAGE3 ITEM NO. 2 MONTHLY PORTFOLIO PERFORMANCE REVIEW from MARQUETTE ASSOCIATES and NORTHERN TRUST dated APRIL 30, 2022 and MAY 31, 2022, and from FPIF dated MAY 2022, with Request to Receive and File. After brief comments, Trustee Smith moved to receive and file the Monthly Portfolio Performance Review from Marquette Associates and Northern Trust; seconded by Trustee Tomblin. Approved by viva voce vote. ITEM NO. 3 Report from Fire Marshal Shawn Sollberger of Pension Fund Contributions, which were made by payroll deductions during the MONTH of JUNE 2022, 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 May 21 , 2022 - June 5, 2022 June 15, 2022 $63,157.99 June 6, 2022 - June 20, 2022 June 30, 2022 $63,564.92 TOTAL $126,722.91 Trustee Tomblin moved to concur and place on file the Fire Marshal's Report for June 2022; seconded by Trustee Smith. Approved by viva voce vote. ITEM NO. 4 Request to APPROVE the following BILLS: Pensions for July 2022 (dated July 30, 2022) ......................................................... $1,492,855.60 Lauterbach & Amen - Prof Svcs - May 2022 ...... ...... .. .... ...... .. .. .. ...... ... 3,550.00 Foster & Foster- GASB 67/68 Prep w/ measurement date 12/31/21 ... .. . . . 3,000.00 INSPE Associates - Dr. James Sostak - Gregory Parker . . . . . . . . . . . . . . . . . . . . . . 2,520.00 SUB-TOTAL FOR JULY .... . ... .. ........... .......... . ......... .. .... .. .......... .. ..... $1,501 ,925.60 APPROVE GRAND TOTAL FOR JULY ......................................................$1,501,925.60 Trustee Smith moved to approve the bills for July 2022 , in the amount of $1,501 ,925.60 ; seconded by President Troglio. Approved by roll call vote . Yeas: Smith, Tarr, Tomblin , President Troglio - 4; Nays: None. PROCEEDINGS - FIREMEN'S PENSION MEETING JULY 25, 2022 PAGE4 ITEM NO. 5 REQUEST to APPROVE the REMOVAL from the PENSION ROLLS of DENNIS W. MURRAY Due to His Death on JULY 14, 2022, and to Make Payments to the Dennis W. Murray Estate, in the Amount of $3,441.84 for 14 days of July 2022. Recommendation: To RECEIVE and FILE the Death Certificate Upon Receipt and to APPROVE the Payment of $3,441.84 for 14 days of July. Trustee Tomblin moved to approve the removal from the pension rolls of Dennis W . Murray due to his death on July 14, 2022, and to make payment to the Dennis W. Murray Estate, in the amount of $3,441 .84 for 14 days of July and to receive and file the Death Certificate Upon Receipt; seconded by Trustee Smith. Approved by roll call vote . Yeas : Smith, Tarr, Tomblin , President Troglio - 4; Nays: None. ITEM NO. 6 MONTHLY FINANCIAL REPORT from LAUTERBACH & AMEN, LLP for the Month of MAY 2022, 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. President Troglio moved to approve the monthly financial reports from Lauterbach & Amen , LLP for the month of May 2022, 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 Tarr. Approved by roll call vote . Yeas: Smith, Tarr, Tomblin, President Troglio - 4; Nays: None. ITEM NO. 7 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. President Troglio 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 Smith. Approved by roll call vote. Yeas : Smith, Tarr, Tomblin , President Troglio -4; Nays: None. PROCEEDINGS - FIREMEN'S PENSION MEETING JULY 25, 2022 PAGES ITEM NO. 8 POLICY Pertaining to the CASH ACCOUNT in the Fund's LOCAL BANKING INSTITUTION, with a Request to Receive and File or Other Action Deemed Appropriate City Treasurer Morris gave a brief update to the Board. He reported $10 million had been transferred , but he said they did not get the $1 .5 million transferred back because of procedures in place that required requests to be done by the 1st of the month in order to be done by the 14th of the month. He said they now have a recurring transfer in place that would happen on the 14th of the month in anticipation of the funding at the end of the month. He reported there was $5,829,157.00 at Morton Community Bank, after the $10 million transfer and the $1 .5 million to cover payroll. After brief comments, President Troglio moved to approve the Policy pertaining to the Cash Account in the Fund's Local Banking Institution; seconded by Trustee Smith. Approved by roll call vote . Yeas : Smith, Tarr, Tomblin , President Troglio -4 ; Nays: None. ITEM NO. 9 DISCUSSION Regarding Rescheduling the AUGUST REGULAR BOARD MEETING to August 29, 2022, to Accommodate a Presentation from Foster & Foster Regarding the Actuarial Report. Trustee Tarr reported Foster & Foster could not make it to the August 22, 2022, regularly scheduled Fire Pension Board meeting in order to provide a presentation. She said they would be available to attend if the meeting was rescheduled to August 29, 2022. Discussion was held regarding the actuarial report based on assumptions. Chairman Troglio suggested an 18 or 20-year rolling amortization. He said the Board should direct Jason Franken of Foster and Foster to fund the pension at 100% by 2040. After the discussion, it was determined to reschedule the August Board meeting to August 29, 2022, at 9:30 AM . President Troglio moved to reschedule the August Regular Firemen's Pension Board meeting from Monday, August 22, 2022, to Monday, August 29, 2022, at 9:30 AM. ; seconded by Trustee Smith . Approved by viva voce vote. UNFINISHED BUSINESS ITEM NO. 13 CONTINUED DISCUSSION Regarding the OVERPAYMENT to the Denise Roxanne Kneer Estate, in the Amount of $2,312.19 for 12 days of January 2022 with a Request to RECEIVE and FILE or Take Other Action Necessary. Trustee Tarr gave a brief update regarding the overpayment of funds. She informed the Board that Attorney Reimer said they could reach out to the Police Dept. for an investigation, however, it might cost more money to pursue it than the money in question . PROCEEDINGS - FIREMEN'S PENSION MEETING JULY 25, 2022 PAGEG In discussion, the Board Members agreed that they had done their due diligence to try to collect the overpayment of funds. President Troglio moved to receive and file the continued discussion regarding the overpayment of $2,312.19 to the estate of Denise Roxanne Kneer; seconded by Trustee Tomblin. Approved by viva voce vote NEW BUSINESS There was no new business to discuss. EXECUTIVE SESSION It was determined that an Executive Session was not needed at this time. CITIZENS' OPPORTUNITY TO ADDRESS THE BOARD OF TRUSTEES It was determined that there were no citizens to address the Board of Trustees. ADJOURNMENT Trustee Tarr moved to adjourn the Regular Firemen's Pension Board Meeting; seconded by Trustee Tomblin. Approved by roll call vote . Yeas : Smith, Tarr, Tomblin , President Troglio - 4; Nays: None. The Regular Firemen's Pension Board meeting adjourned at 10: 19 AM . Stefanie r RMC , CMG, City Clerk Trustee an Board Secretary, Firemen's Pension Fund of Peoria, Illinois /tb