Retiree Health Care Investment Board

CITY OF ROYAL OAK RETIREE HEALTH CARE INVESTMENT BOARD MINUTES OF THE REGULAR MEETING OF THE BOARD OF TRUSTEES A meeting of the Retiree Health Care Investment Board of Trustees was conducted remotely via Zoom, on Friday November 20, 2020 at 8:30 a.m. The meeting was called to order at 8:28 a.m. Tom Michaud, retiree health care investment board attorney with VanOverbeke, Michaud, & Timmony, explained that due to an amendment to Michigan Public Act 228 Open Meetings Act in October 2020, all retiree health care investment board trustees attending remotely must state the city / county and state from where they are attending the retiree health care investment board meeting during roll call. Lee Collick, chairperson, stated that the Legal section of the meeting agenda will be discussed after Roll Call is taken. Attendance / Roll call performed PRESENT: Lee Collick, attending from Royal Oak, Michigan - Chairperson Bret Nelson, attending from Oakland County, Michigan - Vice Chairperson Kyle DuBuc, attending from Royal Oak, Michigan – Trustee Paul Brake, attending from Royal Oak, Michigan – Trustee ALSO PRESENT: Julie Rudd - Bd Chief Administrative Officer/ Bd Secretary/Bd Treasurer Lisa Genord- Administrative Assistant / Pension Technician Tom Michaud – Bd attorney with VanOverbeke Michaud and Timmony Brian Green – AndCo Investment Advisor LEGAL Tom Michaud, retiree health care investment board attorney with VanOverbeke, Michaud, & Timmony, P.C., discussed the memo from his office dated October 20, 2020, regarding the Michigan Public Act 228 of 2020, Open Meetings Act Amendments. Tom reported that there were three important changes included in the amendment: 1) Trustees attending a retirement meeting remotely must state during roll call where they are physically attending the meeting from, i.e., city or county and the state. 2) A written meeting agenda must be posted on the city website / online before the meeting. The agenda can be changed during the meeting. 3) Currently, three retiree health care investment board trustees must be present to have an official meeting (quorum) and be able to vote. Beginning January 1, 2021, retiree health care investment board trustees can only participate remotely if they, 1) are in the military, 2) have a medical condition that precludes them from attending, or 3) there is a state of emergency declared at the state or local level. Tom stated that many companies are not allowing employees to travel in 2021, so the retiree health care investment board still might need to allow some retiree health care investment board attendees to participate remotely. Tom also reported that beginning in 2022, retiree health care investment board trustees may only participate remotely if they are in the military. Moved by Lee Collick to receive and file Supported by Bret Nelson MOTION ADOPTED UNANIMOUSLY 4/0 Public Comment Members of the public were able to participate in the meeting by joining on Zoom Webinar using Meeting ID 87846809161 & password 636798. Participation could be either online or by calling in: Online: https://us02web.zoom.us/j/87846809161?pwd=UFdZZHpmanc2OS9Mc0ZBaWhrMEJJUT09 iPhone: 1 929 205 6099 or 1 301 715 8592 1 Phone: 1 929 205 6099 or 1 301 715 8592 or 1 312 626 6799 or 1 669 900 6833 or 1 253 215 8782 or 1 346 248 7799. There were no public attendees / comments. Board approval of the agenda for November 20, 2020 meeting Moved by Lee Collick to approve the November 20, 2020 meeting agenda Supported by Bret Nelson MOTION ADOPTED UNANIMOUSLY 4/0 Board approval of the draft minutes for October 16, 2020 meeting Moved by Lee Collick to approve the October 16, 2020 meeting minutes Supported by Bret Nelson MOTION ADOPTED UNANIMOUSLY 4/0 INVESTMENTS Investment performance review as of October 31, 2020 presented by Brian Green of AndCo. Market value/allocation of assets as of October 31, 2020 is $129,988,693. Current month – total portfolio outperformed the benchmark: -0.93% vs. -1.51% index. 3-month performance – total portfolio outperformed the benchmark: 0.75% vs. 0.42% index. Year-to date performance – total portfolio underperformed the benchmark: -0.48% vs. 1.98% index. 1-year performance – total portfolio underperformed the benchmark: 3.54% vs. 6.39% index. 3-year performance – total portfolio underperformed the benchmark: 4.59% vs. 6.50% index. Inception – total portfolio underperformed the benchmark: 4.85% vs. 6.80% index. Brian commented that of the investment documents listed below, he recommended that the trustees review the PGIM Real Estate Prisa II 3Q Performance Report, and also noted that the Seizert Capital Partners (SCP) Update Letter dated November 6, 2020 announced that Seizert is now 100% employee owned, which AndCo viewed as a very positive development. Brian reported that we gave a little back in the month of October, and that sectors of the market (non-technology & consumer discretionary) that have been ignored throughout the recession, have now started participating, when in the past they were lagging. Brian also reported that AndCo made a several changes to the city’s investment portfolio in the third quarter, shifting from the Vanguard S& P 500 Fund to the Fidelity 500 Index Fund, which will save the city $6000.00 in investment fees per year while staying invested in the same exact holdings. Brian also reported that within the international equity portfolio, we shifted from Transamerica Emerging Markets to JP Morgan Emerging Market. Finally, in the domestic fixed income portfolio, we shifted from Loomis Sayles Bond High Income to Loomis Sayles Bond Bloomberg Barclays U.S. Aggregate Index, which is more technical and a good addition to the city’s portfolio. Brian also reported that the recent announcements of COVID-19 vaccines becoming available in late 2020, with 90 – 95% efficacy rates, have had a positive effect on the stock market, and that AndCo will continue to monitor the market and rebalance the city’s portfolio. The complete AndCo Investment Performance Review report dated October 31, 2020 is on file in Finance Office. Moved by Lee Collick to receive and file. Supported by Paul Brake MOTION ADOPTED UNANIMOUSLY 4/0 AndCo Preliminary Performance Summary dated November 11, 2020 Moved by Lee Collick to receive and file. Supported by Paul Brake MOTION ADOPTED UNANIMOUSLY 4/0 AndCo Update on Status of Trust Investments Letter dated November 3, 2020 Moved by Lee Collick to receive and file. Supported by Paul Brake MOTION ADOPTED UNANIMOUSLY 4/0 PGIM Real Estate Prisa II Investor Statement ending 3Q 2020 Moved by Lee Collick to receive and file. Supported by Paul Brake MOTION ADOPTED UNANIMOUSLY 4/0 2 PGIM Real Estate Prisa II LP Detailed Management Fee Report ending 3Q 2020 Moved by Lee Collick to receive and file. Supported by Paul Brake MOTION ADOPTED UNANIMOUSLY 4/0 PGIM Real Estate Prisa II 3Q Performance Report Moved by Lee Collick to receive and file. Supported by Paul Brake MOTION ADOPTED UNANIMOUSLY 4/0 PGIM Real Estate Prisa II LP – 2Q 2020 Report Moved by Lee Collick to receive and file. Supported by Paul Brake MOTION ADOPTED UNANIMOUSLY 4/0 PGIM Real Estate Prisa II LP – 3Q 2020 Report Moved by Lee Collick to receive and file. Supported by Paul Brake MOTION ADOPTED UNANIMOUSLY 4/0 PGIM Real Estate Prisa II – Market Watch Report as of October 1, 2020 Moved by Lee Collick to receive and file. Supported by Paul Brake MOTION ADOPTED UNANIMOUSLY 4/0 Seizert Capital Partners (SCP) Quarterly Report dated September 30, 2020 Moved by Lee Collick to receive and file. Supported by Paul Brake MOTION ADOPTED UNANIMOUSLY 4/0 Seizert Capital Partners (SCP) Directions 3Q 2020 Newsletter as of September 30, 2020 Moved by Lee Collick to receive and file. Supported by Paul Brake MOTION ADOPTED UNANIMOUSLY 4/0 Seizert Capital Partners (SCP) Update Letter dated November 6, 2020 Moved by Lee Collick to receive and file. Supported by Paul Brake MOTION ADOPTED UNANIMOUSLY 4/0 OTHER None NEXT MEETING AND ADJOURNMENT Next regular meeting is scheduled immediately following the retirement system board meeting at approximately 8:30 a.m. on Friday, December 18, 2020 remotely via Zoom. Moved by Lee Collick to adjourn the meeting (8:45 a.m.) and confirm next meeting for December 18, 2020 immediately following retirement system board meeting at approximately 8:30 a.m. Supported by Bret Nelson MOTION ADOPTED UNANIMOUSLY 4/0 3