St. Mary's County, MD Length of Service Awards Program, 3 Dec 2021

Previous Meeting

Next Meeting

⏯

youtube image

►

From YouTube: 12/3/21 Length of Service Awards Program for St. Mary's County

Description

No description was provided for this meeting.
If this is YOUR meeting, an easy way to fix this is to add a description to your video, wherever mtngs.io found it (probably YouTube).

A

You're on the air, uh thank you amy. We can't see ourselves.

B

Thank god. Thank you very much amy. We appreciate that uh good morning and uh we'd like to call.

B

To order the length of service awards program, the losap committee for friday december 3rd.

B

At 9 30 a.m we are located in the chesapeake building in leonardtown maryland present is.

B

Myself, dr rebecca bridget county administrator commissioner, mike hewitt jeanette cudmore cfo,.

B

Marianne murray, our community member catherine pratzen human resource director and thank you to.

B

Michelle rantz, our administrator administrative recorder and jody kwasny, our plan administrator.

B

As well as amy carter, our video producer, so with that, we will look at roll call item 2a for the.

B

Approval of today's agenda, if you take a minute to review, we'll, entertain a motion to approve.

A

I'll make a motion to approve the agenda. We have a motion to approve. Today's agenda uh is.

B

There a second I'll. Second, we have a motion in a second all, those in favor aye aye. Any.

B

Opposed motion carries thank you and item. 2B is approval of the meeting minutes for august 27th.

B

If you take a minute to review I'll, entertain a motion to approve.

C

I'll make a motion to approve the minutes of august 27 2021. We have a motion on the floor to.

B

Approve the minutes, is there a second? Oh second, one, just a second, we have a motion and a second.

B

Any discussion hearing, none all those in favor, aye aye any opposed motion carries. Thank you and item.

B

Three is a presentation from marquette associates. We begin with uh the third quarter, investment.

B

Performance report and we'll turn it over to pat wang good morning good morning, dr bridget thank.

D

You and good morning again everyone, it's great to see you all. So the performance report will be the.

D

Top book in the packet laid out, the second book is a set of discussion materials for our later agenda.

D

Items, but you can please hop over that cover page in the or the hardcover and grab exhibit two and.

D

Flip that over and you'll see the first page, there says market environment so exhibit one is just an.

D

Overview or an update on marquette, nothing too no newsworthy there. So we'll start where we always do.

D

We see the market environment and then on page nine, where you see the us economy up top as.

D

You all know we like to start with maybe five six minute overview of the economy and capital markets.

D

Just to provide context for what's going on and context for how and why the low sap fund performed.

D

The way it did during the quarter so we'll start with the economy. Obviously, as we all well know,.

D

Things have changed somewhat over the past week, given the new variant that appears to be in the.

D

U.S now so the at a high level. Obviously the range of outcomes is certainly a little wider.

D

Certainly as recently as a week ago, but with that said I'll I'll talk more about that as we work.

D

Through some of the economic discussion, but if I could draw your attention to the top right chart.

D

On page nine again, where we're just showing at a high level u.s real gdp or economic growth,.

D

Now the bars in this chart are the quarterly economic growth numbers where the orange line.

D

Is the year-over-year number and the strike bars to the writer estimates, but if I could draw your.

D

Attention to the last two fully colored in bars, that's for q2 and q3 respectively, and you can see.

D

The pretty steep drop off and growth there in q3, so the economy still grew, but at a.

D

Much slower rate- and we talk about the reason behind that in the top bullet point there and.

D

Namely, it was pretty straightforward that consumer spending, which grew at a rate at about 12 percent,.

D

In q2 only grew at a rate about 1.6 in q3 and as a whole. You all I'm sure well know the consumers.

D

The driving force behind the u.s economy, accounting for about 67 70 percent of overall.

D

U.S economy, so the economy certainly goes as the consumer goes, and you know probably.

D

A myriad of factors playing a role there and we talk about you know some of those in the second.

D

Bullet point, but at the risk of stating the obvious, the economy is still undergoing those.

D

Supply chain issues, inventory issues and that's consumers and you can't spend money on. What's not.

D

Available right so we've all gone to the grocery store recently seeing the shortages and household.

D

Products again, if anybody's in the market for a home, durable good like a fridge, washer.

D

Couch things of those nature they're on back order for months and months, so the economy's.

D

Still grappling with these issues, and you can see that it's illustrated in the bottom right.

D

Chart here on page nine, where it's just a survey of us manufacturers about their supplier, delivery.

D

Times and when that line is higher means, there are slower deliveries and vice versa. And if you look.

D

All the way to the right there you can see, we did see some marginal improvement earlier this year.

D

But then those supplier delivery times worsened in q3, so clearly the supply chain issues are.

D

Still at the forefront and that's really what's led to a lot of the inflation that we've seen.

D

Over the past you know five six, seven months or so it's largely been in goods.

D

Prices so think, manufacturing right use cars, commodities, food prices, things of that nature.

D

Now, when we think about things moving forward and I'll take a step back quickly with the new variant.

D

We have seen some new travel restrictions they may be in the u.s or certainly abroad. Now not many.

D

Lockdowns, excuse me, notably outside of emerging market economies, but again, given the complexity.

D

Of the global supply chain, those supplier delivery times as we head into 2022, may even slow further.

D

And therefore exacerbate some of the inflation that we've seen already in goods prices now as.

D

Far as other parts of the economy are concerned, if you skip ahead to page 10 here, we talk a lot about.

D

The labor market! So if you look at that top chart to the right, what that's showing is a survey of.

D

Small businesses across the u.s, they ask a myriad of questions and one of them is here. You know what.

D

Percentage of firms have one or more hard jobs to fill and look all the way to the right. There.

D

We're at at least a 50-year high, more than half of respondents say. Yes, we have one or more hard.

D

Jobs to fill so the supply of labor is just not there right now and within that, the quality of.

D

Labor, in other words, the prospective employees that employers are looking for are just not.

D

Matching up with the skill sets that that they're, looking for so long-winded way of saying that.

D

The supply of labor has gone down just like the goods that we've seen that I spoke about.

D

A second ago so what happens? The price of labor goes up and we've seen that in the same survey.

D

Firms that had recently raised compensation was at a 42-year high.

D

Firms planning to raise compensation in the next few months, a record high which in isolation is a.

D

Good thing right: consumers, higher wages, more money in their pockets, hopefully drive consumer spending.

D

Driving economic growth moving forward, but at the same time, from a capital markets perspective.

D

If companies cannot pass along those increases to consumers, then it could eat into profit margins.

D

Eat into you know the profits of corporations and therefore have somewhat of a negative impact on.

D

Equities- and I think we saw a little bit of that theme play out in the third quarter, which we'll.

D

Look at here in just a second but then also from a fixed income perspective. You know generally higher.

D

Inflation leads to higher interest rates, which puts downward pressure on bond prices as well, so.

D

If that dynamic continues to unfold and again, the variant has certainly introduced more uncertainty.

D

I think, as we head into next year, if inflation continues to rear its ugly head, we could certainly.

D

See a little bit more of a volatile environment, you know at least relative to what we've seen.

D

This year you know, despite the last week notwithstanding where we've seen some weakness.

D

Generally, this year has been exceptionally strong. I mean the biggest peak decline in the u.s equity.

D

Market we've seen is just about five percent, which is well below the historical average of about 10.

D

To 12 percent, so if these dynamics continue on to unfold as we head into next year, I think we can.

D

Be looking at more of a volatile environment and when we get to the recommendations, it certainly.

D

Reflects that theory, you know on our end that narrative, you know it's not a time to be taking.

D

Huge bets right now, given the uncertainty within the fund. So when we get to the recommendations.

D

That really bears out our thinking as it relates to that any questions about the economy before we.

D

Look at asset class performance and move into the fund itself. Tell me I've been really not not that.

E

I'm really worried about inflation, I'm not going to teach you! I'm not really worried about anything.

E

My point to you is this: with all this government stimulus spending, that's going to.

E

This bill back better bill, if than when it's ever passed along with, what's already been.

E

Out there- and I was having a discussion yesterday with somebody about our county budget.

E

And his point was there'll always be stimulus. Money there'll always be money coming out of.

E

Washington, d.c and they'll always be covet. It's like we had afghan war for 20 years. This.

E

Kova is liable to just take the place of the afghan war as far as having to you know, people.

E

Have to buy ppe's and all this additional cost associated with trying to keep that pandemic.

E

Under control, but the point is, is that we've heard that inflation will be transitory, I.e.

E

Maybe march or second quarter to third quarter of 22 that it will dip down below two percent or.

E

Prior to where it was before the pandemic, now my thought and again it's just my thoughts, but I'm.

E

Interested in yours is that this inflation thing, what's going on with a lot of people me included.

E

Is when I can't buy it, and I do find it if it's higher, I just buy it anyway, because at least I.

E

Can get it and there's this other idea that people have more money because they couldn't spend for.

E

So long, that's something else: we've been hearing that did savings is so high. So with all that said,.

E

What's your take on inflation, long term say 12 months, 18 months, so I think you're spot.

D

On as far as the rate of change right, so the most recent cpi report, I think inflation rose year over.

D

Year, a little north of six percent, which was the highest number we saw since 1990. So over 30 years.

D

As we head into next year, the dynamic is, you know, all else equal which it never is, but.

D

The rate of change is still going to be elevated, but it looks like it is going to decelerate to.

D

Some degree now is it going to decelerate to 2. I think that's unlikely. I think it's going to.

D

Be more elevated than that and then longer term, even 12 to 18 months or even a little bit more.

D

Of a more intermediate term, I think you know the inflation that we've seen over the past 20 years.

D

Which has kind of been in this one and a half two percent range we're probably looking more at you.

D

Know two to three percent. So, okay, I guess what I'd say. I'm sorry to interrupt you, but you know what.

E

What goes through my mind is: is you're right about uh wages, okay, we're trying to get people back.

E

We're paying whatever it takes to get them. You're hearing restaurants, paying 15.6 to 18.

E

You know because they need to help now. I guess my thought process is if this supply chain thing.

E

Ever figures itself out, we ever get enough truck drivers, whatever it takes to get the markets of.

E

The inventories built back up are these people going to take wage cuts.

E

And my answer to that, is they probably won't, so it seems like we're building in a higher.

E

Rate just based upon the the wages which are good because working people will have more money. But.

E

I still say this: I used to be a small business people making 15 16 dollars. You know that that's.

E

Good but it's still low wages. It's you know it's the thirty. Forty fifty thousand dollar a year.

E

And when that market gets raised out of the the well, what was minimum wage eleven twelve dollars.

E

An hour whatever it was out of the twenty five thousand to thirty thousand into the.

E

Forty to fifty thousand dollar range, it just seems like we're going to have high prices, because.

E

Labor's gonna continue to be high right. Well, that's a really good point. The other dynamic there.

D

Is that you know lower the lower income cohort tends to have a higher propensity to spend right.

D

Yeah because they can't save so if those people on the lower core cohort are making more money.

D

Then that's going to increase demand essentially right and you know, we've learned from lower supply.

D

And even we've had higher demand, given all the stimulus, it's really been both of those factors.

D

Driving inflation, so even if the supply chain does moderate or improve like, we all well hope.

D

If those rising wages do continue in the future like we do expect right now, just.

D

Given the dynamics in the economy and the labor market in particular, then that's going to really.

D

Offset the improvement of the supply chain so in that 12, 18 or even month or even longer period.

D

We think sort of the steady state or equilibrium inflation rate again is going to be higher than.

D

What we've seen over the past, you know 15 20 years, so when we think about that from.

D

An economic perspective spot on, as I mentioned, I think that's a positive but again us as trustees.

D

On the fund, we're really more concerned about with how does that impact? The asset.

D

Classes within the fund and do we have protection within the fund if that environment does unfold.

D

With higher inflation through diversification, to have that downside protection things to look at if.

E

We do have higher inflation because I do believe we will have higher interest rates. I mean this.

E

Free money, this low money has been for a long long time and we're getting used to it. You know it's.

E

Been I don't know how long it's been, but it's been a long time and with that said, it just seems like.

E

You know when we get off that diet we're going to have higher. I just believe we're getting higher.

E

Inflation, higher costs yeah, so one of the things, if you recall we'll um talk more about this when.

D

We look at the investment policy statement later compared to where we are right. Now we.

D

Have a you know pretty much a kind of like a 60, 40 portfolio of equities and fixed income. So if we do.

D

Have higher inflation eventually we're going to be lowering that fixed income, not.

D

You know to a great degree to you know, put on a lot of risk on the table, but inflation would.

D

Impact fixed income negatively right, but at the same time, within the rest of the portfolio.

D

There will be additions, you know, will keep the some of the read allocation, which is generally.

D

Does better than broad equities in that environment the infrastructure allocation.

D

Which should play a similar role and then a small allocation of treasury inflation protected.

D

Securities, too, so when we move in that direction, if that doesn't fold, we're going to have more.

D

Protection within the fund to protect the rest of the assets. If we do go into that environment.

E

Okay, now um we'll just banner on now, let you continue okay, good discussion. Thank you very.

B

Much absolutely so, if you skip ahead to page 12, please now we'll skip over 11 the global economy.

D

The story is largely similar: growth slowed and inflation was really ticking up, but talk a little.

D

Bit about asset class performance and I think these inflationary dynamics that we're speaking.

D

To will be borne out in some of this discussion, so we focus on page 12, really the right hand, side.

D

We'll start with those first three rows where you see the equity markets, u.s international, developed.

D

And emerging and the green bars are the quarterly numbers. Sometimes you cannot see the green bars.

D

Because those numbers are pretty flat like in u.s equities, they were down ever so slightly. So.

D

Taking a breather from the historic run, we've seen since the end of q1 and interestingly, that.

D

Number masks a lot of the intra-quarter moves, specifically that july and august were actually.

D

Quite positive up about four percent, maybe close to five but september, so a pretty big draw.

D

Down of about four to five percent, so it was an environment where the first two months were good.

D

And the last month was actually quite poor and offset those gains. And why I mentioned.

D

That why that's important, if you recall there was a you- know, big contribution into the fund in july.

D

And we talked about the rebalancing at our august meeting so that contribution came in.

D

And we rebalanced the fund across the board to take the asset classes to the respective weights.

D

So then, in july, equities were doing good august equities were doing good, so equities became.

D

Overweight as we headed into august, so we had a little bit more money and equities relative to the.

D

Targets so then, when september came down that was a detractor from a relative perspective. So it's a.

D

Long-Winded way of saying, since we didn't meet for three and a half months or so you know, we didn't.

D

Necessarily have the opportunity to rebalance now given next year and we've talked about this. The.

D

Importance of you know increasing the frequency of the meetings. I think we're going to two months now.

D

And since markets are moving so fast these days, that will mitigate that risk.

D

Moving forward, you know we'll be meeting more frequently and having the opportunity to look.

D

At this and making proposals, so we don't find ourselves in in a similar situation.

D

With that said, the last thing I wanted to mention or two other quick things you see underneath.

D

Emerging market equities in the us bonds there to the right they were up ever so slightly during.

D

The quarter so interest rates moved up just a tick and really intermediate term maturities. uh Putting.

D

A little bit downward pressure on prices, but the quarterly income being paid from those bonds more.

D

Than offset that, so they were slightly positive, but just echo my comments from a second ago, if you.

D

Look at those bottom, two: three rows where you see tips, commodities and us reits. Those are again more.

D

Inflation sensitive type assets, so you can see, tips were actually up just to shade under two.

D

Percent so well ahead of sort of those investment grade bonds that were just up 0.1 percent.

D

See commodities they're really the best performing asset class and then reits again.

D

You know just marginally ahead of the game compared to the broad market, but again really.

D

Driving that theme of those inflationary concerns drove some of the weakness and sort of traditional.

D

Equities but those asset classes that generally respond a little bit better to inflation and two.

D

Of which tips and reach which are going to be a part of the portfolio moving forward did better.

D

In an environment where inflation was the utmost of a concern for investors during the quarter.

D

So with that said, let me pause there for any other questions or comments and we'll jump into the fund itself. As far as the data returns and and market values last concern.

E

Not the last, but another concern I have is: how do you guys feel about these? When I look at these.

E

Emerging markets- I was reading this last night and international that's lagging behind and I think it.

E

Will and I think, with the the common denominator there, these people are not getting vaccinated. What.

E

I thought was very interesting about the omicron that in south africa, 24 percent of the people are.

E

Vaccinated so when you have these emerging markets that obviously are influenced by inflation in the.

E

Same things, we are but they're, not vaccinated. That seems to put them at risk or have a higher risk of.

E

Additional costs, whether it be for health care or an additional cost to the world, to the.

E

Wealthy countries to do something about that, what you're thinking so a couple different.

D

Things so it's always important to take a look, and you know what's happening right now from an.

D

Economic perspective and then taking a look at it from the equity market perspective because.

D

Even though they're somewhat related over the long term, what happens from an economic perspective has.

D

Little bearing on long-term returns for an equity market, so your points well taken emerging markets.

D

Were under pressure during the quarter for reasons, I think you mentioned the other big.

D

Thing was in china: there was a big regulatory crackdown on some of the largest tech companies.

D

And also some concerns around a large property developer there, whether or not they were going.

D

To default so that put chinese equities under pressure, which many other emerging market equities.

D

Traded down in sympathy with that and this year, if you look at the returns, the s p, I think, is up.

D

20 percent international developed markets are up around 10ish, but emerging is actually flat.

D

So equity markets have had these huge gains where emerging hasn't necessarily participated.

D

So the vaccine component definitely driving things. The other thing is, the u.s dollar has been pretty.

D

Strong this year, which is generally an environment, that's tough for emerging market equities,.

D

And lately the u.s dollar has been very strong because the fed has sort of changed their policy.

D

Approach where now they're saying we're going to scale back our bond purchases, we're going to start.

D

Raising rates which has been favorable for the dollar now next year, we're of the mind that the.

D

Market has got a little bit of a head a little bit ahead of itself. Pricing in those fed rate.

D

Hikes which have been very bullish for the u.s dollar and sort of we've already seen the effects.

D

Right right because markets are anticipating that right. So if inflation does decelerate.

D

Or perhaps maybe even come down a little bit lower than expectations, then that gives the fed.

D

Room to kind of back off some of these rate hikes, which would therefore be bearish for the us dollar.

D

And quite bullish for emerging market equities. And when you look at a bit.

D

From a valuation perspective, emerging markets have underperformed u.s and international.

D

Develop woefully over the past seven ten years, so they're actually quite cheap.

D

Right now, relative to those markets and like we talked about earlier this year, the.

D

Biggest driver of performance moving forward is basically the price you pay for something.

D

Right, if you can buy it, cheap, usually returns are better and vice versa. So, even though the.

D

Short term dynamics are not favorable. If we think more of an you know, intermediate term time horizon.

D

We do think emerging markets are going to be probably an out performer. Now we wouldn't be.

D

Putting those chips there right now or maybe even earlier next year, but I think in the latter half.

D

Of next year, we might start see that cycle turn in their favor. Just given how cheap those markets are.

B

Thank you any other questions or comments from the board members questions for pat.

B

Okay, all right, if you please hop behind, exhibit three now we'll walk through the fund itself.

D

So we'll start on page 19, some high level observations and we'll run through the data here.

D

In just a minute, but you can see at the top again on page 19 under observations, uh the fund ended.

D

September at about 9.3 million dollars and we'll have an update on the value of the fund here.

D

Shortly in the recommendations, but that translated there was an investment loss of eighty five.

D

Thousand dollars you see there and it translated into a return of down point seven percent relative.

D

To that policy index of down four- and I talked about really the reason behind that was the equity.

D

Overweight headed into september and time equities, trailed off after that, and there was a one other.

D

Key dynamic that I'll get to in just a second, but before getting there, you can.

D

See that second main bullet point again just reiterating that contribution was made in.

D

July, rebalancing shortly thereafter, which we shared with the committee.

D

But if you look at the negative attribution, the last sort of main bullet point there. So again, this.

D

Is you know what explains the funds performance relative to the benchmark? So is the equity.

D

Overweight and also, what's called fair, fair value pricing and without at the risk of getting too.

D

Technical here, what that means is for, if you're, as a us-based investor, have.

D

Investments overseas or in funds that invest overseas but traded on u.s exchanges.

D

The benchmarks for those funds are priced in the local currency, so how those equities close.

D

On their local exchanges, which close for trading before the u.s, but then these funds that trade on.

D

U.S markets will be adjusted in pricing depending on what happens in the u.s, so in other words,.

D

If you have an investment in, you know a foreign car company right, but at the end of the month.

D

You know you have the toyotas and the fords in our market selling off hard or declining.

D

Then the foreign car company- that's priced on a u.s exchange- is revalued down. Despite what.

D

Happened in the local currency, just because we're u.s investors and that's how the mechanics work.

D

So in the end of september, when markets declined, then those investments on u.s exchanges.

D

Declined further than the indices because of those pricing, adjustments and I'll show you that here in.

D

Just a minute, but that was another key driver since there's only index funds outside the u.s.

D

They were revised downward in price relative to the benchmark, since u.s markets declined, notably.

D

In the last week of september, so with that said, if you look at page 20, just a quick rehash or.

D

A high level summary of the summary of cash flows here so at that top table you can see we began at.

D

About 6.2 million dollars and that cash flow uh just a sheet under 3.2 million dollars. It's not.

D

Exactly 3-2, because there were some uh fees coming out there towards the end of the quarter,.

D

And then that investment change so all told the fund did grow by about 3.1 million dollars.

D

And the returns I'll get to again in just a second here when we look at it from a peer perspective,.

D

But the last thing I'll mention, if you look at the bottom of the page, the asset allocation versus the.

D

Targets you can see when you look at u.s non-us emerging market equities, when you sum those two.

D

Compared to the policy, we ended up on target because we were ahead. We were over target and.

D

Then things declined and then we ended up on target during at the end of the quarter. Given.

D

Equity market weakness, so if you skip ahead to page 21 here on the next page, excuse me.

D

Just a quick rehash on the bottom table of what took place during the quarter again, since we had.

D

The large inflow you can see additions to all the various managers across the board. There.

D

Again, things were taken relatively to target; now they were done in equal dollar amounts.

D

You can see you know various investments, they're, not really. You know to the thousand and that's.

D

Because these are all etfs and they pay dividends during the quarter that are thrown into the cash.

D

Part of the portfolio, so that's why, if you added you know, maybe it was 660 000 up top to the large.

D

Cap schwab, etf, at the end of the quarter, it threw off a dividend that then went into cash, but you.

D

Could see again all those investments were made in um early july and again everything was taken back.

D

To target at that time, so we skip ahead to page 23. If you will talk a little bit about things from a.

D

Pure perspective- and I just want to highlight a couple other quick things before we move on.

D

So, on page 23, this is the peer universe. Page we've talked about this before you know we use.

D

A third party platform to generate these reports, many other public defined benefit funds, use it.

D

A lot of data, a lot of analysis on the page, the key takeaways are those bottom two rows.

D

In the bottom table, where you see the circle and the triangle there to the left,.

D

So if you work your way from left to right there, you can see that negative point. Seven.

D

Percent return that was below the median during the quarter, so 50 would be the median.

D

Lower numbers would be below the median or or better than the median excuse me from a return.

D

Perspective and higher numbers um below the median or lower returns relative to that median.

D

If you look year to date, a similar story, but a flip side for the fund relative to.

D

The index so the funds up 7.5 percent still ahead of that return for the index at 7-2.

D

And as you work your way from left to right, the story's largely been the same as far.

D

As the return relative to the benchmark and relative to peers- and we've talked about this.

D

A lot during our asset allocation discussion, how this fund was, you, know really relatively.

D

Conservative, I think, as you you know, the county began to fund it uh from an asset allocation.

D

Perspective pretty conservative to other peers- and you know I'd argue rightfully so so that.

D

Really explains the rankings there on the short and intermediate term, but most importantly, markets.

D

Have been strong and those returns are above the assumed rate of return. So when you're making more.

D

Money than the actuary is assuming the funded status or the health of the fund grows over time.

D

So with that said just another couple, quick comments: if you look on page 26, I just want to.

D

Illustrate the comment I made around fair value pricing a second ago and then touch base on the.

D

Fees so on page 26, if you look at those darker rows, those are the asset class returns. So the.

D

Top one's the total fund like we talked about and then the rest of the darker rows are the.

D

Individual asset classes, so the second one there, the u.s equity composite. You work your way from.

D

Left to right was in line with the benchmark. It's what we would expect right all low-cost passive.

D

Approach, but to illustrate my comments around the fair value pricing, if you go in the middle of the.

D

Page, where you see develop non-us equity composite again, that schwab international etf is a passive.

D

Fund, but you can see, was about a percentage and a half behind the benchmark because of that pricing.

D

Right so when the markets declined, the adjustment in the price of that investment goes down.

D

Based on what u.s markets do now, this washes out over time and you can see it if you look all the.

D

Way to the right for that schwab, international etf, since it was in the portfolio about three.

D

And a half years ago, it's more in line with the benchmark, so this quarter it was a headwind and.

D

Then it kind of reverses course and washes out over time, but then you can see it's a.

D

Similar story for the emerging markets below that, where the index was about 70 basis, points behind.

D

The benchmark again because of that fair value, pricing issue. But when you look all the way to.

D

The right they're, essentially in line with the benchmark over the three plus year period, so.

D

Quarter in quarter out, it can have a good impact or have a material impact, but over time the.

D

Things wash out and then, as you would expect, the indices are largely in line with the benchmarks.

D

So with that said, unless there any questions, I just wanted to comment on page 29.

D

Here to wrap up on the fees, so we made a uh or an adjustment to this page based on.

D

um The board's request so we're still showing the underlying investment fees up top here so.

D

The bottom row, where you see investment management fee in that top table all the way to the right you.

D

Can see the annual expense ratio which again is low given the fund is small, we want to focus on.

D

Being conservative, keeping the fees down keeping dollars in the fund, so they can grow over time.

D

But per the board's request across all funds: we've added our fee there, so you can see in.

D

The bottom table the market associates fee, the estimated annual fee and as a percentage of.

D

The fund itself so again just to reiterate, obviously we're working across three funds.

D

And it's on a pro rata basis, based on the size of the funds themselves and you'll notice. Here.

D

There's no custody fees so with schwab they're not actually charging you to hold the assets.

D

You know you kind of get what you pay for on the client service side and some of the other aspects.

D

But once we go through the custody transition process which we'll update you on a little later.

D

In the meeting- and we have that fee- we'll then add that there as well so just in the interest in.

D

Transparency and the board's request. I wanted to point out that page as well.

D

uh But with all that said that pretty much wraps up my comments for the performance.

D

Report but again happy to answer or address any questions. I have a question yeah.

F

You made the comment that, because we only meet every three months that we weren't able to.

F

um Get ahead of the equity um rebalancing, so what would we have done differently if we're meeting.

F

Every two months, I guess that's what I'm well really just gives us more frequent opportunity.

D

To meet and as you know, we bring those fund allocations every month, so instead of meeting.

D

Every three months, or sometimes the calendar, worked out to every four months, even though.

D

We're meeting four times a year we're pretty much being set on a two-month schedule, so it gives us.

D

An opportunity for us to pull the values of the fund and then bring them to you all and make those.

D

Recommendations to rebalance as appropriate so had we been meeting every two months in theory.

D

Then we would have had the opportunity to save rebalance or maybe take some equities off the.

D

Table and rebalance into fixed income, which we didn't have now but should have moving forward.

D

If we meet every other month starting next year, so with your other um uh municipal clients,.

F

How often do they do rebalancing like? It depends? You know? Oh no, so when I say it depends, it depends.

D

How often they meet, but usually we'll always bring this information to the table and it can always.

D

Look different depending on what's going on in the markets, but based on where things fall relative to.

D

Policy, the risk tolerance of the committee, the assumed rate of return. We have to take all those.

D

Factors into our recommendation for rebalancing, so I would say those that meet on a quarterly.

D

Basis, they're still usually looking at it and rebalancing on a quarterly basis, but those meeting.

D

Every two months which we have some they're still doing the same thing, but it's helpful just from.

D

A diversification perspective as things zig and zag to take a look at it more frequently and then.

D

Execute any rebalancing from a risk management perspective so that that that'll be the big you.

D

Know positive addition just being able to have these conversations on a more frequent basis.

F

Thank you you're. Well yeah. I would agree with that actually, and I think my perspective on this is.

E

Just because we're meeting every two months don't mean we rebalance everything right right, but the.

E

The bigger issue, in my opinion, would be that you know the global. What's going on out there right.

E

And you know if something happens tomorrow and we had to wait three months to like get a chance.

E

To talk about it, you know I mean I'd hate to see them. Excuse me, large market correction, go.

E

On and have us say well we're gonna wait three months before we take a look at this right, but.

F

If something like that happened, we wouldn't even wait. Two wouldn't even wait. Two months we would.

F

Try to do well, we could do something emergency or right. You could call a special meeting.

B

Right: okay, if we need right right, yeah, special meeting yeah, but to commissioner euit's point. I.

D

Mean if you just think about the pandemic right markets, topped mid february down 35 percent and.

D

It wasn't even a full month before they started a rebound, so if you were only.

D

Meeting in three months, we had a lot of clients that met in early mid-february, and things were.

D

Kind of okay and then things sold off so there were way underweight equities, given the decline.

D

And then weren't able to rebalance- and you know, capture a lot of the rebound.

D

Just due to the nature of the meeting schedule so well, I think it's the amount of of, and do you.

E

Determine liberty, flexibility, that's a better term that we give you to rebalance based upon.

E

Events, saying hey look, maybe a call to the extent of this is going on. You may want to move it.

E

I don't even know if that's something we want to consider, but how much flexibility.

E

We give them to rebalance, they can't rebalance unless they come here. That was my question right.

E

Oh I'm sorry that was a question now that you said it. That's exactly what I was wondering right.

D

We don't have the authority to do it. Okay, right, okay, and we wouldn't.

E

Want you to right right, because we want to keep an eye on this, don't get me wrong.

E

But uh I guess the key gets to be is knowing when it's time for us to make a decision too.

D

And I don't know if that's a question for right now, we're all flying just the mechanics around.

D

Us getting in touch with the the board and the committee to actually.

D

Call a special meeting, but I honestly I don't even know about the mechanics behind that.

E

The liberty, I'm not speaking for everybody here I'll, speak for myself to say, hey, look.

E

Guys we should talk about this. You know uh something to the county administrator to say.

E

Hey look, this just happened, we should, you know, get a conference call going or something.

B

Yeah and I think the um I think, there's two things that we're really describing one is moving.

B

The meetings to every other month, so we have six instead of four to try and capture that, on a more.

B

Timely basis and the other isn't not to act rashly, so we also don't want to.

B

Be too quick to move, which is why I think some of the structure is put in place so that we do have.

B

The information on a 60-day basis that says this is what we know and then the recommendations come.

B

In so that we, if we need to have a special meeting in between, we certainly can and that process.

B

Usually comes through catherine's office as the plan administrator and then we pull the board for.

B

A special meeting or the chair can call a special meeting because of that emergency, for example,.

B

So we do have that flexibility to do. We just want to be cautious, not to overuse that, which I don't.

B

Think we have and to act in an emergency instead of a methodical way. That's my only thought sure.

D

That makes perfect sense, yeah we're on the same great any other comments or questions. uh Then.

B

We'll need a motion to accept the third quarter. Investment performance report I'll make a motion.

E

To accept the third quarter, investment report for marquette associates. Do we have a second? Oh second,.

B

We have a motion and a second is there any discussion hearing, none all those in favor aye.

B

Aye any opposed motion carries thank you uh and then pat. I think we are moving to recommendations.

B

And then to the investment policy statement. So yes, thank you, dr bridget, so these items are.

D

Found in the other book that was in your packet, so starting with the russian materials? Yes, sir, okay.

D

So, starting with the recommendations, you'll find that if you grab exhibit one and flip that over.

D

You'll see this on page four, so a couple of quick comments here you can see in the third column from.

D

The left, where you see total assets up top we're at about a shade under 9.5 million dollars now so.

D

Up about 200 000, since the third quarter, because october was quite strong, markets were up about.

D

Five or six percent- uh the weakness we've seen was in november really in the last week in total, but.

D

Excuse me excuse me, so we're up about two hundred 000 dollars from an allocation perspective.

D

If you would all look at the bottom left table here, and we see the asset classes listed to the.

D

Left in black their allocations and in blue their targets and to the right the differences where.

D

Green is indicative of an overweight and red vice versa. So a couple things to draw out before we.

D

Get into the specific recommendations you can see: u.s equities are about a percentage point ahead.

C

D

So you'll see there the big overweight to emerging market equities, I'm sorry, u.s, equities,.

D

And the other key uh underweight uh third up from the bottom, there fixed income and then.

D

All the way at the bottom cash so like we talked about frequently when we have the recommendations.

D

We usually have decent amount of cash because again those etfs are throwing dividends into cash.

D

Throughout the quarter, so in light of my comments earlier around the sort of range of uncertainty.

D

Right now we don't think it's a time to be taking. You know wide bets. If you will right, you know we.

D

Think rebalancing discipline is is important as things stand today, so you can see this illustrated.

D

In the middle column of the top page, where you see rebalancing so right now, since we're a little.

D

Overweight u.s equities we're recommending a forty thousand dollar redemption from the vanguard. S p.

D

Mid cap, 400 etf, that would go into the. I shares core u.s aggregate bond etf. Further down that page.

D

Obviously you see that number is 80 000, so the other 40 would come from existing cash. So we're.

D

Drawing the cash down to about 20 grand, but a lot of those etfs, the equity ones, they pay dividends.

D

In the third month of the quarter later, this quarter, so as soon as we draw that down, it's.

D

Going to build right back up because you're right exactly! Why are you taking out a mid cap versus.

E

Large cap versus large cap, so when we think about the breakdown of the market itself, large.

D

Caps, since they've outperformed so drastically over the past years are about 75 to 80 percent.

D

Of the total market, so when we look at these proportional numbers here relative to each other,.

D

Relative to that 30 percent target we're kind of in line right now with the market. But again since.

D

We're headed, we believe again, the uncertainty is a little higher if we do experience sort of this.

D

Volatile environment history tells us that those larger companies, you know higher quality, safer.

D

Companies would likely outperform on the downtown, so you think you get a better return on your guys.

E

A better relative return right. Yes, sir. My thought process when I looked at this last night was that.

E

The the larger number will give you more: uh what's the term uh flexibility less less.

E

Movement I mean to take 40 000 to 2.4 million versus 325 000. It just seems like you're, taking.

E

A smaller percentage of the big number right right, but then you know it's always happening, but the.

E

Big number's making more money, I'm with you yeah exactly exactly and then, as you can see, the impact.

D

There to the bottom chart the bottom chart to the right, basically we're still having overweight.

D

To us equities, but when you sum the equity components across the board, it's basically flat.

D

And then the fixed income investment grade would be, then you know up closer to zero and that cash.

D

Would be drawn down so again not a ton of bets within here, given the uncertain outlook and then.

D

Those uh recommendations are therefore summarized then, on page five, all right back up again, I still.

E

Have one of them? Sorry, I was thinking about this last night, so you want to go into aggregate.

E

Bonds with this for 80 000 and the idea would don't you think, the bond market's going to get.

E

Weathered with the interest rate increase so from a relative perspective, if.

D

We have more of an uncertain environment and volatile and even if rates, tick, up, equities.

D

Are going to take it a heck of a lot more on the chin than bonds, but the other thing that.

D

We're seeing now is right now yeah. The other thing think about that on the chin, the other.

D

Thing that we have to be mindful of is, as the fed has indicated, that they are going to scale back.

D

Tighten policy and raise rates we've actually seen a decent flattening in the yield curve.

D

Meaning that at least how things stand right now bond investors, don't think rates are going.

D

To rise in the near term, and if the fed stays on this path of we're going to tighten we're going.

D

To tighten we're going to tighten then they're pushing on the brakes and historically that's.

D

Actually led, at least in the short term, to falling longer term rates, which would be helpful for those.

D

Type of bonds in that environment. So again it's more around this uncertain environment, the biggest.

D

Material or marginal impact here would be moving money from equities to bonds, not necessarily where.

D

It goes within fixed income. Equities will be more impacted by incorrect increases in.

E

Interest rates and bonds. No, I'm sorry, just if we get into a more volatile equity environment.

D

And we see more exactly so. That's the material impact is moving equities to.

D

Bonds, not necessarily where the money goes within bonds, so the key word is volatile environment.

E

I don't know why I'm writing this down, but I'm gonna write it again.

D

So as I as I mentioned- oh sorry, I'm sorry I was just gonna ask there were any other.

B

Questions or comments from the board regarding the rebalancing suggestion.

B

And pat I didn't mean to interrupt, you, did you have anything to add, or should I go ahead.

B

And entertain a motion. Oh please do. I was just going to outline what's on page five, but that.

D

Be right in the motion: okay, great! You can outline what's on five and then I'll ask for the motion.

D

All right great, so thank you as summarized on the previous page. You can see in that table.

D

The explicit recommendation of adding eighty thousand dollars to the ishares core us.

D

Aggregate bond etf and that would the sourcing of those funds would come split evenly again from.

D

40 000 from the vanguard s p, mid cap, 400, etf and again from the existing cash application.

B

It does sound like the measure it sounds like the emotion is: is the board ready to make a motion on.

B

The uh proposed rebalancing I'm so moved. We have a motion on the floor for the uh proposed rebalance.

B

Found on page five is there a second second.

E

In discussion I would say the motion should read: uh we move that we take forty thousand from.

E

Vanguard uh mid cap and forty thousand from cash, and that add that um eighty thousand to I shares.

E

Course, u.s aggregate bond etf. You yes take that as a friendly. Absolutely great! Thank you for the.

B

Clarification, we have a motion in a second. Is there any further discussion hearing, none all.

B

In favor aye, any opposed motion carries thank you, and next is our investment policy review.

D

All right, thank you, dr bridget, so this is. You will find this behind the next tab and there are two.

D

Handouts here so based on our discussion in the august meeting, I believe there was um a request.

D

At that time, just about the new the draft and the new ips, whether or not we could just redline.

D

The existing one and given the material changes that we were proposing, um the request was just.

D

Briefly, come back and talk about the changes in the existing ips and how that would be materially.

D

Different from the current, so what I'd like to do uh just quickly is walk through the current one.

D

Where you see the highlighted uh asset strategy consoles on the bottom and just again highlight.

D

The material differences before we get into the existing document, and we can do this first, one in.

D

Rather short order, but you see on that cover page and throughout this document the material changes.

D

Will be highlighted so at the bottom right there you see again the previous advisor, so wherever.

D

This is a county document, so you know, regardless of who the advisor is it's a.

D

County document, it's a board document. You know that you shouldn't have to say, amend the policy.

D

Based on changes in vendor usage or anything not related to policy itself, right.

D

So that's really the key takeaway on that page and then a similar story on page one.

D

As you flip over again with the executive summary highlighted at the top, and then we've highlighted.

D

Current assets that I'm assuming that should be 2 million, but it says 2. and the expected return.

D

Is 6 again, these are things that are dynamic right, they're kind of you know the current state of play.

D

And things that aren't necessarily policy so again you don't really want to have to amend.

D

The document based on the changing nature and changing characteristics of the fun.

D

And it's a similar story on page three here again the next highlighted pieces of this document. You.

D

Know the background jump into I apologize, no, no so the items that are highlighted or you're.

C

Proposing to delete, essentially what would what I'm proposing or highlighting is the material.

D

Differences of, what's in here now versus what's in the document that we drafted, so you won't find.

D

You know our name, you won't find the size of the fund or the explicit return, because those.

D

Things that that change- and you know you don't really want to have to amend something right.

D

That could change and it really isn't policy and that's pretty much on page three as well.

D

Where you see the background and listing of all the vendors, so again, those things aren't policy.

D

They're, just you know, what's occurring right now, so we we're of the mind that.

D

Again, you shouldn't have to amend policy if you change vendors, because it has nothing to.

D

Do with the investment policy of the fund itself, when we do to see mr binder again.

C

February, yes, okay, a couple months: the next meeting, because we don't have a meeting in january, so he'd.

B

Be on the february meeting: okay, then, every other month, all right, then binders coming in.

E

February, yes, we've invited them, I mean look, we'll wait till we get there, but I'm not gonna be out.

E

Of town that day, so it would be wonderful if we could change that day. A couple days.

E

I it's not about me, but you know I love that guy we we can certainly look at the eternity yeah.

B

Meeting schedule we can change it, we can work at that meeting schedule. Yeah that'll, be that's fine.

D

So many jokes running through my head, namely does, commissioner, you would say the same thing.

D

About me, when I'm not here- I don't know I just like to be here when, certainly I love that guy.

E

About me and my vacation.

D

I get paid to be here, so that's right. So just a couple other quick things to highlight or that are.

D

Highlighted that I wanted to mention so on page four again, the key themes are, you know things that.

D

Aren't policy that are dynamic that can change you don't want to have to amend something for.

D

That so at the bottom of page four, you can see the note that short-term liquidity requirements.

D

Are anticipated to be non-existent? Obviously, that's been the case. Historically, you know. I can't.

D

Necessarily speak to it, but I imagine that to be the case, at least in the near term. Moving forward.

D

But things change, circumstances, change and again we don't want to have to amend the policy just.

D

Based on you know that statement alone, but I read this too tell me: um what would we, what would you.

E

Give me an example of what would be a short-term liquidity requirement. Oh, it would need to be.

D

You know it would be to if you I assume this is pay go now out of the general fund for the.

D

Benefit payments right right, so that would be so liquidity requirements as it relates to the funds.

D

So if you stop doing pay go and start drawing from that yeah that needs to be thought about.

D

Right right exactly so again that may not change in the near term, but if it does, we don't want.

D

To have to amend the document to reflect that because again it's it's not necessarily policy.

D

On the next page, on page five, you know what I've highlighted here under performance expectations.

D

And we have those and I'll highlight them in the document, but as you can see, the three highlight.

D

Sentences, you know there are three different numbers here right: six. Three then the actuarial.

D

Assume of six and then market performance is seven and a half, so at the end of the day, what are we.

D

Trying to do we're trying to meet that actuarial, assume rate of return. That's the most important.

D

Bogey, that's the most important benchmark so in the new document that is explicitly stated, but.

D

We don't state the explicit number because it can change right and we don't want to have to amend.

D

The document, if the board determines you know a higher or lower number, is more appropriate. So.

D

Again, we have the actuarial rate as a good target for returns, but we don't explicitly state it again.

D

On page six, and and this is really important and I'll- have another quick example of this in.

D

A second, so when you see asset allocation up top and I've highlighted three asset classes,.

D

So anytime you have asset allocation, you're, saying hey: this is a permissible.

D

Guideline or permissible investment for the fund, we need guidelines around that.

D

And right now, for three of those that are highlighted below we don't know the current.

D

Document does not have guidelines around it. So again, any time you're saying we can do x, y z, you.

D

Want to have guidelines to say you know how we're going to do it. Why and what's permissible within.

D

It and any other constraints, so the new document will clearly delineate those for all the asset.

D

Classes that have previously previously been approved for a long-term allocation.

D

The next key takeaway, let me I think it's a little further on here in page eight- and this is what I.

D

Wanted to highlight around my comment from just a second ago: don't pat, if I could just oh yes, I.

D

Apologize, no, no! I think you have something on seven. Oh I'm sorry, yeah under domestic equity.

D

Oh yes, yes! Yes, I apologize. So yes under domestic equities, uh one of the things we highlighted here.

D

The current uh guideline was not to hold more than five percent in any one company, so any individ.

D

Individual manager couldn't hold one more than one five percent. uh We had originally proposed that to.

D

Be 10 because in certain markets, namely, like large cap, us growth, which is dominated by the apples.

D

The microsoft's and those names they comprise 10 of the benchmark. So if you have that constraint.

D

You're sort of structurally tying the hands of an investment manager and not being able to.

D

You know make an active decision, they would have to be perpetually.

D

Underweight that from a benchmark perspective and actually when we get to the opeb report,.

D

Later on, you'll see the impact of that based on what happened in that segment of the market. So.

D

In the original document that was a proposed change and I'll provide more color around that.

D

When we get into the new document here in just a minute.

D

So, on page eight now, when you see under domestic fixed income, this really circles back to my.

D

Comment around there being no guidelines for high yield within the document, so high yield is.

D

Below investment grade bonds and here under domestic fixed income, you say you know every bond.

D

Has to have a quality rating, no less than triple b, which is the lowest rung of investment grade. So.

D

Technically we, you know, we couldn't argue with semantics, or we could argue that in technically.

D

We're kind of in breach of the policy here, because we have the allocation of high yield bonds.

D

And there's no permissible language around that asset class. So that's something that we square.

D

In the new document, and then the other one on this page, the international equities is the same.

D

um Comment I made a second ago around domestic.

D

Around the five percent versus the 10 percent in any individual security.

D

And I think it's two two or three other quick things here, the next one.

D

Well, the next few pages just talk about selection of money managers.

D

Duties, responsibilities, things of that nature. Those all are are all in spirit.

D

In the new document, so there's nothing material to highlight there. So it's on page 14, where you.

D

See the next sort of huge highlight in this table and what this is saying is.

D

In this page, you can see what this is saying is that.

D

Not just for the asset classes themselves, but for the managers within them. If you look at large.

D

Cap equity, you know value growth, core you're, defining the benchmarks and the universes. So.

D

When you think about policy policy is really around asset allocation from a benchmarking.

D

Perspective when you get to the managers themselves, that's more implementation, so.

D

If you say any manager we use in these respective buckets, this has to be their benchmark, even though.

D

It may not be the appropriate benchmark for that strategy. So again, this is not really policy. This.

D

Is more implementation, and if we were to use this, it would really constrain the managers available.

D

For inclusion, because they would more or less have to use these respective benchmarks, which.

D

May or may not be appropriate so again, something we think is implementation, not necessarily policy.

D

And I believe the last item is page 17 here so again, just quickly.

D

Again, this being a county document, when we have the signatures pages in the new document, it will.

D

Be for the trustees themselves, dr bridget was the lone signatory on this document were of the mind.

D

That really all trustees have a vote on the policy itself. So in the new document we list all of the.

D

Trustees for the respective signatures, so that's the other key change that I wanted to point out.

D

Questions comments on anything that I talked about on the current policy before we move into the.

D

The new proposed document, I'm just concerned about the time we're at 10 30 when is which.

B

Is when the opeb meeting starts so are folks comfortable to have the review.

B

Or do you want to do that next time or read it in between and ask for questions we can read it in.

A

Between and come back yeah and finally yeah, if, if you just make one quick comment on it, I don't even.

D

Have to open it, but so, as you know, many of you know we did this lengthy discussion for the sorp.

D

Ips so there you'll see a redline version in here, which largely reflects the approved changes.

D

From the sort board to the ips, so when you work through here and you see some of those changes.

D

Just for context, I thought they were all reasonable. They were all approved, so just have.

D

That, in the back of your mind, when you're reading, through this document, they're not coming from me.

D

They're, coming from you know a board. Many of you already sit on that were approved.

D

Which, I think are very reasonable and are now proposed changes for the low set. I'm sorry what.

F

Board is that uh the surprise post-workout so they've already adopted? Yes, okay, yes,.

B

Great and then the expectation pat, is that we would come to a vote next time to approve the ips.

B

Or at a future meeting, yes, so what I can do is I'll bring copies of this.

D

Again, I can bring a clean copy, assuming everybody's on board, if everybody's not.

D

On board, then I'll make the appropriate changes and we'll circle back to that.

E

So, madam chair, I'd, say what you probably want us to do is make any changes, get it back to you. So.

E

You can get it to him or, however, we do that, get it back to me and jody okay, whatever is appropriate.

B

Thank you yeah. That would be great. Thank you great. Thank you. You're welcome and then uh do.

B

You want to go over next steps for us, yes- and this will be very, very quick to wrap up here.

D

So at our next meeting, which will be in well, I guess we'll we'll see right, we'll see when that.

D

Is uh we'll have the q4 investment performance report like we had today for q3? We already know.

D

What we'll have with the investment policy, the recommendations and then just quickly on the.

D

uh Custody rfp update, um that's been moving along and ms pratt's and please correct me where.

D

I stray off course here. These submissions have come in. The technical evaluation committee has.

D

Been distributed, those submissions so we're in the process of scoring them.

D

Which is due in about two weeks time, maybe between two and three weeks, so once that's taken place.

D

We will work with staff to get that in order. We expect to have one or two firms come in for the.

D

Presentation to ultimately select the winner of that award, which we expect to happen in q1 and.

D

Then that transition that plays take place in in q2 so we're moving along nicely in that process.

B

Great, thank you any questions or comments on any of those items. The custody rfp update.

B

Okay, great thank you uh and then we want to look at subsequent meetings uh and so jody.

B

When's our meeting in february, so right now, dr bridget, we have it proposed for february 25th.

E

And I would say sorry that you know I guess I could zoom in, but I'm not going to zoom in.

E

Either the 11th of february or the 4th of march would work.

E

But but look it ain't about me it's about either. One of those dates works for me. How about other.

B

Folks, do you have your calendar or something yeah, we're fine? So you said what march march.

E

March, 4th of february: does that give you more time march, 4th or february 11th in terms of finishing.

B

Out the paperwork to bring to the meeting uh march 4th I'm actually in disney world so february, 11th.

E

I just got back from that position february what february 11th is two weeks earlier yeah. So that's.

D

A fri, that's a friday, oh yeah, fridays are february. 11Th is that, okay for the board members, I'm with.

B

You find out what bind you're talking um and may I have a motion on the floor to please adjust that.

B

So that um we can, I know michelle, have to report that uh for the board's committees and commissions.

B

Right I'll make a motion to change the um the meeting from february 25th to february 11th.

A

For the next meeting of los app, thank you. Is there a second? Oh second, any discussion I just had a.

C

Quick question: do we need to approve the entire calendar for next year? Probably, yes, we do yeah. So.

C

Could we amend the motion and approve the calendar for 2022 the meeting dates with the um change from.

C

February 25th to the 11th, and I was looking for them on board docs- are they listed somewhere? Am I.

B

Ahead of myself, they're on the plan administrator report- oh thank you. That's why I was looking for.

B

The calendar instead of the philanthropy that'll, do it okay, great, thank you, then. Would you like.

B

To withdraw the motion and then we'll capture it all in the plan amendment what's wrong. Well,.

E

Gosh, I tell you guys, but I'm probably going to miss several of those.

E

Look we're we're on my wife and I are like taking some serious vacations nice nice, that is nice.

F

Yeah we're going we're going the first week in december, we're going to middle of october, we're.

E

Going the end of august jesus sorry, maybe I should just give this seat to somebody.

B

So since we're meeting every other month now it's these are just the I think, the last friday right.

B

Of the month every other month is that how we built the calendar? Here's what I guess I would.

E

Ask uh miss bratson, would you be okay with doing the 25th to the 11th of february.

E

Now and as far as the rest of the schedule, it's not about me, I'm sorry to be a pain in the ass.

E

I'm sorry and don't put that on tape. It's on tape so uh committing it. That's okay! So let's pull back.

B

Just a second, let's get organized just a minute so for pat's discussion. I think we're wrapped up.

B

There so we'll go to committee reports, okay and shift over to the plan. Administrator's report and.

B

We'll see where we have the motion of the second on february, so I thought we would withdrew that.

E

Motion- okay, okay, okay, okay, so is that according to am I okay michelle that you have that on.

B

On uh the kind of chronology of events, we withdrew the motion and now we're going to look at the plan.

B

Administrator's report, then we can change any dates and do an amended plan. Administrator's.

B

Report is that fair enough? Yes, okay, so um jody you want to kick us off sure the easy part first. Thank.

G

You, dr bridget, so since the last meeting the trust has dispersed three transactions: 2500 to bolton.

G

Partners for the benefits study, one thousand four hundred twenty dollars and five cents to marquette.

G

Associates for investment, consulting and then 3592 dollars to riggs, councilman, michaels and.

G

Downs for the annual fiduciary insurance payment. So now we move to the proposed dates for 2022 and.

G

These proposed dates were prepared, based on the board's request for the six, as opposed to the four.

G

Last year they do coincide with the opeb meeting dates which are on the same day, and then they fall.

G

The day after the sort meeting dates and those were the items in consideration for preparing.

G

The calendar, and so will the opeb meeting calendar be reviewed in our next meeting as.

B

Well, yes, it will dr bridget, so so, let's keep that in mind. So let's just go down the dates february.

B

25Th we were looking at amending to the 11th right, and that was okay with the other board members. How.

B

About april 29th, good, it's fine is that, what's okay, all right uh june 24th, good august 26th.

C

That one is not good right; that is what now you're, not good. You said that there is not yeah again.

E

That's not good, um that's, okay! That's we can make whatever right we're this is, and so, if the 26th.

B

um Do you have another proposed date either the the week uh after that the the 19th or the 9th.

B

uh I think 19th is mako right, so I think the ninth is, which is a better date for us, the twelfth oh.

B

No, the twenty yeah well yeah, the fifth, the fifth, the fifth or the twelfth we're getting the fifth.

B

Wait a minute, are you back? Are you insulted, I'm in august, I'm in august of 22.? Yes, so august 12th? Oh.

E

That the fifth I'll get you, I got you, I got you so if you go back june 24th. The fifth gives us like.

E

Six weeks that seems right, that's kind of like now, where we are now okay, I'm with you now is the 12th.

E

A bad date is that mako, no, yes, I would say that would not be a good day. The 12th is okay.

B

The 12th and the 19th, the commissioners are out of session, and so, if commissioner hewitt or any.

B

Of the directors take leave, that's usually that week or the week what about september, 2nd okay,.

E

Yes september 2nd, I know september 2nd, it's just it's the friday before labor day weekend.

C

Not that I have plans, but we've done that before, though we have done that before okay or yeah.

E

Okay, look uh I I I hate to be about me. I'm sorry! All right can we can we just do the 11th for now.

E

And let me, but you know we're doing like.

E

So these are things where I can't really, uh so it's not a problem. How we do it is the board's.

B

Commissions and committee post our annual meetings by january 1.. So that's why we're trying to get.

B

All of them out in december, we submit them to diane. Okay, tell me this: can we do? Can we.

E

Do these things by email amongst the group, or do we have to do it in open session, like this.

B

No, I think we can do we have to vote on a schedule at some point. So, even if we try.

B

And coordinate schedules we'd have to bring it back to the meeting for an approval, and so, let's.

B

Even if august 26 is a challenge, let's look at october and december for those two dates.

B

Okay, are we okay with that one? I think commission uh said he was not good with either for october or.

B

December right, okay, okay again, it might be. I just think: that's when we're out of town.

E

Because our anniversary's at 50. can we make, can we approve these dates and then amend them? Yes, so.

B

That was going to be my next suggestion. All right. Let's just do this. Let's just do a pr, let's change.

B

The february to the 11th leave them and then, as we need to change them. If we need to change them, then.

B

We will do that accordingly, okay, so that sounds good. It's okay! Thank you for walking us through.

B

That I think that was important. Sorry to make that no, that was okay, that's the purpose of it.

B

Purpose of it, and so uh with that uh review, thank you for the discussion, uh we'll take a motion to.

B

Accept the plan administrator's report as amended I'll, make a motion to accept the.

A

Plan administrator's report as amended. Thank you so there's a motion in a second any further.

B

Discussion hearing, none all those in favor, I any opposed motion carries thank you and then.

B

We have one old business item. Catherine, thank you, dr bridget. This is in follow-up to the volunteers.

C

Request for increased benefits- and you may recall- we've spoken about this a number of times and we.

C

Spoke about this at our august meeting and one of the takeaways from the august meeting was to.

C

Do some inquiry to see if we could find an estimate for an audit of the.

C

Points lists that are provided to the commissioners for approval every winter.

C

So, thank you to jeanette we reached out to the auditors at s b, company that are.

C

Currently, under contract for the county, they have done this kind of work for other counties.

C

What they have proposed- and I believe this is included in your.

C

Literature is a a test and please correct me: jeanette, for the pro appropriate words.

C

Upon procedures, and they would they would test that the companies the volunteer companies are.

C

Following procedures and policies to create the lists that the commissioners then approve.

A

Right and if you look at the document, um it's it's probably the last two pages in.

A

Your package, dated on november 22nd at the top you can see the procedures are in the middle of that.

A

Page right: do you see that marian? It's probably the last two pages where it says it has no.

A

Letterhead or anything, it's just absolutely stressed to me: yeah yeah yeah. I see it yeah.

A

The actual um procedures that they will they have discussed um in reviewing and testing.

A

Are in the middle, where it says we will apply the following procedures? I read this last name: yeah.

C

And then what would happen is if a company, for example, did not have procedures and did not.

C

Follow the test, then someone would make a decision as to do do we need anything else.

C

Does anything further need to occur, um but their initial take on this would be they would assess.

C

Whether you know appropriate policies were being followed to create those lists right did. I did I.

E

Read this to mean that they also would recommend that they have a policy in place. They don't have.

E

One that they they get one and there's yes and they're supposed to have one yeah. So.

C

So they would follow, they would look at our current um legislation, which is in the county code.

C

What is required and seeing if that is actually what is occurring, got it right.

C

um And I, and I I jumped in I was I I should have explained that the volunteers they originally.

C

Submitted multiple requests for benefits and they modified their request and submitted a.

C

Letter to the commissioners in october and on the email or the memo that I've included.

C

The modified request is only the benefit increase now, so you may recall they originally talked.

C

About health insurance, they talked about gift cards, they talked about access to the landfill.

C

And that's all been stripped away, and what remains is this requested benefit increase.

B

And so I know that you have it on for a presentation today,.

B

What's the expectation catherine of the board.

C

I guess discussion and I don't know- and I'm really open to everyone's opinion.

C

If we felt that it was a good idea to have some kind of an audit does.

C

That go before the commissioners for approval before that occurs.

C

The timeline is that the volunteers will submit lists by february 15th to the commissioners. There.

C

Is no timeline for the commissioners to approve the list if we were to engage smb, they wouldn't.

C

Even be able to begin their work until after the submission of those lists, and I would assume we.

B

Would um so where's the proposed funding for the 17 500. that be from the commissioners or from the.

A

So as we've like with other boards, as we've had extra studies done, you know either work done by.

A

Molten or other work that's been done or reviewed by um mary claire right. This is the same kind of.

A

A thing the board has made decisions and approved whether or not to go forward with this and to have.

A

The trust make these make this payment because there would be another expense that would come.

A

Back right, so that's what I was trying. So it's the authority of the board to have this approved.

B

Action taken and then report to the commissioners with the outcome, as we do with this board and then.

A

um Probably to the commissioners, yes yeah, okay and then potentially an advanced memo to the.

C

Commissioners, because it would certainly change the process that everybody's used to.

C

Because, typically hr is bringing forward in march certified lists saying you know, commissioners.

C

Pleaser approve these and that wouldn't occur. If, if we were to go this route, because smb would do.

C

Their work first, I think the primary reason we're doing this is because with coved- and I.

E

Love blaming covid for some things. I hate blaming it for others. We had this emailing idea as the.

E

Way to be qualified that you went to a meeting or you know, because they weren't really doing.

E

Zoom right, but I know if you got an email and you responded to the email and I'm not.

E

Sure that was like should have been credited towards points, but I don't want to break down.

E

Because these people are, like you know, thank god, we have them right. Last thing we want to do is.

E

Alienate anybody or indicate that there's an issue right, but I think the primary reason is coved.

E

Kind of kind of changed it from what it used to be pre-prove it to what it is during covet.

E

But hopefully it's getting back to normal. I know my wife's going to all her meetings in person now.

C

I think it was that, and I think it was the dollar amount of the requested increase in benefits.

B

And the feeling was, if we were to consider or if the commissioners were to consider that there had.

C

To be some kind of support behind it, catherine, when are the um the points due to? We have to.

A

Submit them to the state, the comptroller's office, don't we on all the qualified, I'm not.

C

That I'm aware of I, I read the code and they have to submit them to the commissioners by the 15th.

C

The commissioners have to certify them, they have to be posted in the companies, because people in.

C

The companies have 30 days to say I agree or don't agree or I should be on that list. So there's that.

C

Process and then they're finalized, okay. For some reason, I thought that we submitted them to the.

A

State for them to receive the tax credit they have something that they have to submit with.

F

Their return, okay, yeah! Okay, are you familiar with that? Maybe that's where they're coming.

E

And I'm sorry uh aren't there. I know we're talking about 150, whatever we're talking about here. 400.

E

300., isn't it also a credit for tax um benefits for the state of maryland? Like yes, would it be.

E

Property tax or income tax, or something it's income tax. I'm talking about! That's what.

E

We're talking about with the income tax and you get a credit now, does that usually take.

E

30 20 20 all these years of service, whatever benefit they're getting if they have enough.

F

Points they get the letter. I guess my point is I'm under the impression they receive a monthly.

E

Check, oh yeah, they do okay, but they also receive a a benefit on their maryland state income. Tax.

E

Correct right, correct, so there's two benefits there right right right, but both of them are.

E

Predicated on the length of service, I.e, the 20 30 and the points. Yes, definitely the points, but.

E

The years of service have to be if you're under 46, you have to been in there, since you were 16.

E

Wow yeah yeah, so does the letter marianne come from the department, the rescue squad or the fire.

A

Department they're, the ones that provide that letter: okay, correct, okay, okay, that's.

A

That's the clarification I needed well, but your point is well taken because, if that is due when.

C

People are filing their income taxes- that's april right, so that so that impacts timeline.

C

Right, well I wouldn't say I wouldn't say april: I mean there's a lot of people to get that rascal.

E

Right in yeah right, you know because everyone wants a refund. You know right right, and so I.

B

Think it sounds like if we want to approve it. It and folks are comfortable that we do a motion to.

B

Approve it moving forward and then february get an update as to where we are in the timelines.

B

And the status and then the recommendations moving forward or can we approve it in february.

B

We I think that would be too late. I mean for this year you, I guess, if we did an.

B

Audit and and approved it in february, then it wouldn't impact until next year, you're right.

F

What are we approving it? Conducting the audit if we want to allocate yeah get sb guys.

E

Just conducting the audit and allocating the funds up to, I think it's 17. or something right and so.

B

We'd have to allocate the funds from within the trust. So would there be a possibility that, after.

F

The audit was done, let's say, everything's, fine, that the board of commissioners would say no we're.

F

Not doing this, oh yes, yes, it's a 1.9 million dollar right! That's why I'm wondering I agree.

F

It is a big hit, so should we see if they're even going to approve that before my sense is look, we.

E

Got to take care of these guys, I mean only one guy, I'm only one, commissioner right, but I've got to.

E

Believe, there's a sensitivity that they don't want to like not do their benefits. Goodness gracious.

E

You know it's a lot of money, and so I think it's a matter of win for an audit right, because if it's.

B

Not this year it's going to be the next year, then I mean it's going to happen. Eventually, it's gonna.

B

Happen anyway, is my point, and so even if we do an audit and then there's a time frame that there's a.

B

Recommendation for when the next one occurs, but you know the recommendation's been on the table.

B

And as long as the fund has been increasing, it's now in excess of nine million dollars.

B

You know, I think there was a recommendation a couple of years ago from the auditor that said.

B

When this fund is now getting of substantial dollars, you know there needs to be the backup.

B

um For the support of the policy is being, um you know, followed, and I think that speaks to.

C

Without any improvement in benefit right, the last um annual report, our audit report.

C

It was a 20 million dollar benefit to the volunteers and that's from two years ago,.

C

Right, yeah right when it was real low, it didn't seem to make it right, and so this is that.

B

Right as it's getting up there right, so it's I think it's just a matter of when whether the.

B

Benefits are changed or not. Well, I think the audit needs to be done, so I'm going to make a.

F

Motion I agree, approve the audit. Okay, okay, approve moving forward with the audit. Okay, that's emotion.

B

There's emotion on the floor in a second thank you. Is there any further discussion.

B

All in favor aye any opposed motion carries okay. So then I will bring forward an update.

C

In february, at the february, thank you okay, great, thank you uh and uh anything else uh today on.

B

From the committee members hearing, none we'll have a motion to adjourn motion to adjourn is.

B

There a second second, all, those in favor aye, any opposed motion carries. Thank you.

B