Auditor Selection Committee - Regular Meeting

903, call to order the, oh, thank you. Call to order the City of Northport Municipal Firefighters Pension Trust Fund Board of Trustees meeting September 18th, 2026. Call to order. Scott Duff, Trustee.

David Hollis, Trustee.

Howard Birch, Trustee.

Timothy Robinson, Trustee.

Chrissy Stoker, almost Chrissy Witt, because I'm getting married. Staff Liaison, Planning

And Jim, can you hear us, Jim? Yes, Jim Brantley with Donnelly and Gross. Okay, we have a quorum. Pledge allegiance. Do we have any public comment? No? OK. Awesome. All right. Approval of the minutes from the June 26, 2026 meeting. Anyone has any questions, concerns?

Did you have any questions, Tim, about the meeting from last time? You're good. And we need to make a motion to approve the minutes as read.

Second, Howard Marsh. I have a motion and a second to approve the minutes. Any other discussion? Hearing none, seeing none, take a vote. All those in favor, say aye. Aye. Passes unanimously. New business. It says here discussion and possible action regarding update on trustee terms. Okay, Chrissy got any update on that for us.

Yes. Um, so Howard was reappointed by the commission, uh, at their recent meeting on, let's see, what did I note on September the 8th? Um, so he's back in the board for another two year to term through 2028 September. Um, yeah, September 10th, 2028 is your new term. And then for Terry, his term was ending September 30th. We sent out an email to the members just asking for anyone to respond if they're interested in running against him. Made a post on the portal homepage. We did not get any responses. So Terry has been reelected by virtue of no one else wants the seat. So he is also back on the board for another two-year term through September 30th of 2028. Okay. How about...

Discussion of possible action regarding the budget for 26-27.

Yes, so I'll turn your attention on the packets to page 6 of 129. This is that annual administrative exercise that Chapter 175 requires. These are all your administrative expenses. Sorry, administrative expenses, not your investment management fees. So basically your actuary, administrator, legal, IME physicians fees are in the event of a disability retirement, audit fees, custodial fees, etc. So I made some notes at the bottom, just taking into consideration what you've actually spent for the current fiscal year, which is well under what was budgeted for fiscal 25-26. You budgeted $244,000 and the goal is to stay under that amount. You've done very well at that. And while I did make some increases to the 2026-27 budget, I think it's prudent to do so just in the event of any unforeseen expenses. Just keep in mind, you don't have to spend this money. You just can't exceed the total bottom line. If you would like to make any adjustments anywhere prior to approving the budget for next year, I'm happy to make those adjustments and you can approve it as amended.

Do you think we need to adjust anything? Or, I mean, we budgeted $244 and only spent $148. Is that what I'm seeing for last year?

So, I mean, some places, like, oh, I'm sorry. I thought you were talking to me. You're talking to your co-owner.

No, go ahead.

Well, so I did increase a little bit for investment consultant. I just noticed that the Mariner fee guarantee was expired. That doesn't mean there's going to be a fee increase, but I did put in a little bit more just in case for that. School travel and dues, the actual expenses aren't very high, but the mileage rate did increase to 76 cents per mile starting on July 1 of this year, just so things are just getting more expensive. So I think I added a little bit more for that. In the insurance line, I added the additional 10,000 for that cybersecurity support program that you approved. I still have not heard when that presentation from FoxPoint Solutions will be given, but you did commit to that particular exercise, so I added more to the insurance line.

Tim just mentioned this, Chrissy, but it shows through 731. So what would we anticipate? I know that's kind of hard to exactly project, but is it another $50,000, another $40,000, something like that? Just so we can see where it would land within that total $244,000. So I guess for all of August, all of September, is there any other end-of-year fees that wouldn't be like the partial quarterly fees that a

So through July, that means, let's see, August, September, that's two more months of plan administrator bills at $2,000 a month. Let's see. Custodial fees, one more quarter of custodial fees. Those are approximately $11,000 a quarter, although as your market value of assets increase, so do the custodial fees, which can't get mad about that because that just means your fund is doing great. and one more quarter of investment consulting fees. So I don't even see you guys hitting $200,000 for the actuals this year.

What is usually captured in miscellaneous? I see there's only like $477.

So for miscellaneous there, I actually put the city bills the board for administrative expenses for Tiffany to be here and do the board recording. And I didn't really want to put that in administrator expenses because it inflates my bills a little bit. I don't know if that's the most professional way to say it, but I'm going to say it. That wasn't one of my expenses, so I put it in miscellaneous. I'm happy to move it to administrator.

No, I'm just curious what that's capturing. And then I think in our packet, it was talking about Donnelly and Gross increasing their fees. Is that... Is that taken into consideration or not, or do you think it's really going to affect the budget of the $25,000?

I don't. I think that $25,000 is a solid amount to have budgeted for legal fees. Ideally, you don't need to use the attorney for that much, but it's there if you need it.

Okay. Do we need a motion to approve this?

Yes, sir.

Okay. Anyone want to make a motion to approve the budget?

Sure. David Oz, make a motion to approve the FY26-27 budget as proposed.

Howard Burr, second. I have a motion and a second to approve the 26-27 budget. Any other discussion? Just a quick question.

We can still, with the budget being what it's going to be, There is room to move, or what do we have to do if we had to, right? Say we needed more attorney's fees, we can add to it or subtract from another?

Absolutely. You can amend the budget any time you want. The idea is just for next year, between October 1, 26, and September 30, 27, not to exceed $285,000 in administrative expenses. And I do not think you'll be in any danger of doing that.

You never know.

But you never know.

Never know. There's always that question of what's coming in the mail next.

Yep.

Any other discussion? No, hear none, see none. Let's call for a vote. All those in favor say aye. Aye. Passes unanimously. And the meeting dates, discussion about the 27 annual meeting schedule. We already have a meeting scheduled for December, but these are March, June, September, and December.

Yes. Let me pull this up here. I feel like one of the days was, are these all the third Friday? I think they are.

It says third Friday of the month.

March 19th is the third Friday. June 11th is the second Friday, actually, because the third Friday in June is Juneteenth, and most cities are closed for that. So June 11th is the second Friday. September 17th is the third Friday, and December 13th, or I'm sorry, December 17th is also the third Friday. So all the third Friday except for June.

With the December 17th meeting, we're within a week of the holidays. Is it possible to move that up a week? Is there anything available or not?

Let's see.

Obviously, with you guys' approval,

And honestly, it doesn't make a difference to me, honestly. I don't have nothing planned for it, to be honest. 10th.

10th? I can also do the 10th.

That's a Thursday, right?

How about the room?

No, no, no, no. I'm sorry, this is for 2027. Yeah, so. Right, you guys are talking about next December? OK. I'm free for that.

Okay. Any other discussion? Before in advance, I can rearrange them all. Okay.

All right. What would those dates be again for 27?

Jim, we have March 19. Okay. June 11. Okay. September 17. And December 10.

Okay, perfect. Thank you.

You're welcome.

We need a motion to approve them then? Just consensus. Just consensus.

Yeah, I've heard from attorneys, and Jim, you can chime in if you disagree with this, but I've heard if you approve them by motion and then you have to make a change, then you have to do something else. Another motion. Another motion to change the meeting, so consensus. Thanks, Jim.

I like that, consensus. All right. Now we've got discussion and possible action regarding the audit engagement letter.

Oh, yes. So in pages 8, let's see, 8 through 15, 16, 8 through 17, this is a letter from your auditor, Malden and Jenkins, Wade-Sansbury. They've been doing your audits. This is just a letter which sets forth the expectations of what the services they will be performing for you for the upcoming audit of the year September 30th, 2026. I mean, I highlighted the fee, but I guess I can't say with any legal expertise whether this document is good to be executed. So Jim, I'm gonna look over at you and ask if you or Paul have had any chance to review the engagement letter for the upcoming audit.

I have not, and Paul and I discussed this meeting before he left, and he did not mention anything to me about it. So I would say if there's a concern about it or you feel like it's something we should review before you approve it, of course, we don't want to put it off a quarter. We have to get this approved, yes?

We do, and I've read through it. It looks very standard. It looks just like the last one, with the exception of fees that were changed. This letter is quoting $13,200 for the year ended September 30, 2026, which is an increase from last year by just a little bit. Can the board approve it contingent upon legal review?

Yes, and we'll get word to you whether there's any issues with it. I'll take a look at it today and send something out.

OK. Thanks, Jim.

Do you need a motion on that as well, Christy, then?

Yeah, I guess the motion would be to approve the engagement letter contingent upon review and approval by council.

for a motion to approve the engagement letter as Chrissy stated.

I'm Tim Robinson. I'll go ahead and make the motion to approve as stated by Chrissy. OK. I have a motion. I'll refer a second.

I'll refer a second. Any other discussion? Hearing none, seeing none, let's take a vote. All those in favor, say aye. Aye. Passes unanimously. Reports.

Let's go to James. that strategy.

I met with them several times earlier this year. I'm going to recommend we move away from that strategy today. Now I'm getting sort of reasons why as we move through the investment report.

But turn to page three of the bigger book.

or in Iran, rising energy prices derailed the global economy. And you'll remember on the top right-hand corner box, Apologies. Since then, we've seen a sharp reversal with the addition of June. We had an interim agreement with Iran on the table, and markets responded very positively to that. And we saw some relief on oil prices throughout the quarter. And you'll see on the top right-hand corner, Top row, S&P 500, U.S. equities up over 15%. That's the best quarter we've had in six years from U.S. stocks. Below that, in the orange, the MSCI Acquiax U.S. or international stocks up 14.5%. And below that, the Bloomberg U.S. Ag or U.S. bonds up almost 1%. So positive and to the right, what we hope to see in any given quarter. Turn the page a couple to page five. And I just want to highlight, although we have some nice returns, there's been some important rotations going on underneath the surface of the market. And last quarter, you'll remember with the rising energy prices, the energy sector or energy stocks were up over 30%. This quarter, we saw energy stocks down 13%. And you'll see that in the top right corner. But information technology stocks, or in other words, the chipmaker stocks that support this AI build up, up over 30%. So we've seen some extreme sector rotations, industry rotations. and narrow leadership. So any of your active managers with a more balanced portfolio across industries are going to lag in that type of environment. Vanguard equity income, which we'll touch on today, is one of those. But long term, they still have good performance. So just something to watch, but an extreme environment. So we've seen active managers all across the board. But other than that, that's the market backdrop. Are there any questions about any of those? Okay, we'll move on to the pensions results. Turning to the pie charts on page 12, you'll see on the top left-hand corner the start and stop points for the pension. The starting point was $74.6 million. up about 4.6 million dollars over the quarter to the top right hand corner 79.3 million dollars this came after 500 000 in net distributions and 5.1 million dollars in investment earnings so the pension made some money over this quarter it was a really nice quarter um overall Now, we meet later in the quarter, so I'll always bring your updated market value to kind of give you an update of where we are. Up roughly $100,000 since that. Now, you're a closed plant. You have heavy distribution, so the investment earnings would be more than that naturally, but up to about $79.4 million. And just a couple weeks here to go to close out your fiscal year. So turning the page to page 14, and I always highlight this page. We talk a lot about historical performance, and that's important. But this page is really going to drive whether or not we hit that 6.75% return target going into the future. And that's how you position across the major asset classes. Now, thematically, what I'm telling clients this quarter is risk awareness and diversification. We're going into our fourth year of U.S. equities having high single-digit, double-digit performance. Anytime we're in that kind of optimistic, bullish environment, we want to look at our risk control mechanisms in the portfolio. We're in a different interest rate environment. We have a new Fed chair. Entering this year, we expected two interest rate cuts. We just got an interest rate hike. We think there's a high probability of another interest rate hike before we close the year. We have midterm elections coming up. Historically, those have been volatile years. Warren Iran, as we all know, still on the table. Henry Price is have reached new peaks again. And finally, a lot is going to hinge on that AI build out. So given this heightened uncertainty, I'm telling clients to look at your fixed income allocation and you'll see your green triangle, your allocation as a quarter in, is close to your vertical long-term target. But that's going to be our war chest. In times of tough market environments or downturn in stocks, that's what we're going to use to pay those benefit payments in the meantime. So we want that close to our long-term target. So overall, the plan is well-positioned, but we'll be proactively looking for opportunities to rebalance quarter over quarter. So any questions on that page? So let's put some percentages to those numbers. Page 20. So again, a really nice quarter for the pension, up almost 7% in line with your policy benchmark. You'll see that you're lagging your peers, and you'll see that across the board. We're comparing you to peers that have a lot more equity holdings than you. You're a closed plan. We did risk you basically three years ago now. So that's showing up in your peer group rankings. You'll see that bottom row, all public plans, 30% to 50% equity median. That's other closed plans that we're comparing you to. You ranked above average in most time periods against that peer group. Next quarter, when you see this report, because we now have three years at that de-risk posture, we're going to promote that to your primary peer group. So you'll see some better numbers there next quarter for your peer group. If you look at your fiscal year today column, we were halfway through your fiscal year last quarter. You were basically flat, up 0.03%. Now we're three quarters of the way through your fiscal year, above that 6.75% return target. You're slightly up since quarter end. We've got two weeks to go, so hoping the markets hold on for you all and you have another nice fiscal year exceeding your return assumption. And you can see longer term, 7 year, 10 years since inception numbers all exceeding that 6.75% return bogey up high 8% in the 10 year time period competitive with your benchmark across the board. So some really nice performance. Domestic equity you'll see was primary contributor performance. focusing on the fiscal year today column, up almost 11%. But it did lag its benchmark so far through the fiscal year, again, because of some of those rotations we've seen. International equity has actually led the U.S. market so far this year, up almost 16%. Again, Euro-Pacific growth has had some performance struggles, so that's why you're lagging your benchmark there. Fixed income has been additive, up over 2%. And real estate up 3%, so some liquidity returns that market we're seeing transaction activity pick up and real estate. So that's hopeful. Any questions on that page? Um, the musical whole kind of the takeaway is it all rolls up to some nice top line returns for the overall pension. So turning the page to page 21, Vanguard equity income fiscal year to date, you'll see up 12% versus its benchmark up almost 21%. Three stocks come to mind in driving this. So we saw inflation from energy stocks last quarter. This quarter has been all about chip inflation because of overwhelming demand for these chips. The prices went through the roof. We had three stocks leave, AMD, Micron, SanDisk. Over the quarter, they were up 200% or 500%. You're talking two to five times just a quarter. So that's what these managers are up against. If you hold a broader, more balanced portfolio, you're going to lag in that environment. But no concerns there. If you look longer term, since inception, outperformer next to the benchmark, top 30% next to their peers. Fidelity large cap growth, remember we moved from MFS growth to Fidelity large cap growth. You have your first quarter performance there up 17% in line with the benchmark. Vanguard total stock market index up 14% so far through your fiscal year. Now American funds, Euro Pacific growth, While they haven't had a bad year, up 16.5%, first to benchmark up 19%, slightly trailing their benchmark but largely in line, you'll see the five and seven year time periods that they're starting to trail their benchmark and their peers. You'll see long term since inception. They've been a good outperformer next to their benchmark and peers in the long run. But they've had some changes in their portfolio management team. So they have 12 portfolio managers. They had a few retirements. They had two. They rotated off and brought in some portfolio managers with a different discipline. because they were leaning more growth than they initially intended. And that's really what hurt their performance. And growth has just been synonymous with high earnings, companies, technology stocks recently. And given the changes in the portfolio management team, as well as what I see as an identity crisis, they don't know whether they want to be core, capture the market, or more growth. I'd rather there be no surprises there and our manager do exactly what we need them to do. So that's what we're going to look at today. Below that, Fidelity International Index up 15% fiscal year to date. All developed stocks there kind of anchoring you in an index. One thing to note, we will not be replacing that strategy. We're just going to replace Europe Pacific one for one with another strategy that you select today. All your fixed income strategies doing a nice job. Dodge & Cox up 2%, Baird Short Term up 2%, and Baird Core Plus up 2%, all very competitive next to their peers. And then finally, ARA on the next page, Real Estate Manager, up 3% as liquidity starts to return to that market. So any questions overall? I know we don't always go through to managers, but we should do it periodically so you know what's under the hood and kind of drive an overall performance. OK.

So James, I know we're going to talk about this at the end, but specific to the Euro-Pacific and looking at it from quarter to fiscal all the way through inception. So your team's belief is that because in that five to seven year range and just the uncertainty, it's best to not stay with them even though Since inception, if you will, it's performed well.

So what we start looking at, and remember, since inception, that's great, but that's the rear view mirror. There's a lot of time period in there. You've been invested in them since 2012. There's been a lot of changes in that team. When we really start looking hard at our strategy, we do due diligence quarterly. But it's when that three and five year time period starts lagging the benchmark, we start looking at what's going on. How's the business doing? Have you had changes in key figures at that firm? Has the process changed that we initially hired you to do in the portfolio? and we've had a mix right so it's not just performance and colleagues we go back and forth i would say half of us are moving away from this strategy half of us are hanging on and i think it has a lot to do with how you use the strategy historically some use that as a growth manager they market themselves as a core manager what i learned from talking to them is that they basically have a 50 50 split on how clients use them and so they're pulled between these polls all the time and so i would rather have certainty in what they're going to do in our portfolio so it's a mixture of quantitative hey yeah they're lagging their performance qualitative shifts as well. There's been some changes over there. I'm ready to move on from them because of those changes. And when I really, me and Kerry were meeting with them, me and Tyler were meeting with them, really our questions, based on how we ask the question, they'll say, well, it's because we're a growth strategy. You ask them another question, well, that's because we're a core strategy. That tells me there's an issue there and how they're distributing their product to their clients.

So that's You can't have your cake and eat it, too.

They want to sell to as many clients as possible, and so it makes it harder for us to use them as a core allocation in our international equity portfolio. Does that answer your question, Dave? Thank you. Yeah. So moving on to the search, and I laid a lot of groundwork there, so we can move a little quicker here, but to the smaller packet, page two. Right off the bat, what I like for your pension is DFA World. I'll explain what that strategy is, but you'll see that automatically it gives you some fee savings. You're about 50 basis points or half a percent now of the market value of those assets versus 30 basis points or three-tenths of a percent. It would result in approximate annual savings about $6,500, so a positive right off the bat there. Moving to the next page. So I brought three strategies. These are all mutual funds now. The bottom one, Euro-Pacific growth, is your incumbent strategy. Harding-Lobner is a strategy similar to Euro-Pacific growth. I brought that just to put in high relief the type of strategy DFA is. DFA is a quantitative strategy. It's a little theoretical, so to help me explain what they're doing over there. But you'll see Harding Loebner, their stock picker, like American Funds, Euro Pacific, they're more costly. Euro Pacific is very reasonable, half a percent for that type of manager. It's because if they want to understand these companies and have any sort of advantage, they have to go in airplanes, go meet with the CEOs, talk to company management. So it's a costly type of strategy. DFA is so cheap because there are a different type of strategy. They're quantitative strategies. So they're not stock pickers. So off the bat, that's a distinction we'll draw. Turning the page all the way to page six. If you look, it's about the six row from the bottom tracking error estimate. And you'll see American funds, Euro Pacific growth, three to five percent. This is on average a percentage of the time, about 68 percent of the time, how much you can expect it to outperform or underperform its benchmark. Fun on the way up. It can be tough in periods of underperformance. You'll see Harding Loebner, their stock picker too, 3% to 6%, taking on a little more risk than American Euro Pacific growth. You'll see DFA, 2% to 4%, so low tracking error. Just want to point that out. They'll hug the benchmark more closely than those other two candidates. Turn into page seven. I went through American Funds, Euro Pacific. Again, 12 portfolio managers, all managing independent sleeves. They have their own philosophies. They're picking stocks. Harding Loebner has two portfolio managers split in the portfolio 50-50, and they're choosing their highest conviction stocks. DFA is a totally different type of firm. It's a 14-person committee, and I'm looking at the top three rows, by the way, of page seven. And what I like to say is these aren't your Wall Street guys, these stock pickers that you see in the movies, right? They're not shaking hands with company management. When you think of DFA, think of PhDs, and lab coats, and they're all huddled around a computer looking at a model. They're not looking at companies. What they're doing is they do a lot of research, and they update their model, and their model sifts through a broad universe of securities, the whole investable international universe. And that model is looking for certain features of securities they think are going to pay you more than other securities. Okay, so it's very technical, quantitative. But if you ask them, hey, what do you think about company management? They're not going to know. They're looking at quantitative features of stocks. And I think we can really highlight this on the next page, page eight. And I think this is when light bulbs usually go off. If you look at the top row, Europack, for being a stock picker, they were well diversified, 400 stocks. They're able to manage that because they have 12 portfolio managers. Harding Loebner, you can see, a lot more concentrated. They have two portfolio managers. They can cover about 70 stocks. DFA has 11,000 stocks. So very widely diversified, and that's because they're letting their model sift through, and they're just researching that model. Does that make sense so far? Turn to page 9, top left corner. You can see historically the number of holdings. Red is Harding Loebner, yellow is American Funds. You can see just the magnitude of difference with DFA and the blue. So we're going to turn all the way to page 13. This is the core of why we're making this change today. So on the right half portion of the page, I had a client called this the paintball target page. But if you look basically top to bottom, you're looking at larger companies versus smaller companies, left to right value versus growth companies. high earnings expectations, value companies that have earnings today. Think of banks, think of utility companies. You'll see in the red and yellow, Harding Loebner and Europe Pacific Growth, they've leaned, each dot is a time period. The smaller the dots, the further back in history. That's what their portfolio looked like. They've leaned way far into growth, and that's what got them in trouble in the first place. If you look at the blue, you can see DFAS had a tight beat. They plot more core, a little value. They'll get into smaller capitalization companies. But kind of more squarely in the middle as we'd want them to be. Now they're looking at valuations of company. They want cheaper companies. They want profitable companies. And they think that smaller companies will have more upside potential. So that's what you're seeing in their positioning there. Now, just to wrap up here, page 15. Now, the blue dot is DFA, red dot is Harding Loebner, and the yellow dot is Europe Pacific Growth. And you can see that over time that DFA, while the cheaper and more diversified strategy, that they've added the most value next to their benchmark over time. So I like to say the other ones, we all like the slam dunk hitter in basketball, but the bounce passes work pretty good too. What they've done is just added value kind of incrementally over time. So I'll just open it up to any questions there or discussion.

Is there a correlation to I'm looking at back at page 9 and it has like the amount of holdings that's increased drastically from whatever that would be 2016 to now. Is there a correlation to performance and amount of holdings? Or not necessarily?

Not necessarily because of the type of strategy. They hold 11,000 stocks, but they might hold, like, you know, a quarter of a percent of a stock portfolio. Very small holding because what they're – and this is where it gets complicated, so, you know, bear with me. But basically, they're looking at a bunch of stocks – to combine and make up a certain type of portfolio right so say they're looking for low price to book stocks so they're looking at the book value the value that shows up on their accounting statements the price of that stock so they want a certain price to book value across that portfolio but for profitability but they're looking more in aggregate they're really not focused on individual stocks so given their strategy i wouldn't say how many stocks you have is going to change it I would say from our standpoint, they're holding basically the whole international investable universe. They're able to do that. That's a good thing for us because we're looking at this benchmark that is the broad universe. They actually hold more than the benchmark holds because they're able to dip down in the smaller capitalization companies. I would say, and usually in a quantitative strategy is different, I would say usually anytime you're looking at a more diversified portfolio, the upside is lower, right? Because you're making less high conviction bets, right? We all know that, you know, if you're betting on something, the more you put in, the more the odds are against you, the higher the upside, right? So if you're a stock picker and you want the... Biggest amount of return you're going to look at a stock that maybe other people aren't aren't too fond of or don't see the value in. So you have that upside potential and you're going to put a lot of your chips in that stock. But remember, we're not trying to get the highest absolute return here. We're trying to get that 6.75% while trying to understand the risk we're taking and managing that uncertainty. But that's a great question. But I would say how many stocks you hold, it depends on the type of strategy. And maybe there is some correlation, but I would never call it causation necessarily.

James, you said you sat down with your team, like you said, with Kerry and Tyler and interviewed.

Yeah, I met with Euro Pacific twice just early this year, and that's when I made my decision. And obviously we have a research team behind us, and they meet with them quarterly as things come up. They send them questionnaires quarterly. We look at their attributions, their holdings. And our research team is, like, Capital Group is a big player. Euro-Pacific growth has been a big part of our portfolios for a long time. If you talk to any financial advisors, they kind of have a legendary kind of reputation about them. So it's not that it's not controversial to move from them. It's that I think it's going to serve its place better. I don't think Euro-Pacific growth is going anywhere. I think Capital Group's a great firm. I think for our purposes, this is the way we should go. And I've moved almost all of my clients over this quarter. If they didn't move, it's because we couldn't meet this quarter.

Okay. Any questions, guys? Okay. All right. Any motions?

We need a motion to...

I'm sorry? Yeah, motion to replace your Pacific Grove with DFA World. The DFA World. I'll go ahead and make the motion. Tim Robinson to go ahead and move forward with James' recommendation. Have it for a second.

Okay. Got a motion and a second. Any other discussion? Okay. No discussion. Let's take a call for a vote. All those in favor say aye. Aye. Passes unanimously. Thank you very much. I appreciate it. It looks like Donalyn Gross. Jim, anything for us?

Just you've received a letter regarding the rate increase.

I'm happy to answer any questions about that. I think from the overview thing, in terms of that rate increase that I would direct your attention to is the fact that our rates have remained the same for a little over 10 years. We have not adjusted it.

So we've had to adjust rates in a couple of different areas and pension board work was one.

Okay. Chrissy, is this pretty, I mean, you deal with other plans pretty in line for fees? Or rates?

They're lower. These are good rates. These are good rates. And the fact that they haven't increased in 10 years, that seems like a good approach.

I see you worked that into the 26-27 budget also.

Yeah.

Anything else for us, Jim?

Well, I did, in the interim, during your investment report, I went and read the audit proposal letter.

Nothing in this jumps out to me.

The only thing I don't have in front of me that I might want to look at is just in terms of does this letter differ in any way from the one we received from the last time? But beyond that, there's nothing in this. All of this seems very legalese as it relates to the standards under which the audit is going to be conducted. and the responsibilities and liabilities that they are and are not willing to take on with regard to that audit. But it seems fine to me having read it. So, I don't see any reason to withhold approval.

Would you like me to send you the previous engagement letter just for comparison?

That would be great.

Okay.

if you don't hear from me then everything is fine and if after receiving that i see anything that is concerning to me in terms of a change from last year to this then i or paul will will communicate with you perfect thank you jim okay nothing else for no that's right thank you jim another report appreciate it um i got two

I don't think we, the approvals on the consent agenda?

Was there a vote on the proposed hourly rate change?

I don't, it just says Donnelly and Gross. It says place the item on the agenda for the next meeting.

Yeah, I think the board needs to approve the change of rates effective October 1st. So that's with regard to page 115 of 129 that the So effective 10-126, we request to adjust from your current rate of $2.65 per hour to $3.35 per hour for attorneys and $95 per hour to $1.75 per hour for paralegals and law clerks.

Okay.

Do I have a motion? A motion to accept the proposed change to our rate for Dowling Gross.

Do I have a motion? Second. Second. David Austin? Second. Any other discussion? Hearing none, seeing none. Call for a vote. All those in favor say aye. Aye. Passes unanimously.

Before we move on, Jim, will there be an addendum to the contract that shows that increase, or we'll just have in the minutes that the increase, oh, I'm sorry, my mic's not on. Will there be an addendum to the contract to show the new fees, or how would you like to proceed with that? Just having it in the minutes that the board approved the raise?

Yeah, I think that's sufficient as long as the board takes action on it and it's recorded in the minutes.

Okay. I don't think we need to execute a new contract.

I got old business. I have nothing on the agenda there. Then I have the consent agenda, approval of paid invoices, new invoices, and the fund activity report, June 20th to September 11th. Anything out of the ordinary, Chrissie?

No, just your usual bills. There were cost of living adjustments there on the fund activity report, which is the last page of your agenda packet. But other than that, just your usual invoices.

I have one question of that, Chrissy. I think I asked about it last year. This is, the call is the guys that are in the drop, because we have the portal, they're not on there, I think I had asked. So like me, Kevin Barnes, Scott Titus, and Ron Jachonski.

What's not on the portal?

It's not on the portal. On this form here on the consent agenda for the COLAs I asked. So our names aren't on there, but I had asked actually Titus. He said it was recognized on his portal, but his name's not on here. And you said I can add it or not add it. As long as we get them is what I could say.

Oh, you know what? I must have misunderstood you. So on the fund activity reports, the only reason we don't include drop members is because the money is still in the fund. You are getting COLAs, but it's not being processed and sent to Salem Trust to adjust your benefits into your bank account. But I can. No, no, no.

I could say this is my first one this year, and I had just asked last year because I had looked at it. I hadn't seen Chief Titus on there. Okay. But he said, I said, hey, did you check your portal? And it was recognized there. I said, okay. So no worries. All right. Any other discussion for the consent agenda?

Your travel expense, Scott. Yes, sir. I'm looking up there for the mileage. Yep. It might be my stupidity or not knowing, but it turned in $145,000. What happened to the other 40 miles on Sunday and Wednesday? I misplaced another decimal point. On page 122. 104 and 104 is what, 208? Yep. So I got you at the top there, miles driven. Wait a moment. Okay.

So it was 144 miles each way, right?

It was, yes. I just did Jamie at Foster and Foster just uses, you know, from your, I think I used from here. He said you could either use here. He said he attaches it. I kind of vaguely remember filling this out because I had gotten out of the hospital or whatever. Yeah, I didn't even care. I don't want to say I didn't care, but I just filled it out or whatever I had.

So...

where those other 40 miles on sunday and wednesday went um it's not working out your favorites no i know so this is okay so all right i i see where this comes from okay so if he drove 144 miles oh i know what that is it's 72 and a half cents per mile because this is the fourth increase yes so yeah so equal okay so 144 times

0.25 gives you 104.40. That's what it is.

Yeah, so the 144 is miles and the 104.40 is the mileage. I agree that's a little confusing, but thank you for pointing it out.

Thanks for looking after me. Because I sure wasn't. Yeah, please. So, all right. Any other thoughts, concerns on the consent agenda? All right. I need, I think, a motion to approve the consent agenda as... I move to accept the consent agenda. I have a motion and a second to approve the consent agenda. Any other discussion? Hearing none, seeing none, take a vote. All those in favor say aye. Aye. Passes unanimously. And then we have staff report from Foster and Foster, our plan administrator, Chrissy. Anything else that you'd like to add?

My staff update is just that I'm getting married next month. So my last name is going to be Witt, W-I-T-T. So you'll see my name change on the agenda, emails, authorized signer form, all my credit cards, everything. Well, that's a lot, but I'm really excited to be changing my name. So next time I see you guys, I will be married, unless you're going to FPPTA. Anybody going to the fall school? Good.

I think Terry's going. Terry might be going.

But you guys, I won't see until I'm married. So the new and improved me will be showing up in December. That's all I have for a staff update. You guys still have Jamie. He's great. Very easy to work with. If you ever travel or do anything, you'll correspond with Jamie, and he's just a rock star. Let's see. The state monies amount this year was, why don't I have my, hold on. Oh, my computer's freezing. Give me a second.

Drum roll, please.

Really slow drum roll, maybe? That's OK. OK, here we go. Now, interestingly, I think the state messed up the state monies this year. I'm not saying yours, but I'm saying in general. And I don't know exactly how it's going to be resolved, and I don't know whether yours was impacted, but just as an example, I have a client who in years past was getting $30,000 approximately in state monies, and this year got $300,000. That's not right. I mean, it's a little town. It's a little tiny beach town. So there are some issues. But you guys, it looks OK. In fact, your amount this year was $536,867.72, which was about $44,000 more than last year. So it's interesting, though. Some of my fire plans have gotten less money. And it's weird. Venice was one of them. Venice has been growing. I don't really understand what's going on. But you guys got a great distribution. So it's already been sent to the fund via electronic fund transfer. So you guys are in good shape.

Yeah, and we invested those into fixed income, which you were slightly underweight for bringing it to that target.

Awesome. So all good news there. You do need to renew your FPPTA membership. A motion would be in order to do that because it's $750 for the membership for 2027, which is not actually an increase from this year, which is impressive because FPPTA loves to charge high fees. If you want to keep the membership, a motion would be in order to renew.

David Hall is making a motion to renew the FPPTA membership.

I would verse second. Got a motion and a second to approve. Membership to FPPTA. Any other discussion? If you're not seeing none, call for a vote. All those in favor, say aye. Aye. Passes unanimously. Okay. December 18th is our next meeting. 9 a.m. this room, I'm assuming. 244? Yep. Okay. Any other... No public comment. Anything else? Okay. Anything else before adjourn? Nope. Okay. Meeting adjourned.

All right. 9.55. Quick one. Thank you, Jim. Have a nice weekend.

It was good to be back with you guys again.

Thank you.