Investment Committee - Regular Meeting

or to good afternoon welcome to the investment committee for the town of Mount dessert I'm Phil lichenstein the chair and I'd like to bring the meeting to honor I'd like to have anyone present either on Zoom or in person to identify themselves and and make just a quick introduction so we all know who's here so we can then go by our first names I'm May Wier I'm Derwin Lunt Matt Weaver Chief investment officer for First National wealth management okay um Matt which materials would you like me to pull up for um your presentation here I have quarter three and quarter four um I have uh all of 2024 I have um or calendar year 24 which one would you would you like me to open let let's look at the uh calendar year and and and fourth quarter data it's okay I think that's the most relevant the great choice okay yeah uh it was a it was a busy quarter um for us we we did a lot of uh buying of of both equities and fixed income securities uh we had a a very large uh contribution to the account in midt May is that I think that's yes yep it was September that I deposited the CIP funds yeah so that was close to two 2 million and uh we went to work and and looked to to buy uh CDs and and uh individual corporate bonds if we liked what we saw in terms of the uh rating and and we've we've added

a little bit to the duration of the portfolio we've been Buy bu a little bit longer dated bonds CDs uh in anticipation of some rate Cuts uh later this year and we're we're now being told that you know we're likely to see one or two uh based upon the data the inflation data we've we've uh received over the last couple of months but the uh the good news here is fiscal year uh we were 8.38 on the portfolio against a blended Benchmark of 8.10 for the quarter uh we were uh just slightly negative. 65 against a benchmark of minus 1.08 I I believe the the reason for that is our our slight bias to Value uh we had a A pullback in the in the fourth quarter just a slight pullback and uh typically growth you know underperforms value and and when when we have down markets and that was the case there so um it's not a you know our our gap between the value and growth is not a large one but we're uh with that that bias for the time being uh we we feel that Equity markets are are fairly valued at this point U they're not overvalued under I think we're fairly valued so we're going to have to pick our spots we we we haven't had a correction of uh you know 10 in in some time and it's um prob to so we we have that cash at hand and I know may you had a had a question from one of the other

uh members about about the cash allocation and our our Target is is [Music] can you hear me okay yeah that's much better okay um so the uh cash allocation our Target is is close to three to 4% um I I mentioned that that large uh contribution in uh September and that's the reason why you know that that number is a little little north of 4% uh we're putting it uh that that money to work when we when we see the opportunity and uh I expect us to be closer to that you know four to five% Target here in a month or so uh the the money is not sitting there not you know earning uh a decent return it's it's getting close to 4 and a half% so um you know that's actually better than you can get on a three-year CD at this point so uh but we again we feel like the you know if we're going to have a couple rate cuts it makes sense to try to lock in uh you know some two year three year four year five year uh bonds or CDs uh because you know when we get those rate Cuts we'll have we'll have lower rates here in the second and third quarter um but uh overall we we're pleased uh do you have any any questions for me regarding the the performance I specifically don't I mean I've been aware of the market trends and I think you've been really clever as far

as you know taking advantage of cash and doing things with cash and buying CDs and being able to look for the next place to go and also in bonds which I I understand in theory but I don't have any great experience in purchasing them myself as you know as a I would say as a regular investor I I personally don't own any bonds and I'm aware of the bond market and how how it is and I know it's how important it is for us municipality because we Bond everything we can sure and I you know I I tend to look for CDs uh with with Municipal money although you with this portfolio it's it's a fairly large uh Municipal portfolio uh so I I do go out and buy a corporate bond from time to time but it's the the individual corporate bonds make up about a million out of the the six that we have in fixed income the rest of the uh allocation is in individual CDs and uh Vanguard bond funds and I you know the the bonds that are in there are are from City group and I think there's a Goldman Sachs uh Florida Power and Light the default uh risk is very low um so I you know I but I I tend to look at at at CDs uh first and then you know if it occasionally buy a corporate bond but um I know one of the other members had a question about uh the ratings on the bonds and I think that that question may was uh uh you know why why is why is five million of the fixed income portfolio not rated and the reason for

that is that CDs do not get rated like a bond uh answer that that say that uh goes that same uh that's also true for uh bond funds as well they're not rated they're about so like so for example the like the Vanguard fund is definitely any of those funds ETFs and funds are never rated if I'm not mistaken correct right the it's a basket of individual uh fixed income securities uh and you know they they're mostly investment grade there might be you know a small component of you know uh below B rated but you know that that's why they're Diversified and and uh and and the the expense ratios obviously are very low for Vanguard and we want to pass on that that low fee to uh to our clients so I agree with that um let's see I want to address any of these other questions May before I go on look at the portfolio uh what is what are the fees based on um when when we uh took over in 2015 it was a very competitive uh RFP process we we came out on top uh fee was part of it um I think we were on the lower end of of uh of the banks that were part of that proposed process we're charging 40 basis points and that that was based on a market value or portfolio that was uh significantly less than what it is today um it was closer to I think six million when we took over and we're now

close to uh well we're over 13 so not not not all of that of course is uh uh principal appreciation but uh you know we've had some contributions and uh so I I talked to Pete today because we want to be proactive about these things and we realize that you know this is a much much more significant relationship in terms of of market value and we we our relationship with the town is is a good one we we uh we certainly you know are have a lot of charitable uh organizations that we donate to in the in the MDI area and you know we want to support the town uh in any way we can so I I asked Pete if we could uh discount from where we are and move it from 40 basis points to 30 basis points so we're we're going to be proactive with that and and and do that uh as of this month well thank you for that thank you that's awesome well you know really good business relationships are built on trust and and and I think you've earned our trust and I think you you've also been very you know very transparent to us and helpful when we needed you at the first well that thank you that that's a good segue uh I think to the next next thing I wanted to talk about and that's the uh ESG piece and I know one of your members brought that up and man and I have been discussing it today and um it Jake definitely sent that email you you you sent that to me May and I I don't know I just don't know where it went may I I don't I I don't have a good excuse

for you um it's CA um but as of right now the town owns uh 200,000 of the Vanguard uh social index fund and so this is small again one of our past members was the CFO for friends of Acadia and where everything had to be an ESG and I think uh we were trying to navigate you know where the the investment Committee in the town never wanted to be called on why are we spread in only in social responsibility stocks where we could have had higher returns in other places with that said I'm also the chair of the sustainability committee and I really believe in you know in trying to make socially responsible you know decisions when possible and profitable you know because we have just because I believe in that doesn't mean every citizen believes that so it it puts me in a place of understanding and know that just because I believe in something doesn't mean everybody else does and I didn't know so we're quite low I mean $200,000 and is is nothing I think B based on the terms the language in the policy you know I need to move that up to you know 400 500,000 to get it within that that range so I I plan on doing that I want to you know be thoughtful about it and and look for opport unities um yeah I you know it it adds a little bit of beta to the portfolio risk because you know that any ESG fund is going to be heavy on Tech because there's a lot of companies that that make it through the screen that are that are Tech related so for for instance

this fund is about 43% Tech against the SNP which is about I think the waiting is closer to 30 32% so but you know it's it's 10% or or a little less of the of the equity allocation so yeah you're right it's not GNA it's not going to move the the needle too much um but it it does add a little bit of I guess overexposure to Tech but I get over time you know that that should be that should be good for the return you know there in years where where energy uh outperforms then then typically ESG funds underperform and then when we have you know good years in in Tech um we should we should see uh uh outperformance uh in in the ESG fund so yeah I I I tell my clients that you know if they want to add an ESG component you know that's fine and I think 10% is is a an appropriate allocation uh for for the component so I I I don't a you know I I just I don't think it's something that you want to go all in on I I don't think it's something that should be 100% of a portfolio but but having a component is is is okay as long as the client knows that you know there a little bit more risk but that way you know the way I see it there's a little bit for everybody in this that way you know we we can't appease everyone and if we were all es all in esgs and didn't get the returns or vice versa where we're all in on you know owning every possible big you know big oil or defense contractor or you know tobacco firm that would also alienate a good chunky of our population too so I think we we've come up with something and we could watch it over

time we can always change if things do better over time we can always change that allocation yeah you know there's hope in you I have to be optimistic for the future that the SE are good companies and hopefully they they can perform well and still take care of the environment or be socially responsible yeah and and you know the the funds out there are you know from you know some of the larger companies Fidelity or uh you know Federate or whoever it might be you know they create an ESG product then they really have to create their own Benchmark right so exact um you know that is that a conflict I don't I don't know I guess not but um the reason that I'm using the Vanguard fund is for one thing the expense ratio is only 14 basis points so you're almost getting into the market for free um and it's it's broad-based it's almost 450 positions in in the fund and I I prefer broad-based funds over you know a concentrated portfolio May thank you may did I answer all the questions that and he's on Jamie I want to welcome you to the call if you do have any questions here here's a good chance that we've been trying to answer some of the questions directly from Matt that you'd asked us oh thank you sorry I'm I'm late but I didn't think I'd make it so uh I'm sorry good J glad to have you buildings are taller Where You Are oh yeah yeah plane was an hour early [Music] so better than late yep so do you understand what Matt was referring to regarding the SG positions

and and you know with the the minor wrists of the town you know yes that any soci environmental stock could you know could have some risk but it's only no more than 10% of our portfolio I did but I I read it in the I was just in the uh in the policy statement that we're supposed to be 133% is that is that a Mand up to I think it's up to 133% is what the policy was 7 to 12% 7 to 12 7 to 12% yeah I thought I saw 13 somewhere okay well we're right there well not far off basis point off there and then um Jamie was also wondering about um the I think when you were um for your question about um the um the recent quarterly statement Jamie was that for quarter three that you were asking about okay I get confused though that's our essentially that's our quarter one right for 25 yes yeah c 2 correct that was the one yeah it had it had different information that I could gather I got the other one so so uh soon before okay yesterday but the so the first one had different information and um obviously the numbers have changed too but yeah I was referring to that okay um but yeah so so um Matt Jamie was wondering about how um on the statement it says that we hold um seven equities and four of them appear to exceed our

maximum requirement of 5% um and I think Jamie was and that where is that in the investment policy that I can yeah and those were funds I don't know I mean of course the funds hold a lot but we only have seven funds and are is are each of those funds only I mean that's not very many so obvious stocks in them my my understanding is that language uh is is for individual equities right we don't have any we don't have any I I I don't I tend not to buy individual stocks for municipalities I I I don't want the headline risk in the portfolio um and I I i' prefer broad-based uh ETFs or funds at uh low cost and uh we'll we'll just try to get the allocations right in those funds and based upon our our investment committee will meets twice a month uh we're going to have a a a big meeting here our annual meeting where we go over our fund models and also uh rebalance our our portfolios based upon research that we we have for 25 and and make some you know make some changes on the margins to our allocations to to each asset class so uh we we should be doing that in in mid-February and we may be making you know some changes at that point is that helpful Jamie and you understand that that that the threshold was for individual stocks and not for funds so so for the committee then we are we are saying that that does not apply in the case of funds maybe we should correct if you were going to buy an individual so as an example if we were going to buy Microsoft today there that would be the limit but if Microsoft is in any of those funds it

it is irrelevant right because you're buying okay Y and it also I think Matt explained why they do what they do for municipalities again if for some reason they decide if Microsoft went South next week you didn't lose every you didn't lose the farm of course if it went North well it' be better because I have a little bit okay good thank you for that um and then Jamie was also wondering um about how it our equities and fixed income assets are at the low end of the U of our statements minimum requirement um whereas the cash is over twice the liquidity requirement of $500,000 um so I think Jamie was wondering if you could uh follow up or explain that a little bit Matt yeah so that that contribution that of almost two million that we received in in late September you know move that cash allocation up and and we've been allocating to to to both sides of the portfolio but we've also had some some fixed income securities mature uh in the fourth quarter as well so we have to go out and replace them uh if you'll notice uh you the the statement that was sent the other day May um there's two or three pages of just buys of of individual fixed income securities here uh starting in in uh early October where we you know looking to buy CDs and keep them under the uh keep them at or under that 250 K FDIC uh threshold so that the town is is fully insured in case of you know uh a

bank failure so we're we're good there uh that's another reason why I use uh CDs so you know we're we're a little I know we're on the thank you the lower end of the ranges uh with Equity uh as I mentioned earlier we we believe that that markets are fairly valued at this point uh if if we do see an opportunity and we have that correction and I I know we'll be coming at some point um being being in this business since the mid 90s I I've I've seen I've seen some ugly Corrections and I know you know they they everything's fine until it isn't it's what one of things I like to say you know in the markets and uh you know it it can change quickly and when we have those those pullbacks uh want to take advantage of it and allocate that cash so um I I'm going to add that ESG position that's going to be in that 400 to $500,000 uh addition size so that that'll lower the cash as well okay okay and um Jamie the the large contribution of cash that he's referring to uh is the um contribution to the CIP uh would do yearly after approval from the town meeting for the budget for that year um so we put in uh 1.7 million into the uh Investments to account for the CIP budget got it many things so I I I missed I guess the first part but I was curious about whether it would make sense to think about at least separating the CIT money from the long-term money and thinking about it because I I think they're probably different objectives or

not so I guess I so I'm um I think I need some more clarification with that question because the uh the CIP is broken down by Reserve um and it has allocations proportionate to the amount of that's in that reserve and the assets that are needing um funding from that specific Reserve um and then and that makes up for the majority of of this investment account um is the the reserves that we account for um but then another part of that is an unallocated Reserve that we have that's just under the general fund not under um our Reserve funds um which is not as not restricted in the same way that the reserves the CIP reserves are um but the but it is very much it's broken down and and and allocated based on the reserve type if that makes sense is that does that understand do you understand that now yeah well so so what percentage do you know roughly of the total fund is the CIT money that's a very good question I can get that number to you okay thanks yeah um it I would say less than 20% that is not Reserve funds so I me we think about I'm just doing a quick math in my head we have about 1.8 I think we have I think we have over $10 million in the reserves themselves and then we have um another so that's for the general fund then we have another million for the marinas part of the CIP and their Reserve funds um and then we have I think a million dollars in the unallocated so I guess it's it's one million out of the 13 million would be the unallocated um investment Reserve balance okay

okay I didn't know that yeah thanks yeah for sure sorry no go ahead I I just wanted to add my two cents about about Reserve funds in general I this is what I I tell my Municipal clients uh you know we we do manage a lot of Reserve funds firr fund police cruiser whatever Town Pier um you know that has an investment Horizon that's 10 10 15 20 years down the road my my only I guess uh my my feeling about reserves is as you get closer and that investment Horizon is two or three years it it may be time to drisk so that that principle is is safe because if we have a a a severe you know downturn uh I we won't have enough time to recoup those principal losses so that that's just a reminder that I tell my my Municipal clients that if you know there's a reserve that's you getting close to to using the funds it's um something to think about okay okay that's really good to know yeah so we're gonna do buy a fire truck or do you know some major road construction or I.E there the marina was going to do an large pro project in there you know you you're going to take advantage of of bringing the funds in it will be too building thater for sure so then it means I need to take a distribution and add it to our general fund in order to finance yeah yeah and um I usually follow uh the um the audit has a number that is due to the general fund from the reserves account um and then I was planning on making a transfer

um at the end of fiscal year 24 but I might want to do it a little bit earlier now if even without an audited number to make sure that we have all the funds available but um that's something I'll have to think about thank you Matt that's an excellent point yeah you're welcome um there see okay um that is those were the questions from um from Jamie that I I needed J assistance um to answer Matt so the other ones I can handle um I think um I have that's all my questions for you if unless anyone Phil or Jamie if you have any more I've had a enough thanks well those were all really good qu Jamie those were all really good questions and instead of you know internalizing them it's really good to put them out in the open and I hope you gain better understanding because I think we all do when we talk about things like this I mean there's a lot of moving pieces as you could see and a lot of allocations and and separate pots that you know have to be protected okay um Matt unless you have anything else for us do you want me to bring up the other report or I think I'm gone through my piece so perfect perfect we'll we'll make sure we have this amended policy uh in the file going forward and uh we'll have that that ESG component there at probably 8 to 10% at least initially sounds good

excellent thank you very much listen thank you so much for your time and and again to you and your staff are doing a really you know doing very well for our towns and our town specifically and we look forward to seeing you in person it hopefully sometime around the 15th of when the quarter shuts sometime around after the 15th of September would probably be a really good time right there the quarter would end September 15th or September 1st doesn't the quarter end o which quarter we talking one or two or three or four September 30th it's the 30th okay so it would be October then yeah so would October still work for you to come of course and that would make more sense right that to have you come in a month before the quarter shs that's true and I would even um I I do need when it comes to um the reconciliations for uh our accounts I think I needed a little bit more than just 15 days after the period ends right um so we can we can talk about um um yeah date to set but I I definitely need more than 15 days after the period ends to report we may want to have another meeting or as a group after after 6:30 yes yes but Matt I'll keeping uh contact with you and um I can figure out a meeting time um this fall um once um all of our periods have ended um that we can we can get you in um via Zoom or in person for another um meeting that sounds great great thank you Matt folks thank you likewise happy Friday bye bye bye have a good weekend you too Jamie where are you I'm in New York City darling you're in New York what are the building is that the Empire State

Building short no I was looking at the big uh I don't know what it looks like the top of oh I don't know what that is anyhow thank you for your questions I don't know if you heard uh Matt explained that uh you mentioned something about fees they're lower their fees from 40 basis points to 30 basis points due to the size of our portfolio and earned so that that's a really nice gift that they they they're doing for us yes that's called I think they we've earned their B you know I think that it's been very mutual the you know they' the town's done well by them and they feel the other way around symbiotic Rel than they didn't just do that because I asked the question did they I hope so they got to give you credit for it I I believe it it's probably something to do with the fact that the ESG requirement hasn't wasn't being um put into place because they hadn't got the email from Jake with the amended investment policy back in May of 201 23 so now we're now we're in compliance with that right that's that's a good break yeah it is it's fantastic I'm really grateful for that um so I and I uh I realized just now that we didn't approve View and approve the minutes from the 64 meeting right he wasn't on so it's perfect so exactly yeah I'm G to make a motion to approve the the the minutes from the last meeting if you need to need to pull them up I can and let's get the date the date was what 6:30 when did we meet 6:14 2024 yeah so I'd like to get I'd like to make a motion to to approve the minutes from 6:14 2024 I will

second thank you thank you okay that way the selectman can see them and all that they get posted and that's one question because I was late coming um is any part of this tax exempt I don't know with Municipal all of it it's all tax we have no Capital worries um okay no as a as a government we are not subject to tax and I don't do any filing but we can tax people but the town has the great privilege that we can tax individuals that is correct and businesses so it's a one-way Street very good buide services and it's a nice Community yes yes that too so one of the things that when you get back and there's some time between now and the June meeting and and Michael joining back up we' like to find one more citizen to join us and we've also one of the other things we discussed was try to amend the meeting time Friday seem to be best for Matt Weaver and that's always it's a good day for me but we'd like to see if we can get wedy Littlefield to be able to attend so I'll reach out to Wendy on my own to find out is there a better time of day on a Friday for her to you know to be able to attend because I think it's really important to have a board member here yeah we originally had the meeting scheduled for 3 um but Matt had a 3:30 and that wasn't going to work so but I'll I'll make sure that we I'll and I'll reach out then I'll reach out to her to find it because she we she's missed the last three or four she has but since you've been involved at least yeah um yeah so we can figure that out um there's no policy changes theyd like to make today and let's see uh Jamie was also

wondering um if there's if we have a number or percentage that we want in cash at all times um and my answer to that is I'm not sure of do you mean cash in the investment fund or cash in our bank accounts well I I just from from the documents I got I don't know where that cash is but um so the in the fall one uh it was like 300,000 something I mean it was it was 330,000 and then in the the last one it was aund 10% whatever so I don't know because with with with the needs for the money going in and out they I I just don't know what what your have a policy on does it the the 500,000 perhaps of a liquidity requirement that does that might be uh a number that we want to have cash at all times right but you've you've got so much more than that right correct yeah yeah so um but I guess so then I guess is your question do we want to revisit that part of the investment polic well I just don't know what your need it's really based I think on your needs for for having cash available when you when you have to pay something I gotcha um so yeah we have the $500,000 um liquidity but when it comes to I guess operating um I'm just making I'm making sure we have enough money in the in the the general fund to make these purchases and if um we don't have a cash flow problem here um so so it hasn't been an issue yet um but and we do have a money market account at a separate bank for corre for our you know day-to-day operations that's true we do

have a money market account with where all your so all the payrolls and things like that are all taking care of out of that if necessary I haven't pulled from that this phical year either because we have enough funds in the operating account um another thing to think about is that uh our IC Reserve account um which is connected to our operating account um we started that we got that last fall I believe October of 23 and it started at 5.25% I believe that was the return and now that's gone down significantly in the last few months down to less than four because of the decrease in interest rates cor of course so I'm just that's something to think about that that's where we have a significant amount of our cash um is in that IC Reserve account um so we might have to talk about going out to bid for I wouldn't say money market but another possibility of being able to capitalize on interest in a different manner but at the same time the rates are not great right now so I might not want to mess with it but it's just something to think about that we're not getting as good of Interest as we were a year ago we took advantage of the high interest rates when we could correct that money is not in in in these things we were talking back today that's separate right sir it's a separate account that is in Bar Harbor Bank and Trust and how much money is in that on average roughly um we have a as of now I just did a transfer for 4 million uh last month so I think we have uh one $4.1 million on the ISS Reserve um and then we have another 4 million in um the operating account in addition to the 13 million that here in uh in addition to yes in addition to the 13 million that's not liquid obviously with our uh first um National wealth management and then we have

um one I can I I have it on my reporting today that I'll show you um we have over a million dollars in our money market account at First National Bank so we're talking about $9 million of liquid assets at this moment that pretty for we're pretty fortunate aren't we yes we are yeah many municipalities have wish they had the problems that we do yeah so when we start discussing as far as you know trying to you know have staff retention and possibly doing raises and things it's not like that the town's broke okay so um let's see so we BR minutes and then now I will do my um rundown on the first half of fiscal year 2025 and I will pull up my reports and share my [Music] screen I like that film time is not poor by any means thought you'd want to hear that we are not all right so Jamie can you see this yes I can okay well I was right on the money at get 9.9 million in cash right now um that's under fund 100 so our general fund uh then in our arpa uh account we have uh 294,000 which is all restricted for the rest of our uh Spectrum Broadband project we've paid one invoice out of that and I need to transfer uh those funds from the operating account or from the arpa account to reimburse the operating account um and then that clear too

oh and Jamie I here's the other thing I didn't even get to the part of our cash uh well we I wouldn't say it's it's it's our um your sweeps that's the ICS um but the keeps going back but our 300 fund which is our bonds um the amount that's another bank account that we hold um we in uh we I transfer the uh expenses that were paid on behalf of the capital projects fund from the capital projects fund into the general fund and as of right now we have um $6 million of bond funds to be paid out to the general fund when capital projects have been completed does anyone manage that or um I mean it was there's a there's a um what's the term I think it's called Arbitrage um and that's when I can't make more interest on these bond funds than we are paying so you can't in basically you can't invest the money more than you're paying out so and since these are specifically bond funds that they're borrowed um correct we cannot um earn more interest on them so they're in a specific a different account outside so that they they're not gaining as much interest so that we're not um out of compliance with Arbitrage rules laws laws so this this is $6 million that uh I use to replenish the general fund when we make expenses or we pay for expenses on behalf of the capital projects these are all of our bonds that we've taken out and uh the majority of them are with um Bar Harbor B Cho correct something outside so then here is just um this is just our investments um our

Bal bances so our general fund this is sort of unallocated um I think Jamie this is what we were talking about with the breakdown of the reserves um this right here is for um 100 that's our 100 unallocated um and then this uh the 400 Reserve this is right here our um or CIP reserves um and then uh down here for 600 this is the Marina's um CIP share of the CIP Reserve funds the marina fund needs to be kept separate because of the way it's the way the structure for the marina is as an Enterprise fund it so it can't be like the General Pool of the regular CIP it needs to be separated out for that classification for governmental accounting purposes it is a Enterprise fund and it is accounted for differently than General government it's our warant article that we our approval it's just a transparent for you know article just so the the taxpayers are aware of the that this exists and how it does but everything is taken care of out of the two funds they generate their income yeah and then this report right here is just a breakdown of um how much of the funds are allocated to each of the reserve accounts so we have um at the top we have these um unallocated or the capital land acquisition capital gains in there um we can talk about that uh and then pretty much just everything you know Public Works equipment this is what they pay for their trucks out of um this just shows the the the proportional share of the reserve uh funds uh owed to each um asset class essentially so the B you

know so basically on our warant articles we get the individual budget so for for example when Public Works comes in they're going to have a contribution directly for each of these vehicles all these line items go directly in from from their budget but the CIP budget is is separate and we present the CIP as one document correct where it used to be individual reserves accounts in each of the budgets and it was very it was very complicated difficult to track yeah I could totally see that and so yeah you can see the fortunately almost almost a million of the um CIP is for the marina SE we like I said account for it separately and the pier project what do you think it's estimated in the three to four range three to five so it's higher it's higher than I thought so they're gonna have to redo the the the large concrete pier for are we talking about bonding this yeah but this will be bonded this will be bonded this won be C funds it's a large project and it should be bonded in yeah we have to we have to take out another bond for that correct in um this town meaning it's good to know um but they have the income to pay it off yeah for sure it's a money maker still okay so um then this report right here is uh just we have a cemetery um and trust account with Bar Harbor Wealth Management um and these are you know as you can see pretty small numbers but we have um these These are scholarships that were um restricted I guess by the donors of these of these trust accounts um and so we've paid for for the

scholarships that they have approved or the S board has approved um believe the Stanley um the Stanley scholarship has a a covenant that it's only $100 um I guess not only was it's an old it's a very old um trust and a very old Covenant and so that was what they they said at the time that a mount dessert high school student gets $100 um and then the Reynolds one is more um is is is more lenient I guess and it's flexible so we decide um and I bring the like for but we decide what the scholarship is going to be for the Reynold scholarship based on the performance of of that trust um for the so it wouldn't be the same every year J exactly um this past year for the gradu 2024 graduating senior we had 350 um that was based on uh calendar year 23's performance and the year before that it was $300 um so nice it's going up yeah I don't know if it'll be I don't believe it'll be going up this year it might stay 350 or go down to 300 just depends I have to do that analysis um okay yeah so that's that's our trust f FS right there um and then this is the this is the interest income that we um earn from our various bank accounts um so let's see here as of December um we are at 67.5% of our um estimated interest earnings for fiscal year 25 um which is honestly better than I thought we would be based on how the rates have been going halfway through right yes we are exactly and so the fact that we're over half over 50% of of our our estimated

earnings at six-month Mark why why are all these numbers minuses oh great question um it's it's our it's the way that our accounting system accounts for um if if it's debits or credits essentially um and usually the um the revenues have a negative balance or negative sign and the the expenses have a positive it oh okay so we're adding not subtract when you see a minus we're actually adding not subtracting yes and then when you see when you see a positive we're we're spending we're spending um yes so I did I was brought up with the old math where a plus sign meant yeah no and we still follow follow that I promise I promise just our our our software our financial software um just has a special way of of letting us know which ones which great question we do not have negative 121,000 um and then here is the interest that we've earned um for the first half of um of fiscal year 25 on our capital projects so as you can see significantly less um because we haven't paid that much interest um on on our um issues yeah dividends and that is the end of the report so total total of or the appropriation of $410,000 in interest Revenue even close we only have 100,000 108,000 left until we reach our goal so you can see 301 thousand of Interest revenue and a little less than five months to go yeah right there not bad it's right got a complicated

job and she can explain it Jamie let alone that she understands it one thing is to understand it and the second thing is to explain it so I give her a lot of credit being able to explain you know the ups and the Downs thank you all right so so next thing on the agenda um uh last meeting Jamie you had a question about land trusts and their uh their ESG Investments um and how they were doing if they were only investing in esgs um and I reached out to several land trusts um but two got back to me um and I was able to discuss with their uh the people who were in charge of their Investments um one was Frenchman Bay conservancy and other one was a um I don't know down east um it's in it's in Washington County anyway um so I talked to them and I asked them as as uh nonprofit organizations whose number one mission is is to be environmentally sustainable and contribute positively to the environment and the overall being of everyone um they diversify their portfolios and even these land trusts do not do all ESG investing I thought that was really interesting so that that's very different than from what Jason Irving was on our committee and the way they have to handle the the funds of friends of aadia friends of Acadia is all ESG based interesting and and so when I was thinking of land trust you know I didn't even think about friends of Acadia because they're not a land trust the other the other the other Land Trust do well at doing good yeah yeah but but they basically said they they're they're um the people that are on their finance and investment boards they're

very worried about or their their number one um goal is growth um and obviously they they do invest in um esgs um but they're having to be careful and not to put all their eggs in one um environmentally friendly basket and they're not saying that they're investing in tobacco or Big Oil um but but I think it's very interesting that they're they're well if they want to make Acquisitions they need to have the capital and you know opportunities come up and to take advantage of those opportunities they have to be ready to play yeah so Frenchman Bay Conservancy they they have a diverse portfolio and it's not just esgs and they're doing great they're really good organization they've done great they really have bought some beautiful pieces of land yeah yeah I love them um so Jamie I thought that was really interesting um that like I said I was only able to talk to a couple but ones organizations that I think that would do 100% um ESG investing are not doing it I believe like your libraries do not do that like I believe I believe like the the Jessup Library would not be like 100% ESG again how else would they pay for their Capital you know programs that they need do do we have any restrictions on on the other other side do we uh invest or not invest in big in oil or fossil fuels or do we have any restrictions on the tobacco that's a great question I don't see that in our investment policy but I know Phil I thought I brought up we I don't think we own big tobacco that was something that that I brought up a few years ago and I believe we're not invested any big tobacco no we're not or I don't believe we're invested in oil either I know we're in big Tech I think he has one fund I think there's one I think there's one Fund in there that

that is oil okay because oil is starting to buy up all the greeny organizations anyway that Technologies I just know we're in medical most big Tech I think there's what uh one of the the Holdings one of the funds is uh it's I think it's kico Phillips actually okay I think we I think we have a small position in kico Phillips interesting um I'm open to make any changes at the next meeting if if it if it's something that's bothered by anybody and we are you know we are a collective Force but how how would that work Phil if or or anybody um if if we if we just own whatever the um Vanguard fund is we can't ask them to strip out one thing can I no they can't if you buy that fund it's going to be it has to be insulated from tobacco and oil because it's just it's a basket like it's that M explains to us yeah so that that knew that one he just bought for $200,000 that's that will not have big oil or tobacco correct right yeah that is a certified ESG ESG wouldn't have any of the above yeah but if if the town decided that it didn't want as you were saying well we have kico Phillips and maybe we shouldn't have it You' have to change the fund then right yeah we have to change the investment policy I think it's I think that's a bond though I think if I think I think the the kico Phillips is a is a bond right right that would we'd have to ask Matt to right so I think we go we go back and look at I can go back and look at the portfolio after the meeting but I I think if I remember there's a kico Phillips along the same list were the Sally May ones to where I think you'll see that there was a

bond I'm just curious I'm not r no but if we were going to make any policy changes we do have to bring it to the voters we need to be transparent correct to the town to the town meeting yeah yes because that's how we did our we brought our ESG allocation to the town meeting when two years ago when we were at the neighborhood house yeah and that was the 7 to 12% correct and we're working to get to that 12% yes we are as of today no that came up at the last meeting too with him is it's it's a slow thing I think they're very careful how they oh absolutely yeah I think they're doing a good job I think we're we're I think we're doing very even though now that he's not on the call I think we've done very well by the first and they've been very competitive and come back to us when they they they like our they respect our business and how we you know as a municipality and they are very careful with it's it's not new territory to that we're not the only municipality they managed yeah he had really good points there especially and I thought some helpful things when you need to take the money out and knowing like two to three years out that we're going to be buying a $1.5 million fir Tru you don't want it all invested and have only $750,000 at the time and you got a bond the rest yeah I think that was a very good point and my as I said in the thing my only and I just throw it out again as a thought is I think we have to obviously be very careful but I think we're awfully [Music] preservative I think unfortunately I think that it goes with the territory I think you'll find that all your all your not your municipalities and nonprofits operated in similar environment unfortunately as far as an Investment Portfolio not with not with not with

Equity Investments as low as we have I don't I don't think I mean I from the ones I'm involved with they don't and our policy says up to 65 I'm not saying we should be I'd rather be safe than sorry but it I do think we've we're missing some of the growth that's happened in the last several years I don't disagree with you I just I think again when you work with these you know portfolio managers that you know that's their that's we pay them for you know that's where their fees come from is to make sure that we don't lose the farm and there's always going to be like oh we missed that Tesla stock when it you know when it tripled that's not always the you know what a municipality gets to do now and he did say he was he was being he said we should be careful and everything you know he has to think about 208 you know remember how how bad 2008 was he wants to make sure that that could be next that could be six months six years or six weeks away and they always have to have some you know they want to have damage control plan because we're the first ones to scream when they lose everything I'm I I don't I'm just saying you know oh I hear you I'm saying yeah yeah but that's why I think it's important that we discuss this and talk about it and it's that just not something that's hidden and uh again I think it's something that we could continue to confront him on you know when we meet again in June absolutely I I I think it goes also that's why I ask the question about the banks I mean I think it's a it's a bank mentality more than an investment mentality in a [Music] way you were in Maine cons you know bang our savings I think would be the same thing you know I think they I think Barbara Bank and Sh there there reason why these banks have been successful

they are because they're very conservative and ridden through the bad times as much as the good times okay so the next was um continuing to session on new member Recruitment and I think Jamie if you once you're back and maybe you and I can think about some throw out some idea I only want someone that that would have some kind of investment knowledge and you know and understand that how you know confidentials even though we're transparency as as an org as you know there's nothing hidden here we just it's not something you want to be really talking about at the coffee shop we want someone that you know again has about someone with Integrity so um that raises a question maybe derl and this is one for you is is all this money is a great thing for the town but is it a is it is there a political liability involved here I mean if if it was general knowledge that we had all this money and we were um would there be a move to lower taxes for example who knows I wouldn't I wouldn't discount that idea Jamie so how transparent is it we don't print the portfolio in in the town report I can tell you that no but it's in the I have to do accordly report to the select board yeah in there it's it does go to the select board that means it goes to the citizens because all those packets to the select board are all public this is we're a municipality this is all public documents but we don't fly the flag up by the way hey you know we have $4 million invested yeah no it's it's it's part of the quarterly investment reports that I submit to the select board and we're lucky you know again I think there are many towns that would cut off their ring figures to have the

problems that we have and I think when you bring up as far as the political ramifications I think it's it's a Weare of but I think the a conservative approach is usually you know your border selectman is going to probably knows this is like our you know that whole Marina could go south tomorrow sure we'd have to you know we've had we had all those King Tides last year we luckily Our Town fared fairly well but if it didn't we were replacing you know roads and buildings we' have an opportunity to at least to recover some of it and another thing to consider is that the majority of this portfolio is restricted as and it has been based on uh the CIP and what's in our um when the CIP was was established that is how these reserves were explained to have been used for because they used to this be individual Reserve accounts instead of in in a big Clump like this the way the CIP is so when people are s go ahead great and may yeah if you could get me the breakdown of percent the the sorry the what what percentage the total is CIP and what you know not right now but some yeah no no I'm just I'm just pulling out I think it was it's I think it's 18 is CIP because when we had Matt on the call I think we were looking at just that number that was the money we sent over right so that was the that was the what we added to the portfolio 1.7 million 1.7 million I think it's the CIP no no no that was what we that was what was budgeted to be invested oh to be invested in 2025 excuse me I speak wrong so right now the Reserve balance as

in all of our asset lines have 8,228 th000 allocated for them so this eight million right here is is is reserved literally um for these assets so it's over half oh yeah okay and then that doesn't include the um or maybe it does it might I believe that includes the unallocated um which is we can't have a a conversation about um that would be capital gains pulling from capital gains to reduce taxes which we have done done on occasion and I didn't do it last year because the market was so volatile and I'm not sure if we're going to be able to do it this year but um that something you know if someone if someone brings that up the reserves are used to um to to subsidize um lower the tax um burden right that is that is true um and then I mean the thing is with the CIP is that all these funds you know they're going to to assets that are that are in on the books to be purchased and are we're getting interest on them um or not interest we're we're able to to get actually returns um on them whereas if they're just hanging out with from our um in our operating account we're not we're not getting anything from them is that clear yeah not interest return all right so going back to So Jamie when you have some time between now and town meeting it would be good to in town meeting's always a good shot of SE other people that we always forget about because people have a habit of you

know emerging that first week in May so maybe we could start to think about another citizen that would be good yeah I'm I don't I've been thinking um I mean Sam McGee obviously comes to mind but um he can't because he works for Barbara bacon trust we can't have him would' love to have him but can't you follow you conflict interest he he's the one that um giv us the bonds okay I didn't he's my bond guy I didn't know we yeah okay do we have all the bank cover do we have all the banks covered oh I don't know to the most part I don't know again I'll give it some thought I again I think bhe you know more eyes on it is better and again someone qualified you know I think you know again I think mik Mike B even though Mike has been in the background I think he'll be a great asset and I was happy to give him the time to finish his dissertation he'll be back he only I think he only attended one meeting before he haded Def and this is the Y defense he's planed to be back in September uhuh good next meeting uh other business yeah what schedule next investment I think was scheduled the next so do we beat in early July after the the or do we beat after town meeting I think we should meet after town meeting and I can report on um quarter 1 so what do you think before we all get busy for the Sumer sometime around the the the 1 of June or late may you know right after

maybe the week after Memorial Day we might be a really good week to meet let's look at that I'll look at my calendar quickly too again Jamie I think you asked really good questions and I don't think any of us feel defensive because you know that's how we all learned other so let's go look at June 6th as as the next meeting does that work for everybody or we can do May 30th one of the other I might be out of town for either of those dates but I could we could bump it up then to the uh to the 13th of June which is a we don't want to meet on Friday the 13th never picked that we could go June 20 or we could move it back up to before Memorial Day we don't want to meet the Friday of Memorial Day weekend we're not doing that I think that June 6 might work June 6 or May 16th well my calendar doesn't usually go out that far but um they happen to be free on both those days ah perfect June 6 it is June 6 66 2025 at 300 p.m. let's go D 3:30 let's let's do 3:30 I will speak with Wendy because that I think School's Out by then oh yeah the graduation I want I'd like to get Wendy in the room okay um so maybe we she's not up by the way she's not up for election this year I think she is oh so then we get some pick somebody else so we'll go for that day 330 so 3:30 is good that that gives a Matt a chance to get up here and still get out of here okay um he's not gonna come to that meeting he's not going to come to the October meeting so instead of meeting quarterly we're gonna meet roughly three times a year so that' be like in thirds is is that are you good with that I'm good with anything I'm just

yeah I mean we have to update the investment policy in order to do that to meet more than twice to the investment policy says quarterly so we would have to update the investment policy we don't want to do that we'll stick to quarterly um so that would put us quarterly anyhow that June June but but we won't have it it'll be more of um the meetings won't be as involved I'm I'm confused though if we meet in January in June how's that quarterly that's an excellent question Jamie um okay um what about what about in April we'll just meet in April we'll meet in April um after the President's Day week let's we just go ahead and bump it up to April it's just easy I'm glad you're here Jamie to keep us keep us keep us on the right path the days are just flying together I can't even keep so how about the 25th so I propose either the 11th or the 25th of April well this is this instead of the June meeting or an addition to no an addition to an addition to oh okay okay and then that means we'd want to push our June meeting to July right and then after this after 6:30 July or um or August correct to give me enough time to close the books for the period so I propose that we do April 25th wait or April or versus April 11 do your books go out to April I'm I'm I'm good on both the uh the 25th is the day before my birthday and I be with my and since it's a weekend I might not be here or I might have other people so it's is the 11th better I'm trying to forget it but yeah the 11th is better what's this do the 11th okay and and

you're saying not 3 but 3:30 yeah it's it's let's push it back a little in hopes that that Wendy can attend okay and Matt probably Matt will not be there right we we we don't need Matt we just need the report yep the quarterly and we will have it we're not gonna have the quarterly quarterly report by April 11th that's an excellent point we're not going to have it by then we usually get it by the 15th or the 16th this time we got on the 16th so let's go to May 2nd then I think May April we'll have it by the 18th okay could you do the 18th it's good Friday it doesn't bother me doesn't bother me school vacation week do the 18th let's go for the 18th because to they be in the 17th it puts a spot out perfect exactly three months later yes we have change the other one yes but we'll worry about the other one after we meet on on April 18th okay okay y that works and that way we can um so I'm putting to 3:30 on April 18th and I can send out a reminder Tom Brown never had us meet quarterly you want I know we never met so it's we you know John Brown the past year I don't think we ever met quarterly so I mean that's the goal but we'll try let's go for it it's good it this it keeps us all in our toes and and it keeps us a good comp but it also keeps our ear to the ground and and and reminding how well we're doing and if we need we can see the changes before they happen to us four short meetings instead of two long ones maybe exactly the half an hour each perfect

perfect okay um do I have a motion to adjourn other business other business oh first of all other business we did a lot of other business so many business um questions and comments how long are you in New York for uh just the weekend enjoy yourself thank you I'd love to see the mati show if I was in town actually I we're going to go to the other one though Siana show oh nice well I look forward to see you and talk to you when you're back and again thank you for your time and questions and most of all zooming in while you're away a pleasure now I'm gonna get well have a good evening and a better weekend enjoy your stay in New York have fun see you you too yeah bye bye m