Auditor Selection Committee - Regular Meeting

And press the button? All right. All right. So I'll start this over. Call to order the City of Northport Firefighters Municipal Firefighters Pension Trust Fund Board of Trustees meeting June 26, 2026, 0900 hours, City Hall Room 244. Present. Chair Terry McLeod.

Howard Burns, Trustee. David Haas, Trustee. Scott Duff, Trustee. Doug Lowe, Foster and Foster.

Chrissy Stoker, Foster and Foster.

on the way board general council she said on you right uh pledge allegiance sorry i skipped right over you yeah james you were sitting over there threw me off uh pledge allegiance So again, we have no public comment. All right. So moving right on to approval of minutes. I would first make a motion to approve the minutes of March 13th, 2026.

All right.

We have a motion. Do we have a second? Scott Doff, second.

All right.

All in favor?

Okay, page six of 106 on the tablet shows you all of the invoices that were paid during the quarter. Warrant 27 was just one invoice with audit services, and warrant 28 was everything else, all standard, usual and customary invoices, but certainly if you have any questions about any specific invoices, feel free to pull those out and we could look at them separately. There are no new invoices for payment approval today. And the fund activity report being the final component of the consent agenda.

Sorry, Chrissy, what's the code to get into that?

436-022.

I was looking for it at the top of the page.

Sorry about that. I dropped the ball. Anyone else need the code?

OK.

So again, that starts on page six is the summary of the invoice payments. And page 21 is the fund activity report. A couple drop entries. I'm sorry, we had an early retirement. He also took his accumulated share plan balance and then a couple drop entries. Questions, concerns?

OK. We need to approve this, right? Yes. Scott Duff, make a motion to approve the consent agenda as presented.

Howard Burse, second. We have a motion and a second. All in favor? Aye. Aye. Motion carries. Moving on.

So a couple terms coming up. Well, first of all, Scott, you were rechosen as the fifth trustee at the last meeting. The commission did ratify that appointment, so you're officially back on the board. Terry, your term is coming up at the end of September, and if you would like to serve another term, then I will, well, if you want me to. I don't know if you have an internal procedure for announcing terms and nominations and things like that, but I'm happy to email the membership and let them know that your term is ending in September. If anybody is interested in potentially running against you, I can send out that email if you'd like. Or is there an internal procedure that you have?

No, that's fine. Okay. I'm going to send that out and see if anybody's interested.

And you are interested in serving another term? Sure.

Okay.

Is that code personally in the Northport email? What emails? You have all the retirees, I'm assuming. I don't...

Well, in this case, I mean, my understanding is, and I did confirm with Paul, that this is just an active member seat, so I wouldn't be emailing retirees.

Yeah, just the city.

But as far as member emails, I do believe I have everyone's city email address.

Yeah, just first initial, last name. Okay. Yeah, okay.

So I will do that probably, say maybe mid-August, that will go out. Do you want me to make any physical flyer to be posted at any stations, or are you good?

No, I don't believe so. Okay. I'm okay with email.

Okay. All right, so I will take care of that and keep you guys posted. Howard, your term is coming up also, and I believe to reapply for a city commission appointed seat, you just need to reapply online.

Done.

Done? Excellent. And that's all I have for trustee updates.

Okay. And then your position is September also? Beers?

His is through September 10th.

I think that was it for you.

That's it for me. Next is Doug is going to discuss the cybersecurity support program, which you can find on pages 22 and 23 in your tablets.

Okay. I assume maybe, maybe not.

You looked over April letter from our CEO, but I'm here to give you the cliff notes on it.

When I first saw this, I'm like, what is this? And then as I got more and more information, I thought, oh, this is really a good idea. So here's the genesis of it. I think you know our CEO likes to acquire little benefits companies around the country, primarily dealing with unions, public sector, private sector. And recently, we acquired a bigger company, very exciting, about 50 actuaries. different. They come from the private sector. And I'm aware of the term Taft Hartley. It's a pension plan, deals with the unions. And what came with that group was a requirement that their pension boards of trustees, because they service clients just like us, just on the private side, that falls under the Department of Labor. Now, you guys being a Chapter 175 public sector pension plan, you fall under IRS and 175 and 112. The Taft-Hartley plans fall under DOL. Well, there's a requirement for the Pension Board of Trustees to do every single year with all of their vendors and every Taft-Hartley plan. It's not required on the IRS side yet, but we're wondering, is it just a matter of time? So that's why I'm here discussing it with you today. This requirement is the trustees have to ensure that all of their vendors are, I call it, tight with respect to cybersecurity, meaning the enhanced risk that's going on is we all see in the news every day. Breaches, tricks, AI. now data centers that will probably just greatly enhance the ability for good and evil, so to speak. The cybersecurity requirement has been required by the Department of Labor going back to about 2021. And that requirement is every single year. So while it's not on the IRS side yet, we think it's a good idea. Essentially, what you would be doing is if you agree with this proposal, we got in contact with a company that specializes in putting out a survey to vendors that makes the Department of Labor happy. And it's a non-intrusive survey. The vendors aren't required to give passwords or access to their systems. to this company that does the survey. But I've seen the questions. And it will very clearly let you know if any of your vendors are weak with respect to cybersecurity. Now, if you pulled all of your vendors in here right now, that includes us as the actuary, Chrissy and her side is the administrator, Mariner, the money managers. Anybody who has access to the monies of the trust fund said, do you guys have protection with cybersecurity? Oh, yeah. They would all say yes, right? The question is, is that yes with respect to the Department of Labor requirements? So you might find that maybe somebody's got Windows 95 and Geek Squad. I don't know. I'm going to guess that all of your vendors are, in fact, compliant. But here's the problem where you guys are in as fiduciaries. Let's say there is a breach, God forbid, like the city of Cocoa. I don't know if you're aware of that. We handle the Cocoa pension plans, and I was told the night before, hey, we're meeting somewhere else because everything's locked down, and they're still recovering from it to this day. It was a ransomware attack, so I don't know how much they had to give up. They still don't have all their data back. So God forbid that happens here at Northport. So right now, if that happened, you would likely have a group of retirees and probably active firefighters that became aware of it here asking you guys questions. Like, we're trying to get to the bottom of it. We're very alarmed. We'll get back to you. Versus going through this process at least one time See, the Department of Labor requires this every single year. You guys have never done. In fact, we don't think any plan in the state has done it. But if you have at least this survey, and let's say everybody came back green, then you could say to those retirees, like, we understand this vendor was breached. They did go through the survey. They passed at the time. We're going to have further conversations with them. But you've got protection as fiduciaries that you've done what you could have to try and avoid this. Whereas now, if it happens, you're going to say, well, we trusted that this vendor said they were tight under DOL guidelines. So our CEO was so on board with this that he went to this company. It's called FoxPoint Solutions. It's the same company that services that 50 actuary company that we bought. And our CEO, Brad, said, look, I want to pay you, Fox, I want to pay you a lot of money so we can get a group discount, so we can go around Florida and start bringing us out to our clients. And so we're bringing to you the best rate that we could find. While the DOL requires this survey every year, we're thinking one time for now, get that initial report. We can revisit annually to see if there's been new updates from the DOL on this. So this is my proposal to you, is to have you authorize us to contact all your vendors, have them go through this. It's not intrusive. Our IT department has already done it for us. We've had dozens of clients around the state already. Plans like yours say yes. Our IT department, it takes them like 45 to 60 minutes to fill up a survey. You will then get a presentation from a representative of that company saying, here's all your vendors. Here's where they were green. Here's yellow. Here's some red. They will make certain recommendations to you. So we're bringing this proposal. The best rate we could get is $10,000 for the report. But you will get a presentation from a Fox Point representative. He'll be up there on the screen if you agree. And to the extent that Fox Point makes recommendations for any vendors, and you need to get Paul involved to do some kind of remediation, whatever fees he generates will come out of that $10,000. There will not be additional legal fees on top of it. So hopefully I didn't make it more confusing than the letter came out. I wanted to keep it short and sweet. Here to gauge your interest and answer any questions that I can. The Department of Labor is requiring it? It's a mandate. In fact, it's such a mandate that DOL often audits the Taft-Hartley plans frequently for that purpose, to make sure that they're fulfilling it.

What about the compliance on the side of whoever that is, the company that's representing us in some capacity? They can say, no, thank you. I don't want to do this.

Oh, certainly. And then that, see, that's almost like a positive of saying yes to this, because you might immediately get information back. We know it doesn't take long to fill out there, like 30 questions in 12 categories. If you immediately start getting information, then if you have something like, no, no, we don't want to do this, like, well, why wouldn't you? You have a valued relationship with the Northport Fire Pension Plan. Why would you not want to prove this? It does not take a lot of time.

So this survey provides insight into their security background. Does FoxPoint Solutions provide any sort of guarantee or warranty for their services?

No, that's the thing. It's kind of like insurance on top of insurance. There's no guarantees of a breach. It's not life lock. They say, hey, we'll restore you back. This is simply trying to get ahead of things. While all of your vendors likely have cyber insurance, this would be like a layer on top of that, like another firewall. Because yes, there's cyber insurance, but think of the chaos if there is a breach trying to fix everything up and restore the trust. So yeah, it's not a life lock. There's no guarantee, but we think that getting everybody in the green and all the categories is the way to go. And right now, we don't know if there's any yellows or reds. That's the thing. Okay.

Paul, did you have something? Mr. Chairman, yeah, I can give you some thoughts. I think it's a wonderful idea, first off. I've had a couple of meetings with Jonathan Davidson, who's the chief operating officer and chief legal officer for Foster & Foster. And let me give you a little more detail on it. When they talk about, okay, so first of all, as fiduciaries, and as anyone in society, we have a duty of reasonable care normally, but fiduciaries have a particular duty of care to the members and participants. And basically, one way of looking at that is if you exercise due diligence and reasonable efforts, you're really discharging that obligation. going a long way to discharging the obligation. So what this company is going to do is it sends out a survey where the IT departments and IT vendors for the various vendors will answer very targeted questions. And then there's, I think, a little bit of back and forth about that sometimes with FoxPoint. But my last meeting also included a person with FoxPoint and Mr. Davidson. And so the idea is that they're going to drill in to try to help find out if there is um an issue with any of the particular vendors and and then narrow down what that issue might be so that their action needs to be taken it's easier to identify um i had another board many of the plans i represent And one of the other boards had asked a question I thought was pretty relevant that I also put to Mr. Davidson and I was very interested in the answer, good answer.

A lot of events, so what we think of as vendors, a lot of times it'd be people like me, I'm a vendor for the board. Doug and Foster and Foster, they're a vendor for the board for actuary. Christie, she's a vendor for the board as the administrator.

The question was, well, for all the funds who are – I mean, how many times is that survey going to go out to foster and foster about whether their IT is up to snuff or my firm or your CPA? Well, your CPA is probably not as common among others. But Mariner is another example. Mariner represents a lot of funds. So – really piqued my interest was I had not initially understood that by vendors, they also were referring to the particular investment managers that manage each one of the investments that we have. So it wouldn't just be, say, Meritor, but it would be, and I have to pull the portfolio to look, but this survey would actually drill into each of those mutual funds or other funds that we own.

So those vendors would be answering the question.

And the point that Mr. Davidson made that I thought was very helpful to me was that a key here is those people who are handling money, right, or who could have that access. So I wanted to add that for you. So when we're talking about vendors, they do a deeper dive than just Foster and Foster, not only in Gross or Mariner. They're actually going to go into the deeper investment managers. And we're expecting to, you know, kind of hear some answers here within a few months. I wanted to just point out for, I heard, I think, a question from Scott. This is not required right now for us. This is not a legally mandated requirement by the Division of Retirement or Florida law or the other regulatory body, which would be the Federal Internal Revenue Service. It's not yet required by them. It is, however, required of the private sector plans. And under the private sector, as Doug mentioned, they're regulated by a federal law called Taft-Hartley, which does require it. So I hope those comments were a little bit helpful for you.

Very helpful. Thank you, Paul.

So I see on page 22 and 23 it talks about it, but it doesn't explicitly lay out the cost and stuff like that. That's just that $10,000. There's no ancillary cost.

Yeah, that's basically the lowest. Depending on the size and complexity of the plan, our suggested billing, again, we paid Fox Point up front to try and get the best rates, not knowing if we could have got zero bites. But these plans are finding out, yes, we want to do it. The $10,000 is the lowest.

OK.

What they've done is they've priced it based on, as I understand from Mr. Davidson, is it's priced based on the size of the plans, and we're in the lowest category.

I've got no further questions about it. If we were so inclined, we'd just need a motion for approval as stated, correct?

Yes, at this point, unless you have other questions, I'm happy to answer if I can. Okay.

Sounds good to me.

I mean, I don't know what you guys think.

It seems reasonable to do it at least initially to get a gauge on how these organizations are managing their security, right? And we're signing up for the year.

Just the initial report, we can revisit annually. You certainly will have good questions and feedback from the Fox Point rep, so a lot more details to come after that.

You said you think that there's a chance that It is speculative how if let's say that was to become a requirement next fiscal year next calendar year Is there a would we be would we be obligated to pay the $10,000 again to re up to?

That's come up as well. That would be a follow-up We just have to see how many plans want to do it what kind of a deal we can get from Fox Point and if it becomes a requirement. Clearly, if it becomes a requirement, everybody has to do it. I'm guessing there may be even a reduction. Because we handle over 200 pension plans in the state. And if suddenly the IRS says, you must do this, and we've got 200 sign up, I'm guessing we could probably get a better rate going forward.

Cool. Well, entertain a motion for a motion accepting the program for the cybersecurity support program as presented. Do we have a motion? Make a motion to accept the proposal from Foster and Foster regarding cybersecurity program for $10,000. We have a motion. Do we have a second? Second. We have a motion and second. All in favor? Aye. Motion carries unanimously.

Okay. Thank you. Thanks, guys. Appreciate your time on it. I apologize. I think I've let you guys all know I've got to get up to a couple other meetings this afternoon, but I'm going to jump on this meeting here shortly in the car and listen in, and if I have any feedback, I'm aware of what you guys are going to be discussing on the share plan, so I'll be on for that.

Okay. And you, Wade, spoke briefly. I by obviously you guys know we have a new DVP coming. I was approached with some questions relative from the union standpoint on some of the pension items, some of the things that they would like to look into. I was instructed that if the board allows the union to directly contact Foster Foster for any of these questions and concerns, and if they want to do any kind of study, the union can, you know, pay for those things. We just have to kind of vote to allow that direct contact.

That's very common. I just need the board's permission to do work for somebody other than you. And then, so it sounds like

You give the go-ahead to the union, and as long as they pay, then... Yeah, and that was kind of what I was pointing towards, is if they want, they have to pay for it.

We do this all the time, so thrilled to work with the union. I'm doing this all the time. Venice, Titus, all over the state, so... Do you need a motion for that? I would I think so usually boards usually give me you know and I'll revisit you know we're not going to leave this as a standing order let's say the next round of negotiations three years from now comes up and the same thing I'll come back to you you know so this would be like for this round okay so entertain a motion to allow the union to have direct consulting at their expense of foster-foster for the next negotiating term

TODD BANDUCCI- I'll make a motion as stated.

TODD BANDUCCI- Motion.

Second.

TODD BANDUCCI- Motion to second. All in favor? Aye. TODD BANDUCCI- Aye. All right. I will let them know to get in contact with you whenever they choose to. TODD BANDUCCI- Perfect. Thanks, guys. Thanks, Doug.

TODD BANDUCCI- All right. Are we working on some stuff for the guys that were wanting to look into that reduced contributor?

TODD BANDUCCI- Yes. I'm going to have that out in July. OK. TODD BANDUCCI- And then I'll plan to attend the next meeting just for that, and also if the union has us do anything, and we can perhaps chat about that as well.

You said July. Are you going to send it to all the board members?

Yes, because that was authorized by you guys. So that will come out to Chrissy. I'll copy all you guys, and then I'll answer. I'm happy to answer quite even before the September meeting on that, but we'll get that out in a couple weeks.

All right.

Thanks, guys.

Moving on to the next item. Paul, discussion of response to legal request letter.

I'm sorry, Mr. Chairman, would you just say that one more time?

Next item on the agenda is your response to the legal request letter.

Okay, are we talking about the Mr. Krajic matter?

Yes.

All right. There's no further action required by the board. There's no change in the law or

Did anybody have any questions related to his opinion statement? I believe you'd have to ask a public comment.

I spoke with the city clerk about this. I'm on the agenda.

Okay. Okay. All right. Perfect. Okay.

Go ahead. I have something to read.

Do I need a... Yeah. Here. Here's one here for...

Chris Krejcik, I'm a retired member of the pension fund. Our inclusion into the share plan accounts and annual crediting was discussed at the June 24, 2024 pension board meeting, at which time a motion in the second to include us came up. A vote was delayed pending the actuarial study to determine the actual dollar amounts owed. At the next meeting in September of 2024, the board actuary presented the actuarial study to the board. At this time, the pension board attorney brought up the subject of conflict of interest and advised the board that if they didn't feel comfortable to address this, they could abstain from making any decision, which they did. No action was taken. The board attorney then advised the board to let the city and the union negotiate this matter, stating, It is totally acceptable if the board decides not to vote on this matter if each of you decide it is appropriate to abstain instead of voting no or instead of voting yes for the request from the excluded retirees. That is absolutely acceptable. The board attorney then stated board wouldn't be taking action to forward the change and the net effect of that would be where it should be, which is the city and the union to decide if they want to make the change. On March 12, 2025, a letter was sent to the pension board with a formal request for inclusion into the share plan. The board attorney replied on March 24, 2025, stating that that request does not constitute a claim under the pension ordinance requiring a hearing before the board. Again, no action was taken. In September of 25, I met with the city commissioner to research how and why a city ordinance could not be followed. I was directed to meet directly with the city manager, which I did on December 15th of 2025. At the December meeting, a member of the city's legal team was also present and all documentation regarding our exclusion from the share plan was forwarded. In meeting with both the city commissioner and the city manager, both questioned how and why this matter was forwarded to the city and the union for resolution. We are not, were not represented by the union, and it is unclear how or why the union would be negotiating this. Again, we are not negotiating to be included in the share plan. Per the CBA and the ordinance, we are included. We just want to be made whole. On February 24, 2026, an analysis was written by Caitlin Coughlin, Assistant City Attorney for the City of Northport, that reinforces our position that we should be included in the annual crediting aspect of the share plan as the language as written in the ordinance does not exclude us from that portion of the share plan. This analysis was delivered to the board at the June pension meeting. Some highlights from what Ms. Coughlin wrote. Under Florida law, collective bargaining agreements are interpreted under traditional principles of contract law. When the language of an agreement or ordinance is clear and unambiguous, it must be applied as written and courts will not add limitations or conditions that do not appear in the text. Longstanding administrative practice or perceived negotiating intent cannot override unambiguous contractual language. Unlike the one-time initial allocation provision, neither the CBA nor the ordinance conditions annual crediting on a minimum hire date, retirement date, or prior receipt of the initial allocation. The employment window applicable to the initial crediting December 1, 2005 through September 30, 2012 does not appear in the annual crediting language. Accordingly, under the plain language of the CBA and the ordinance, initial share crediting is not a condition precedent to annual supplemental applications. Reading the initial allocation employment cutoff into the annual crediting provision would require adding additional limiting language that does not appear in either document, which Florida law disfavors when interpreting contracts and ordinances. Thus, because neither the ordinance nor the CBA imposes a minimum retirement or hire date for annual crediting, the provision reasonably encompasses all retired members who are alive on the applicable September 30 of the relevant plan year, including those who retired prior to 2012. The union attorney's revised opinion, actually I'll come to that in a minute. So the ordinance and supporting documentation regarding our inclusion into the annual crediting has been looked at by three attorneys involved with this issue. Our attorney, the city legal team, and the pension board attorney, and all agreed that we should have been and should be included in share plan annual crediting. I've noticed the reversal by the pension board attorney after speaking with past individuals involved with the pension plan referencing the intent to exclude us. As Ms. Coughlin notes in her analysis, there is no language in the ordinance nor CBA that excludes us from annual crediting. She goes on to say that the union attorney's revised opinion asserts that a retiree must have received initial crediting to hold a share account. This is not supported by the text of either the CBA or the ordinance. The CBA first establishes the share plan benefit and then separately describes the mechanism for initial and annual crediting funding. Treating initial crediting as a condition precedent conflates benefit creation with funding mechanics and is inconsistent with the structure of the CBA and ordinance. interpreting the documents in this manner would insert limitations not present in the text. Florida courts generally decline to infer conditions or restrictions from pension ordinances. In summary, the governing documents clearly limit eligibility for the one-time initial share plan allocation, but do not impose similar restrictions on the ongoing annual supplemental benefits. because Florida law requires strict adherence to the terms of a ratified collective bargaining agreement and its implementing ordinance, any interpretation of the annual crediting provision that imports limitations not expressly stated in the governing documents presents legal risk. Administration of annual crediting falls within the authority of the Pension Board. However, moving forward, annual crediting should be administered consistently and in accordance with both the CBA and ordinance for all eligible participants. Over the past several months, the Pension Board has addressed several issues regarding benefits for other Northport Fire Rescue members. The first dealt with a member who wished to purchase time towards retirement from their past time as volunteer with another department. This is an example of the board and the city attorney working to help out another retiree or another member of the pension plan. The pension board attorney worked personally with this member to try and find a way to make this happen despite several obstacles. And that's great. I mean, that's what is supposed to happen. The second involved a member who had recently passed away from cancer, and there were some issues regarding the pension benefit for the family. Everybody worked together to try to make that right for that person and their family, which is, again, it's a wonderful thing. That's the way it's supposed to happen. At the March 2026 meeting, there was a discussion regarding entry into the drop plan for several members. Towards the end of the discussion, the board attorney stated, our role is for the members and the members' benefits, okay? And that's purely our job, and if I could find a way, I would. We're asking for the same consideration. We have faced constant roadblocks throughout this process. From the previous board administrator, we've had to retain an attorney to help us through this process. It's difficult for all of us that are involved in this to comprehend that we've had to do this to receive the benefits that the ordinance and the CBA state we should be receiving. It is also difficult for us to comprehend that without an affirmative vote, it's going to be necessary for us to file a lawsuit against the board to receive these benefits. A lawsuit will result in expenses for us, expenses for the board, and potentially expenses for the city. This does not have to be. As noted above, all three attorneys that have looked at this ordinance as written have concluded that we should have been included in the annual accrediting aspect of the share plan since its inception. All excluded members were original members of Northport Fire Rescue. I was a member of the pension board for six years. When the pension was established, benefits were for all members. As the department grew and benefits were enhanced, these benefits were given to all members. There was never a differentiation between union and non-union or dates of employment. Pension benefits were the same for all. No members were ever excluded. Somewhere along the way, this became derailed. We are asking for the board to do the right thing and award us the benefits we are rightfully entitled to. We are asking for a vote today on this process to make us whole and to include us in the annual crediting going forward. So I'm asking for a vote. As noted by the city attorney, this is the city's, we were directed to go to the city and the union on this. I went to the city on this. This is the city's position, and I confirm that with Ms. Coghlan. The city's position is that we should have been and should be included in the share plan for annual crediting. And she goes on with administration of any award rests with the pension board. So it's up to the pension board to say yes or say no. The city can't do that, and the union can't do that. So that's what I'm asking for today, is to be included in this, to follow this ordinance as it's written. Okay, we've had three attorneys look at this ordinance as it's written. All three attorneys have agreed that we should be in this share plan. Your attorney, after speaking with... Individuals from the past relied on the intent that we were to be excluded. But the ordinance and the CBA do not say that.

OK. Thank you very much. Paul, do you have any response to anything that was stated?

I don't feel it's necessary. And the board does not need to take any action.

Any questions, comments, concerns? See none, hear none. I'll give you another moment.

Yeah, go for it. Well, yeah. I don't understand why that's being said by your attorney. Who makes this decision? If it's not the pension board that makes this decision, who makes this decision? You guys are the ones that are charged with with members' benefits. I mean, even your board attorney said that. It's your responsibility. It's your responsibility to do what's right for the members and their benefits. I'm asking for a vote.

MR. Mr. Chairman, you've been most kind to these requests. And the board has been patient and listened repeatedly. And you're not required to answer those questions or do anything for them.

MR. Thank you very much. Moving on to Mariner. James?

All right. Good morning. First off, it's very good to see you all today. So no new action items at this meeting. We did have a volatile quarter. We've come a long way.

Excuse me real quick. Yes, sir. Chrissy, would we still be okay with three members here for quorum?

Yep.

Okay.

So, Mr. Beard, you've got to take off. I appreciate it. Thanks.

So, page three of the full investment report, I have a handout, just a snapshot of the market close as of two days ago. But really... And this year, going into 2020, Apologies. And finally, in the red, the Bloomberg US Ag was even down modestly about a tenth of a percent. Now, with negotiations on the table, we've seen a stark reversal of these returns, and that's why I brought... This nifty handout today. But you'll see if you look at the year-to-date column, top row S&P 500 U.S. stocks now up 8% so far throughout the year. Second to last row in that top box, international stocks up almost 13%. And finally, second box for fixed income, top row, Bloomberg, U.S. Ag, U.S. Bonds up almost 1%. So now all the asset classes not only retracing those previous losses, but in strong positive territory. One thing I do want to highlight while we're on this page, now you hold more U.S. stocks versus international stocks next to your peers. So anytime we see U.S. stocks kind of have a rough quarter versus international stocks, which are down only 1%, you are going to lag your peers in the short run. But longer run, it's been very additive to the overall portfolio. So when we get to the peer group rankings, just something to keep in mind. Any questions about the market environment? Okay, so we'll move on to page 12, the pie charts. And you'll see on the top left-hand corner, the pension started a quarter at $76.6 million. It was down about $2 million over the quarter to $74.6 million. $700,000 in net distributions. and $1.3 million in investment depreciation. Again, this was a volatile snapshot. I pulled your market value as a market close yesterday. You're now up almost $4 million since quarter end to $78.3 million. So very nice growth in the stock market since quarter end. Any questions on that page? OK. On the next page, I just want to highlight very briefly, remember, we decided to terminate MFS growth, move to Fidelity Large Cap Growth Index Fund. That change went through over the quarter. And finally, BlackRock Multi-Asset. Remember, we Decided to terminate that manager and split it back between domestic and fixed income its funding sources And we did have a residual amount there just from income accruals for that fund that's now been swept completely clean as well Moving the page to page 14 And I always say this every quarter, but this is the most important page in your book. We talk a lot about historical performance, which is important for evaluating our past decisions. But when we're talking about that 6.75% return assumption we want to hit going into the future, really our positioning across the major asset classes is going to determine whether or not we hit that bogey. And you'll see each of the green triangles, your allocation as of quarter end, are very close to the vertical long-term lines, your long-term return targets in the major asset classes. So we can say the plan is well positioned. One thing I'm asking clients to look at, if you look at total fixed income, you'll see that green triangle is right on target. Given ongoing volatility, midterm elections coming up, we expect it to continue to be a volatile year in the markets. So we want to make sure we're close to our fixed income target. Because that's really how we manage risk and the overall portfolio. So doing very well on that front. Any questions on that page? Okay. Moving to plan results. And I'll be brief here. But turn to page 20. Again, a volatile quarter. Remember, we de-risked the plan. You're now a closed plan a few years ago almost now, but we're still comparing you to other open plans. So you'll see in your peer group rankings that if you compare it to that second blue line down that you're starting to lag those peers. But what we want to start looking at is that third blue line down and comparing you to other closed plans. And you'll see longer term That y'all are a lot more competitive there. We will promote that two quarters from now to being your primary peer group once we have three years of data and your new risk positioning. But you'll see for the quarter down 1.7%, really in line with your benchmark down 1.4%. lagging your peers, but as expected, given domestic equity volatility. I'm looking at the fiscal year-to-date number. I'm important because this is halfway through your fiscal year. You'll see you're just slightly positive, so really flat for the fiscal year. I asked one of our analysts to run your preliminary numbers as of the end of May. You're now up approximately over 7% fiscal year-to-date as of May. Now, that target can move around a lot, but hoping we stay in that green territory next to your 6.75% return assumption. If you look at the 7-year, 10-year since inception time periods, you can see very competitive next to your benchmark. Each of those time periods outperforming that 7.65% return bogey. No, 6.75% return bogey. And if you look at that third line down again against other closed plans, you'll see you're above average in each of those time periods next to your peers. So very good performance over the long run for the plan. Focusing on the fiscal year-to-date column, you'll see total equity down 1.3%. Domestic equity, again, the main detractor, down 2.4%. International equity, actually positive, up almost 4%. Fixed income, also additive to the plan, up a little over 1%. And real estate, up almost 2%. Just going underneath the hood briefly to page 21, I do want to look at one of your international equity strategies. We've been talking about them. They've had a lot of challenging performance with tariffs. Me and our team met with their portfolio management team over the quarter. And basically they acknowledge that they so their growth strategy, they're looking at high earnings potential companies. You know, they're looking at all the big pharmaceutical companies, big technology companies that are expected to have great revenue in years to come. And they're depending on that. And while that helped them against until about 2022, when we saw the interest rate hikes and really those stocks go out of favor. and the international markets. What we've seen them do is now they're replacing two of their portfolio managers. Remember, they have 13 portfolio managers that manage independent sleeves of the portfolio. So robust infrastructure, but they're moving two off and they're adding two value managers to help tame that overall tilt going forward. And you'll see since inception, which is why we've been watching them and kind of holding on, They were up 8.4% versus the benchmark up 8.2% above average next to peers. So they've been additive next to their benchmark and peers. But if you look at the five-year and seven-year numbers, you can see that they're starting to lag next to their benchmark. So given that and given portfolio management changes, I always just want to give it a second look. So I would like to do a deep dive next quarter, bring a strategy in, let you review it and potentially talk about simplifying the overall international equity portfolio, increasing diversification and looking at cost management there. So just kind of a preview of what's to come. But again, overall, it rolls up into a nice performance update.

That's right.

That's right. And just this morning, I saw that there were some new bombings on a U.S. base. So we'll see how that affects negotiations. We have had some relief on that front until today. And then it's back to the AI theme and whether or not those companies will pay off the amount we're hoping that will pay off. And I think that's going to be the roller coaster we see for the next five or ten years, whether or not that story plays out as investors are open.

Okay.

Okay. Thank you all. That wraps it up for me.

Thank you very much. All right. We have nothing for old business. Chrissy.

That would be great.

Usually it's me.

I did good. Mr. Chairman, I've got an update for you on the cancer presumption when you have a minute. I'm sorry to interrupt you, Christy. I didn't want to forget. I almost forgot that.

Yeah, go ahead. I was just telling Scott he needs to get his financial disclosure form filed, and I won't move on to the next thing.

He's got his own line. He did my training hours yesterday.

I just didn't get it. OK, well, thank you, Christy. I got an email this week from the Assistant City Attorney indicating that she and the chief and the deputy chief are reviewing her draft of that ordinance to include the cancer presumption but she reiterates in this email that i'll be you know she'll get it to me once they've all finished their work on it um but that she says florida affirmed as they must that florida law will be followed regardless of the verbiage in the code Okay, so what I'll do is when I get that, I'll make sure it complies with the statutory code, but whether it's enacted as an ordinance change or not, everybody please know those cancer presumptions still apply because state laws supersede everything, basically. So thank you, Christy, for letting me to jump in. I didn't want to share that report. I don't often have reports.

No trouble, Paul. No trouble at all. I don't have a lot to say, so Scott, I'll Real quick, something that's not on the agenda. My colleague Jamie alerted me to the fact that your fiduciary insurance policy is going to expire before the next meeting. I think it's particularly important that it be renewed and there is no lapse in coverage in the event of any lawsuit. You have a three-year policy currently. The expiring premium was $13,000. worked with Jamie. It's amazing. Just this morning, he said the broker got a rush quote three years, $14,822.76, which is $335 more per year, which those premiums increase with plan assets. So that is absolutely normal. Paul, do you have any input as to that, the renewal premium that's been quoted for an updated policy? Do you think it's appropriate? No.

I don't have any input on that. Thank you for asking.

So I do recommend that you authorize Jamie and I to bind that policy when your current policy expires in September just to keep the coverage continuous.

Do we have a motion for approving the fiduciary? Do we need a motion for that, right? Yes.

Scott Duff make a motion as stated by Chrissy about the fiduciary.

A second, if possible. All right. All in favor? Aye. Aye. Motion carries. Okay, excellent. Thanks. I was paying attention. Yeah.

This is the most exciting thing on the agenda. Actually, it's not on the agenda, so I appreciate you guys still having time.

You only got Scott to record this brief one.

That's good. Yeah. And Scott, you're going to the annual conference. Do you need anything in advance, or are you all set?

No, good.

Okay, well, have fun. The Division of Retirement's having a conference. That's the free one. It's in September in Daytona Beach Shores, which I think was where it was last year. I've received one email, and it's the same one that's in your packet, and there's no hot link inside it, so I don't think they've actually released the registration, but it's coming, so if you're interested, mark your calendar. And fall trustee school, if you're interested in that,

So our next meeting, September 18th. Anybody have any problems with that? We're still good for that? I don't think so.

Yeah, I think we're all still good. You know what shift that is, though? That's OK. We said in our next meeting in September, we set dates for the following, or do we do that?

I kind of like to do it in the third quarter, so next meeting, just in case there's any issues, it gives us another meeting to figure it out.

Okay. Well, when we set the next years, I was just going to recommend we do them, because you and I are on B now, that we do them on A and C. Sounds great.

I do have something before we enter.

Yeah, please.

I have two questions. I have a question for Doug. Doug, can you hear me? Yes, it did. Just a question for you. I know we never are short-sighted and look at like, you know, a recent retirement or someone going into the drop, but I'm just curious if there's any, anything would be affected by the fact that we had of early retirement, like an early drop, someone else left, you know, kind of with 20 years. And I guess my question is, is that forecasted that there's an assumption that there's going to be a handful of people in the plan that are going to leave much before their 28 point, whatever it would be full a hundred percent. Does that make sense? Yeah.

Yes. Yeah. We, that's why we go through the, um, that every five year exercise of an experience study, um, we have assumptions for when people will retire. And then every five years, we match that up with reality and make adjustments. We'll make recommendations. So the short answer is yes, we do have assumptions for that.

Okay. And do you think given that we're a small three people that we're leaving with less than 25 years, does that change anything? I mean, obviously it seems to be in the plan's favor because people are going to be locking in at a lower AFC would be my assumption.

Yeah, when people take earlier retirement, there's a cost component and a savings component. Here we have a higher assumption than most plans for early retirement, and that's because your penalty, so to speak, is much better.

It's more favorable for Northport firefighters to leave if they have 15 or 20 years of service.

They get very low reduction. And so... we're assuming more people take early retirement for North Port Fire than the average plan.

That makes sense. Thank you. And then, Paul, this question's for you. First of all, thank you for helping steer a challenging conversation. I do appreciate that personally. And then I guess my next question is, where do we go from here where there just continues to be this, you know, call a difference in... interpretation of the law, the ordinance or whatever, where does that leave us going forward? I know you said we don't have to take any action, but assuming this just keeps going on, where do you foresee this going?

Thank you for that question. I really appreciate you taking that up. I was debating whether to bring up that question myself. Thank you for that. So let me address two things, or several things. First, I struggle with this idea of having this come up constantly, and you're hearing this over and over.

I think that's the purpose of public comment.

And we may want to, I don't remember whether we have a policy, I think ours mirrors insidious to have time allotted for public comment. You know, many will allot three minutes or something like that. And then you have discretion to allow someone to continue. I mean, you're not, you know, often going to But you have the right to. Another idea would be to call it out of order and say, you know, we've heard this before. It's out of order. Address something new. I shy away from saying to do that and saying, you know, we should just look at the time limits or let them talk in public comment. And just remember that public comment never, ever, ever requires any board action. You could adopt a more firm approach and decide, look, we've addressed this matter. rule it out of order. I can be sort of the parliamentarian. I kind of act that way. And as your general counsel, because you don't have a separate parliamentarian, if we think that would be helpful, I can do that in the past, in the future. So that's in terms of the day-to-day or the quarterly meetings and hearings come up over the years. So now let me get to, I think, really the crux of the question, which is, well, what about this? And what can happen from here? if anything. Their claims are doomed. I mean, my initial review of it was from that. You guys know I'm looking at trying to help people. And that's why I reissued the opinion, because the original opinion that was just dead wrong. It was flat wrong. And so we correct it. That's what we do. And it is absolutely correct. There is absolutely no doubt that the excluded, that members were explicitly excluded in that category. This happens all the time in pension plans in Florida and around the country. Certain benefits can be provided to certain and others can be carved out. Usually they've got higher dates and stuff like that, which is what this is based on. You know, could the ordinance have been written better? Sure. But we've got what we've got. There's other major problems with their case. First of all, they don't have a case. legally. If those issues are addressed by the court, I'm confident that they'll be found in our favor, but I can't guarantee that. But, you know, that's why you have a pilot course as well. However, it has two other fundamental problems, and that's the problem with statute of limitations and a similar doctrine called LACHES.

It's spelled L-A-C-H-E-S. It's a legal concept like the statute of limitations that says, look, You can't bring a case after so many years. There's a limit.

A delay in bringing a case or delay past the time limit set by statute. The statute of limitations in this case was five years. Anybody who thought they were entitled to a benefit based on the enactment of that collective bargaining agreement and that ordinance had five years in which to bring their claims. The Latches Doctrine and the Sucker Doctrine has applied that even if you don't address statute of limitations, the passage of time and the delay are someone from having you, forcing you to relitigate something that, gentlemen, this literally happened almost a generation ago. You know, the idea that you lose witnesses, you lose memories, and that's why you have this issue coming up. Because, you know, I didn't write that ordinance, all right? I'm not perfect. But I think if I had written the ordinance, I might have written it in a little more clear way. Regardless, it's still clear and plain on its face. Those members were excluded. The share plans were initially created and designed only for members who were outside that excluded category and retirees who were outside that excluded category. So then I'll turn the mic back over in a minute. They can go to court. That's their only option. They would file a claim in state circuit court, call a petition, for declaratory judgment. And that's a vehicle that allows any court to look at any dispute over interpretation of a statute, ordinance, or a contract. And that's the route they would go. Now, if they file suit against the board, it's important to remember something.

The expenses that go into

defending a lawsuit, all right, ultimately, as an economic matter, are not coming out of the benefits or the health and actual soundness of the benefits of the members or the participants. So the legal expenses cannot legally affect in any way and will not the health of the plan, the benefits the existing members will expect to receive, or those participants who've already retired and are receiving benefits. This is because those expenses of that lawsuit, meaning paying court costs for transcripts and lawyer fees and that kind of thing, those expenses are normal expenses of the plan. And it is the city's obligation to make sure that given all the expenses that occur, that the plan is still actually sound and the contributions are sufficient to fund all of those benefits. Finally, the law allows recovery of attorney's fees and costs. So the prevailing party is entitled to attorney's fees and costs. They have a steep, I believe a steep hill to climb here. And if they file a lawsuit and do not win, these individuals will be subject to not just losing their case, but having a judgment against them for considerable attorney's fees and costs that were incurred by the pension board and ultimately backed I'll turn the mic over and invite any other questions or comments.

Thank you for that. If they do file suit, is that something we would receive or you would get directly from the attorney? Would any and all communication for that suit go directly between the two attorneys?

Another great question. Correct. the attorney would contact me and tell me, hey, we filed this lawsuit or we're getting the file up, will you accept service, which I would agree to do, and then handle it that way, notify the board members right away, get you competent on the whole thing, full disclosure, as we always do. It's possible that they could instead, that would be the, when you know that another lawyer is involved representing a client on a matter, The customary professional and courteous thing that we would normally do is we would do what I just said. You go to another lawyer and say, hey, we're going to file this lawsuit or we have filed it against your client. We accept service of it so that you can file a response to it. Do it through the lawyer, not through the client. Technically, they don't have to do that. And they can have a process server, such as a civil deputy or a private process server, serve the serve the chairman of the board would be an example. So it's possible you could receive that. And if you do, you'd know to find me immediately. But the normal professional courteous course of action, particularly for lawyers north of South Florida, excuse me, but it's true. North of South Florida, people behave more professionally with each other. In South Florida, I could see that happening where it's kind of more like the Wild West legally.

And Paul Scott here. If they if they did file suit, I remember our president of our union saying they would probably I don't know if that's a countersuit or or we would all be members, the 60 something people that are receiving this benefit would say, well, then it's a countersuit or whatever to say this is, you know, to hold up the ordinance of how it's how it's been implemented the last 15 years. So how would that? How would that work? I mean, The ball would be in their court, whether if they filed, then I guess the union would get involved and say, hey, these 60 members are saying, you know, this isn't the way it should be or happened or whatever. They're going to implement the law, how it's been implemented or so forth. That's correct. Okay.

That's correct. And then here's another element to that.

I didn't feel it appropriate to make the comments again today. I put them in writing previously and advised the Board of the numerous times we've had to address them, but you've got a fiduciary obligation to the members and the retirees, right? And those, if you were to grant this request from these excluded members, every single one of those other members would have a successful lawsuit because now their benefits are reduced. So... You've done the correct and the right thing here. If there's a suit, you know, I hear threats of lawsuits constantly. You know, if there's a lawsuit, fine. You know, hey look, that's what we do.

Last question I would have with that is with fiduciary insurance and what we've done with this in the past and present. If we were served a lawsuit, do any of us have any personal exposure to that or is it all covered under the plan? Do we have any concerns with that?

All covered under the plan. Zero personal concern or liability whatsoever. You guys have nothing individually, personally to be worried about. You are not legally, no ifs, ands, or buts. Totally covered by the plan. This is just the plan. It's not you individually. And if it were, you've got excellent insurance.

Okay.

But it's not. I mean, it's not. It would be a lawsuit against the pension plan. And what they could do is they could name the city as the party and the union as the party. And if they don't, then we could or whatever. It gets a little more involved. I don't want to weigh you down with details. But the bottom line is there's nothing to do here. You guys are good. You guys are safe. There's nothing that your decision is going to do. Even if they hire all the lawyers in the world and win, still the legal expenses do not affect the actuarial soundness of the plan or the benefits of the members and participants in any way. Those must be made up in actuarial contributions ultimately from the city.

All right. Thank you for that.

Thank you.

All right. We good? Anybody else? I appreciate it. It's been a fun meeting. So we'll see everybody on September 18th. We'll have a comment and finish up. So meeting's adjourned. Thanks, everybody. Thanks, Paul. Thanks, Doug. See you guys.