MINUTES OF THE REGULAR MEETING - Aurora GERP



MINUTES OF THE REGULAR MEETINGCity of Aurora General Employees' Retirement BoardHeld Thursday, March 19, 2020 and Friday, March 20, 2020 12100 East Iliff Avenue, Suite 108Aurora, CO 800148:00 AM - Meeting Called to Order on March 19th1:00 PM – Meeting Called to Order on March 20th Roll CallChairpersonDavid McConicoPresentLegislative MembersCliff HaightPresentAndrew JamisonPresentMichelle RedingExcusedSue Sandstrom PresentTom Tobiassen PresentTrevor VaughnPresentNonvoting MembersJanice Napper (for the City Manager)PresentTerri Velasquez (Finance)PresentRenee Mosley (for Human Resources) PresentHanosky Hernandez (City Attorney)PresentStaffSteven ShanksPresentAaron Kahn PresentDue to concerns about COVID 19, the Board Meetings held on Thursday, March 19, 2020 and a special follow up meeting on Friday, March 20, 2020 were conducted over the phone.2)Approval of the MinutesSue Sandstrom made, and Cliff Haight seconded, a motion to approve the minutes of the Regular Meeting held on February 20, 2020. The motion passed unanimously with Sue Sandstrom, Cliff Haight, Andrew Jamison, Tom Tobiassen, and Trevor Vaughn for, with David McConico abstaining.Trevor Vaughn made, and Cliff Haight seconded, a motion to approve the minutes of the Investment Managers Meeting held on February 27, 2020. The motion passed unanimously with Trevor Vaughn, Cliff Haight, David McConico, Andrew Jamison, Sue Sandstrom, Tom Tobiassen for, with Sue Sandstrom abstaining.3)Treasurer’s ReportSteve Shanks reviewed financial statements and investment performance for February. On March 16, 2020 the fund was valued at approximately $446.8 million. Steve Shanks reviewed the fund’s allocation. The Plan’s Investment Policy Statement dictates that the Board should rebalance. Board members requested that Steve reach out to Alex Browning to provide Callan’s input and recommendations on implementation. Board members agreed to discuss rebalancing on Friday, March 20, 2020.On Friday, March 20, 2020, Steve Shanks provided the Board with a proposal to sell a total of $11 million from Fixed Income and Real Estate, buy $8 million of US and International Equity, and transfer the remaining $3 million to cash. Board members discussed the timing of the rebalancing and their concerns about volatility in the markets. Alex Browning noted that these transfers don’t rebalance to the target, but to the minimums or maximums to comply with the Investment Policy Statement. He suggested that in volatile markets, rebalancing leads to better overall returns over time. Steve Shanks stated that the distribution from Heitman America Real Estate Trust will take time to complete.Sue Sandstrom made, and Cliff Haight seconded, a motion to rebalance the funds as proposed. The motion passed unanimously with Cliff Haight, Andrew Jamison, David McConico, Sue Sandstrom, Tom Tobiassen, and Trevor Vaughn for. Steve Shanks noted that David McConico, Tom Tobiassen, and Steve had met with BKD to discuss Cyber Security and IT policy. Tom Tobiassen provided Steve with a list of questions developed by the Institution of Internal Auditors Research Foundation. Steve is working on answering and addressing the questions. Both Tom Tobiassen and Renee Mosley offered to help.4)Review of Lump Sum Distributions for FebruaryTwenty-four participants took lump sum distributions totaling $291,640.645) Approval of Retirement BenefitsAaron Kahn presented the retirement calculations. Sue Sandstrom made, and Cliff Haight seconded a motion to approve retirement benefits for Daniel Adams, Deidre Ruth McCammon, and Joe Warren. The motion passed unanimously with Cliff Haight, David McConico, Andrew Jamison, Sue Sandstrom, Tom Tobiassen, and Trevor Vaughn for. Public CommentsThere were no public comments.6)Old BusinessA)Review Watchlist – Segall, Bryant & HamillSegall, Bryant & Hamill acquired Denver Investment in 2018. At that time the Board deemed that extra scrutiny was appropriate and put Segall, Bryant & Hamill on its Watch List. Both Callan and the Board have assessed that the transition has gone smoothly, with no disruptions to management of the fund. Cliff Haight made, and Trevor Vaughn seconded, a motion to take Segall, Bryant & Hamill off the Board’s Watch List. The motion passed unanimously with Cliff Haight, David McConico, Andrew Jamison, Sue Sandstrom, Tom Tobiassen, and Trevor Vaughn for. 7)New BusinessA)Callan’s Contract ExtensionAt the Board meeting on Thursday, Steve Shanks noted that due to a mistaken assumption, Callan’s contract expired on December 31, 2019. Both Staff and Callan had assumed that the contract was through the end of 2020. At the call-in meeting on Friday, Steve Shanks and Alex Browning discussed a proposal to extend the Callan contract by 5 years and to continue to increment the fee structure by 3%. Board members discussed the extension after Alex left the call. The Board has been happy with Callan’s service, but members suggested that periodically interviewing other Investment Consultant candidates is part of their fiduciary duty. Hanosky Hernandez noted that the contact indicates that either party can terminate the relationship with a 30-day notice. Cliff Haight made, and Andrew Jamison seconded, a motion to extend Callan’s contract by 5 years to December 31, 2014. The motion passed unanimously with Cliff Haight, David McConico, Andrew Jamison, Sue Sandstrom, Tom Tobiassen, and Trevor Vaughn for.8)Report on TravelSteve Shanks noted that the NCPERS conference was cancelled. GERP will be paid a refund for Trevor Vaughn. Andrew Jameson indicated that he will be participating in a virtual conference presented by GFOA.9)Staff ReportStaff has decided that due to COVID 19 they will cancel the May 12, 2020 Retirement Ready Workshop. Educational opportunities later in the year remain in place.Also due to COVID 19, GERP staff are now conducting most business from home. Aaron Kahn conducts retirement consultation over the phone and internet. The office is closed to the public, but one staff member a day is in the office to answer phone calls, and to conduct business difficult to do off site.Terri Velasquez has proposed that Staff members could be allowed to participate in the City’s 457 Deferred Compensation Plan administered by Nationwide. Currently, staff members and retired staff members have their 457 assets with Colorado Retirement Association, formerly known as CCOERA. Aaron Kahn noted that he’s excited by both lower fees associated with Nationwide, but also it would help him understand the resources available to plan participants and retirees as he’d have access to those resources as a 457 participant. The details of the transition will be worked out with Michelle Escobedo.Cliff Haight made, and Sue Sandstrom, a motion to adjourn. The motion passed unanimously.Meeting Adjourned 9:47 AM March 19th; 1:43 PM March 20th Minutes Submitted by Aaron KahnMinutes Approved David L. McConico 4/16/2020 0 _Chairperson of the BoardDate ................
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