OPENPUBLICA · PUBLIC MEETING RECORD
Record of Proceedings

Sacramento City Administration, Investment & Fiscal Management Board Special Meeting - May 25, 2023

Administration, Investment, & Fiscal Management Board — Thursday, May 25, 2023
BodySacramento, California
SessionAdministration, Investment, & Fiscal Management Board
DateThursday, May 25, 2023
StatusFILED
Video Record
Meeting Thumbnail
⇩ GET FROM SOURCE

STREAMING COPY IN PREPARATION — RECORDING AVAILABLE FROM THE ORIGINAL SOURCE

Transcript — Verbatim
0:23

Vice Chair, staff is ready when you are.

0:27

Thank you.

0:28

Uh good afternoon and welcome to the Thursday, May 25th, 2023 Administration Investment and Fiscal Management Board Meeting.

0:35

The meeting is now called to order.

0:36

Will the clerk please call the roll to establish a quorum?

0:42

Thank you.

0:43

Please unmute your microphones for roll call.

0:49

Member Bach.

0:50

Present.

0:52

Member Colville.

0:54

Here.

0:56

Member Milstein.

0:58

Here.

1:01

Vice Chair Bader.

1:03

Here.

1:05

Chair Leone is absent.

1:08

Thank you.

1:09

We have a quorum.

1:11

Okay.

1:12

Um I'd like to remind members of the public in the chambers chambers, which we have none so far.

1:19

So if you'd like to speak on an item in the agenda, please turn in a speaker slip when the item begins.

1:24

For members of the public who wish to join virtually, please refer to the agenda zoom link.

1:30

Online, if you're online, please raise your hand at the bottom of your screen.

1:33

In the mobile app, you can raise your hand by tapping raise hand option or the more tab in the more tab.

1:39

And if you're calling in via telephone, you can raise your hand, dial star nine, then unmute or mute, dial star six.

1:46

Speakers will be called on by the last four digits of their phone number.

1:50

We will now proceed to today's agenda.

1:52

Our first order of business today is the approval of the consent calendar.

1:59

I'll make a motion to approve the consent color as is.

2:04

Oh, sorry.

2:05

Uh any members of the public to speak on the consent calendar.

2:10

Thank you, Vice Chair.

2:11

I have no speaker slips in chambers and no speakers with their hands raised.

2:16

Okay.

2:16

I have a motion by member Cobil and a second by member Bach.

2:20

The clerk please call the roll for the vote.

2:30

Member Bach?

2:31

Aye.

2:32

Member Colville?

2:34

Yes.

2:35

Member Milstein.

2:36

I can't vote on item one, but I vote on yes on everything else.

2:41

Thank you.

2:43

Vice Chair Bader?

2:45

Yes.

2:46

And Chair Leon is absent.

2:48

Thank you.

2:49

The motion passes.

2:54

Okay, the next item on the agenda is the selection of the chair and vice chair for calendar year 2023.

3:07

Uh Jason, I know that uh seats D and E are up for um renewal, so it's gonna have to be probably someone in currently in staff.

3:18

So I would recommend you're the vice chair now, you being the chair going forward, and I will be the vice chair.

3:26

I think it's actually the the records incorrect.

3:28

I'm actually the chair right now, and you are you are the vice chair.

3:32

Yeah, yeah.

3:33

Is that an issue going forward for next year?

3:34

Or is that we can do back to back years?

3:37

This has been how long have you been?

3:39

Just one year.

3:39

Oh, yeah.

3:40

Fine.

Discussion Breakdown — Share of Meeting
Budget and Finance█████████████████████████████████████████████49%
Pension Funding██████████████████████24%
Procedural████████████████████22%
Personnel Matters████4%
Public Health█1%
Summary of Proceedings

Sacramento City Administration, Investment & Fiscal Management Board Special Meeting - May 25, 2023

The Administration, Investment & Fiscal Management Board held a special meeting on May 25, 2023, at 1:33 PM, chaired by Vice Chair Jason Bader (Chair Leon absent). The Board approved a consent calendar of 11 items, selected a Chair and Vice Chair for 2023, and received reports on the Sacramento City Employees’ Retirement System (SCERS) financials, audits, investment performance, and asset allocation. All votes were unanimous (4-0), with Member Leon absent.

Consent Calendar

  • Item 1: Approved meeting minutes of November 17, 2022.
  • Item 2: Approved continuation of Bloomberg Agreement for FY 2023–2024.
  • Items 3–8: Accepted SCERS Monthly Investment Reports for October 2022 through March 2023.
  • Item 9: Adopted a Resolution approving the Investment Policy for SCERS.
  • Item 10: Received and filed the SCERS Pensioners’ Cost of Living Increase report.
  • Item 11: Adopted a Resolution setting the interest rate credited to member accounts for FY 2023/2024 at 8.25%.

Discussion Items

  • Item 12 – Selection of Chair and Vice Chair for 2023: The Board elected Jason Bader as Chair and John Colville as Vice Chair for the remainder of calendar year 2023.
  • Items 13–15 – SCERS Annual Financial Report and Audit Results (FY 2022): Finance Manager Osvaldo Lopez presented that SCERS received an unmodified (clean) audit opinion. Key figures (from the 98-page report):
    • Net position decreased by $57 million from the prior year, primarily due to a decline in investment assets (from $313 million to $256 million).
    • Total contributions decreased from $3.8M to $3.5M; benefit payments decreased from $29M to $28.1M.
    • Net investment income swung from a $77M gain in FY2021 to a $28.8M loss in FY2022, driven by a $37.6M depreciation in fair value.
    • Net pension liability increased by $45.2 million to $16.4M (from an asset of $20.8M in FY2021).
    • Funding status declined from 110% to 94%.
    • Plan membership decreased from 876 to 828 members; only 2 active members remain.
    • No audit difficulties or disagreements with management; no instances of non-compliance.
  • Items 16–17 – Segal Marco Advisors Quarterly Investment Performance Report (Dec 2022) and SCERS Quarterly Investment Report (Dec 2022): The Board waived presentations and approved both items as a package.
  • Item 18 – SCERS Quarterly Investment Report (March 2023): Presented by Chief Investment Officer Stacy Hussey. Highlights:
    • Plan balance remained stable despite normal operating withdrawals.
    • Equities recovered since early 2023; next equity raise of $4 million by June 30.
    • Options program (restarted Oct 2022) gained ~$150,000 (20 bps) through March, run at one-third of historical capacity.
    • Fixed income portfolio outperformed its benchmark by ~200 basis points; portfolio yield about 4.05%.
  • Item 19 – SCERS FY2023/24 Asset Allocation Policy: Recommended shifting 2.5% from domestic equities to fixed income, resulting in a 65% equities / 35% fixed income mix. Stacy Hussey noted that capital preservation is key given a mature, closed plan. Segal Marco’s analysis projects a 20-year expected return of 6.5%–7.3%, well above the actuarial assumption of 6%. The Board adopted the resolution. Discussion touched on possibly reducing the actuarial assumption in the future if long-term yields normalize.
  • Item 20 – Segal Marco Advisors Quarterly Investment Performance Report (March 2023): Presented by Jeffrey Nipp. Market context: U.S. stocks (S&P 500) up 7.5% in Q1 2023; bonds returned ~3% for the quarter. The SCERS portfolio returned 4.1% in the quarter and 6.2% fiscal year-to-date, outperforming its custom benchmark. The consultant also discussed risks from the U.S. debt ceiling. The Board commended Stacy Hussey and staff for strong performance.

Key Outcomes

  • All 20 agenda items were approved or received/filed without objection (4-0 votes, Member Leon absent).
  • Chair and Vice Chair elected for 2023: Jason Bader (Chair), John Colville (Vice Chair).
  • Asset allocation change approved: reduce domestic equities by 2.5% and increase fixed income, targeting 65/35 equity/fixed split.
  • Interest rate on member accounts set at 8.25% for FY2023/24.
  • The Board requested staff to investigate tracking down five former plan participants with outstanding benefits to finalize plan liabilities; staff will coordinate with HR and possibly legal/police resources.
  • Next regular meeting scheduled for September 21, 2023, at 1:30 PM.
  • Meeting adjourned at 2:17 PM.

Meeting Transcript

Vice Chair, staff is ready when you are. Thank you. Uh good afternoon and welcome to the Thursday, May 25th, 2023 Administration Investment and Fiscal Management Board Meeting. The meeting is now called to order. Will the clerk please call the roll to establish a quorum? Thank you. Please unmute your microphones for roll call. Member Bach. Present. Member Colville. Here. Member Milstein. Here. Vice Chair Bader. Here. Chair Leone is absent. Thank you. We have a quorum. Okay. Um I'd like to remind members of the public in the chambers chambers, which we have none so far. So if you'd like to speak on an item in the agenda, please turn in a speaker slip when the item begins. For members of the public who wish to join virtually, please refer to the agenda zoom link. Online, if you're online, please raise your hand at the bottom of your screen. In the mobile app, you can raise your hand by tapping raise hand option or the more tab in the more tab. And if you're calling in via telephone, you can raise your hand, dial star nine, then unmute or mute, dial star six. Speakers will be called on by the last four digits of their phone number. We will now proceed to today's agenda. Our first order of business today is the approval of the consent calendar. I'll make a motion to approve the consent color as is. Oh, sorry. Uh any members of the public to speak on the consent calendar. Thank you, Vice Chair. I have no speaker slips in chambers and no speakers with their hands raised. Okay. I have a motion by member Cobil and a second by member Bach. The clerk please call the roll for the vote. Member Bach? Aye. Member Colville? Yes. Member Milstein. I can't vote on item one, but I vote on yes on everything else. Thank you. Vice Chair Bader? Yes. And Chair Leon is absent. Thank you. The motion passes. Okay, the next item on the agenda is the selection of the chair and vice chair for calendar year 2023. Uh Jason, I know that uh seats D and E are up for um renewal, so it's gonna have to be probably someone in currently in staff.

SUMMARIZED BY OPENPUBLICA AI
TRANSCRIPT VIA PUBLIC VIDEO
openpublica.com