Sacramento Administration, Investment & Fiscal Management Board Meeting - February 15, 2024
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Sacramento Administration, Investment & Fiscal Management Board Meeting - February 15, 2024
The Administration, Investment & Fiscal Management Board (AIFM) met on February 15, 2024, at 1:05 PM (opening at 1:30 PM per minutes) at City Hall, 915 I Street, Sacramento. The board reviewed quarterly investment performance reports for the Sacramento City Employees' Retirement System (SCERS), the annual financial audit, and elected officers for 2024. All items on the consent calendar were approved unanimously. No public comments were received.
Consent Calendar
- Minutes Approval: Approved the November 16, 2023, AIFM Board meeting minutes.
- SCERS Monthly Investment Reports: Accepted reports for October, November, and December 2023 (File IDs 2024-00453, 2024-00454, 2024-00455).
- Independent Auditor’s Reports: Received and filed the Internal Control and Compliance Report and the Results of Audit for FY 2023 (File IDs 2024-00463, 2024-00464).
- Bloomberg Agreement Continuation: Adopted a Resolution to continue the Bloomberg agreement for FY 2024-2025 (File ID 2024-00529).
Discussion Items
- Segal Marco Advisors Quarterly Investment Performance Report (Item 8): Jeff Nipp (Segal Marco) presented the report for the quarter ending December 31, 2023. Highlights included strong stock and bond returns in Q4 2023, with the S&P 500 up 12% for the quarter and 26% for the year, driven by large-cap tech (‘Magnificent Seven’). The total SCERS fund value was approximately $254 million as of year-end, with a calendar year return of 14.6% (ahead of the custom benchmark). The board discussed the options program and international equity allocation. A motion to accept the report passed 4-0 (Member Coletto absent).
- SCERS Quarterly Investment Report (Item 9): Chief Investment Officer Stacy Hussey reviewed the SCERS portfolio for December 2023, noting that the options program had a negative return for the fiscal year due to outsized equity gains. She updated on post-December market conditions: the S&P 500 was up about 5% year-to-date as of mid-February, with expectations for the Fed’s first rate cut shifting from March to June 2024 (projecting 3-4 cuts by year-end). The board discussed reducing the international equity allocation from 5% to 2.5% to streamline the portfolio, with funds currently earning 5.43% in a liquidity bucket. A motion to accept the report passed 4-0.
- SCERS Annual Financial Report FY 2023 (Item 10): Finance Manager Osvaldo Lopez presented the audited financial statements, which received an unmodified (clean) opinion. Key changes: net position restricted for pensions decreased by $4.2 million from FY 2022, primarily due to benefit payments timing. Total contributions dropped from $3.5 million to $3,000 because the city was not required to contribute in FY 2023 (funding status exceeded 100% per the actuarial valuation). As of June 30, 2023, the funding status was 95.5% (up from 94%), with 780 plan members (only one active member). The board discussed whether the budgeted $1.3 million contribution for FY 2025 was necessary given current returns; staff will consult with the actuary. The report was received and filed.
- Selection of Chair and Vice Chair for 2024 (Item 11): Cecilia Ventris (Office of the City Clerk) presented the item. Member O’Toole nominated the incumbents. Jason Bader was re-elected as Chair (eligible) and John Colville as Vice Chair (eligible, as he has not served two consecutive years in that role). Motion passed 4-0. Terms begin at the next regular meeting.
Key Outcomes
- Consent Calendar: Approved unanimously (4-0).
- Investment Reports (Items 8 & 9): Both motions to accept carried 4-0.
- Annual Financial Report (Item 10): Received and filed; staff to investigate whether the budgeted FY 2025 contribution can be adjusted.
- Chair & Vice Chair (Item 11): Jason Bader (Chair) and John Colville (Vice Chair) elected for calendar year 2024.
- Member Comments: Board discussed reviewing the Treasurer’s management fee (currently 34 basis points, unchanged for ~25 years). Staff will research and potentially agendize for the May 16, 2024 meeting.
The meeting adjourned at 1:47 PM.
Meeting Transcript
30 seconds has begun. Chair Staff's ready when you are. Uh good afternoon and welcome to the February 15th, 2024 Administration Investment and Fiscal Management Board meeting. This meeting is now called to order. Clerk, will you please call the rural to establish a quorum? Thank you, Chair. Members, if you can please unmute. Member Yusuf. Present. Member Coletto is absent. Vice Chair Colville. Member O'Toole. Present. And Chair Bader. Here. Thank you. We have quorum. All right. I'd like to remind members of the public if you would like to speak on an agenda item, please turn in a speaker slip when the item begins. You'll have two minutes to speak once you are called on. And the first uh after the first speaker, we will no longer expect except speaker slips. So we'll now proceed with today's agenda. Please rise for the opening acknowledgments in honor of Sacramento's indigenous people and tribal lands. To the original people of this land, the Neason people, the Southern Maidu, Valleys and Plains, Miwok, Putwin, Winton peoples, and people of the Wilton Rancheria, Sacramento's only federally recognized tribe. May we acknowledge and honor the native people who came before us and still walk beside us today on these ancestral lands by choosing to gather today in the active practice of acknowledgement and appreciation for Sacramento's indigenous peoples history, contributions, and lives. Thank you. Please remain standing for the Pledge of Allegiance. I pledge allegiance to the flag of the United States of America. And to the Republic for which it stands one nation under God. Indivisible of liberty and justice. Okay, our first business of today is uh approval of the consent calendar. Clerk, are there any members of the public that wish to speak on the consent calendar? Thank you, Chair. I have no speakers for this item. Okay, are there any members that wish to speak on the consent calendar? No. Okay. Is there a motion and a second for the consent calendar? I'll move approval. And a second. I can second. Second. Okay. So we have a first by member O'Toole and a second by Member Cobil. Please call the vote. Thank you. Members, if you can please unmute. Member Yusuf. Aye. Member Kaleno.
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