Firefighters' Pension Plan Board of Trustees Regular Meeting

>> Your parents place in the team. 3rd term. Was one story. 4, flooded. >> That why I wondered what Fung says. Yeah, it's gotten to point. Said they wouldn't let us out there. They blocked it all off. Could you >> And your 3 years was Yeah, some I really don't think it's going to happen again for a long time roll. >> That's what they thought of the first Let's take a lie about So go back to who are He's you know, To Percent For See where that this year. >> less your always. The high school did you do? See I didn't go in. I think as you've been here the meant, something for us. So what does the door and I was so So they And for those listening at make sure you come to city You read Good morning. Everyone will call the meeting to order for the firefighters pension Plan Board of trustees regular meeting for January. 21st. >> Call the meeting to order. First on the agenda is the Pledge of Allegiance. Would you like to leave this? And that >> one >> thank you, Heather. Pledges civility. I knew that this month we may disagree, but respectful to one another. We will direct all comments to issues. We will not engage personal attacks. Chair Hartley, President Vice Chair Joseph President, Secretary Treasurer Greg's. >> She okay, okay. Trustee, Snow. President trustee present. Public input that we can skip that. Everybody in the audience I see is going to be on the agenda. So. >> Approval of the minutes for December second meeting or 2025 our last meeting from last year, I looked over the minute since I wasn't here. And that they were. Why he's here to read with a 47 minutes of the meeting. think that was a new record. He seen the trend when you're not. haha would be She was still there. Any comments on the minutes? Cheryl Entertain a motion for the adoption of the minutes that from December 2nd. I make a motion to adopt the minutes. I'll second that motion table move in second for the adoption of minutes. There's no further discussion. partly yes, vice chair. Just a yes, trustee, snow. Yes, trusting Yes. >> That motion passes unanimously. Thank you. We'll move on to the investment performance of DRC. We'll turn it over to. Randy and Kurt. You can introduce yourselves for everybody listening in at home. It's nice to have you over for him. It's going to share a that we? right? You know. >> 2 hours and 55 minutes to be exact this morning. But that front his house. 06:00AM. I bet you won't get back as quick of that. We want haha so matters of interaction for those at home. Kurt I am director client service and chief operating officer of D R Z. >> And though the term for 21 years. you're yourself you read for all and I have and with the firm 18 years in the capacity of of helping to manage small-cap assets, the trusted with us. >> Some of the direct your attention does started the firm on Page 5 of the book before you and this is the 24th year. The firefighters have been. Dr Zee Small-cap value clients. We only have one other small-cap this longer. So we appreciate the partnership very much so. In reading are going to talk about. The portfolio performance today. And I don't know Chairman Hartley how much time you would like us to spend normally 15, 20 minutes of that last question. Well, I think I may be on 20 side given the experience. You all have those in the last 12, 18 months, we want to make sure we cover everything in that regard. From was. Just short of 6 billion in assets under management small-cap value. We have 25 to those relationships, including you all are public funds. A lot here in the state of Florida and around the country as well. We lost no small cap value clients and the last year in we had one come on board. We've added value relationships with Randy's team is involved with as well. So good growth at Brz. Also at the Micro Cap client public trip publicly traded utility up in Idaho that joined in the 4th quarter. So everything going well within Brz and the from. Some of direct your attention, please the team pay. Just as a reminder on Page 8, it's a small cap value investment team. You know, Randi mentioned that he's been with the rz for 18 years. He has 28 years of investment management experience. You know, are also members of the board of directors. But what I want to share with you on this page is the fact that every team, member of the Small-cap value team Dr Zee Equity owner. And we think that's important that everybody's got skin in the game with regard to what we do in your behalf and the economics of our company and they participate in that and the average tenure of that team all working together is 18 years. So a lot of consistency with the team. Moving on to. Page 9, which is your performance report. That's been challenging period. We're going to add some color to that here today. If you look back at the 1st quarter of 2025, it was a negative quarter. I think the index is about down 7.7%. Your portfolio is down 5.3%. So we outperform materially in the 1st quarter. Fundamentals matter. Dividend yield mattered. Quality mattered in that 1st quarter. And then we had April, which was Liberation Day, which ran, deny contestant, feel very liberating from our perspective and everything just kind of went sideways and Randy can speak to that with regard to conversations we're having with management teams of the companies that we own. But very challenging period from early April 8. That was the low. To the end of the year. I'll give you some statistics. The index for April 8. I'm talking about the Russell 2000 value that you measure us against. To the end of the year was up. 39.7%. So big recovery right after that massive downturn in the first 8 days of April. Within that index. Lowest return on equity return on equity is a major quality, right? How well companies doing the lowest quintile. If you divide it up in the 20%, each lowest quintile. Was up. 98%. That's more than double. What the index that? earners we say that would be in companies. If you think about P price to earnings ratio, negative, they're losing money. Non earners over that period were up 86%. And so take it one step further. Companies with no sales growth within the index or 155%. So very, very low quality. it was not in favor. Quality was not in favor. You guys know us. We focus on quality. We focus on dividend. We focus on balance sheet. Load at. From 3 of the year. That was not the place to be. So we were chasing that. You would. You need to question us. We were not chasing that. We stay true to our discipline. We saw turn in the month of December. We outperformed in the month of December material. Lee. Thus far through Friday of last week, Friday's close rep about 100 basis points year to date. Thus far through 2026. So we like to turn were seen. We like what we're seeing in the portfolio. If you look at our performance has really started about 18 months ago. It started in. At the end of the 2nd quarter in 2024. And kind of lasting into 2025. It's really damage starter. Long-term record with you. You know, long-term record. We're still ahead. But it has hurt the near term performance relative for what's has hurt great deal. whenever and the speaker that here in just a minute. From a philosophy standpoint, I mentioned our repeated again, which is on Page 11. And the small-cap value process that we have in place. We're buying companies that pay at least a one percent dividend yield. We think that in your this is an important component of total return over time. It's real cash to us. Shareholders in your portfolio. You only buy companies that pay dividends. Exactly. Who has to pay? At least a one percent dividend yield. And then we're looking for companies that are trading at a discount from a relative. But why perspective so is it cheap? Versus the broader market? The broader small-cap market on a historical basis. If that's the case that has the yield is training discount. What's going on with that company level that's going identify catalyst. The push that stop price forward. And that's really that the art form of what Randy and his team do. That's that's the heavy lifting. They do. So we're looking for 2 times the upside relative to the downside of the real price target to to the companies that we buy. And I'm going to turn your attention to Page 13. The merits of the evidence. So why didn't yield point to the page down there at the bottom? Dates back to start dates back to 41 years on the importance of giving. And, you know, you see any orange players in the Russell 2000 value, 10.2% per year over 41 years versus non didn't pairs. 9.1% may not sound like a big spread that spreads narrowed in the last 18 months. But one percent per year over 41 year period. You guys know the power compounding. It's it's very, very real. And in 2025 the county year dividend payers within the Russell 2000 value game, 3.8%. The index is up about 12 non that impairs gain. 24.7%. Double in the next. And we only focus, as I mentioned on pair's. That's really what was the head went for us in the following page illustrates that. So what we showed you here for the county, you're in the December 31st of 2025. You see by sector. The greater than one percent dividend payers in the index, how they perform. Relative to the non payers. And as you can see, almost every one of these with the exception of consumer Staples is negative. think this is our investable Were we? The full stocks were picking from with that one percent. >> Given positive cash flow characteristic. Every sector. Are one? Correct? >> that notes in here. Share with you. I talked about companies with positive earnings and negative earnings. So for every one of these sectors, except for real estate until these the negative earners out before. The poster child is communication services. Communication services, game. 95% 2025. Companies with positive earnings making money. Lost 13.1%. Another good example is health care honors up. 46.4% companies with positive earnings. Health care companies in the Russell 2000 value lost 2.7%. Technology. Same thing, Niners up. 59% in 2025. Versus those companies with positive earnings of 9.6%. They had when the a turn to Randy, that give you a little bit of color here. think skirt and thank you to the board. Obviously. The team. >> And myself included all disappointed with with what the last 12 months looks like. And this is Kurt mentioned. It's the last 9 Well, and maybe it's the last December was for good. That's been tough. And it was personified by the tariff situation. And you really put it. The mainstreet com economy into a bit of a tailspin. Whenever the tariffs set. We speak to companies, obviously with. An average of 18 years, a 10 year doing this following the same universe of stocks we have gotten, you know, a lot of copies really well years and we speak regularly with them. And those conversations. have over the years, you know, going through different periods and different times. You we've leaned on them. They they've also knots about how to manage the current virus. And I think with the tariff situation, it was a bit of hands in the air. Where does the mango? Where supply go? How much inventory should I be keeping if if I'm not certain weather? The price of the inventory and buying is going to be going up as much as I fear it's going to be going up. And then what happens to the demand? If I try to raise prices by that much. And so. Companies around that a full time period just totally got conservative with with everything with their outlooks, with their projections. And we took the opportunity to get a little more cyclical because we saw these company outlooks bottoming out because there was no more expectation of growth for the coming year and and there was a very conservative look at the world. That gave us some confidence. So more cyclical and use our beta, which had been 0.8, 5, which was historically low and that's served us well in the 1st quarter because that was a defensive positioning to the market. Delta neutral to slightly offensive through that April time period. And so there were some companies that we we've captured cyclically that saw some improvement through the year. And I think we could have actually done a lot worse in our research where we monitored the moves we've made and the changes we make say that we actually improve the performance of the portfolio. And beta at that point in time. But there was just no way to keep up. With what the for all the all the reasons her mention now, I will also add. We're not perfect and all of this, there's some investments that didn't work out through this time period in and there are always a few. They don't work out. It's just unfortunately the pool stocks, those one percent payers. We're looking at. Have at last. And so picking within that universe of stocks has been difficult. Now, we were rewarded in December. We've been rewarded year to date. And if you asked every individual on the team's been doing this for quite a while, we all think this is one of the best set ups we have going forward for relative performance because we've got a lot of companies trading at multi-year lows on valuation standpoint. And if you look at the quality of the portfolio and the characteristics. Cash will return on equity, the ability to continue to pay dividends and where the portfolio is. You don't currently. We feel really good. Our valuation screens. Tell us that we've got more opportunities to win today than we've had since great financial crisis dot com period. And this does feel a lot like the dot com bubble. Got to experience for the early part of my career. And if you look at the bottom of Page 16, this is a confirmation of we do. Our often times when we talk about what we do, we talk about consistency. We think consistency is a real standout factor for us between the teams. Longevity, our investment discipline, our track record all speaks to consistency. There are consistency. It is to a fault. Occasionally. And this last 9 months, this is especially so. If we would be the aid. Our self discipline and held on to a lot of the stocks that we owned a couple years ago that we're doing well that continue to do well whose valuations moved multiples beyond what they've historically traded at. We were down a bit better. But we sell those expensive stocks and we move on to new opportunities. And that strict adherence to our disciplines mentioned earlier, there's just been tough and this it's not unlike other periods we've been through, but it is. No less frustrating to us. And and so things like momentum on this page that were very underweight versus the index. That's our self discipline are overweight to you, which looks. Very summer where we always have been. Is there and then the other one, that's that's an outlier here, which should make you raise your eyebrow is the fact that we're so much more profitable. As a portfolio to the index than what we've been historically. So that quality measure that we've always had is even higher today because the benchmark he's got so much, John, the top performing. And then the volatility factor, which longer term volatility is one of the worst places you can be exposed to. We're so underweight volatility today that it almost doesn't make sense whenever our beta predicted banned in the portfolio is one or greater. So you've as much cyclicality, if not a little more. And the index yet. Your volatility. Is standard deviation below what you've been historically. To summarize this one page. We're following our discipline. The quality in the portfolios as good as it's ever been. And that's a factor that you want to be exposed to longer term. We're going to continue to stick to our discipline, do what we've done and follow. The fundamentals were as invested in this process and use a client as we've ever been. And we're not changing any of that. So I apologize. Personally for the experience of the last. Several months. And promise you that we are working every day. To turn this around and have food that. We'll see a turn like we've historically whatever things are for us. And we saw that in that December. So little bit of that year at the start of the year. And if we can get past the noise of tariffs. And the noise of money flowing into. and broadening out a little bit more. The economy. You're going to see meaningful relative returns in this portfolio. Happy to answer any questions. Talk about any specific positioning. Any specific stocks in the portfolio were overweight. were under way. That's on 2, 3, Also provide some of our top 10 holdings there. One on the top. You may be familiar given where all the calls to his Brunswick. Mercury Marine. We have anything. Voters here. If you've noticed. Some of the go by with 6. 500 or southwards on the back. Multi-million dollar. Those continue to be very popular. And that's been a big profit center for Brunswick over the last 5 or 6 years. And they have dominated mark and sharing young all if you look back. 10, 15 years ago, you would have seen young everywhere. And now you Ashley looking, there's a lot more engines out there. This is a great story. It's done well for us. This year's been a top holding. We continue to like it. We are trending it on the margin just because it has outperformed its at the upper end of its valuation range. They also make. See Ray, they also make Boston Whaler, but it's the engines Real profit driver for this company and especially whenever you go from selling, you know, 150 Mercury's to sell its 600 horse power Mercury's. That's a difference of about 90 grand. Peas. And then once you get rid of the, you know that the 28 that used to down in the hole and replace it with multiple outwards. The whole construction of the boat. The whole performance of the vote changes. Just it used a huge second driver. That it's been a thing. Let me ask you a couple questions. Obviously, I was looking forward to this meeting because I got at home and I realize it's going to be a tough meeting. And I know you're going to have some tough meetings. >> The next several months as you go, see your other clients I believe Greystone comes in next month. The goal for our. Quarterly report. Have you heard from them yet? Scott Jones? >> Because I'm sure was there in the 4th quarter. If I remember correctly to have conversation with, this OK, I'm sure he's going to. You know, obviously when we start seeing the 3, 5, year number below the index. It starts 7 flares off. You make me feel old because I realize that on the board 24 years now because that was the first hire that the board that was on. But I've seen the peaks and valleys. So I understand you operate, but I wanted to make sure there's no chasing anything. You are sticking to your discipline. You haven't gone outside the company's. You're lookin still only dividend payers and that's it. That's correct. >> We have not done anything differently. We are focused on fundamentals, focused on valuation and only investing in those companies that pay one percent you know, no different than whenever hire us. >> Out of the 25 firms. Have any put you on watch. >> The one aware 4 new group, California. >> We usually, you know. I'm obviously concerned. I wanted to hear from you guys today, which is for me. turn it over to my colleagues here in a second. But I just wanted to make sure that we're still the highest quality. Because I have seen you guys turn around before. From the bottom. Right back up to the top. So I want to hear what say. And that's good. I think you time. I think they point out change. think that's important. I mean, I look I look from from the beginning, inception. You know, you've made is over 9%. Expected rate return. But obviously that's yesterday's news. We want to see performance improve going forward. >> I look yesterday's news, I look at your December 31st. 2024 report. And 3 return was 4 point 6, 6%, versus 1.9 4 for the index. The seven-year return was 8% versus 6.1. The 5 years 9.40, versus. 7.29. This. And we outperform in the 1st quarter that that feels like forever ago. Given what happened, you know, with with Randy's comments with the tariffs. And just to comment one more thing on Page. One sense. see. The top 25 contributors and in calendar year 2025. On the right hand side with How many paid that goes back to what we're talking about before and then you see our top 25 holdings as well. And there are some exhibits in here because people comes up in conversation. small-cap value? He's been in the penalty box. So you think about style boxes, large cap growth, mencap growth and large cap and get value small small-cap values and the worst performer. 3 years in a row. What's going to what's going to change that? Well, if you look at Page, 28. What changes this historically? And is this they to goes back the 1972. It's been market peaks of concentration. In large cap. So what you saw and in 1973, the drivers ATnT easement code that Exxon, GM and IBM, high concentration and a large cap lead to a change in leadership to see that blue line going straight up from that point on that small cap, the large. And the next peak in concentration. You all know very well was dot com bubble in March of 2000. Again, change in leadership in favor of small. Hear what we've seen. Where we are now. I mean, you can see with your own eyes. The concentration in large cap. Is extraordinarily story. And you can see that blue line has been going down since 2012 large been beating small and Iran is point what we see our work. Has those very, very excited about what the future holds for small-cap value as well as our process. But the Randy's point as well, it's been a painful experience. And for much of 2025. >> Yeah. The being smoke at being value. >> You you. >> Rarely seen. This unfavorable. The set up. And so people say, you know, even leave in looking at it. The last 20 years being. Long periods of time. Small-cap. large can value is out for growth. You're at a point now. Where are you? God and so extreme. Ys. And only come along. Every 20 years or so. And if history proves itself out like it has in the past. You want to be very exposed. Do this. Take your corner of the market? Yes, you back on page. TWENTY-SIX. 8.6, 9 for Robert half. Neither love that company here. >> got so much holdings in that. >> That's a dividend yield of Robert Halfon and I'm glad you asked that question because Randy knows this company very well. >> Robert half is he is. Great company. For staffing. This is the go-to. For project activity. That you might have as a company and you need people to come in and help you. Figure out which direction to go on a temporary basis. And that projects INS and you send them back to Robert, have this company is a company that doesn't have much debt at all. He's historically paid out a strong given. It's been around for a long, long time. And the hiring market is is been kind of stuck in neutral here for several years. You've got a lot of worries eyes going. A big chunk of their business away. And what we've seen is companies like Kroger have actually investing in AI in terms being able improve their but to also help others. Improve their business. So having people on staff to be able to take those projects on. And help companies integrating AI capability. We feel like they're going to be able to participate in what sector they. Communication or industrials Yeah, Industrials is is historically the catchall of where you see. Service related companies in addition and manufacturing companies. have anything either. Appreciate coming today. Appreciate you Coming into play. Everything. The owners of the company in your tenure with them. >> We appreciate your relationship and having the opportunity to visit with you all. And we look forward to coming back and giving you a much improved results. hold you to >> All right. It was next one. absolutely. Good to see. Thank you. We'll turn it over to our annual presentation by Grs. A Rotor Smith and company for actuarial valuation report for the physical year that ended September 30th of 2025. >> We'll turn it over to you, Brad. I want kind of for a 47 record. I didn't expect to. yes, it's as funny as I do this. And this and I. >> Region minutes regularly. But I. From coming this meeting, I put out the entire agenda. Is it just a coincidence that you weren't here, Yeah, it is on the doctor. So. I. For for purposes of. Formality. And my name is Brad Armstrong. My employers give some company and primary purpose today to present the actual violation. Of Sarasota Firefighters, Pension Fund as of September 30 is 2025. This to terminals. Cut Houston's. just a as so. I guess. It determines contributions for fiscal 27. October. First of 26. 26 September. 30th 27. My paws and confusion as because our report. Isn't properly updated Page B 2. So after a presentation to the board does adopt. devaluation report. The ADA compliant in the final reports will be. publish with appropriate fiscal I'm not supposed to be this. All right. So that's 2026. 26 27. let's go back to page as of now for 2. observers experience. The that they work. 2 things will talk about in a moment, quite substantial that are finding progress. spite of that, a and progress. From 9% funded. 89.2. So that's that's a good it's situation, when I cover. The next page. Overall, they. experienced no surprise to us return investments. So you just spoke to dares there was some kind of performance. But but overall, your is quite well and the funding value of assets recognize it. 12.6%. rate of return 6.6%. The the you might know that the board adopted the 6.5% for purposes of this report. Why has that 6th? That's not a typo. At the beginning of that period. October one. 24, we were sending 6.6. So the comparison for the period ended September 30th 25 was in fact, 6.6%. We also. Had a 2 pension who stepped versus 5.5%. Expect it. So that what what that means. We have more more liabilities that we expected a year Very favorable for retirees and of fishers. But as far as liabilities for the pension fund. We still have to pay them. that that resolves experience Camp 8.5 million. Path that Clayton say a 9 point and there investments. 641,000 loss liabilities. This was times over 10 years. I'm It's if we could go back to the funded ratio, it was. If if this was the only thing that was changing assumption changes and you would have been 93.5%. Fund a person's 89%. So 4 and a half percent. If you look at Page a 3. that 4 and a half percent increase. Set by 3.4% for adopting the frs mortality. A table switch. Our family. for your retiree population and beneficiaries because that list projecting longer life and it was side as well by a 0.9%. Due to say. Reduce investment return assumption from 6.6% to 6 0.5% so at 3.4, 2.9. That's 4.3. So. 4.5 before the assumption, Sanchez, last 4.3. 0.2% Sunday percent that ties out to good one. And in terms of liabilities, we talked about this last 24 report. We we do. We are at a recognize some investment gains. And asset valuation about that. And they were. Likely to be sufficient to offset the increase and center adoption of the frs as well as that. Change an. Send a vessel for a return. And so that did. What's the case, you know, for for the most part? Those those 2 assets, one, it wasn't it was about 9 billion dollar increasing. Live on said with the assumption changes. 0.5 million dollar. Game. So so those 2 are close to call in offsetting. Different look forward and comment. Market by assets still the funding value of assets by 9 million dollars. So those those good. I recognize assets are going to be available on a show. Your projection of contribution requirements and its looks very as farce. The employer and this board, you know, responsibilities, too. Medicaid's extreme. Swings, particular swings in the direction. So we're in good position respect to that. The protections that have time that out. Get to in a moment. So a comment This is the beginning it. Talking Chapter one. 75 plant, the plant funding reserve increase from 425,565 1000. This. There's a lot of activity with the chapter on 75 or sits there. Hard to protect year to year, especially the something about the solutions that you often get at the beginning of October. But this is also available to employer. Just the Well, I've been a couple of years, but I mean, for the majority of our relationship both county and and and thus a contributing. It's their local agreement. Acts It's just the city. So so the 565,000 as Should there be a shortfall? In particular? relative to the chapter one, 75 receipts, our best predictor of what to expect next year is what we got last year. That goes up and down coast and that goes down. Make up the difference. And and you. We save 100% required contribution. And the offense was so kind of f. Reads through Elevate importance this year, more so than this. And and a while so began 15, 16. This this is specific to the There was. A lot of discussion that took place 10 years ago surrounding this. Legal advice was given an impact statements were filed. Us. A $781,422. As the specified amount. 2 as used to fund the 2003 retiree sheriff and and here it many be used to reduce the required employer contributions. Next. Paragraph. And so that these are going more important from from my point of view. So spending a little bit of extra time in a row. We have in recent years. What have to prevent tax revenues excess of same $781,000 figure. So the 2, the 2000 retiree sheriff and the other half are used to reduce staff liability. you affected exceed the 7 on $1000 this past fiscal year by 235,000, 670. thank It was an even number had another paragraph. whatever around we have to go through around the rules. Or maybe we just Put our spare change and to the required contribution. It is reduced by $117,835. For the city and $117,035 goes to the Post retirees, sheriff and the most important paragraph. On this page. You'll see ball that House underlined. So, you know, my personal decision, I mean, I I think what one of the 3 and probably would have been sufficient. I just want everybody to to be aware, particularly those who are in the Post retiree group. 2, 2, 3 years from exhausting. That balance. It can. It can be replenished. benefits completely exhausted. No additional funds are available. The following year. It could be restored to a degree. It's probably. Very soon and not going to MASH the PRE 2003 months. And so there's a communication issue and you may want to get out ahead of make people aware, people who severely restrict comes. That's this may be something that they've. Belt a little bit of reliance on. And you just have prepare them and make them aware. And it's awfully if if the chapter one 75. Find us stay at current level. as something here again. It may not be as much as to pre 2003 amounts. So what Emphasize that? To the contribution requirement us just over 4 million dollars. So $350,000 more. look at a 6. this is. What happens. You so. When when you invest in risky Earlier this morning we heard discussion about, you know what, what happens? You can either perform. So what if you took all off the table and and, you know, invested Treasuries. Your presently if you look at the chart of bottom of a 191 million with. Go 233 Million. So you would 40. 2. And on us. In addition to what you have and in order buyout, you know, To get somebody to take on a rest. So the diligence, it's this. This is not her trying engage in any sort of investment consulting. This is you're telling you that. As wholly appropriate for the due diligence that put to the aspects and hiring investment consultant suppression like money managers because it's a big deal on. It matters a lot that that might. can be appropriate that. Thanks. City Parks. Waterfront. You know. Other aspects of the General Avenue. So it's a big deal. So. With we generally look at every year for last few years. So I'm just emphasizing So the 5th, if you. as an out and the has to a return assumption. 2002, there was a lot of discussion about I'm going to wear them a nation and how long that pairs bay I would suggest suspend pretty successful. Relatively stable contributions sets sets. We adopted so I think that's effective. And you'll notice I'm the chief investment return of some someone from 6.7, 6.6, 6.5 over the last. 3 valuations and the Astros. Is a reference to the frs mortality. Assumption being adopted. So that all section head be as a boy, 8. There is. These are the various bases that that. Have been established. And in the last 4 years since we tender Laird Avenue station. 2025. We have experience. Nearly a quarter offsetting the assumption changes. So if you go now to the Big 10. This is. The the final page and my prepared comments that 25 26. Fiscal year from the 24 violation us. Employer contributions. 3, 9, 690. If if you're 349,000. So it increases from. A 3 million, 690 Billion 4 million. 39,000. But the experience. The and recognize the favorable investment experience of the last couple of years. Overall that 9 million dollars that we talked about, those that recognized that will primarily be recognized. And next valuation. So and only have time any. Setting the last us employer contribution all it's projected to decline over a million next shares. So you're very well. As of this valuation of that. Even so, you know, last 3 and a half months, every everything's. Look like I got path. So the first part of this fiscal year. So did. He has got delegates, but it has ball. So a reduction in the 6 and a half percent of 7 brave investor return. And future updates. Yeah. First went out tables could increase protect contributions that means this. This president was our assumptions for men consistent. So and it at that. Note that for mortality assumption is it isn't uniformly increasing. Life expectancy is. 4 years ago that it actually decreased. Life expectancy is there for. Reduced liabilities by a little bit. Went. When the pension fund about that. That was going to be my question COVID last 2 years on lights. right months from from. I'm not here to give medical by demands, but but it. What? What what's the pandemic was officially COVID-19? was endemic. something population. That what that something we do about? You know, that was that's Second I got a 6, 6, 6 years ago. You know, we were where Sohn, I generally have 2020. Little did we know. But I think I think I mean, there are certain lifestyle changes. People younger. The younger generation supposedly is tracking last Kyle. That does not show what either of my but but overall sales are down. And you know, so this. So there could there could be trance, you how sometimes. But but I think the should the shelter-in-place. I mean, there's less less activity and out. A lot of people may have taken less of a concern, I suppose, you know, so it could be lifestyle changes that that placing that as well. But are only one time they were concerned about people in the fashion fun or, you know, for purposes of liabilities here. So. Generational improvements are little consequence to us because our birth cohorts are. here. So you're showing in the future because you have a set next year. 6.5 percent of some rain returns. You showed that. city's contribution. Diminished by up to a million dollars. The Senate also figuring in mortality cable staying the same and help out is that figured in also. You are ahead that figure and I'm just asking because I don't right. The 3 and a half percent COLA and do you also have that figure you? You always have the beginning. That gloomy part. >> An estimated. 5 of us are going to step aside and 3 do figured in that figure to to get that 1 million down. >> Or correct? Yes, those like this. So let's just take 5 that could pass is next. Time here. Is that a standard part due to the fact we end the year you get a raise that. it's got to be high is higher because the higher wages me that well. You know, the the talks about 3 and a half We know we know that's wrong from the 5 and a half anything, half people out that they're alive not. but when we put on probabilities together. Our expectation is on average yeah. I told her show years ago, but I mean, if Sicily, we would probably know exactly who's going to die year. and Sarah, so we do. it's it's a 50, 50, a toss up between 2 individuals. On average. One of them passed away. And that's where you get the half. So. 3 and a half people are still lives that we didn't expect to be. That bans. That's a there's a few more people, a law that we didn't expect to be alive last year as as was the fact that everybody is a year older for summertown. It. So far, relenting that that actually He's year every year here. Rate of mortality goes up a little bit. You know. So so your existing population, if it was 100 lets us well as everybody was in 75. 5 and a half or expected to die the following year. If you took the same 100 people, it would probably be 6. 6 would be expected. The I a you know, so this mentality cable a memory you mentioned before previously. >> We had 2 years to comply with that. And this is the second year we did so. have any estimates when the next one will come out. When I first. Yeah, it was. You mentioned there's a mentality table coming with an updated and it is to then I was new for sure. On the board, you said, Well, 10 years ago, and I don't know. I guess it's time now. It seems like they keep. Well, it doesn't seem like has 5 years go by. You know what, chance a national thing? No, it's it's specific to the state of Florida and state of Florida. If you go back to as it. It was a what? 8 take it. I'm sorry. Thank 3 of them since '06. That's what that's The published mortality tables often times. 10 years before see hope for brand. No scale mortality table as mentioned is that they experience studies for the Florida retirement system. Members in this a special rescue members. That's the though those are the tables that are mandated. So the first time that they and was in 2016. What what you see for 5 years. But I for us as a four-year cycles. So so 3 or 4 years from now. So experienced ADM. Almost certain that chance I want some sun for a special risk. And and when they do once again, a lot of 2 years to comply. So I think I think the answers to the questions every 4 years from now, this based on current state law. They have any questions about this. So I know we need to. Have a vote to adopt this, but it would be with the change as noted on Page B to correct. >> Yes, sir. Okay. I You got it. Make sure because obviously. Get this back. So so, Carol, entertain a motion for the adoption of the where valuation report for September 30th 2025. Like Motion. Also that. tables been moved. And second, there's no further discussion. Take a recall vote for the adoption of the year after a >> Chair currently, yes, vice chair Joseph. Yes, secretary great. Yes, us to snow. Yes, Kristie, much. Yes. All right, Fred, back to you. This is the one that I know show up to talk about to get 67. this just in just to confirm. So had that mortality rate not been updated. We would have been. >> 4% higher funded. But >> That's correct. We Haha my to my That And then and this simplest of really picking 25 if if you had retired was expecting a lot of 25 years. Chance that assumptions of them having 26 years, that would generate a 4%. An increase in cash flow. That's that's. What's happening that. Whenever there's additional payments? Yes, and yeah, that that increases liabilities. Conversely, shorten life expectancy is. Impaired lives. I'm Laura liabilities. But this this is generally to serve, receive and file that think has 67 and and Mylan of Jenkins. For purposes of making their presentation to the board February 25th complaining that they're on it. statements. the only. If you want to look at a couple Let's one pitch. Pitch too. This this gives at least left side the chart. Very quick idea. What? You know, we talk about changing assumptions. What if we want using 6 and a half full, but for areas in fire What you see there that would. Increase liabilities by 21 million dollars. You know, so ran a dramatic. What if you want from 6.5 to 6.4. I want but don't increase about 2 million dollars. So I'm pretty consistent with what we saw. And if if you back to the pension report, but what did the type of person? And in terms of the increase in the city's contribution? have family ties over 10 years. It the second paragraph of comments C on one page right and 3 and the and the yeah. Yeah. The full valuation report. Through that second pair. If we lowered. When we low are the 7 best return by a 10th of a percent. And Chris liabilities by 1.9 million, roughly 10 Million. Increase the city's contribution requirement by $240,000. So you. You could estimate. Pretty quickly what what the effect of that particular assumptions change a little You know, if you have the guys 67 report. At Like I said, my Lynn Jenkins. Well. Cover it with the rest of. Their presentation next month. Is that sufficient for today? they have in question time. And then. MS. them But the 3rd item, the item under new business. For sure Hartley. But I didn't this is this is. Declaration of an expected rate of best It's. For the current year for each of the next several years. And for the long term there Florida statutes Section one, 12.6, 6, 1, Pat panic on a dime of the Florida statutes. So those are the 3 K parents the next several years. And that and specifically using the sad story language for the long term thereafter. A current year. It's the next several years. thereafter we? Going through the charity speak on this particular item of it. But we should strongly recommend 6 and a half percent. That's my expenses for all 3 of those. The sport has been. expected rate return. We discuss annually so think all of us are comfortable that. We feel comfortable. Short-term, long-term beats all the definition of that statute. That's why we took in the lower. And I think, though, that was the 6.0. 5 is the lowest that, yeah, you're at that. This particular glide path as the tent of wind. That probably comes up every that. the fact the fact that your contribution requirement. Includes investment expenses. And miss It's even more conservative. When you compare it to your parents, most of your parents not receiving investment us part of cow. Their local employer contributions. And you are, you know, so. There's a Greystone. Well, they're probably administrative, I guess. But your your money managers. That their expert who says paid for as part of the Constitution So heat. You just you just need to cross return to basics and a half percent for him. A fair assumption. But we like it higher. All right. We don't have to vote on gets been 67. We do that after. We do that with they called. It will be part of the financial stadium and that's Anything else for bread. You do. But you do need to to have an official that for the expected return. >> Because I tell the state you did that. >> That's why okay. That's that's what that My my recommendation to Practice and my son got go. I think. >> I didn't understand I did >> so I guess is there any discussion about? >> expected rain returns the trust? I think everybody by consensus is comfortable with the 6 and a half. But we will have a little Well, first the motion. Yes, yeah. I make a motion that we maintain the 6 and a half percent rate of return. fiscal year and future fiscal years. 2 fit to change it. >> Ocean on the table been moved and seconded. there's no further discussion with the roll. Call them. >> Chair Hartley. Yes heist. You're just yes. Greg is trusting snow. Yes, resting. Not sure us. Yes. There you go. attorneys happy you're happy thank you for that report. Nice. you going to be in Orlando. You're going to be in for of Tuesday for sure. And okay. Thank you. All right. I don't know if you've been listening and Pedro. Anybody, it. From her attorneys office. Anybody there? We can't hear >> Did not know Yeah, we can hear you. >> that I was out of control. Trying to speak earlier. But you guys, the guys made the motion those everything was OK. You can get my boys to do. A little was shot. For of you guys saw there are a lot I do with law. But, you know, I'm sure everybody was really our program. >> It was not a tough loss. I was born in Indiana and I'm wearing >> so I think you things you guys so for having we really have nothing to report on. That. meeting legislative session that you guys may be aware begin their the special person. called earlier. But there's been nothing at least that I've seen, that that has been filed yet. That would affect our plan order requirement that obviously we'll keep you Will, you know very early, we'll let you know, people attend the legislation. But and nothing and nothing really to report on. >> 2 babies may that update. We we are or Chairman Harvey potentially getting position to for the end of a lot of security matter that was approved by the board. Maybe 6 ago or so. But again, other than that right now. We'll we'll certainly keep you posted if anything develops about from that. The time being. No, no. For the use of for the report. >> Pedro to get my email this morning. I replied to thank you very much. Over. All right, but I didn't. Thank you very much. Appreciate I have been all of you here to help pull will. >> Of, you know, are back with you and all figure out big, okay. Yes, sir. Thank you. You're Upcoming educational opportunity that think ever you guys mentioned >> that's coming up week or so. I'll be there because they're going to be there. >> The board, it's about it until >> Any questions for Pedro trustees. We're good. Thank you. Pedro. >> All right. Other matters. You will. Asset allocation of. January 14 people turnover you, dad. >> Yes, this is just for your information. This is the asset allocation. As of January 14, this before we transfers and will. Any questions. Thank you for keeping that. Ledger for us. Anybody have anything. Good of the order, anything? This reminder for carry out of here. Make sure you grab paperwork. Credit card from a true if you're going to the conference, I mean, not behavior. I mean, All right. Then we will be adjourned.