BOT of The Consolidated Police Officers and Firefighters Retirement Plan

1 City of Gainesville City of Gainesville Board of Trustees of The Consolidated Police Officers and Firefighters Retirement Plan Meeting MINUTES May 21, 2025, 9:00 a.m. City Hall, Roberta Lisle Kline Conference Room (Room 16) 200 East University Ave Gainesville, FL 32601 Members Present: Walter Barry, Leah Hayes, Harvey Lewis, Christopher Silcox, Steven Varvel Others Present: Staff Present: William Johnston, Chief Investment Officer; Greg Williams, Sr. Analyst Others Present: Joe Griffin, Foster & Foster; Jim Cavanaugh, LSV Asset Management; Brendon Vavrica, Mariner; Don Sheppard, Citizen _____________________________________________________________________ A. CALL TO ORDER The meeting was called to order at 9:00 a.m. B. ADOPTION OF THE AGENDA Moved by Walter Barry Seconded by Harvey Lewis Approve. Approved C. APPROVAL OF THE MINUTES Moved by Christopher Silcox Seconded by Harvey Lewis

2 Approve as recommended. Approved as Recommended D. BOARD ATTORNEY UPDATE The Board's Attorney, Mr. Klausner, was unable to attend; however, he relayed to Staff that he had no significant updates related to proposed 2025 pension legislation. E. BUSINESS DISCUSSION ITEMS 1. 2025-418 Presentation by Foster & Foster (B) Plan actuary Joe Griffin of Foster and Foster reviewed the Plan's October 1, 2024 Actuarial Valuation. Mr. Griffin discussed member census data, market value and actuarial value of assets, Plan liabilities, and Plan gains and losses. Unfunded liability and funded ratios for Police vs. Fire and the Consolidated Plan were discussed. The Plan's Investment Rate of Return (IRR) assumption of 7.75% was also discussed, and it was noted that the Plan's long term annualized return exceeded 9% over 10 years and since inception as of FY 2024. Required FY 2026 contribution rates, the FY 2021 refresh of the five-year actuarial smoothing of investment returns, average salary growth rates and pensionable payroll growth rates were also discussed. The increase in the City's FY 2026 required contribution rate and the factors causing the increase were discussed. Annual salary increases were much higher than expected, which increased the Plan's unfunded actuarial accrued liability. Member Varvel noted the salary growth rates displayed in the report appeared unusually high. Staff indicated that they would work with the actuary to review those calculations. Mr. Griffin also discussed the five-year actuarial smoothing refresh made in FY 2021 to adjust a previous actuary's smoothing methodology, which contained some bias. The Plan's unfunded actuarial accrued liability also continued to increase due to the Plan's negative FY 2022 investment return, which was exacerbated by having only three years of investment return smoothing since the refresh, rather than the standard five years. Positive FY 2023 and FY 2024 investment returns had lessened the impact of the negative FY 2022 return on the Plan's unfunded liability. Mr. Griffin also noted that Foster & Foster was finishing an Actuarial Experience Study for the Plan, which would include recommendations related to Plan actuarial

3 assumptions. The Experience Study was expected to be completed within a couple of months. Moved by Walter Barry Seconded by Leah Hayes Recommendation: The Board of Trustees hear and discuss a presentation and approve the draft fiscal year 2024 Actuarial Valuation. Motion: Approve the Actuarial Valuation. Approved 2. 2025-291 Presentation by LSV Asset Management (B) Jim Cavanaugh of LSV Asset Management reviewed the firm, and the Plan's U.S. Large Cap Value and Small Cap Value equity portfolios. Mr. Cavanaugh discussed the portfolio profiles, strategic themes, and performance. LSV's quantitative investment process, expected earnings, and top and new holdings were also reviewed. LSV's market outlook and impacts to earnings within the market and growth of earnings was also discussed. Mr. Cavanaugh discussed Large Cap and Small Cap valuations, and the mag-7 stocks and their impact on indexes, and the impacts of investment asset shifts from active to passive management. Recommendation: The Board of Trustees hear and discuss a presentation and take any action deemed appropriate. 3. 2025-292 Presentation by Mariner (B) Brendon Vavrica of Mariner Consulting reviewed total Plan and individual manager investment performance relative to benchmarks. Plan investment returns through the quarter ending March 31, 2025, and month ending April 30, 2025, were reviewed, noting volatility in portfolio performance. Tariffs, interest rates, inflation metrics, potential policy shifts, and their impacts on the economy and markets in the near future were discussed. Recommendation: The Board of Trustees hear and discuss a presentation and take any action deemed appropriate. 4. 2025-293 Election of the 5th Member to the Gainesville Consolidated Police Officers’ and Firefighters’ Retirement Plan Board of Trustees (NB)

4 The Board discussed the election of the 5th Trustee because Trustee Lewis' term was ending. It was also noted that the City Clerk's Office had previously advertised the two City appointments to the Board because Trustee Varvel's and Trustee Barry's terms were ending. Trustee Varvel's and Trustee Barry's applications for the City's Board appointments were the only applications received for the City, and the City Commission would vote on those appointments in June. Trustee Lewis indicated that he was willing to continue serving as the Board's 5th Trustee in accordance with FL Statutes 175 and 185, and the Board voted to elect Trustee Lewis to a new term as the Board's 5th Trustee (Member Lewis abstained). Moved by Steven Varvel Seconded by Walter Barry Recommendation: The Board of Trustees discuss appointment of the 5th member and take any action deemed appropriate. Motion: Nomination of Harvey Lewis as the 5th Member of the Board of Trustees for the Gainesville Police and Fire Retirement Plan. Approved F. PUBLIC COMMENT G. MEMBER COMMENT H. NEXT MEETING DATE I. ADJOURNMENT The meeting was adjourned at 10:39 a.m. Kristen Bryant, JD, CMC, City Clerk