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Okay, let's call.

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Uh,

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>> member

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» member

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is passing.

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Uh, vice chairman

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>> here.

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» here.

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>> Fairville

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» Fairville

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>> here.

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» here.

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>> Member Jane

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» Member Jane

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>> here. Member Bridley

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» here. Member Bridley

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>> here

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» here

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>> and then Mayor Owen

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and uh Vice Mayor look

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around.

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» Uh are there any public comments? Anyone

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online?

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>> No, no one online.

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» No, no one online.

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>> Let's go to the regular agenda item.

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» Let's go to the regular agenda item.

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First is review include the draft

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minutes.

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» Any corrections?

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I mean there was a typo in section two

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of the public property tax.

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Do I have a motion to approve the

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minutes with the one change?

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>> I motion to approve the minutes. No

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» I motion to approve the minutes. No

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changes.

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Then you can sit next to Andrew. Sorry.

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So,

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>> so next item is uh review of the bars

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» so next item is uh review of the bars

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that have crossed the border ending

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September 3rd.

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>> Can we do a motion motion? I'm sorry.

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» Can we do a motion motion? I'm sorry.

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Motion.

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>> Yes.

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» Yes.

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>> Yes.

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Yes. Uh so before us we have um

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presentation just real quick on on this

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item. Item three is a review and discuss

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of PAR's OPEC OPEC trust program and a

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snapshot of the quarter ending September

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30th 25 review presentation by

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administration in our um asset

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management group investment funds. We'll

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discuss

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George and then oh thank you

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funding and to the trust and we'll

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discuss the expense and investment

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discussion. So um with this item real

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quick I just want to give a background

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um in the staff report at that our

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September 9th um finance committee

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meeting the committee reviewed our roll

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forward oped valuation and liabilities

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and assets as of June 3025

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uh which provided the latest output

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actuality report and the balance of the

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par trust as of 63035

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and the staff report which showed a

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decrease in the oped liability of

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171,000 and um uh 7.9 million against an

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increase in the town fiduciary fiduciary

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net position of 9,57,000.

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Uh this is an increase of 388,745

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and net position. They revealed our net

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opet balance of 1,70.

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So today's meeting we're providing an

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update to the annual program for the PAR

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trust as of November 30th 25 and then

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we're going to do an overview of the

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investment performance for the first

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quarter um ending uh September 30th 25.

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So in the staff report on page two, I

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had listed the um the roll forward that

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we reviewed at September 9th as our

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September meeting and then the 63025

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trust position updated as of 11:30.

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So um there was a the trust balance went

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up to 9.25 25 million to the OPED

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liability is 7.98 million and net OAP

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asset introduced about

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7,000 to 1 million268.

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So um there's still a favorable asset

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experience um that contributes to

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decreasing our net liability. And again

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we have um our presentation here we have

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director Andrew Brown of PFM asset

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management to present today. I'm sorry

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we have

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administrative director uh Jennifer Mesa

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with PARS to discuss the outlook of the

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pre-unding trust program and I see that

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you just what was just handed to you was

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the actual hard copy of the presentation

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that was included in your graphic. Uh,

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so without further ado, I would like to

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turn it over to Jennifer Mensah of ours

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and Andrew Brown of management and I

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will pull up the presentation online so

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you'll be able to see it as well

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as they talk through it. So without

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further ado,

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>> All right. Perfect. Thank you so much.

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» All right. Perfect. Thank you so much.

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Um, and good evening or good afternoon

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everyone. Thank you for having us here

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today. I went ahead and put uh together

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a presentation here for you. We won't

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cover every single page, but we want to

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provide you as much information as we

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can in case you have additional

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questions that we can work to. Um, if we

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go to slide number two, just our contact

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information at any point in time, feel

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free to reach out to us if you have

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questions. If you don't have any today,

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but maybe in a couple days or after this

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meeting, something comes up. We're

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always available to assist you. Slide

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number three, just a little bit of a

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reminder of the trust team myself

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public agency retirement services. We do

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the administration of this account. So

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the record keeping, the audits, the

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reporting, all of that is done by force.

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US Bank holds the over $9 million that

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you currently have and safeguards those

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assets and overseas PFM where Andrew is

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from making sure that everything that

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the town has requested for the

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investments is being properly done and

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managed through PFM. So those are the

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different parties within the group. Um,

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if you have any additional questions, I

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can answer them.

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Slide number four, we go through the uh

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program. You have what's called a

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combination trust that allows you to put

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money aside for retiring healthcare

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obligations. Um and you also could

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technically put money aside for pension.

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That's something that we talked about

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maybe a little bit over five years ago.

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Now, that uh part of the bucket has not

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or that part of the program has not been

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utilized, but you have uh flexibility.

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Currently, you're only using the OPM

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side. As I mentioned, you have over $9

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million in that. Yeah. You select when

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to put money in and you have flexibility

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of taking that money out. You can take

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that money out to pay uh for any retiree

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uh related expense, whether you

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reimburse the town back for those

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expenses. If you have some kind of

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stipen that you provide them, we can pay

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them directly. We can pay a third-party

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provider that may be offering some of

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those benefits out of the trust. And for

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any actual evaluations, you can pay it

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out of the trust as well. So, a lot of

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different ways that you can utilize the

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asset. Um, when

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slide number five,

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top portion just shows you this program

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started back in May 16th of 2012. Uh,

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town manager, city manager is currently

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the plan administrator. So, on behalf of

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uh your city council and this committee,

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any changes would be done uh there by

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Jordan. The investment strategy is

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called the moderate index strategy which

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Andrew is going to go out and talk about

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in just a couple of slides. That is not

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something that is locked in. The city

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can or the town can make changes at any

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point in time to that investment

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strategy. And that's why we try to meet

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on a regular basis in case things happen

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or you know something else changes with

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the town and you want to make changes to

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the investment. So that can be done at

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any time of the year at any time uh that

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we needed.

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bottom portion are your assets. As of

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November 30th, you've contributed a

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total of $9.4 million into the account.

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That includes the initial June 2013

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contribution of 1.2 million plus the

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additional $8 million in there. You have

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taken money out. You've been taking

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money out almost every fiscal year. A

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total of over $5 million taken out of

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the truck. Your net investment earnings

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from KFF have been of over $4.8 8

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million on there and the account balance

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as I mentioned November 30th is $9.2

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million in the account.

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Line number six shows you this

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information uh based on the historical

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information on every fiscal year that we

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program. So you can see when the money

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came in, you can see your total assets

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there and then of course those

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reimbursements taken out of there in the

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center uh column for you. And you can

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see since 2024, we have not had any

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additional contributions into the

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program. As you'll see in the next page,

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the plan is very uh well established in

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a very healthy place. The town has done

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a great job of establishing the program,

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putting money aside, and really

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addressing those liabilities on the

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account. So all we are seeing in the

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last couple of years is reimbursements

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to pay down those retirey healthcare

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obligations.

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By number seven, this is the liability

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for this specific program. These reports

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are not done by PARs. Uh you currently

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use a company called Position Actuaries

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that does that for you. And what we went

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ahead and did is compared the 2024

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versus the latest 2025 on there. The

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discount rate or the long-term expected

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rate of return for this type of plan

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under this portfolio is about 6.5%. So

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that's what the actuary is quoting on

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there. That gives you a total OPED

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liability or what currently is due for

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this type of liability with your town of

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about 7.9 million. Now, the actual money

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that you have in the trust is over that

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at $9 million. So, as you can see,

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currently if you, you know, you had to

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pay the bill today, you currently have

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assets to meet all of those obligations.

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Now, again, that's a running number. It

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can change. That's why you do ask for

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evaluations at a minimum every two years

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because things can change, premiums and

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so forth, costs can change. So that is a

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floating number that we'll see from time

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to time. At this time, you're in a very

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healthy funded status. Uh you're funded

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at 113%.

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Uh but less than uh 5% of our agencies

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in California are that well funded. So

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good job to you to the town and staff

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for actually establishing this, funding

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it, and having it in such a healthy

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condition.

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And then the last number that I want to

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take a look at there is the annual

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benefit payments. The about half a

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million dollars that you currently um

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you know pay out for these type of

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liabilities. You can always take that

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out if you're currently doing to um

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other

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» sign number eight. Um I'll have Andrew

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touch base more as I mentioned on the

277
00:11:41,760 --> 00:11:43,600
investments. This is just historically

278
00:11:43,600 --> 00:11:45,760
what you have uh returned with the

279
00:11:45,760 --> 00:11:48,800
inception to date of 6.47. In the

280
00:11:48,800 --> 00:11:50,079
previous slide I had mentioned your

281
00:11:50,079 --> 00:11:52,720
discount rate is 6.5. So you're right

282
00:11:52,720 --> 00:11:54,800
there u meeting that discount rate from

283
00:11:54,800 --> 00:11:57,279
the actuary as well. That's that's what

284
00:11:57,279 --> 00:11:58,399
I'll point out there and then I'll have

285
00:11:58,399 --> 00:12:00,240
Andrew come back if he needs to to that

286
00:12:00,240 --> 00:12:02,160
slide.

287
00:12:02,160 --> 00:12:04,560
So that is the administrative portion of

288
00:12:04,560 --> 00:12:07,120
this program. Details on your assets and

289
00:12:07,120 --> 00:12:09,120
so forth and your liability. I'm going

290
00:12:09,120 --> 00:12:11,040
to turn it over to Andrew to discuss the

291
00:12:11,040 --> 00:12:12,880
investments. But are there any questions

292
00:12:12,880 --> 00:12:14,480
on the slides that I've touched on

293
00:12:14,480 --> 00:12:17,200
already?

294
00:12:17,200 --> 00:12:17,670
>> Okay,

295
00:12:17,670 --> 00:12:17,680
» Okay,

296
00:12:17,680 --> 00:12:19,350
>> Robert, I think there were some

297
00:12:19,350 --> 00:12:19,360
» Robert, I think there were some

298
00:12:19,360 --> 00:12:21,920
premeating questions. Uh, one of which I

299
00:12:21,920 --> 00:12:24,320
think was fairly much in the

300
00:12:24,320 --> 00:12:27,360
interpersonal role. Do we want to do all

301
00:12:27,360 --> 00:12:30,399
questions at the end or if you want to

302
00:12:30,399 --> 00:12:31,430
>> I think one of them was the

303
00:12:31,430 --> 00:12:31,440
» I think one of them was the

304
00:12:31,440 --> 00:12:32,320
reimbursement.

305
00:12:32,320 --> 00:12:33,990
>> You mean the funds?

306
00:12:33,990 --> 00:12:34,000
» You mean the funds?

307
00:12:34,000 --> 00:12:36,069
>> Um, yeah, we can handle that right now.

308
00:12:36,069 --> 00:12:36,079
» Um, yeah, we can handle that right now.

309
00:12:36,079 --> 00:12:40,160
Um uh report

310
00:12:40,160 --> 00:12:43,360
discussed it. Um correct. So uh PARS

311
00:12:43,360 --> 00:12:45,440
administers the retirey health benefits

312
00:12:45,440 --> 00:12:49,120
for us. So every month um through our

313
00:12:49,120 --> 00:12:50,880
retirees have to participate with

314
00:12:50,880 --> 00:12:54,880
CalPERS help. And so, um, because we

315
00:12:54,880 --> 00:12:58,240
have this, uh, trust with ARS, um, we

316
00:12:58,240 --> 00:13:01,519
get the bill every month from from, um,

317
00:13:01,519 --> 00:13:04,720
Kalpers, and then we verify based off of

318
00:13:04,720 --> 00:13:08,160
the individual retiree, whatever, um,

319
00:13:08,160 --> 00:13:10,800
plan reimbursement they get, we we we

320
00:13:10,800 --> 00:13:12,800
take that, we reconcile it against what

321
00:13:12,800 --> 00:13:15,680
their premium is, and then we reimburse

322
00:13:15,680 --> 00:13:19,360
them their um, retirey health. Um

323
00:13:19,360 --> 00:13:21,440
because Kalpers, what CalPKERS does is

324
00:13:21,440 --> 00:13:23,440
they deduct their retirey health out of

325
00:13:23,440 --> 00:13:27,440
their pension. So that comes out from

326
00:13:27,440 --> 00:13:29,120
Kalpers. They take out the retirey

327
00:13:29,120 --> 00:13:32,320
medical from the retiree, the annuity.

328
00:13:32,320 --> 00:13:35,360
Um and what we do through PARs is we

329
00:13:35,360 --> 00:13:38,320
reimburse the retirees their medical.

330
00:13:38,320 --> 00:13:40,320
And so every month we send that to PAR

331
00:13:40,320 --> 00:13:42,800
say a list of all the individuals. Um

332
00:13:42,800 --> 00:13:45,279
they already have their address, they

333
00:13:45,279 --> 00:13:46,959
have their bank information. and we set

334
00:13:46,959 --> 00:13:49,600
it up and we send every month um prior

335
00:13:49,600 --> 00:13:52,720
to the end of the month um before the

336
00:13:52,720 --> 00:13:55,200
annuitant's uh healthcare is taken out

337
00:13:55,200 --> 00:13:58,560
we send that list to um PARS and then

338
00:13:58,560 --> 00:14:01,519
PARS reimburse each individual annuitant

339
00:14:01,519 --> 00:14:03,519
their reimbursement amount health

340
00:14:03,519 --> 00:14:05,360
reimbursement amount and so on that

341
00:14:05,360 --> 00:14:09,360
slide that um previous slide on page six

342
00:14:09,360 --> 00:14:11,920
we saw the dispersements

343
00:14:11,920 --> 00:14:15,279
uh so the dispersements

344
00:14:15,279 --> 00:14:18,000
amount you can see are all in that

345
00:14:18,000 --> 00:14:20,800
column under the dispersement. So u as

346
00:14:20,800 --> 00:14:23,920
of June 26th and again this is on a

347
00:14:23,920 --> 00:14:26,639
calendar year as of June 26 we

348
00:14:26,639 --> 00:14:29,120
contributed 347,000

349
00:14:29,120 --> 00:14:31,760
and that's what was contributed in total

350
00:14:31,760 --> 00:14:34,639
to reimburse the annuitance their health

351
00:14:34,639 --> 00:14:38,240
um retirey health uh care. Uh so PARS we

352
00:14:38,240 --> 00:14:41,279
work in tandem with PARS on this uh and

353
00:14:41,279 --> 00:14:45,360
you could see it as of fiscal year 24 we

354
00:14:45,360 --> 00:14:47,440
stopped doing contributions because what

355
00:14:47,440 --> 00:14:50,399
we were doing prior the town would every

356
00:14:50,399 --> 00:14:53,199
month the town would contribute whatever

357
00:14:53,199 --> 00:14:55,040
um that retirey help for the month was.

358
00:14:55,040 --> 00:14:57,839
So if it was 35,000 we were contributing

359
00:14:57,839 --> 00:15:00,720
35,000 to PARS and PARS was taking that

360
00:15:00,720 --> 00:15:02,959
amount and dispersing it to the

361
00:15:02,959 --> 00:15:05,199
individual retirees. So that's how the

362
00:15:05,199 --> 00:15:06,959
flow of funds work and that's how we use

363
00:15:06,959 --> 00:15:09,440
the retirement trust. We use the trust

364
00:15:09,440 --> 00:15:13,040
because it's um in doing so the retiree

365
00:15:13,040 --> 00:15:17,040
is not um taxed on that benefit because

366
00:15:17,040 --> 00:15:18,560
we're we're reimbursing through the

367
00:15:18,560 --> 00:15:22,480
trust. So um

368
00:15:22,480 --> 00:15:24,880
with the Jennifer mentioned that we do

369
00:15:24,880 --> 00:15:27,199
the OPEC act report that's precision

370
00:15:27,199 --> 00:15:30,079
actual does their actual report we work

371
00:15:30,079 --> 00:15:32,720
in tandem we send that to to PARs and

372
00:15:32,720 --> 00:15:35,680
that way we can kind of gauge and see

373
00:15:35,680 --> 00:15:38,160
where we're at based off of our assets

374
00:15:38,160 --> 00:15:40,880
and our liabilities. And so PARS helps

375
00:15:40,880 --> 00:15:42,480
us with that administering that

376
00:15:42,480 --> 00:15:44,639
reviewing it. And then Andrew is on the

377
00:15:44,639 --> 00:15:46,639
investment side making sure that we meet

378
00:15:46,639 --> 00:15:50,320
the investments for it. Um and and and

379
00:15:50,320 --> 00:15:55,680
also the uh the cost the expenses for

380
00:15:55,680 --> 00:15:58,800
the uh administrator and the investment

381
00:15:58,800 --> 00:16:01,680
also comes out of the cars trust and and

382
00:16:01,680 --> 00:16:05,600
I'll uh touch work on that after we talk

383
00:16:05,600 --> 00:16:08,399
talk about the investments. Um but

384
00:16:08,399 --> 00:16:11,680
that's that's all I have. Is there any

385
00:16:11,680 --> 00:16:13,759
questions? Um I just wanted that's how

386
00:16:13,759 --> 00:16:16,560
the process works with cars. Um, and

387
00:16:16,560 --> 00:16:18,800
then they they managed the they

388
00:16:18,800 --> 00:16:23,910
administered the plan for us.

389
00:16:23,920 --> 00:16:27,350
Any questions?

390
00:16:27,360 --> 00:16:29,759
So then I'll turn it over to Andrew.

391
00:16:29,759 --> 00:16:31,350
>> Let me let me have you go, Robert, if I

392
00:16:31,350 --> 00:16:31,360
» Let me let me have you go, Robert, if I

393
00:16:31,360 --> 00:16:34,240
could to 2.8 page uh number in the

394
00:16:34,240 --> 00:16:40,150
bottom right hand corner.

395
00:16:40,160 --> 00:16:43,680
» There you go. Yep.

396
00:16:43,680 --> 00:16:45,110
>> So it's good to be back here. Thank you

397
00:16:45,110 --> 00:16:45,120
» So it's good to be back here. Thank you

398
00:16:45,120 --> 00:16:47,680
for the invitation. Uh, as the finance

399
00:16:47,680 --> 00:16:49,519
director Baron highlighted in the staff

400
00:16:49,519 --> 00:16:51,519
report, I'm going to touch on

401
00:16:51,519 --> 00:16:54,240
performance. We'll take a look at the

402
00:16:54,240 --> 00:16:57,360
economic snapshot of PF and asset

403
00:16:57,360 --> 00:16:59,920
management, highlight positioning for

404
00:16:59,920 --> 00:17:02,240
the portfolio, and then I think there's

405
00:17:02,240 --> 00:17:05,120
also some supplementary questions uh

406
00:17:05,120 --> 00:17:06,959
submitted related to fees and expenses

407
00:17:06,959 --> 00:17:09,360
and investment policy statement. Uh so

408
00:17:09,360 --> 00:17:10,640
those are going to be the five topics

409
00:17:10,640 --> 00:17:13,839
but um any other topic that uh you want

410
00:17:13,839 --> 00:17:18,160
to uh discuss just feel free. Uh so this

411
00:17:18,160 --> 00:17:20,880
is my first investment uh presentation

412
00:17:20,880 --> 00:17:24,319
for calendar year 2026. Uh and so the

413
00:17:24,319 --> 00:17:25,679
the slide that we're looking at here the

414
00:17:25,679 --> 00:17:28,480
the quarterly uh market summary the

415
00:17:28,480 --> 00:17:30,000
factors to consider over the next six to

416
00:17:30,000 --> 00:17:31,280
12 months. This is something we call our

417
00:17:31,280 --> 00:17:33,600
heat map. And what we do is we take nine

418
00:17:33,600 --> 00:17:35,919
economic and market variables and we

419
00:17:35,919 --> 00:17:38,000
apply some type of color-coded rating

420
00:17:38,000 --> 00:17:40,880
system to our outlook on these nine

421
00:17:40,880 --> 00:17:43,840
dynamics. Uh and it's designed to cover

422
00:17:43,840 --> 00:17:46,960
a 6 to 12 month horizon. Uh the color

423
00:17:46,960 --> 00:17:50,240
coding uh corresponds to red and yellow

424
00:17:50,240 --> 00:17:52,320
uh some type of negative view. Gray

425
00:17:52,320 --> 00:17:54,320
there in the middle would be a neutral

426
00:17:54,320 --> 00:17:56,559
outlook and then light green, dark green

427
00:17:56,559 --> 00:17:59,280
is some type of positive view towards

428
00:17:59,280 --> 00:18:01,360
one of these dynamics. uh upper right

429
00:18:01,360 --> 00:18:04,000
hand corner you'll see it's uh ending uh

430
00:18:04,000 --> 00:18:06,799
September 30th 2025. So we have not

431
00:18:06,799 --> 00:18:09,600
updated it officially

432
00:18:09,600 --> 00:18:13,200
um uh for for dissemination for the 1231

433
00:18:13,200 --> 00:18:15,679
period of time uh but but but I have

434
00:18:15,679 --> 00:18:18,240
people who who have uh shared our our

435
00:18:18,240 --> 00:18:21,600
views and um they haven't changed. So,

436
00:18:21,600 --> 00:18:23,919
so where you see the black dots on these

437
00:18:23,919 --> 00:18:26,240
nine dynamics are exactly where we are

438
00:18:26,240 --> 00:18:29,600
today and and certainly we can debate um

439
00:18:29,600 --> 00:18:31,440
you know maybe we should have moved

440
00:18:31,440 --> 00:18:33,679
something here and there you know when I

441
00:18:33,679 --> 00:18:35,520
think about the six to 12 month horizon

442
00:18:35,520 --> 00:18:36,880
you know predicting the future is

443
00:18:36,880 --> 00:18:39,440
difficult at any time I think we have a

444
00:18:39,440 --> 00:18:41,120
better handle on a six-month horizon

445
00:18:41,120 --> 00:18:43,919
versus a 12-month horizon and and if we

446
00:18:43,919 --> 00:18:45,360
were thinking about the next six months

447
00:18:45,360 --> 00:18:47,840
I think we're pretty constructive pretty

448
00:18:47,840 --> 00:18:49,840
positive I think growth in the in the

449
00:18:49,840 --> 00:18:50,960
United States is going to be pretty

450
00:18:50,960 --> 00:18:53,760
solid. Um and and a lot of uh that

451
00:18:53,760 --> 00:18:56,080
positive feeling really comes from, you

452
00:18:56,080 --> 00:18:57,600
know, where we have many of these black

453
00:18:57,600 --> 00:18:59,520
dots in the green regions, upper leftand

454
00:18:59,520 --> 00:19:02,799
corner. First off, monetary policy. Um

455
00:19:02,799 --> 00:19:04,400
we're still working through the positive

456
00:19:04,400 --> 00:19:07,600
impact of 2024 rate cuts. We got some

457
00:19:07,600 --> 00:19:11,120
rate cuts in the fourth quarter of 2025

458
00:19:11,120 --> 00:19:13,039
and and our best guess is we get one or

459
00:19:13,039 --> 00:19:17,039
two more here in 2026. So, so that was

460
00:19:17,039 --> 00:19:19,679
maybe some of the uh catalyst to uh

461
00:19:19,679 --> 00:19:22,080
putting that uh rating as as a positive

462
00:19:22,080 --> 00:19:23,760
outlook for monetary policy. Interest

463
00:19:23,760 --> 00:19:26,559
rates in our view are likely uh to t

464
00:19:26,559 --> 00:19:29,280
continue to trend downward. Uh financial

465
00:19:29,280 --> 00:19:31,520
conditions look excellent. Much of that

466
00:19:31,520 --> 00:19:33,360
really stems from the one big beautiful

467
00:19:33,360 --> 00:19:36,080
bill that was signed into law there on

468
00:19:36,080 --> 00:19:38,880
July 4th that has some tremendous

469
00:19:38,880 --> 00:19:41,360
provisions for corporations to expense

470
00:19:41,360 --> 00:19:45,280
R&D and capex as well as uh it is widely

471
00:19:45,280 --> 00:19:48,400
anticipated uh that that tax refund

472
00:19:48,400 --> 00:19:51,120
season uh in the upcoming quarter the

473
00:19:51,120 --> 00:19:53,360
later this quarter second quarter this

474
00:19:53,360 --> 00:19:55,520
year is going to see some uh pretty

475
00:19:55,520 --> 00:19:58,000
significant tax refunds for individual

476
00:19:58,000 --> 00:20:00,320
tax filers. Uh, and typically when you

477
00:20:00,320 --> 00:20:02,480
get a windfall of cash coming in,

478
00:20:02,480 --> 00:20:04,720
Americans typically spend it. So, so we

479
00:20:04,720 --> 00:20:06,559
think financial conditions are poised.

480
00:20:06,559 --> 00:20:08,480
And really, I mean, if if it was just a

481
00:20:08,480 --> 00:20:10,720
six-month horizon there at 12:00, we'd

482
00:20:10,720 --> 00:20:13,440
probably move economic growth uh to one

483
00:20:13,440 --> 00:20:16,080
of the shades of green there. Uh, and we

484
00:20:16,080 --> 00:20:17,440
also probably would move consumer

485
00:20:17,440 --> 00:20:19,039
spending to one of the shades of green

486
00:20:19,039 --> 00:20:20,960
there, right in the middle. Uh, with

487
00:20:20,960 --> 00:20:22,480
respect to inflation, the upper right

488
00:20:22,480 --> 00:20:24,720
hand corner, we do have it rated as a

489
00:20:24,720 --> 00:20:27,919
yellow. We did get CPI today. CPI

490
00:20:27,919 --> 00:20:31,679
headline was 2.7, core was 2.6.

491
00:20:31,679 --> 00:20:34,159
Still kind of closer to the 3% level

492
00:20:34,159 --> 00:20:36,320
versus the 2% level that the Fed is

493
00:20:36,320 --> 00:20:39,760
looking to target. Um, many economists

494
00:20:39,760 --> 00:20:42,799
out there, point to 2%. Kind of maybe a

495
00:20:42,799 --> 00:20:44,480
little bit hesitant to put my initials

496
00:20:44,480 --> 00:20:46,720
next to that. Uh, you know, I might stay

497
00:20:46,720 --> 00:20:50,080
at the mid 2% level. uh but but may

498
00:20:50,080 --> 00:20:54,400
maybe not so ownorous uh from a from a

499
00:20:54,400 --> 00:20:56,400
policy standpoint for monetary policy

500
00:20:56,400 --> 00:20:58,640
halting the Fed from cutting rates going

501
00:20:58,640 --> 00:21:00,799
forward. Uh labor markets we do have it

502
00:21:00,799 --> 00:21:03,840
rated as a yellow there at 3:00 and um

503
00:21:03,840 --> 00:21:06,320
yeah uh last five six months we've seen

504
00:21:06,320 --> 00:21:09,679
a slowdown in job creation. uh it's been

505
00:21:09,679 --> 00:21:11,440
sort of what's been termed in the media

506
00:21:11,440 --> 00:21:15,840
and and I hate reusing well you you know

507
00:21:15,840 --> 00:21:17,679
beat them into the ground phrases but I

508
00:21:17,679 --> 00:21:20,960
I will today low higher low fire um you

509
00:21:20,960 --> 00:21:22,720
know there's not a lot of terminations

510
00:21:22,720 --> 00:21:24,640
out there but there's not a lot of new

511
00:21:24,640 --> 00:21:28,799
job creation either um some economists

512
00:21:28,799 --> 00:21:30,880
point to well with the uh the slowdown

513
00:21:30,880 --> 00:21:33,360
in immigration maybe we only need

514
00:21:33,360 --> 00:21:35,520
something around along the lines of 50

515
00:21:35,520 --> 00:21:38,480
to 60,000 new jobs the Dallas Fed put

516
00:21:38,480 --> 00:21:41,039
out a report in the fourth quarter uh

517
00:21:41,039 --> 00:21:42,880
putting forth that that that uh

518
00:21:42,880 --> 00:21:44,720
potential data point that maybe 50 to

519
00:21:44,720 --> 00:21:47,360
60,000 new jobs might be that that that

520
00:21:47,360 --> 00:21:50,880
that neutral rate of growth. Um maybe

521
00:21:50,880 --> 00:21:53,280
maybe not. Uh but but but certainly with

522
00:21:53,280 --> 00:21:55,039
the low number of new jobs that have

523
00:21:55,039 --> 00:21:56,960
been posted in the economy, we feel

524
00:21:56,960 --> 00:21:58,720
pretty comfortable still keeping it at

525
00:21:58,720 --> 00:22:00,960
yellow in terms of our rating. And then

526
00:22:00,960 --> 00:22:02,960
just two other quickly uh items that

527
00:22:02,960 --> 00:22:07,440
I'll touch on. um valuations,

528
00:22:07,440 --> 00:22:09,200
you know, some some argument, some push

529
00:22:09,200 --> 00:22:11,440
back there. At uh six o'clock, we have

530
00:22:11,440 --> 00:22:14,880
it at slightly negative. Sometimes uh

531
00:22:14,880 --> 00:22:16,159
clients would say, "Well, why should you

532
00:22:16,159 --> 00:22:17,360
put it at red?"

533
00:22:17,360 --> 00:22:18,950
>> And and maybe because of the textbooks

534
00:22:18,950 --> 00:22:18,960
» And and maybe because of the textbooks

535
00:22:18,960 --> 00:22:21,760
that I at least studied uh growing up,

536
00:22:21,760 --> 00:22:24,320
um yeah, it kind of feels a little bit

537
00:22:24,320 --> 00:22:26,559
expensive or or very expensive there at

538
00:22:26,559 --> 00:22:29,120
23 times price to earnings ratio for

539
00:22:29,120 --> 00:22:31,600
large cap stocks in the United States,

540
00:22:31,600 --> 00:22:35,280
the S&P 500. Uh so so my inclination is

541
00:22:35,280 --> 00:22:38,640
to be a little more conservative. Um my

542
00:22:38,640 --> 00:22:40,720
other colleagues feel that yellow is

543
00:22:40,720 --> 00:22:42,480
maybe the the one that deserves the

544
00:22:42,480 --> 00:22:45,120
merit. Uh but but yeah, it the market's

545
00:22:45,120 --> 00:22:48,080
a bit overvalued to say the least. And

546
00:22:48,080 --> 00:22:49,760
that's worrisome because if we don't get

547
00:22:49,760 --> 00:22:51,600
the economic growth and the corporate

548
00:22:51,600 --> 00:22:53,440
earnings that that we anticipate in

549
00:22:53,440 --> 00:22:56,159
2026, uh we're probably poised for a

550
00:22:56,159 --> 00:22:58,559
market selloff. And then we get to the

551
00:22:58,559 --> 00:22:59,840
fun part of the presentation where we

552
00:22:59,840 --> 00:23:02,000
talk about policy and political risks.

553
00:23:02,000 --> 00:23:04,640
Uh that always seems to be a hot topic

554
00:23:04,640 --> 00:23:08,400
with uh committees and whatnot. Um you

555
00:23:08,400 --> 00:23:10,720
know, three months ago, well, I guess I

556
00:23:10,720 --> 00:23:12,320
didn't totally lay out the the

557
00:23:12,320 --> 00:23:13,840
presentation format. When you see a

558
00:23:13,840 --> 00:23:16,080
white dot, a white dot is where we were

559
00:23:16,080 --> 00:23:18,240
maybe three months ago. So if this is

560
00:23:18,240 --> 00:23:21,840
for the 9:30 ending period, uh for that

561
00:23:21,840 --> 00:23:25,679
June uh June 30th to to uh end of

562
00:23:25,679 --> 00:23:27,760
September period, uh we had it at

563
00:23:27,760 --> 00:23:30,799
excessive risks. We moved it to yellow.

564
00:23:30,799 --> 00:23:32,799
Um and and I know what my colleagues

565
00:23:32,799 --> 00:23:34,400
were thinking about when they moved it

566
00:23:34,400 --> 00:23:37,600
from red uh highly negative to slightly

567
00:23:37,600 --> 00:23:39,760
negative. It was sort of the notion and

568
00:23:39,760 --> 00:23:41,520
it wasn't a debate of whether or not the

569
00:23:41,520 --> 00:23:44,640
the Trump policies were were disruptive.

570
00:23:44,640 --> 00:23:48,000
Yeah, they are disruptive. Um but but it

571
00:23:48,000 --> 00:23:49,360
was maybe the recognition that the

572
00:23:49,360 --> 00:23:50,880
market really wasn't caring too much

573
00:23:50,880 --> 00:23:53,760
about disruptions and and and maybe also

574
00:23:53,760 --> 00:23:56,159
uh not all disruptions yield negative

575
00:23:56,159 --> 00:23:58,640
outcomes and and so when when we think

576
00:23:58,640 --> 00:24:00,000
about some of the policies that have

577
00:24:00,000 --> 00:24:03,039
been uh enacted uh over over President

578
00:24:03,039 --> 00:24:06,000
Trump's first uh 12 13 months in office.

579
00:24:06,000 --> 00:24:07,679
You know there's been some highly

580
00:24:07,679 --> 00:24:09,840
disruptive policies but but with okay

581
00:24:09,840 --> 00:24:13,120
outcomes. one uh would certainly be the

582
00:24:13,120 --> 00:24:15,120
one big beautiful bill that's um going

583
00:24:15,120 --> 00:24:16,640
to be a huge catalyst for for the

584
00:24:16,640 --> 00:24:18,640
economy and it's always already been a

585
00:24:18,640 --> 00:24:21,840
very nice catalyst in some industries.

586
00:24:21,840 --> 00:24:23,919
Uh Operation Midnight Hammer that that

587
00:24:23,919 --> 00:24:26,480
that was certainly a positive. Um and

588
00:24:26,480 --> 00:24:28,559
then also some benefits coming from the

589
00:24:28,559 --> 00:24:31,039
initial deregulation uh policies

590
00:24:31,039 --> 00:24:33,440
enacted. So, so, so yeah, there have

591
00:24:33,440 --> 00:24:36,000
been some positives, but then you just

592
00:24:36,000 --> 00:24:37,919
kind of go through the first 11 12 days

593
00:24:37,919 --> 00:24:41,360
of 2026 and and it's one to make my head

594
00:24:41,360 --> 00:24:44,159
spin and um

595
00:24:44,159 --> 00:24:46,159
I just kind of jotted a few down.

596
00:24:46,159 --> 00:24:48,480
Venezuela, abduction of Maduro and his

597
00:24:48,480 --> 00:24:51,120
wife, cajoling, Trump, cajoling oil

598
00:24:51,120 --> 00:24:52,559
executives to invest hundred billion

599
00:24:52,559 --> 00:24:55,200
dollars in Venezuela, a country where

600
00:24:55,200 --> 00:24:57,120
many of them got kicked out several

601
00:24:57,120 --> 00:24:59,520
years ago. So, you know, how, you know,

602
00:24:59,520 --> 00:25:01,600
eager are are people to, you know, once

603
00:25:01,600 --> 00:25:03,919
burn, twice shy sort of thing. Strong

604
00:25:03,919 --> 00:25:06,400
overtures to invade Greenland. Directing

605
00:25:06,400 --> 00:25:08,000
Fanny May and Freddy Mack to purchase

606
00:25:08,000 --> 00:25:09,600
200 billion in agency mortgage back

607
00:25:09,600 --> 00:25:12,320
bonds. Uh, truth social posting calling

608
00:25:12,320 --> 00:25:13,679
for prohibition of institutional

609
00:25:13,679 --> 00:25:15,600
investors to buy residential homes,

610
00:25:15,600 --> 00:25:18,080
preventing defense companies from buying

611
00:25:18,080 --> 00:25:21,279
back stock and issuing dividends. Um,

612
00:25:21,279 --> 00:25:23,520
and then just yesterday trying to cap

613
00:25:23,520 --> 00:25:26,080
swipe fees for credit card issuers at

614
00:25:26,080 --> 00:25:30,080
10%. I mean, it's it's it's a lot. It's

615
00:25:30,080 --> 00:25:31,919
a lot for one administration in one

616
00:25:31,919 --> 00:25:34,880
year, not to mention 12 13 days. So, so

617
00:25:34,880 --> 00:25:36,880
I don't know if you want to push back in

618
00:25:36,880 --> 00:25:38,400
terms of, hey, why don't you guys put it

619
00:25:38,400 --> 00:25:40,880
back to red? I certainly wouldn't uh I

620
00:25:40,880 --> 00:25:44,559
wouldn't fight you. Um, but yeah, I

621
00:25:44,559 --> 00:25:46,480
don't know if hopefully it's nothing

622
00:25:46,480 --> 00:25:48,159
more than a debate about, you know, just

623
00:25:48,159 --> 00:25:49,600
the merits of, you know, where do you

624
00:25:49,600 --> 00:25:51,600
guys put it, red or or yellow, rather

625
00:25:51,600 --> 00:25:54,320
than, hey, you know, you highlighted

626
00:25:54,320 --> 00:25:55,679
some of the good benefits of of

627
00:25:55,679 --> 00:25:58,000
disruptive policies. You know, hopefully

628
00:25:58,000 --> 00:26:00,320
these current policies don't yield

629
00:26:00,320 --> 00:26:03,279
negative results um for for the

630
00:26:03,279 --> 00:26:05,200
remaining three years of of his

631
00:26:05,200 --> 00:26:08,640
presidential term. So, yeah, that wasn't

632
00:26:08,640 --> 00:26:10,640
much of an overview. It was maybe a

633
00:26:10,640 --> 00:26:12,000
little bit longer than I anticipated,

634
00:26:12,000 --> 00:26:14,960
but this is my first time in 2026, so

635
00:26:14,960 --> 00:26:18,000
I'll get better. Um, any any questions

636
00:26:18,000 --> 00:26:24,149
or or feedback on any of that?

637
00:26:24,159 --> 00:26:26,400
» Okay.

638
00:26:26,400 --> 00:26:29,840
All right. Uh, Robert, maybe page 2.9,

639
00:26:29,840 --> 00:26:31,360
which I think is in the next one. And

640
00:26:31,360 --> 00:26:34,240
and just a quick stop on this page. This

641
00:26:34,240 --> 00:26:35,600
covers our our asset allocation

642
00:26:35,600 --> 00:26:39,039
positioning and and and the the the one

643
00:26:39,039 --> 00:26:42,640
sort of u scarlet letter for us in 2025

644
00:26:42,640 --> 00:26:45,600
calendar year 2025 was we moved a slight

645
00:26:45,600 --> 00:26:48,640
underway position to equities there uh

646
00:26:48,640 --> 00:26:51,279
called maybe the third week in April. uh

647
00:26:51,279 --> 00:26:52,960
we got a little bit nervous about the

648
00:26:52,960 --> 00:26:55,600
the potential negative input of uh or

649
00:26:55,600 --> 00:26:58,960
impact of tariffs uh from from uh t

650
00:26:58,960 --> 00:27:02,159
liberation day there on April 2nd or 3rd

651
00:27:02,159 --> 00:27:04,080
and we moved from a 50% equity

652
00:27:04,080 --> 00:27:07,039
allocation to a 48% allocation in this

653
00:27:07,039 --> 00:27:08,960
portfolio. So it was a slight

654
00:27:08,960 --> 00:27:11,120
underweight. It wasn't a big move. Uh

655
00:27:11,120 --> 00:27:13,360
and and like I said the market didn't

656
00:27:13,360 --> 00:27:15,840
really seem to care. it kept on going up

657
00:27:15,840 --> 00:27:18,480
and and so maybe the third week in July,

658
00:27:18,480 --> 00:27:20,640
we moved back to a neutral allocation

659
00:27:20,640 --> 00:27:23,679
going back from 48% to 50% in equities.

660
00:27:23,679 --> 00:27:25,440
Uh and we've maintained that position

661
00:27:25,440 --> 00:27:27,760
across all of the asset allocation

662
00:27:27,760 --> 00:27:30,640
decisions within the plan. So when you

663
00:27:30,640 --> 00:27:32,080
look at this and you look at all the the

664
00:27:32,080 --> 00:27:34,559
black dots and the neutral uh section

665
00:27:34,559 --> 00:27:36,400
there in the middle of the page, uh US

666
00:27:36,400 --> 00:27:39,600
equities u international equities

667
00:27:39,600 --> 00:27:40,720
combining that together that's going to

668
00:27:40,720 --> 00:27:43,200
be 50% of the portfolio. fixed income is

669
00:27:43,200 --> 00:27:45,520
going to be 48% and your cash is going

670
00:27:45,520 --> 00:27:47,279
to be at a 2% allocation and that's

671
00:27:47,279 --> 00:27:49,279
where we've been since the third week in

672
00:27:49,279 --> 00:27:51,200
July and and that's where we maintain

673
00:27:51,200 --> 00:27:54,240
our current position today.

674
00:27:54,240 --> 00:27:58,950
Robert maybe page 3.1

675
00:27:58,960 --> 00:28:03,760
and and so this is going to be and um I

676
00:28:03,760 --> 00:28:05,279
think Robert you put the first quarter

677
00:28:05,279 --> 00:28:07,520
it is the first quarter of the fiscal

678
00:28:07,520 --> 00:28:08,720
year correct

679
00:28:08,720 --> 00:28:11,029
>> third quarter at least we're we're

680
00:28:11,029 --> 00:28:11,039
» third quarter at least we're we're

681
00:28:11,039 --> 00:28:12,000
mapping it on here

682
00:28:12,000 --> 00:28:12,789
>> correct

683
00:28:12,789 --> 00:28:12,799
» correct

684
00:28:12,799 --> 00:28:13,590
>> um

685
00:28:13,590 --> 00:28:13,600
» um

686
00:28:13,600 --> 00:28:17,990
>> and and so you know uh maybe

687
00:28:17,990 --> 00:28:18,000
» and and so you know uh maybe

688
00:28:18,000 --> 00:28:21,190
>> maybe the most relevant column to look

689
00:28:21,190 --> 00:28:21,200
» maybe the most relevant column to look

690
00:28:21,200 --> 00:28:22,799
at and I'll I'll be happy to look at any

691
00:28:22,799 --> 00:28:24,480
column here uh would be maybe the

692
00:28:24,480 --> 00:28:26,960
one-year column there. Third or fourth

693
00:28:26,960 --> 00:28:29,760
one over from the left. Uh and for the

694
00:28:29,760 --> 00:28:31,440
first line item, total portfolio. This

695
00:28:31,440 --> 00:28:34,159
represents the total portfolio uh for

696
00:28:34,159 --> 00:28:36,559
the pool that we're invested in. Uh you

697
00:28:36,559 --> 00:28:39,039
saw a page that Jennifer presented her

698
00:28:39,039 --> 00:28:41,440
her her last page in her presentation

699
00:28:41,440 --> 00:28:43,840
that actually um took a look at the cash

700
00:28:43,840 --> 00:28:48,159
flows for the town's uh uh portfolio and

701
00:28:48,159 --> 00:28:50,080
that actually would be maybe a more

702
00:28:50,080 --> 00:28:53,200
relevant period or re relevant uh

703
00:28:53,200 --> 00:28:54,799
exhibit to look at and maybe we can kind

704
00:28:54,799 --> 00:28:57,440
of finish off on that if if you want to.

705
00:28:57,440 --> 00:28:59,840
Um, so in terms of a 12-month period of

706
00:28:59,840 --> 00:29:02,640
time, the actuary says make 6.5%.

707
00:29:02,640 --> 00:29:08,630
And and we generated a a 9

708
00:29:08,640 --> 00:29:10,720
» 92.

709
00:29:10,720 --> 00:29:16,950
Does it show 9.65 up there?

710
00:29:16,960 --> 00:29:19,360
» Yeah. 9

711
00:29:19,360 --> 00:29:21,669
>> It says 9.65, but the

712
00:29:21,669 --> 00:29:21,679
» It says 9.65, but the

713
00:29:21,679 --> 00:29:25,350
>> the book shows 9.92.

714
00:29:25,350 --> 00:29:25,360
» the book shows 9.92.

715
00:29:25,360 --> 00:29:28,070
>> Oh, yeah. the basin.

716
00:29:28,070 --> 00:29:28,080
» Oh, yeah. the basin.

717
00:29:28,080 --> 00:29:30,070
>> No, of course.

718
00:29:30,070 --> 00:29:30,080
» No, of course.

719
00:29:30,080 --> 00:29:32,630
>> Yeah. Well, we're gonna go with 9.92

720
00:29:32,630 --> 00:29:32,640
» Yeah. Well, we're gonna go with 9.92

721
00:29:32,640 --> 00:29:33,760
because that's the book.

722
00:29:33,760 --> 00:29:35,590
>> The one in the book in the packet is

723
00:29:35,590 --> 00:29:35,600
» The one in the book in the packet is

724
00:29:35,600 --> 00:29:37,279
9.92.

725
00:29:37,279 --> 00:29:37,669
>> Yeah,

726
00:29:37,669 --> 00:29:37,679
» Yeah,

727
00:29:37,679 --> 00:29:38,470
>> that's correct.

728
00:29:38,470 --> 00:29:38,480
» that's correct.

729
00:29:38,480 --> 00:29:40,549
>> We're going to go with 9.92. Apologies.

730
00:29:40,549 --> 00:29:40,559
» We're going to go with 9.92. Apologies.

731
00:29:40,559 --> 00:29:43,440
Apologies there. Uh, and so, yeah, way

732
00:29:43,440 --> 00:29:46,080
ahead of 6.5% for a 12-month period of

733
00:29:46,080 --> 00:29:48,720
time. Uh, how did we get there? Well, we

734
00:29:48,720 --> 00:29:50,000
certainly got there in the back of of

735
00:29:50,000 --> 00:29:52,240
the equity market. Uh, the domestic

736
00:29:52,240 --> 00:29:55,440
equity line item there, 17.2%.

737
00:29:55,440 --> 00:29:57,440
uh the international equity line item

738
00:29:57,440 --> 00:29:59,039
17.3%.

739
00:29:59,039 --> 00:30:00,640
Uh when we do our capital market

740
00:30:00,640 --> 00:30:02,720
assumptions, we expect domestic equities

741
00:30:02,720 --> 00:30:04,720
to get about 7% and international get

742
00:30:04,720 --> 00:30:07,600
about 7.4. So, you know, heck, that's

743
00:30:07,600 --> 00:30:10,000
almost two and a halfx of of what we

744
00:30:10,000 --> 00:30:12,320
would expect to generate over a 12-month

745
00:30:12,320 --> 00:30:13,200
period of time. So, that's certainly

746
00:30:13,200 --> 00:30:15,760
indicative of a really good 12 months.

747
00:30:15,760 --> 00:30:18,000
Uh other growth is a category where we

748
00:30:18,000 --> 00:30:19,760
lumping together some diversifying

749
00:30:19,760 --> 00:30:22,000
assets, real estate as well as

750
00:30:22,000 --> 00:30:24,960
infrastructure. Uh thumbs up on the

751
00:30:24,960 --> 00:30:28,320
infrastructure investment um at 16.2%

752
00:30:28,320 --> 00:30:30,080
that was one of our best performing

753
00:30:30,080 --> 00:30:32,399
asset classes over the last 12 that

754
00:30:32,399 --> 00:30:34,960
12-month period of time. Um real estate

755
00:30:34,960 --> 00:30:36,880
struggled real estate struggled over

756
00:30:36,880 --> 00:30:38,320
this period of time. I think investors

757
00:30:38,320 --> 00:30:39,919
were were kind of hoping they get a

758
00:30:39,919 --> 00:30:41,679
little bit more in the way of interest

759
00:30:41,679 --> 00:30:44,480
rate cuts uh to maybe spur that that

760
00:30:44,480 --> 00:30:46,559
real estate market. it it was actually

761
00:30:46,559 --> 00:30:48,399
the only category that that has a a

762
00:30:48,399 --> 00:30:49,919
minus sign in front of it over this

763
00:30:49,919 --> 00:30:53,360
12-month period of time at 2.3%.

764
00:30:53,360 --> 00:30:55,440
Uh fixed income fixed income was at

765
00:30:55,440 --> 00:30:57,600
3.3%.

766
00:30:57,600 --> 00:31:00,720
It's a better story when you look at um

767
00:31:00,720 --> 00:31:03,760
the 9-month period of time uh for for

768
00:31:03,760 --> 00:31:07,120
for this portfolio at 6.2% 2% and then

769
00:31:07,120 --> 00:31:09,039
when you throw on about a percent there

770
00:31:09,039 --> 00:31:12,799
in the fourth quarter uh we got about 7%

771
00:31:12,799 --> 00:31:15,600
from our real estate investments which

772
00:31:15,600 --> 00:31:18,080
it's important because in a 50/50

773
00:31:18,080 --> 00:31:20,640
portfolio half of it does come from real

774
00:31:20,640 --> 00:31:23,200
estate and and and real estate has been

775
00:31:23,200 --> 00:31:24,640
one of maybe the more disappointing

776
00:31:24,640 --> 00:31:27,840
areas uh for the portfolio for the plan

777
00:31:27,840 --> 00:31:29,679
and it's not really any of our doing

778
00:31:29,679 --> 00:31:31,840
because we're invested in in an index

779
00:31:31,840 --> 00:31:34,960
fund if you will for for fixed income.

780
00:31:34,960 --> 00:31:37,120
uh it's it's the more so the market and

781
00:31:37,120 --> 00:31:38,799
the low interest rate environment and

782
00:31:38,799 --> 00:31:41,360
also 2022 when the Fed increased

783
00:31:41,360 --> 00:31:44,399
interest rates up uh at a very high clip

784
00:31:44,399 --> 00:31:46,320
but over that 12-month period of time a

785
00:31:46,320 --> 00:31:47,840
3.3%

786
00:31:47,840 --> 00:31:49,279
return and then finally rounding it out

787
00:31:49,279 --> 00:31:50,799
cash

788
00:31:50,799 --> 00:31:52,399
while the Fed is cutting rates and that

789
00:31:52,399 --> 00:31:54,080
is impacting some of our money market

790
00:31:54,080 --> 00:31:56,000
yields we were able to still generate

791
00:31:56,000 --> 00:31:57,840
about a four and a half% return on our

792
00:31:57,840 --> 00:31:59,760
cash we don't have a lot in cash as I

793
00:31:59,760 --> 00:32:02,480
said it's about a 2% allocation um but

794
00:32:02,480 --> 00:32:04,320
but it it wasn't

795
00:32:04,320 --> 00:32:06,799
detracting over that period of time. So,

796
00:32:06,799 --> 00:32:08,320
putting it all together just to shade

797
00:32:08,320 --> 00:32:10,960
under 10%. Very happy to uh very happy

798
00:32:10,960 --> 00:32:14,159
to show that to you. Um

799
00:32:14,159 --> 00:32:16,559
I I will give you the estimate based on

800
00:32:16,559 --> 00:32:18,559
um we don't have our our final numbers

801
00:32:18,559 --> 00:32:21,760
uh solidified just yet. Um but um it

802
00:32:21,760 --> 00:32:25,679
looks like we had about a 1.8 1.9%

803
00:32:25,679 --> 00:32:28,159
uh we'll call it the second quarter of

804
00:32:28,159 --> 00:32:30,320
the fiscal year, fourth quarter of the

805
00:32:30,320 --> 00:32:32,480
calendar year. Uh so maybe just a shade

806
00:32:32,480 --> 00:32:35,760
under 2%. So, not about three months to

807
00:32:35,760 --> 00:32:39,279
uh end the calendar year.

808
00:32:39,279 --> 00:32:40,720
Uh I said I was going to talk about

809
00:32:40,720 --> 00:32:42,799
positioning and maybe that that slide

810
00:32:42,799 --> 00:32:44,799
that we looked at previously does

811
00:32:44,799 --> 00:32:47,679
capture that at a 50/50 allocation. Uh

812
00:32:47,679 --> 00:32:50,880
that that is currently where we are at.

813
00:32:50,880 --> 00:32:52,720
Um Dr.

814
00:32:52,720 --> 00:32:54,549
>> Yes sir. Just to go back to what you

815
00:32:54,549 --> 00:32:54,559
» Yes sir. Just to go back to what you

816
00:32:54,559 --> 00:32:58,159
said at the beginning, the the total

817
00:32:58,159 --> 00:33:01,679
portfolio and then these other things

818
00:33:01,679 --> 00:33:07,120
you said isn't necessarily a portfolio.

819
00:33:07,120 --> 00:33:09,269
>> This would be the investment portfolio

820
00:33:09,269 --> 00:33:09,279
» This would be the investment portfolio

821
00:33:09,279 --> 00:33:12,159
that the town of Athetherton and I'll

822
00:33:12,159 --> 00:33:14,720
make up a number six to seven seven

823
00:33:14,720 --> 00:33:17,679
other agencies are invested in. Okay.

824
00:33:17,679 --> 00:33:19,750
>> So your your portfolio assets, your plan

825
00:33:19,750 --> 00:33:19,760
» So your your portfolio assets, your plan

826
00:33:19,760 --> 00:33:22,720
assets are in this portfolio. Um but but

827
00:33:22,720 --> 00:33:25,840
but it's not totally isolated to to the

828
00:33:25,840 --> 00:33:27,120
town.

829
00:33:27,120 --> 00:33:29,509
>> But why would So the town's returns

830
00:33:29,509 --> 00:33:29,519
» But why would So the town's returns

831
00:33:29,519 --> 00:33:32,080
would be exactly the same. Then

832
00:33:32,080 --> 00:33:34,870
>> it would be maybe a little bit more or

833
00:33:34,870 --> 00:33:34,880
» it would be maybe a little bit more or

834
00:33:34,880 --> 00:33:38,159
maybe a little bit less um than than

835
00:33:38,159 --> 00:33:41,200
what the other plan or whether the

836
00:33:41,200 --> 00:33:42,880
portfolio participants are are

837
00:33:42,880 --> 00:33:44,799
experiencing. The drivers of that would

838
00:33:44,799 --> 00:33:47,360
be cash flows going in and out. Uh the

839
00:33:47,360 --> 00:33:49,440
drivers also would be fees and expenses

840
00:33:49,440 --> 00:33:50,799
which we're going to touch on probably

841
00:33:50,799 --> 00:33:53,679
about 90 seconds. Um I think you're

842
00:33:53,679 --> 00:33:55,440
maybe maybe one of the more larger

843
00:33:55,440 --> 00:33:58,480
participants and so it's a gradiated fee

844
00:33:58,480 --> 00:34:00,399
schedule. So more the more assets you

845
00:34:00,399 --> 00:34:02,799
have the lower fees and expense that

846
00:34:02,799 --> 00:34:05,279
that you uh that you incur.

847
00:34:05,279 --> 00:34:07,669
>> The assets are segmented. So the buckets

848
00:34:07,669 --> 00:34:07,679
» The assets are segmented. So the buckets

849
00:34:07,679 --> 00:34:11,040
the pools are each each town, right? So

850
00:34:11,040 --> 00:34:12,480
their inflows and outflows are going to

851
00:34:12,480 --> 00:34:14,079
affect something. So when you're

852
00:34:14,079 --> 00:34:16,079
invested in bucket A, you're going to

853
00:34:16,079 --> 00:34:18,639
put more more in the equity. You're

854
00:34:18,639 --> 00:34:20,480
going to reallocate in that portfolio.

855
00:34:20,480 --> 00:34:22,000
Maybe bucket B doesn't have the cash

856
00:34:22,000 --> 00:34:24,079
available to do it. Or is it's just

857
00:34:24,079 --> 00:34:25,679
timing issues on all this stuff.

858
00:34:25,679 --> 00:34:26,470
>> It it's not

859
00:34:26,470 --> 00:34:26,480
» It it's not

860
00:34:26,480 --> 00:34:28,389
>> it's all of us having have same amount

861
00:34:28,389 --> 00:34:28,399
» it's all of us having have same amount

862
00:34:28,399 --> 00:34:30,560
of money, but one person needs a little

863
00:34:30,560 --> 00:34:32,000
bit more and one person is getting a

864
00:34:32,000 --> 00:34:33,040
little more.

865
00:34:33,040 --> 00:34:34,710
>> It's not segregated. So that's that's

866
00:34:34,710 --> 00:34:34,720
» It's not segregated. So that's that's

867
00:34:34,720 --> 00:34:35,599
the key point.

868
00:34:35,599 --> 00:34:37,190
>> It's not it's it's a pool.

869
00:34:37,190 --> 00:34:37,200
» It's not it's it's a pool.

870
00:34:37,200 --> 00:34:39,270
>> It it's a pool. So, so let's say for

871
00:34:39,270 --> 00:34:39,280
» It it's a pool. So, so let's say for

872
00:34:39,280 --> 00:34:42,960
example, uh, um,

873
00:34:42,960 --> 00:34:44,480
Selenus,

874
00:34:44,480 --> 00:34:46,960
I'm making this up. Selenus says,

875
00:34:46,960 --> 00:34:49,510
>> uh, Selenus needs a $7 million

876
00:34:49,510 --> 00:34:49,520
» uh, Selenus needs a $7 million

877
00:34:49,520 --> 00:34:51,760
distribution to play plan, paid plan

878
00:34:51,760 --> 00:34:52,639
participants.

879
00:34:52,639 --> 00:34:53,030
>> Yeah,

880
00:34:53,030 --> 00:34:53,040
» Yeah,

881
00:34:53,040 --> 00:34:56,230
>> they it will say, uh, portfolio manager,

882
00:34:56,230 --> 00:34:56,240
» they it will say, uh, portfolio manager,

883
00:34:56,240 --> 00:34:58,560
make sure that we have enough liquidity.

884
00:34:58,560 --> 00:35:00,560
Portfolio manager checks, yes, we have

885
00:35:00,560 --> 00:35:04,720
$12 million in liquidity. uh US bank as

886
00:35:04,720 --> 00:35:07,440
plan administrator would pull these

887
00:35:07,440 --> 00:35:08,400
seven million

888
00:35:08,400 --> 00:35:10,310
>> 12 is is if we're all each of town

889
00:35:10,310 --> 00:35:10,320
» 12 is is if we're all each of town

890
00:35:10,320 --> 00:35:12,560
that's all of our our that's our that's

891
00:35:12,560 --> 00:35:14,960
everybody's one and a half or so

892
00:35:14,960 --> 00:35:19,349
>> some but but but then but then upon um

893
00:35:19,349 --> 00:35:19,359
» some but but but then but then upon um

894
00:35:19,359 --> 00:35:21,040
at at a certain point in time the

895
00:35:21,040 --> 00:35:23,839
investment manager says oh well geez uh

896
00:35:23,839 --> 00:35:26,079
we are low on cash or we we've moved

897
00:35:26,079 --> 00:35:28,320
from our target asset allocation

898
00:35:28,320 --> 00:35:30,400
position yeah uh and then we have a

899
00:35:30,400 --> 00:35:32,000
decision to to potentially rebound

900
00:35:32,000 --> 00:35:34,400
balance that portfolio.

901
00:35:34,400 --> 00:35:36,390
>> Sure. So if it's pulled then then and

902
00:35:36,390 --> 00:35:36,400
» Sure. So if it's pulled then then and

903
00:35:36,400 --> 00:35:39,359
the why would

904
00:35:39,359 --> 00:35:41,040
I imagine these returns are really

905
00:35:41,040 --> 00:35:43,200
close. But why would it matter per city

906
00:35:43,200 --> 00:35:45,119
then? If we all have a big thing all

907
00:35:45,119 --> 00:35:46,960
together then we're all getting the same

908
00:35:46,960 --> 00:35:48,800
return. If you want $7 million it's

909
00:35:48,800 --> 00:35:50,400
coming out of that big pool.

910
00:35:50,400 --> 00:35:52,630
>> I I would offer well if you consistently

911
00:35:52,630 --> 00:35:52,640
» I I would offer well if you consistently

912
00:35:52,640 --> 00:35:54,720
put more money in well let's say you

913
00:35:54,720 --> 00:35:56,400
were the only agency

914
00:35:56,400 --> 00:35:56,710
>> right

915
00:35:56,710 --> 00:35:56,720
» right

916
00:35:56,720 --> 00:35:59,589
>> that that that was putting money.

917
00:35:59,589 --> 00:35:59,599
» that that that was putting money.

918
00:35:59,599 --> 00:36:03,040
I don't believe that that you're if you

919
00:36:03,040 --> 00:36:05,359
were putting money into an individual

920
00:36:05,359 --> 00:36:08,320
account, I don't think that that the

921
00:36:08,320 --> 00:36:11,520
cash flows would um the performance

922
00:36:11,520 --> 00:36:14,160
based on the cash flows would exactly

923
00:36:14,160 --> 00:36:16,640
foot to the performance based on

924
00:36:16,640 --> 00:36:17,910
>> maybe the thing that we care about is

925
00:36:17,910 --> 00:36:17,920
» maybe the thing that we care about is

926
00:36:17,920 --> 00:36:19,359
that we don't suffer as a result of

927
00:36:19,359 --> 00:36:22,320
other people's cash needs.

928
00:36:22,320 --> 00:36:24,630
>> Certainly appreciate. I don't think that

929
00:36:24,630 --> 00:36:24,640
» Certainly appreciate. I don't think that

930
00:36:24,640 --> 00:36:27,440
you do, but but but but there is a

931
00:36:27,440 --> 00:36:28,480
dynamic there,

932
00:36:28,480 --> 00:36:30,630
>> especially when we're overfunded. So,

933
00:36:30,630 --> 00:36:30,640
» especially when we're overfunded. So,

934
00:36:30,640 --> 00:36:33,359
we're overfunded, we could sit back and

935
00:36:33,359 --> 00:36:36,880
use and have Robert's cash needs met

936
00:36:36,880 --> 00:36:40,480
without too much trouble. So,

937
00:36:40,480 --> 00:36:41,270
>> it's maybe

938
00:36:41,270 --> 00:36:41,280
» it's maybe

939
00:36:41,280 --> 00:36:44,470
>> Robert's cash needs a question for next

940
00:36:44,470 --> 00:36:44,480
» Robert's cash needs a question for next

941
00:36:44,480 --> 00:36:47,200
time for you for for if if we want to

942
00:36:47,200 --> 00:36:49,440
get into the weeds. Um I don't want to

943
00:36:49,440 --> 00:36:50,880
get too far into the weeds because I

944
00:36:50,880 --> 00:36:53,359
think you missed things. But um maybe

945
00:36:53,359 --> 00:36:57,280
that's to are are we are

946
00:36:57,280 --> 00:36:59,040
is the mechanism and is the way that you

947
00:36:59,040 --> 00:37:00,320
operate and the policy the way that you

948
00:37:00,320 --> 00:37:02,960
operate it such that

949
00:37:02,960 --> 00:37:06,000
that towns that are overfunded so to

950
00:37:06,000 --> 00:37:09,040
speak are actually um

951
00:37:09,040 --> 00:37:10,640
um

952
00:37:10,640 --> 00:37:12,400
not benefiting from the overfunding. So

953
00:37:12,400 --> 00:37:15,440
to their we're we're we're helping the

954
00:37:15,440 --> 00:37:18,000
underfunded. We're actually the biggest

955
00:37:18,000 --> 00:37:20,800
draw you start

956
00:37:20,800 --> 00:37:22,240
definitely two different two different

957
00:37:22,240 --> 00:37:26,240
dynamics going on here. I mean, so so

958
00:37:26,240 --> 00:37:29,920
your your funding policy uh to to me I I

959
00:37:29,920 --> 00:37:31,200
began to think, okay, well, if you're

960
00:37:31,200 --> 00:37:33,920
113% funded, which I think the marked

961
00:37:33,920 --> 00:37:37,200
market through November, uh then then we

962
00:37:37,200 --> 00:37:38,560
begin to think about, well, do we need

963
00:37:38,560 --> 00:37:41,599
to take 6.5 the risk commenserate with a

964
00:37:41,599 --> 00:37:44,160
6.5% discount rate, which

965
00:37:44,160 --> 00:37:47,190
>> in in our in our recommendation is a 50%

966
00:37:47,190 --> 00:37:47,200
» in in our in our recommendation is a 50%

967
00:37:47,200 --> 00:37:48,880
equity, 50% portfolio.

968
00:37:48,880 --> 00:37:49,430
>> Yeah.

969
00:37:49,430 --> 00:37:49,440
» Yeah.

970
00:37:49,440 --> 00:37:51,270
>> So that's completely germanine to the

971
00:37:51,270 --> 00:37:51,280
» So that's completely germanine to the

972
00:37:51,280 --> 00:37:53,040
town. it doesn't really impact or or or

973
00:37:53,040 --> 00:37:56,160
or consider other agencies within this

974
00:37:56,160 --> 00:38:00,000
pool. Um the and our answer would be

975
00:38:00,000 --> 00:38:01,920
yes, we would still maintain we would

976
00:38:01,920 --> 00:38:03,440
recommend maintaining the course with a

977
00:38:03,440 --> 00:38:05,839
50/50 portfolio

978
00:38:05,839 --> 00:38:08,640
because of the the cash requirements. I

979
00:38:08,640 --> 00:38:10,880
mean because right now what did you what

980
00:38:10,880 --> 00:38:13,839
did you disperse last year or where the

981
00:38:13,839 --> 00:38:14,800
town disperse

982
00:38:14,800 --> 00:38:15,990
>> um

983
00:38:15,990 --> 00:38:16,000
» um

984
00:38:16,000 --> 00:38:18,630
>> 4.5ish

985
00:38:18,630 --> 00:38:18,640
» 4.5ish

986
00:38:18,640 --> 00:38:21,200
almost 5%. So if you think about the

987
00:38:21,200 --> 00:38:24,800
dynamics here, uh you're assuming 6.5%

988
00:38:24,800 --> 00:38:27,839
but you're also kind of distributing

989
00:38:27,839 --> 00:38:31,520
four and a half um couple nickels for

990
00:38:31,520 --> 00:38:34,079
our fees and expenses. You have a little

991
00:38:34,079 --> 00:38:35,680
bit left in a perfect world, right? And

992
00:38:35,680 --> 00:38:37,200
this isn't even factoring in those years

993
00:38:37,200 --> 00:38:38,480
where we have down.

994
00:38:38,480 --> 00:38:38,870
>> Um

995
00:38:38,870 --> 00:38:38,880
» Um

996
00:38:38,880 --> 00:38:39,510
>> yeah,

997
00:38:39,510 --> 00:38:39,520
» yeah,

998
00:38:39,520 --> 00:38:40,790
>> you have a little bit left over for

999
00:38:40,790 --> 00:38:40,800
» you have a little bit left over for

1000
00:38:40,800 --> 00:38:42,320
compound growth, but we're really not in

1001
00:38:42,320 --> 00:38:43,680
growth mode. But I mean, we're we're

1002
00:38:43,680 --> 00:38:47,119
using the assets for for what they're

1003
00:38:47,119 --> 00:38:50,079
intended for to to support the the

1004
00:38:50,079 --> 00:38:51,440
liability.

1005
00:38:51,440 --> 00:38:53,670
>> As maybe even more, I'm just trying to

1006
00:38:53,670 --> 00:38:53,680
» As maybe even more, I'm just trying to

1007
00:38:53,680 --> 00:38:55,440
get the basic question as I can.

1008
00:38:55,440 --> 00:38:55,990
>> Yeah.

1009
00:38:55,990 --> 00:38:56,000
» Yeah.

1010
00:38:56,000 --> 00:38:58,550
>> How are we affected by other towns? We

1011
00:38:58,550 --> 00:38:58,560
» How are we affected by other towns? We

1012
00:38:58,560 --> 00:39:00,480
could isolate our assets and stick them

1013
00:39:00,480 --> 00:39:02,079
right here in our corner and have

1014
00:39:02,079 --> 00:39:04,960
everybody else stay over there. Do we do

1015
00:39:04,960 --> 00:39:07,200
better or do we do worse or we just do

1016
00:39:07,200 --> 00:39:10,560
do the same? Is the pooling

1017
00:39:10,560 --> 00:39:12,160
does the pooling allow you to do the

1018
00:39:12,160 --> 00:39:13,520
administration that you need and pull

1019
00:39:13,520 --> 00:39:15,839
this whole thing thing off at le less of

1020
00:39:15,839 --> 00:39:18,079
a cost? That's why we pool or you

1021
00:39:18,079 --> 00:39:19,670
>> Well, there are three questions there. I

1022
00:39:19,670 --> 00:39:19,680
» Well, there are three questions there. I

1023
00:39:19,680 --> 00:39:21,680
had I had the no, they had the yes and

1024
00:39:21,680 --> 00:39:24,880
the um one one thing that that that we

1025
00:39:24,880 --> 00:39:27,760
typically do is is in and this is well

1026
00:39:27,760 --> 00:39:29,520
the Wii is the royal we but it's really

1027
00:39:29,520 --> 00:39:33,440
the trustee. uh the trustee establishes

1028
00:39:33,440 --> 00:39:36,480
a limit usually at $10 million uh to to

1029
00:39:36,480 --> 00:39:38,480
have an individual account and and the

1030
00:39:38,480 --> 00:39:40,480
town since day one has been under that

1031
00:39:40,480 --> 00:39:42,640
that that limit

1032
00:39:42,640 --> 00:39:45,589
>> 92 93 I mean potentially we could talk

1033
00:39:45,589 --> 00:39:45,599
» 92 93 I mean potentially we could talk

1034
00:39:45,599 --> 00:39:49,119
to the trustee um since my paycheck has

1035
00:39:49,119 --> 00:39:51,440
the same name that the trustees has. I

1036
00:39:51,440 --> 00:39:53,440
mean we could potentially look at an

1037
00:39:53,440 --> 00:39:56,240
individual account. Key point though, we

1038
00:39:56,240 --> 00:39:57,920
would not do anything different than

1039
00:39:57,920 --> 00:40:01,040
what you see on the asset. You see the

1040
00:40:01,040 --> 00:40:02,720
percent sign with the the allocation

1041
00:40:02,720 --> 00:40:04,720
there. We would allocate it the same way

1042
00:40:04,720 --> 00:40:06,480
we'd manage the same.

1043
00:40:06,480 --> 00:40:08,710
>> But you wouldn't be potentially

1044
00:40:08,710 --> 00:40:08,720
» But you wouldn't be potentially

1045
00:40:08,720 --> 00:40:10,240
positively or negative. You wouldn't be

1046
00:40:10,240 --> 00:40:12,720
impacted by other agencies cash flows in

1047
00:40:12,720 --> 00:40:15,119
or cash flows out

1048
00:40:15,119 --> 00:40:16,230
>> because it got effect.

1049
00:40:16,230 --> 00:40:16,240
» because it got effect.

1050
00:40:16,240 --> 00:40:16,870
>> Yeah.

1051
00:40:16,870 --> 00:40:16,880
» Yeah.

1052
00:40:16,880 --> 00:40:18,870
>> A smidge, but but it could be to the

1053
00:40:18,870 --> 00:40:18,880
» A smidge, but but it could be to the

1054
00:40:18,880 --> 00:40:19,839
positive. Uh

1055
00:40:19,839 --> 00:40:20,550
>> it could be

1056
00:40:20,550 --> 00:40:20,560
» it could be

1057
00:40:20,560 --> 00:40:21,190
>> but but

1058
00:40:21,190 --> 00:40:21,200
» but but

1059
00:40:21,200 --> 00:40:22,870
>> the point is we don't know. So if you

1060
00:40:22,870 --> 00:40:22,880
» the point is we don't know. So if you

1061
00:40:22,880 --> 00:40:23,599
just sit there,

1062
00:40:23,599 --> 00:40:24,950
>> I'll answer it in a maybe a slightly

1063
00:40:24,950 --> 00:40:24,960
» I'll answer it in a maybe a slightly

1064
00:40:24,960 --> 00:40:26,960
different way. When we put together our

1065
00:40:26,960 --> 00:40:28,880
um portfolio composits, our investment

1066
00:40:28,880 --> 00:40:31,520
composits, so when we when we show the

1067
00:40:31,520 --> 00:40:33,599
world, you know, quote unquote, how much

1068
00:40:33,599 --> 00:40:35,440
better we are than than the Calurge,

1069
00:40:35,440 --> 00:40:37,520
right? We're going to an RFP and we put

1070
00:40:37,520 --> 00:40:39,359
together our composits for the 50/50

1071
00:40:39,359 --> 00:40:42,320
portfolio. Uh the the the variance in

1072
00:40:42,320 --> 00:40:44,720
terms of our returns for our 5050

1073
00:40:44,720 --> 00:40:48,000
portfolios, it's not too wide. So when I

1074
00:40:48,000 --> 00:40:50,320
see that, it's not too varied. So when I

1075
00:40:50,320 --> 00:40:53,119
see that, I say, well,

1076
00:40:53,119 --> 00:40:55,200
the the whatever the cash flows in and

1077
00:40:55,200 --> 00:40:58,079
out of those 10, 12, 15 accounts that

1078
00:40:58,079 --> 00:41:00,880
make up our 50/50 portfolio, it's not

1079
00:41:00,880 --> 00:41:05,680
really walloping one or pool. And it's

1080
00:41:05,680 --> 00:41:09,359
pretty tight. But if as a homework

1081
00:41:09,359 --> 00:41:10,960
assignment you want us to look into

1082
00:41:10,960 --> 00:41:14,160
maybe doing a separate account

1083
00:41:14,160 --> 00:41:14,630
>> we can look at

1084
00:41:14,630 --> 00:41:14,640
» we can look at

1085
00:41:14,640 --> 00:41:16,550
>> if you would just confirm why there

1086
00:41:16,550 --> 00:41:16,560
» if you would just confirm why there

1087
00:41:16,560 --> 00:41:18,400
would be if you would like I look into

1088
00:41:18,400 --> 00:41:20,560
why there's a difference. It's cash

1089
00:41:20,560 --> 00:41:22,480
flows, but I'll give it I'll write out

1090
00:41:22,480 --> 00:41:24,319
to me would be the thing that would make

1091
00:41:24,319 --> 00:41:27,359
sense would be

1092
00:41:27,359 --> 00:41:29,839
that

1093
00:41:29,839 --> 00:41:33,760
each each per each pool participant

1094
00:41:33,760 --> 00:41:36,000
uh their return depends on their the

1095
00:41:36,000 --> 00:41:39,280
timing of their inflows and outflows.

1096
00:41:39,280 --> 00:41:41,520
At the portfolio level, it's like an

1097
00:41:41,520 --> 00:41:44,079
average of that. But

1098
00:41:44,079 --> 00:41:46,960
but we shouldn't be impacted by what

1099
00:41:46,960 --> 00:41:48,960
anyone else is doing.

1100
00:41:48,960 --> 00:41:50,000
I

1101
00:41:50,000 --> 00:41:51,670
>> shouldn't be from a philosophical

1102
00:41:51,670 --> 00:41:51,680
» shouldn't be from a philosophical

1103
00:41:51,680 --> 00:41:53,760
standpoint or shouldn't be from a

1104
00:41:53,760 --> 00:41:54,640
investment.

1105
00:41:54,640 --> 00:41:55,589
>> Well, both.

1106
00:41:55,589 --> 00:41:55,599
» Well, both.

1107
00:41:55,599 --> 00:41:57,510
>> Well, I mean, you you should have a

1108
00:41:57,510 --> 00:41:57,520
» Well, I mean, you you should have a

1109
00:41:57,520 --> 00:42:01,359
system that doesn't impact us depending

1110
00:42:01,359 --> 00:42:04,079
on what other people are doing.

1111
00:42:04,079 --> 00:42:06,870
>> Well, so so then I would encourage you

1112
00:42:06,870 --> 00:42:06,880
» Well, so so then I would encourage you

1113
00:42:06,880 --> 00:42:07,359
to

1114
00:42:07,359 --> 00:42:08,710
>> see if you can isolate it, right? That's

1115
00:42:08,710 --> 00:42:08,720
» see if you can isolate it, right? That's

1116
00:42:08,720 --> 00:42:09,839
I mean that's what I would do.

1117
00:42:09,839 --> 00:42:11,510
>> I would encourage you then to discuss it

1118
00:42:11,510 --> 00:42:11,520
» I would encourage you then to discuss it

1119
00:42:11,520 --> 00:42:13,839
if if you do want to pursue individual

1120
00:42:13,839 --> 00:42:15,520
account. Well, the first thing would be

1121
00:42:15,520 --> 00:42:18,640
if you could maybe get back to Robert

1122
00:42:18,640 --> 00:42:22,960
and explain exactly how differences can

1123
00:42:22,960 --> 00:42:26,790
arise.

1124
00:42:26,800 --> 00:42:30,400
» Sure. I'll give an official one pager.

1125
00:42:30,400 --> 00:42:31,910
>> I got to think it's going to be really

1126
00:42:31,910 --> 00:42:31,920
» I got to think it's going to be really

1127
00:42:31,920 --> 00:42:33,520
hard to isolate that.

1128
00:42:33,520 --> 00:42:35,910
>> Well, when you say isolate, I I can't do

1129
00:42:35,910 --> 00:42:35,920
» Well, when you say isolate, I I can't do

1130
00:42:35,920 --> 00:42:37,920
the the accounting.

1131
00:42:37,920 --> 00:42:39,109
>> What if that's

1132
00:42:39,109 --> 00:42:39,119
» What if that's

1133
00:42:39,119 --> 00:42:41,349
>> Yeah. No, that I'm going to give it a

1134
00:42:41,349 --> 00:42:41,359
» Yeah. No, that I'm going to give it a

1135
00:42:41,359 --> 00:42:43,520
philosophical. These are the three

1136
00:42:43,520 --> 00:42:45,839
reasons why you would anticipate a

1137
00:42:45,839 --> 00:42:48,560
different return uh between an

1138
00:42:48,560 --> 00:42:51,119
individual account where it's just your

1139
00:42:51,119 --> 00:42:53,440
$450,000 coming in and whatever

1140
00:42:53,440 --> 00:42:56,400
contribution you're putting in uh versus

1141
00:42:56,400 --> 00:42:59,599
the experience of

1142
00:42:59,599 --> 00:43:03,760
a coming pool that that has you know a

1143
00:43:03,760 --> 00:43:07,119
very I mean the main thing Thomas is is

1144
00:43:07,119 --> 00:43:08,800
okay well we ended the we ended the

1145
00:43:08,800 --> 00:43:11,520
quarter there at 2.6% 6% cash.

1146
00:43:11,520 --> 00:43:13,990
>> Um, other pools might have ended the

1147
00:43:13,990 --> 00:43:14,000
» Um, other pools might have ended the

1148
00:43:14,000 --> 00:43:15,599
quarter at 1 point something percent

1149
00:43:15,599 --> 00:43:18,319
cash or maybe 5%. Maybe somebody got a a

1150
00:43:18,319 --> 00:43:20,880
10% contribution to cash that we were

1151
00:43:20,880 --> 00:43:23,520
gradually dollar cost averaging in and

1152
00:43:23,520 --> 00:43:26,079
we dollar cost

1153
00:43:26,079 --> 00:43:29,440
on great days which slightly increased.

1154
00:43:29,440 --> 00:43:31,359
You know, we bought low and then it went

1155
00:43:31,359 --> 00:43:33,200
up after we we put that large

1156
00:43:33,200 --> 00:43:35,680
contribution in and it gradually showed

1157
00:43:35,680 --> 00:43:38,400
a little bit of upside in that pool

1158
00:43:38,400 --> 00:43:39,599
experience.

1159
00:43:39,599 --> 00:43:41,680
I mean, and like I said, I'll give you

1160
00:43:41,680 --> 00:43:44,480
the memo, but but that's the main thing.

1161
00:43:44,480 --> 00:43:46,150
>> I take a look at isolating it. It's it's

1162
00:43:46,150 --> 00:43:46,160
» I take a look at isolating it. It's it's

1163
00:43:46,160 --> 00:43:48,079
as if as if Tom and I got together and

1164
00:43:48,079 --> 00:43:49,440
said, "Hey, let's combine our retirement

1165
00:43:49,440 --> 00:43:51,200
accounts together and we'll have an

1166
00:43:51,200 --> 00:43:52,640
accountant to kind of figure things out.

1167
00:43:52,640 --> 00:43:54,240
We'll allocate it out. You might need

1168
00:43:54,240 --> 00:43:55,520
some money and then I might need some

1169
00:43:55,520 --> 00:43:58,160
money after

1170
00:43:58,160 --> 00:43:59,599
I wanted to have my retirement account."

1171
00:43:59,599 --> 00:44:01,440
He doesn't want mine either.

1172
00:44:01,440 --> 00:44:01,829
>> Yeah.

1173
00:44:01,829 --> 00:44:01,839
» Yeah.

1174
00:44:01,839 --> 00:44:04,309
>> So, is it that you think it's similar

1175
00:44:04,309 --> 00:44:04,319
» So, is it that you think it's similar

1176
00:44:04,319 --> 00:44:07,040
expense ratio for for operating on a

1177
00:44:07,040 --> 00:44:09,040
separate account versus a pool? We don't

1178
00:44:09,040 --> 00:44:10,720
charge anything more for an individual

1179
00:44:10,720 --> 00:44:13,359
account. So that's the you're charged

1180
00:44:13,359 --> 00:44:14,960
based on your assets under management.

1181
00:44:14,960 --> 00:44:17,040
Since that's one of our check boxes,

1182
00:44:17,040 --> 00:44:19,280
let's let's knock that out right now. Uh

1183
00:44:19,280 --> 00:44:23,040
at at let's see.

1184
00:44:23,040 --> 00:44:24,950
>> So if we wanted it separate, it wouldn't

1185
00:44:24,950 --> 00:44:24,960
» So if we wanted it separate, it wouldn't

1186
00:44:24,960 --> 00:44:29,359
cost us anything. Is that correct?

1187
00:44:29,359 --> 00:44:33,030
>> It doesn't cost any more. Yeah. uh the

1188
00:44:33,030 --> 00:44:33,040
» It doesn't cost any more. Yeah. uh the

1189
00:44:33,040 --> 00:44:35,520
blended um

1190
00:44:35,520 --> 00:44:37,680
the expenses for the index funds the the

1191
00:44:37,680 --> 00:44:40,319
the weighted average for the index funds

1192
00:44:40,319 --> 00:44:42,880
is going to be 4.8 basis points.

1193
00:44:42,880 --> 00:44:45,910
>> Uh and then I think I I calculated the

1194
00:44:45,910 --> 00:44:45,920
» Uh and then I think I I calculated the

1195
00:44:45,920 --> 00:44:50,240
uh expense for 9.2 million at 30.7

1196
00:44:50,240 --> 00:44:52,240
or so. So I think we were just a shade

1197
00:44:52,240 --> 00:44:55,920
under 36 basis points all in all in for

1198
00:44:55,920 --> 00:44:58,160
investment management. So that's uh the

1199
00:44:58,160 --> 00:45:00,160
embedded expenses for the index funds

1200
00:45:00,160 --> 00:45:04,960
and what PFM asset management US bank uh

1201
00:45:04,960 --> 00:45:05,920
charges.

1202
00:45:05,920 --> 00:45:07,750
>> What what's the review process for that?

1203
00:45:07,750 --> 00:45:07,760
» What what's the review process for that?

1204
00:45:07,760 --> 00:45:08,720
One of the things I mentioned last time

1205
00:45:08,720 --> 00:45:11,280
was Fidelity's got a 0% total market

1206
00:45:11,280 --> 00:45:14,319
index. I think does

1207
00:45:14,319 --> 00:45:17,119
a process in house to substitute lesser

1208
00:45:17,119 --> 00:45:20,800
cost. Can we go from a third from 3 to

1209
00:45:20,800 --> 00:45:22,640
0.25? Is that something that's looked

1210
00:45:22,640 --> 00:45:25,359
at? I respect your diligence in terms of

1211
00:45:25,359 --> 00:45:28,000
trying to get below this cost. I think

1212
00:45:28,000 --> 00:45:30,079
one of the things that we do think about

1213
00:45:30,079 --> 00:45:31,440
I mean obviously we think especially

1214
00:45:31,440 --> 00:45:33,119
with index ones we think about fees and

1215
00:45:33,119 --> 00:45:34,880
expenses expenses

1216
00:45:34,880 --> 00:45:36,069
>> because it's easy because you guys can

1217
00:45:36,069 --> 00:45:36,079
» because it's easy because you guys can

1218
00:45:36,079 --> 00:45:37,839
keep your management keep the fees

1219
00:45:37,839 --> 00:45:39,040
related to it and run it to where you're

1220
00:45:39,040 --> 00:45:41,280
running and drive the cost of the

1221
00:45:41,280 --> 00:45:44,880
portfolio down. We need liquidity. Uh,

1222
00:45:44,880 --> 00:45:47,359
and we also need need a provider that

1223
00:45:47,359 --> 00:45:49,680
that won't tag you for a because

1224
00:45:49,680 --> 00:45:51,520
sometimes if you if you if you pull

1225
00:45:51,520 --> 00:45:53,200
money out within a 30-day window of

1226
00:45:53,200 --> 00:45:57,119
time, they'll assess a a modest penalty.

1227
00:45:57,119 --> 00:46:00,950
>> Yeah.

1228
00:46:00,960 --> 00:46:03,280
» Yeah. I'm I'm not wondering about I'm

1229
00:46:03,280 --> 00:46:06,480
wondering about what the process is for

1230
00:46:06,480 --> 00:46:09,440
for not just us but for for the others

1231
00:46:09,440 --> 00:46:11,200
where you look down your when was the

1232
00:46:11,200 --> 00:46:12,800
last time you had a fund change. Do

1233
00:46:12,800 --> 00:46:14,079
what's the process for looking down

1234
00:46:14,079 --> 00:46:16,480
there and going I have Fidelity total

1235
00:46:16,480 --> 00:46:18,560
market index. There's other total market

1236
00:46:18,560 --> 00:46:20,800
indexes that are out there and they may

1237
00:46:20,800 --> 00:46:23,200
be they may track the index similarly

1238
00:46:23,200 --> 00:46:25,680
the same and they may be at less cost.

1239
00:46:25,680 --> 00:46:27,839
Do you have a process where you go, you

1240
00:46:27,839 --> 00:46:30,480
know, it's January, it's time for us to

1241
00:46:30,480 --> 00:46:31,839
take a look at that?

1242
00:46:31,839 --> 00:46:33,670
>> Well, it actually kind of follows that

1243
00:46:33,670 --> 00:46:33,680
» Well, it actually kind of follows that

1244
00:46:33,680 --> 00:46:37,920
that sort of rubric for index funds. I

1245
00:46:37,920 --> 00:46:39,520
mean, it's it's probably going to be a

1246
00:46:39,520 --> 00:46:41,280
once a year dynamic. I mean, it's not

1247
00:46:41,280 --> 00:46:42,000
going to be a

1248
00:46:42,000 --> 00:46:43,670
>> still I mean, we're just that's how you

1249
00:46:43,670 --> 00:46:43,680
» still I mean, we're just that's how you

1250
00:46:43,680 --> 00:46:44,480
got to.

1251
00:46:44,480 --> 00:46:46,150
>> So, a manager research group would look

1252
00:46:46,150 --> 00:46:46,160
» So, a manager research group would look

1253
00:46:46,160 --> 00:46:48,240
at index funds pretty much on a on an

1254
00:46:48,240 --> 00:46:51,119
annual basis. Uh determine liquidity,

1255
00:46:51,119 --> 00:46:52,800
determine if there's any fund provisions

1256
00:46:52,800 --> 00:46:55,280
that that change. uh index funds they

1257
00:46:55,280 --> 00:46:56,400
don't raise their fees. So

1258
00:46:56,400 --> 00:46:58,230
>> what about substitution? Does that

1259
00:46:58,230 --> 00:46:58,240
» what about substitution? Does that

1260
00:46:58,240 --> 00:46:59,839
happen often? Because there's fidelity

1261
00:46:59,839 --> 00:47:02,710
>> doesn't happen often and when it does

1262
00:47:02,710 --> 00:47:02,720
» doesn't happen often and when it does

1263
00:47:02,720 --> 00:47:06,720
happen for index funds it's you know

1264
00:47:06,720 --> 00:47:08,400
attracting the underlying venture. Why

1265
00:47:08,400 --> 00:47:09,200
is

1266
00:47:09,200 --> 00:47:10,710
>> well this international fund doesn't

1267
00:47:10,710 --> 00:47:10,720
» well this international fund doesn't

1268
00:47:10,720 --> 00:47:12,400
have exposure to Canada.

1269
00:47:12,400 --> 00:47:15,030
>> Well who cares? It's only 6%. Well wait

1270
00:47:15,030 --> 00:47:15,040
» Well who cares? It's only 6%. Well wait

1271
00:47:15,040 --> 00:47:16,319
a minute we care because we're not

1272
00:47:16,319 --> 00:47:18,720
tracking. So, so that's usually more of

1273
00:47:18,720 --> 00:47:21,920
a catalyst um to to make us think about

1274
00:47:21,920 --> 00:47:24,079
a replacement for for an index fund.

1275
00:47:24,079 --> 00:47:24,390
>> Yeah.

1276
00:47:24,390 --> 00:47:24,400
» Yeah.

1277
00:47:24,400 --> 00:47:26,230
>> Uh yeah. Well, um

1278
00:47:26,230 --> 00:47:26,240
» Uh yeah. Well, um

1279
00:47:26,240 --> 00:47:28,309
>> I mean our plan here is to have I just

1280
00:47:28,309 --> 00:47:28,319
» I mean our plan here is to have I just

1281
00:47:28,319 --> 00:47:31,119
got the statements is to is to have all

1282
00:47:31,119 --> 00:47:34,640
these funds, show what they are, look at

1283
00:47:34,640 --> 00:47:36,319
what their tracking record is, look at

1284
00:47:36,319 --> 00:47:37,839
what their expenses are, and see if

1285
00:47:37,839 --> 00:47:40,319
there's a substitute for it. And then

1286
00:47:40,319 --> 00:47:42,560
just ask, go, hey, there's a substitute

1287
00:47:42,560 --> 00:47:45,200
for fidelity of whatever. Are you guys

1288
00:47:45,200 --> 00:47:47,119
considering that? If we have our own

1289
00:47:47,119 --> 00:47:49,200
pool, does it make any different or is

1290
00:47:49,200 --> 00:47:51,200
this a policy decision that you make for

1291
00:47:51,200 --> 00:47:52,800
everybody? Everybody's going to get the

1292
00:47:52,800 --> 00:47:53,680
Fidelity B.

1293
00:47:53,680 --> 00:47:55,589
>> It's a policy decision that everybody

1294
00:47:55,589 --> 00:47:55,599
» It's a policy decision that everybody

1295
00:47:55,599 --> 00:47:57,359
gets. Yeah. So, so

1296
00:47:57,359 --> 00:47:58,790
>> that's a good one though. I think if you

1297
00:47:58,790 --> 00:47:58,800
» that's a good one though. I think if you

1298
00:47:58,800 --> 00:48:00,480
track the same you have less expenses,

1299
00:48:00,480 --> 00:48:02,079
why not do it?

1300
00:48:02,079 --> 00:48:04,069
>> Well, sure. I mean, all things being

1301
00:48:04,069 --> 00:48:04,079
» Well, sure. I mean, all things being

1302
00:48:04,079 --> 00:48:05,440
equal, but all things aren't always

1303
00:48:05,440 --> 00:48:07,200
equal. And you do have the tracking with

1304
00:48:07,200 --> 00:48:09,440
the underlying index. Um, and and

1305
00:48:09,440 --> 00:48:10,800
liquidity is a big deal, too. Totally

1306
00:48:10,800 --> 00:48:12,400
agree. And there's also some providers

1307
00:48:12,400 --> 00:48:14,240
that that that will uh you know nickel

1308
00:48:14,240 --> 00:48:16,240
and dime you in terms and remember I

1309
00:48:16,240 --> 00:48:17,440
mean we have a lot of inflows and

1310
00:48:17,440 --> 00:48:18,079
outflows.

1311
00:48:18,079 --> 00:48:19,349
>> I get it.

1312
00:48:19,349 --> 00:48:19,359
» I get it.

1313
00:48:19,359 --> 00:48:21,030
>> The fund provider thinks that we're

1314
00:48:21,030 --> 00:48:21,040
» The fund provider thinks that we're

1315
00:48:21,040 --> 00:48:22,640
buying and selling and flipping things

1316
00:48:22,640 --> 00:48:24,000
around and we're not.

1317
00:48:24,000 --> 00:48:26,069
>> Um but yet they still want to give you a

1318
00:48:26,069 --> 00:48:26,079
» Um but yet they still want to give you a

1319
00:48:26,079 --> 00:48:30,880
little bit of a penalty and that's the

1320
00:48:30,880 --> 00:48:34,950
>> fair. That's fair.

1321
00:48:34,960 --> 00:48:37,200
» Yes. So just to piggyback on that on the

1322
00:48:37,200 --> 00:48:41,040
the the investment uh cost. So the costs

1323
00:48:41,040 --> 00:48:45,520
are about um as I mentioned about point

1324
00:48:45,520 --> 00:48:50,880
30 basis point um so it's about 26,000

1325
00:48:50,880 --> 00:48:53,040
and then with the administration it's

1326
00:48:53,040 --> 00:48:55,520
about 24. So the total

1327
00:48:55,520 --> 00:48:58,870
>> expenses about 49,000 on

1328
00:48:58,870 --> 00:48:58,880
» expenses about 49,000 on

1329
00:48:58,880 --> 00:49:01,349
>> the 8.8 million

1330
00:49:01,349 --> 00:49:01,359
» the 8.8 million

1331
00:49:01,359 --> 00:49:03,990
>> is is the cost between the administrator

1332
00:49:03,990 --> 00:49:04,000
» is is the cost between the administrator

1333
00:49:04,000 --> 00:49:06,160
and the investment. Um so about you're

1334
00:49:06,160 --> 00:49:10,400
looking at 48,000 um cost per year. um

1335
00:49:10,400 --> 00:49:15,750
about 8.8 millions in assets.

1336
00:49:15,760 --> 00:49:16,880
» This part of this discussion going to be

1337
00:49:16,880 --> 00:49:19,760
on again on on shorts allocation um on

1338
00:49:19,760 --> 00:49:24,079
our equity versus bond or is that

1339
00:49:24,079 --> 00:49:26,470
>> yeah we we'll we'll bring that back um

1340
00:49:26,470 --> 00:49:26,480
» yeah we we'll we'll bring that back um

1341
00:49:26,480 --> 00:49:29,119
when we do our our end of the year we'll

1342
00:49:29,119 --> 00:49:32,000
review we'll say um this is you know our

1343
00:49:32,000 --> 00:49:34,160
investment strategies is the modern

1344
00:49:34,160 --> 00:49:36,079
index um asset.

1345
00:49:36,079 --> 00:49:38,150
>> Do we want to change it? We want to um

1346
00:49:38,150 --> 00:49:38,160
» Do we want to change it? We want to um

1347
00:49:38,160 --> 00:49:39,200
be more conservative.

1348
00:49:39,200 --> 00:49:40,549
>> That was the last one we just did.

1349
00:49:40,549 --> 00:49:40,559
» That was the last one we just did.

1350
00:49:40,559 --> 00:49:42,470
>> Yes, that was the one in in June,

1351
00:49:42,470 --> 00:49:42,480
» Yes, that was the one in in June,

1352
00:49:42,480 --> 00:49:44,559
correct? And and and the committee

1353
00:49:44,559 --> 00:49:46,800
recommended we just stay where we're at

1354
00:49:46,800 --> 00:49:49,920
um because that one meets the uh at the

1355
00:49:49,920 --> 00:49:53,920
time it was 6% um our our investment

1356
00:49:53,920 --> 00:49:55,760
return, but through the actuarian

1357
00:49:55,760 --> 00:49:58,880
mentioned that now it's 6.5%.

1358
00:49:58,880 --> 00:50:01,599
So um in and see the plan is is the

1359
00:50:01,599 --> 00:50:03,839
investment plan is making is

1360
00:50:03,839 --> 00:50:06,309
>> next step up is is is the next step up

1361
00:50:06,309 --> 00:50:06,319
» next step up is is is the next step up

1362
00:50:06,319 --> 00:50:07,680
from ours is

1363
00:50:07,680 --> 00:50:10,710
>> balanced balanced is something we we run

1364
00:50:10,710 --> 00:50:10,720
» balanced balanced is something we we run

1365
00:50:10,720 --> 00:50:13,839
uh the target allocation can be 60 40

1366
00:50:13,839 --> 00:50:16,720
60% equities 40% bonds

1367
00:50:16,720 --> 00:50:19,670
>> the range is 50 to 70% equity so it can

1368
00:50:19,670 --> 00:50:19,680
» the range is 50 to 70% equity so it can

1369
00:50:19,680 --> 00:50:21,359
go as low as 50

1370
00:50:21,359 --> 00:50:22,870
>> uh if you think that that's low I mean

1371
00:50:22,870 --> 00:50:22,880
» uh if you think that that's low I mean

1372
00:50:22,880 --> 00:50:26,559
that's our target and then as high as 70

1373
00:50:26,559 --> 00:50:30,390
>> um I Yeah, I didn't come, you know, when

1374
00:50:30,390 --> 00:50:30,400
» um I Yeah, I didn't come, you know, when

1375
00:50:30,400 --> 00:50:32,480
I did my own internal pregame prep. I

1376
00:50:32,480 --> 00:50:34,480
didn't come here thinking, uh, I'm gonna

1377
00:50:34,480 --> 00:50:36,880
talk I'm gonna talk overunded plan to

1378
00:50:36,880 --> 00:50:38,880
take more equity risk.

1379
00:50:38,880 --> 00:50:40,870
>> Um,

1380
00:50:40,870 --> 00:50:40,880
» Um,

1381
00:50:40,880 --> 00:50:44,870
>> it's coming too.

1382
00:50:44,880 --> 00:50:46,559
» Yeah, we we'll definitely bring that

1383
00:50:46,559 --> 00:50:49,280
back. We always review um the investment

1384
00:50:49,280 --> 00:50:51,440
strategy to see where we where we ended

1385
00:50:51,440 --> 00:50:52,720
up by the

1386
00:50:52,720 --> 00:50:54,470
>> at the end of the year,

1387
00:50:54,470 --> 00:50:54,480
» at the end of the year,

1388
00:50:54,480 --> 00:50:56,390
>> but we're bringing this because we

1389
00:50:56,390 --> 00:50:56,400
» but we're bringing this because we

1390
00:50:56,400 --> 00:50:58,000
wanted to start reviewing it as a

1391
00:50:58,000 --> 00:51:00,640
quarterly um snapshot

1392
00:51:00,640 --> 00:51:02,630
>> rather than the yearly that we doing.

1393
00:51:02,630 --> 00:51:02,640
» rather than the yearly that we doing.

1394
00:51:02,640 --> 00:51:05,920
So, this is just the the quarter review.

1395
00:51:05,920 --> 00:51:09,599
So, we're we're about 200,000 more in

1396
00:51:09,599 --> 00:51:14,800
the net position than we were in June of

1397
00:51:14,800 --> 00:51:18,000
25. So we made 200 something thousand

1398
00:51:18,000 --> 00:51:20,160
even though we've been distributing um

1399
00:51:20,160 --> 00:51:22,559
money out of it. So you know the first

1400
00:51:22,559 --> 00:51:25,440
quarter is a positive 200. So if we do

1401
00:51:25,440 --> 00:51:28,319
four more times it's positive 800 and

1402
00:51:28,319 --> 00:51:31,280
we've expended 450,000. So we spent

1403
00:51:31,280 --> 00:51:35,920
eight we earn 800 spent 450,000 we had a

1404
00:51:35,920 --> 00:51:36,960
positive balance.

1405
00:51:36,960 --> 00:51:38,230
>> Nice return.

1406
00:51:38,230 --> 00:51:38,240
» Nice return.

1407
00:51:38,240 --> 00:51:39,430
>> Yeah I like it

1408
00:51:39,430 --> 00:51:39,440
» Yeah I like it

1409
00:51:39,440 --> 00:51:40,790
>> when it works.

1410
00:51:40,790 --> 00:51:40,800
» when it works.

1411
00:51:40,800 --> 00:51:42,870
>> That's a good lubricate.

1412
00:51:42,870 --> 00:51:42,880
» That's a good lubricate.

1413
00:51:42,880 --> 00:51:45,910
>> So um yeah. So this is, you know, for

1414
00:51:45,910 --> 00:51:45,920
» So um yeah. So this is, you know, for

1415
00:51:45,920 --> 00:51:47,520
the first quarter, we're we're we're

1416
00:51:47,520 --> 00:51:50,319
looking good. Um, but again, yeah, we

1417
00:51:50,319 --> 00:51:53,200
we'll we'll do the snapshot reviews and

1418
00:51:53,200 --> 00:51:54,079
then

1419
00:51:54,079 --> 00:51:56,950
>> fabulous jobs for

1420
00:51:56,950 --> 00:51:56,960
» fabulous jobs for

1421
00:51:56,960 --> 00:51:59,359
great team. Great team,

1422
00:51:59,359 --> 00:51:59,990
>> mayor.

1423
00:51:59,990 --> 00:52:00,000
» mayor.

1424
00:52:00,000 --> 00:52:02,549
>> How many like humans are participating

1425
00:52:02,549 --> 00:52:02,559
» How many like humans are participating

1426
00:52:02,559 --> 00:52:04,960
like retirees are participating in this

1427
00:52:04,960 --> 00:52:07,280
plan? Is there any like oversight as

1428
00:52:07,280 --> 00:52:10,640
we're not adding new people to it? We're

1429
00:52:10,640 --> 00:52:12,240
adding more money like the interest is

1430
00:52:12,240 --> 00:52:14,160
doing more than we're paying. Like at a

1431
00:52:14,160 --> 00:52:16,400
certain point, we won't have enough

1432
00:52:16,400 --> 00:52:18,480
people.

1433
00:52:18,480 --> 00:52:20,319
We'll have a lot less people in this

1434
00:52:20,319 --> 00:52:22,559
plan. Like is someone watching?

1435
00:52:22,559 --> 00:52:23,030
>> Yes.

1436
00:52:23,030 --> 00:52:23,040
» Yes.

1437
00:52:23,040 --> 00:52:24,470
>> Number of humans.

1438
00:52:24,470 --> 00:52:24,480
» Number of humans.

1439
00:52:24,480 --> 00:52:26,470
>> Yes, we do that. Um when we do the

1440
00:52:26,470 --> 00:52:26,480
» Yes, we do that. Um when we do the

1441
00:52:26,480 --> 00:52:30,000
actar, we do the census um data on that

1442
00:52:30,000 --> 00:52:32,800
and that's what you know every two years

1443
00:52:32,800 --> 00:52:35,680
we do a census of who's on the plan or

1444
00:52:35,680 --> 00:52:37,599
the in the future retirees. There's

1445
00:52:37,599 --> 00:52:40,079
still a handful of current employees

1446
00:52:40,079 --> 00:52:42,880
that do get some retiring help and

1447
00:52:42,880 --> 00:52:46,079
majority get still get retirey help but

1448
00:52:46,079 --> 00:52:49,359
they get that minimum amount right and

1449
00:52:49,359 --> 00:53:02,870
that gets calculated in

1450
00:53:02,880 --> 00:53:04,640
We're on 3.1. I don't know if there's

1451
00:53:04,640 --> 00:53:05,280
any.

1452
00:53:05,280 --> 00:53:08,150
>> There's no other exhibit um that I was

1453
00:53:08,150 --> 00:53:08,160
» There's no other exhibit um that I was

1454
00:53:08,160 --> 00:53:13,270
going to utilize in the presentation.

1455
00:53:13,280 --> 00:53:15,200
» I think Yeah, we got to the end. All it

1456
00:53:15,200 --> 00:53:19,680
was was the at the end was um the trust

1457
00:53:19,680 --> 00:53:21,920
programs. Uh I'm just going to go

1458
00:53:21,920 --> 00:53:26,000
through it real quick. Here's the

1459
00:53:26,000 --> 00:53:28,160
uh strategies

1460
00:53:28,160 --> 00:53:30,960
that was at the end the index

1461
00:53:30,960 --> 00:53:33,200
at the end of the report. This is the

1462
00:53:33,200 --> 00:53:35,839
there are different strategies there.

1463
00:53:35,839 --> 00:53:38,000
We're in the moderate

1464
00:53:38,000 --> 00:53:39,760
um

1465
00:53:39,760 --> 00:53:42,960
be that 11.3% this month.

1466
00:53:42,960 --> 00:53:44,470
>> That's true.

1467
00:53:44,470 --> 00:53:44,480
» That's true.

1468
00:53:44,480 --> 00:53:47,030
>> Yeah.

1469
00:53:47,030 --> 00:53:47,040
» Yeah.

1470
00:53:47,040 --> 00:53:51,030
>> Yeah. So this this is in your packet. Um

1471
00:53:51,030 --> 00:53:51,040
» Yeah. So this this is in your packet. Um

1472
00:53:51,040 --> 00:53:53,280
these are the different strategies that

1473
00:53:53,280 --> 00:53:56,559
we have and then and you know how much

1474
00:53:56,559 --> 00:53:59,920
uh percentage the strategic range.

1475
00:53:59,920 --> 00:54:08,480
So the moderate 40 60 is 46 m to 20 and

1476
00:54:08,480 --> 00:54:14,230
she's very in that 50%.

1477
00:54:14,240 --> 00:54:17,280
And then here's here's where we in early

1478
00:54:17,280 --> 00:54:21,119
in the report the one year the index

1479
00:54:21,119 --> 00:54:23,520
we're at 9.65.

1480
00:54:23,520 --> 00:54:27,440
So here it is these are the other five

1481
00:54:27,440 --> 00:54:30,079
um strategies and we're in that middle

1482
00:54:30,079 --> 00:54:32,079
moderate

1483
00:54:32,079 --> 00:54:34,000
index.

1484
00:54:34,000 --> 00:54:36,319
And then how Andrea mentioned the next

1485
00:54:36,319 --> 00:54:39,200
one up would be the balance and then the

1486
00:54:39,200 --> 00:54:42,720
highest more risky risk of risky one

1487
00:54:42,720 --> 00:54:45,440
would be the capital appreciation

1488
00:54:45,440 --> 00:54:47,040
strategy.

1489
00:54:47,040 --> 00:54:48,640
Andrew,

1490
00:54:48,640 --> 00:54:51,839
in measuring your own performance, if

1491
00:54:51,839 --> 00:54:56,240
you went if you went to 55% equity, 35

1492
00:54:56,240 --> 00:54:58,800
fixed income,

1493
00:54:58,800 --> 00:55:02,079
would the benchmark go 5535 or would you

1494
00:55:02,079 --> 00:55:04,800
stay at 5050?

1495
00:55:04,800 --> 00:55:08,230
>> Oh. So, so if we're talking the moderate

1496
00:55:08,230 --> 00:55:08,240
» Oh. So, so if we're talking the moderate

1497
00:55:08,240 --> 00:55:08,880
strategy,

1498
00:55:08,880 --> 00:55:09,190
>> Yeah.

1499
00:55:09,190 --> 00:55:09,200
» Yeah.

1500
00:55:09,200 --> 00:55:11,910
>> and we move to 55, the benchmark would

1501
00:55:11,910 --> 00:55:11,920
» and we move to 55, the benchmark would

1502
00:55:11,920 --> 00:55:13,599
still stay at 5050.

1503
00:55:13,599 --> 00:55:17,190
>> Good. And so then the way to and we're

1504
00:55:17,190 --> 00:55:17,200
» Good. And so then the way to and we're

1505
00:55:17,200 --> 00:55:18,480
really interested in a bunch of index

1506
00:55:18,480 --> 00:55:20,400
funds. So the way that we would either

1507
00:55:20,400 --> 00:55:22,880
add value or detract value, you know,

1508
00:55:22,880 --> 00:55:24,880
nine times out of 10 is is the asset

1509
00:55:24,880 --> 00:55:26,480
allocation. It's not like we come up

1510
00:55:26,480 --> 00:55:28,880
with a better index fund better than the

1511
00:55:28,880 --> 00:55:36,230
index,

1512
00:55:36,240 --> 00:55:39,520
» you know. So this is all included in the

1513
00:55:39,520 --> 00:55:43,200
your packet. Um yeah, we wanted to bring

1514
00:55:43,200 --> 00:55:44,960
the team out again just to kind of start

1515
00:55:44,960 --> 00:55:48,319
on the quarter review and and you can

1516
00:55:48,319 --> 00:55:53,430
see you know the September 385

1517
00:55:53,440 --> 00:55:56,160
positive

1518
00:55:56,160 --> 00:55:59,200
quarter and we'll continue to review

1519
00:55:59,200 --> 00:56:01,359
that in the quarter ended the second

1520
00:56:01,359 --> 00:56:04,319
quarter which ended 1239.

1521
00:56:04,319 --> 00:56:06,240
We'll do an update in a couple months

1522
00:56:06,240 --> 00:56:11,190
time on

1523
00:56:11,200 --> 00:56:14,319
bring see where we're at and answer the

1524
00:56:14,319 --> 00:56:15,680
question some of the questions about the

1525
00:56:15,680 --> 00:56:18,160
investment expense the flow of funds how

1526
00:56:18,160 --> 00:56:21,510
it's working

1527
00:56:21,520 --> 00:56:23,200
we have great partners with PARs as the

1528
00:56:23,200 --> 00:56:25,760
administrator overseeing and then Andrew

1529
00:56:25,760 --> 00:56:30,960
and his team uh the investment

1530
00:56:30,960 --> 00:56:33,359
and then we'll we'll Andrew and I will

1531
00:56:33,359 --> 00:56:34,799
touch based on some of these questions

1532
00:56:34,799 --> 00:56:38,640
and then we'll bring it back up answer

1533
00:56:38,640 --> 00:56:40,079
when we see the second quarter.

1534
00:56:40,079 --> 00:56:43,359
Hopefully it's another positive 200,000.

1535
00:56:43,359 --> 00:56:46,630
>> You give me a martial art.

1536
00:56:46,630 --> 00:56:46,640
» You give me a martial art.

1537
00:56:46,640 --> 00:56:48,549
>> Is it possible to have too much money in

1538
00:56:48,549 --> 00:56:48,559
» Is it possible to have too much money in

1539
00:56:48,559 --> 00:56:50,720
this? I mean like you know no such thing

1540
00:56:50,720 --> 00:56:53,920
as too much money but like

1541
00:56:53,920 --> 00:56:55,589
>> but we can't really move it anywhere

1542
00:56:55,589 --> 00:56:55,599
» but we can't really move it anywhere

1543
00:56:55,599 --> 00:56:58,640
else, right? It has to stay in here.

1544
00:56:58,640 --> 00:56:59,829
>> Yeah. And eventually

1545
00:56:59,829 --> 00:56:59,839
» Yeah. And eventually

1546
00:56:59,839 --> 00:57:02,470
>> substitute money, right?

1547
00:57:02,470 --> 00:57:02,480
» substitute money, right?

1548
00:57:02,480 --> 00:57:03,280
Yeah,

1549
00:57:03,280 --> 00:57:05,270
>> I was gonna say eventually one of your

1550
00:57:05,270 --> 00:57:05,280
» I was gonna say eventually one of your

1551
00:57:05,280 --> 00:57:06,559
questions was, you know, you're starting

1552
00:57:06,559 --> 00:57:08,880
to have less active employees. If if at

1553
00:57:08,880 --> 00:57:11,119
the end of the the life of your plan,

1554
00:57:11,119 --> 00:57:13,200
your your retired healthcare plan,

1555
00:57:13,200 --> 00:57:15,280
you're done. There's no more employees,

1556
00:57:15,280 --> 00:57:18,240
nothing left in there, any residual, any

1557
00:57:18,240 --> 00:57:19,839
additional money in the trust goes back

1558
00:57:19,839 --> 00:57:22,160
to your account, goes general fund. We

1559
00:57:22,160 --> 00:57:23,760
don't have to like

1560
00:57:23,760 --> 00:57:25,430
>> I'm just like, it's awesome that we're

1561
00:57:25,430 --> 00:57:25,440
» I'm just like, it's awesome that we're

1562
00:57:25,440 --> 00:57:27,839
getting so much more interest than our

1563
00:57:27,839 --> 00:57:29,270
>> what we're paying. So, it's good that

1564
00:57:29,270 --> 00:57:29,280
» what we're paying. So, it's good that

1565
00:57:29,280 --> 00:57:31,599
we're building, but like at some point

1566
00:57:31,599 --> 00:57:32,960
it might get too big.

1567
00:57:32,960 --> 00:57:36,789
>> So, maybe 35 40 years or so, it might

1568
00:57:36,789 --> 00:57:36,799
» So, maybe 35 40 years or so, it might

1569
00:57:36,799 --> 00:57:38,559
get to that point. But if the town is

1570
00:57:38,559 --> 00:57:42,000
still a town and pursive

1571
00:57:42,000 --> 00:57:44,799
employees that get

1572
00:57:44,799 --> 00:57:47,829
>> um the PMPA minimum and if the fund is

1573
00:57:47,829 --> 00:57:47,839
» um the PMPA minimum and if the fund is

1574
00:57:47,839 --> 00:57:49,920
way overfunded at that point, how does

1575
00:57:49,920 --> 00:57:51,760
that work? So, the fund's got two

1576
00:57:51,760 --> 00:57:53,920
million fund still has 8 million in

1577
00:57:53,920 --> 00:57:55,920
there, but we only have PMPA minimum

1578
00:57:55,920 --> 00:57:58,640
staffed moving forward. How do we

1579
00:57:58,640 --> 00:57:59,200
address that?

1580
00:57:59,200 --> 00:58:00,150
>> Well, and that's why you're not

1581
00:58:00,150 --> 00:58:00,160
» Well, and that's why you're not

1582
00:58:00,160 --> 00:58:02,000
contributing to the program any to try

1583
00:58:02,000 --> 00:58:04,079
to stabilize that. Um, and then also you

1584
00:58:04,079 --> 00:58:05,359
have to think the investments. The

1585
00:58:05,359 --> 00:58:07,280
investments while I want to guarantee

1586
00:58:07,280 --> 00:58:09,920
double digits or extra and won't let me,

1587
00:58:09,920 --> 00:58:12,559
we will have um some down years.

1588
00:58:12,559 --> 00:58:13,910
>> There's downturns. Yeah.

1589
00:58:13,910 --> 00:58:13,920
» There's downturns. Yeah.

1590
00:58:13,920 --> 00:58:15,990
>> And then if there's changes in the

1591
00:58:15,990 --> 00:58:16,000
» And then if there's changes in the

1592
00:58:16,000 --> 00:58:17,920
health care costs, right, I have those

1593
00:58:17,920 --> 00:58:20,960
costs have been keep going up. So

1594
00:58:20,960 --> 00:58:22,480
there's going to be compression whether

1595
00:58:22,480 --> 00:58:24,880
the investments do well or they don't do

1596
00:58:24,880 --> 00:58:27,599
well and then your costs keep going up.

1597
00:58:27,599 --> 00:58:30,000
So right now in the last several years

1598
00:58:30,000 --> 00:58:32,799
we've been fine but on the liability

1599
00:58:32,799 --> 00:58:35,760
side the cost trends can go higher and

1600
00:58:35,760 --> 00:58:38,079
on your census right in the healthcare

1601
00:58:38,079 --> 00:58:41,359
plans um you know have been going up you

1602
00:58:41,359 --> 00:58:44,960
know 10% 13% a year so when that happens

1603
00:58:44,960 --> 00:58:47,119
and your investments

1604
00:58:47,119 --> 00:58:49,680
I mean right now we're actuarial

1605
00:58:49,680 --> 00:58:51,910
>> right it is in the actuarial and and

1606
00:58:51,910 --> 00:58:51,920
» right it is in the actuarial and and

1607
00:58:51,920 --> 00:58:53,760
they review it and then they kind of put

1608
00:58:53,760 --> 00:58:56,240
in the the demographic assumptions on

1609
00:58:56,240 --> 00:58:59,040
the healthcare care the the cost the CPI

1610
00:58:59,040 --> 00:59:01,839
they also do mortality rates and all of

1611
00:59:01,839 --> 00:59:05,599
that. So um the one thing is you know

1612
00:59:05,599 --> 00:59:08,880
mortality rates improve uh then your

1613
00:59:08,880 --> 00:59:10,720
your health care cost your retired

1614
00:59:10,720 --> 00:59:13,520
health care cost continues. So um

1615
00:59:13,520 --> 00:59:14,960
there's that part of it.

1616
00:59:14,960 --> 00:59:16,870
>> At present there's nothing that the town

1617
00:59:16,870 --> 00:59:16,880
» At present there's nothing that the town

1618
00:59:16,880 --> 00:59:20,160
is paying that the fund can't pay. Is

1619
00:59:20,160 --> 00:59:22,559
there any leakage of maybe wrong choice

1620
00:59:22,559 --> 00:59:26,240
of words? Uh, no. We're we're also re

1621
00:59:26,240 --> 00:59:28,640
getting reimbursed from the the amount

1622
00:59:28,640 --> 00:59:31,040
that we the minimum pen that we pay the

1623
00:59:31,040 --> 00:59:33,760
FAR to Calers. We're getting reimburse

1624
00:59:33,760 --> 00:59:36,640
that as well through the the trust.

1625
00:59:36,640 --> 00:59:38,150
>> There's no there's nothing there's no

1626
00:59:38,150 --> 00:59:38,160
» There's no there's nothing there's no

1627
00:59:38,160 --> 00:59:40,720
other switch, no other volume to have

1628
00:59:40,720 --> 00:59:47,349
the bond pay more and the town pay less

1629
00:59:47,359 --> 00:59:49,680
» other than Yeah. just the retirey help

1630
00:59:49,680 --> 00:59:52,079
um that those components. Yeah.

1631
00:59:52,079 --> 00:59:54,789
>> Agree. Correct. Yeah. I mean, you could

1632
00:59:54,789 --> 00:59:54,799
» Agree. Correct. Yeah. I mean, you could

1633
00:59:54,799 --> 00:59:56,960
have those actual evaluations, but

1634
00:59:56,960 --> 01:00:00,240
that's just like a small fraction of

1635
01:00:00,240 --> 01:00:02,230
>> Yeah. I mean, that's something easy. I'm

1636
01:00:02,230 --> 01:00:02,240
» Yeah. I mean, that's something easy. I'm

1637
01:00:02,240 --> 01:00:04,559
just thinking something.

1638
01:00:04,559 --> 01:00:07,349
>> Would the change to a charter town

1639
01:00:07,349 --> 01:00:07,359
» Would the change to a charter town

1640
01:00:07,359 --> 01:00:12,150
affect any? Okay. So, that's

1641
01:00:12,160 --> 01:00:14,559
» got to ask

1642
01:00:14,559 --> 01:00:17,109
>> exiting from Calerts.

1643
01:00:17,109 --> 01:00:17,119
» exiting from Calerts.

1644
01:00:17,119 --> 01:00:18,309
>> Exiting from Calbert

1645
01:00:18,309 --> 01:00:18,319
» Exiting from Calbert

1646
01:00:18,319 --> 01:00:19,430
>> change things, but that is an

1647
01:00:19,430 --> 01:00:19,440
» change things, but that is an

1648
01:00:19,440 --> 01:00:22,960
astronomical con.

1649
01:00:22,960 --> 01:00:25,520
Yeah.

1650
01:00:25,520 --> 01:00:25,990
>> Got it.

1651
01:00:25,990 --> 01:00:26,000
» Got it.

1652
01:00:26,000 --> 01:00:28,069
>> The cost will go opposite. Yeah. We need

1653
01:00:28,069 --> 01:00:28,079
» The cost will go opposite. Yeah. We need

1654
01:00:28,079 --> 01:00:30,640
more money.

1655
01:00:30,640 --> 01:00:31,430
>> Yeah.

1656
01:00:31,430 --> 01:00:31,440
» Yeah.

1657
01:00:31,440 --> 01:00:33,270
>> I know what last year you put in $3

1658
01:00:33,270 --> 01:00:33,280
» I know what last year you put in $3

1659
01:00:33,280 --> 01:00:35,440
million as a discretionary payment

1660
01:00:35,440 --> 01:00:36,079
occurs.

1661
01:00:36,079 --> 01:00:36,950
>> ADP.

1662
01:00:36,950 --> 01:00:36,960
» ADP.

1663
01:00:36,960 --> 01:00:37,910
>> ADP. I

1664
01:00:37,910 --> 01:00:37,920
» ADP. I

1665
01:00:37,920 --> 01:00:40,390
>> mean, have you considered doing the the

1666
01:00:40,390 --> 01:00:40,400
» mean, have you considered doing the the

1667
01:00:40,400 --> 01:00:43,520
PARs 115 trust instead of something like

1668
01:00:43,520 --> 01:00:43,760
that?

1669
01:00:43,760 --> 01:00:46,470
>> I said some Yeah. Um, we we we have

1670
01:00:46,470 --> 01:00:46,480
» I said some Yeah. Um, we we we have

1671
01:00:46,480 --> 01:00:49,520
discussed that and it's still

1672
01:00:49,520 --> 01:00:51,030
>> established the trust, right?

1673
01:00:51,030 --> 01:00:51,040
» established the trust, right?

1674
01:00:51,040 --> 01:00:55,030
>> Correct. But it's not um as far as we

1675
01:00:55,030 --> 01:00:55,040
» Correct. But it's not um as far as we

1676
01:00:55,040 --> 01:00:56,960
presented those options of putting it in

1677
01:00:56,960 --> 01:01:00,160
the trust and let it build up or

1678
01:01:00,160 --> 01:01:02,720
making the contribution here and then

1679
01:01:02,720 --> 01:01:04,559
and we've done that just making it

1680
01:01:04,559 --> 01:01:08,799
directly to Calers and and let's see

1681
01:01:08,799 --> 01:01:11,040
what it does instead of

1682
01:01:11,040 --> 01:01:13,750
>> right just putting money aside into the

1683
01:01:13,750 --> 01:01:13,760
» right just putting money aside into the

1684
01:01:13,760 --> 01:01:16,960
trust for over time. So I think that

1685
01:01:16,960 --> 01:01:19,200
could be the next

1686
01:01:19,200 --> 01:01:22,559
proposition is okay, we've done the the

1687
01:01:22,559 --> 01:01:24,880
ADPs, instead of doing that, let's set

1688
01:01:24,880 --> 01:01:27,040
aside a savings, right?

1689
01:01:27,040 --> 01:01:27,589
>> Yeah.

1690
01:01:27,589 --> 01:01:27,599
» Yeah.

1691
01:01:27,599 --> 01:01:31,750
>> 200,000 a year, 500,000 a year for the

1692
01:01:31,750 --> 01:01:31,760
» 200,000 a year, 500,000 a year for the

1693
01:01:31,760 --> 01:01:36,160
future for for council decision.

1694
01:01:36,160 --> 01:01:38,309
>> It might depend on how the new

1695
01:01:38,309 --> 01:01:38,319
» It might depend on how the new

1696
01:01:38,319 --> 01:01:41,599
investment manager calers,

1697
01:01:41,599 --> 01:01:44,069
>> right? Yeah. They just diversify your

1698
01:01:44,069 --> 01:01:44,079
» right? Yeah. They just diversify your

1699
01:01:44,079 --> 01:01:44,480
bets

1700
01:01:44,480 --> 01:01:48,710
>> manager and uh uh yeah and the plan is

1701
01:01:48,710 --> 01:01:48,720
» manager and uh uh yeah and the plan is

1702
01:01:48,720 --> 01:01:51,680
has done well. Um they're staying at

1703
01:01:51,680 --> 01:01:54,240
7.8%.

1704
01:01:54,240 --> 01:01:57,349
>> Uh they had that new portfolio approach

1705
01:01:57,349 --> 01:01:57,359
» Uh they had that new portfolio approach

1706
01:01:57,359 --> 01:02:00,880
that they were adding. So yeah, I mean

1707
01:02:00,880 --> 01:02:03,760
there was only that one year where there

1708
01:02:03,760 --> 01:02:05,520
was that negative

1709
01:02:05,520 --> 01:02:08,390
>> but I mean yeah that's but that is an

1710
01:02:08,390 --> 01:02:08,400
» but I mean yeah that's but that is an

1711
01:02:08,400 --> 01:02:11,200
option is instead of doing ADP and we

1712
01:02:11,200 --> 01:02:13,040
bring that up but I think what it was

1713
01:02:13,040 --> 01:02:15,760
just to give the money to helpers let's

1714
01:02:15,760 --> 01:02:19,359
reduce our cost now uh and see what what

1715
01:02:19,359 --> 01:02:21,119
that

1716
01:02:21,119 --> 01:02:22,960
and it has it's reduced our UIO

1717
01:02:22,960 --> 01:02:26,480
component payments it's reduced our um

1718
01:02:26,480 --> 01:02:28,960
normal cost uh rates

1719
01:02:28,960 --> 01:02:30,559
115 wouldn't do either of those two,

1720
01:02:30,559 --> 01:02:32,240
would it?

1721
01:02:32,240 --> 01:02:34,470
>> No, the 115 would just it's just

1722
01:02:34,470 --> 01:02:34,480
» No, the 115 would just it's just

1723
01:02:34,480 --> 01:02:36,000
building our what we've done with this

1724
01:02:36,000 --> 01:02:37,839
trust with the OPE just putting money

1725
01:02:37,839 --> 01:02:41,599
aside for the future. I mean, we're in

1726
01:02:41,599 --> 01:02:44,240
essence what it is is we're taking

1727
01:02:44,240 --> 01:02:46,880
500,000 whatever we put in there and

1728
01:02:46,880 --> 01:02:49,440
we're letting um Andrew's team go and

1729
01:02:49,440 --> 01:02:52,720
say, "Okay, let's let's earn whatever we

1730
01:02:52,720 --> 01:02:56,079
can on this interest." So this 500,000

1731
01:02:56,079 --> 01:03:01,520
could be 5 million 10 years and then or

1732
01:03:01,520 --> 01:03:03,760
or longer, right? Or

1733
01:03:03,760 --> 01:03:05,589
>> and then take that money and then here

1734
01:03:05,589 --> 01:03:05,599
» and then take that money and then here

1735
01:03:05,599 --> 01:03:07,119
you go. Instead of it being an

1736
01:03:07,119 --> 01:03:09,280
operations expense one year, it's like

1737
01:03:09,280 --> 01:03:11,920
oh now we have 6 million in here.

1738
01:03:11,920 --> 01:03:14,870
>> Uh and like this OPE trust, you know, it

1739
01:03:14,870 --> 01:03:14,880
» Uh and like this OPE trust, you know, it

1740
01:03:14,880 --> 01:03:18,880
started in 2012 2011. We didn't

1741
01:03:18,880 --> 01:03:22,470
>> at that time. I mean it we contributed

1742
01:03:22,470 --> 01:03:22,480
» at that time. I mean it we contributed

1743
01:03:22,480 --> 01:03:25,359
to it. we did significantly 5 million to

1744
01:03:25,359 --> 01:03:27,920
it. So we almost doubled our investment,

1745
01:03:27,920 --> 01:03:29,520
right? What's in the truck.

1746
01:03:29,520 --> 01:03:32,230
>> So we put in 5 million and now it's 9.2

1747
01:03:32,230 --> 01:03:32,240
» So we put in 5 million and now it's 9.2

1748
01:03:32,240 --> 01:03:35,440
million um you know in a matter of of

1749
01:03:35,440 --> 01:03:39,839
what 14 years and and

1750
01:03:39,839 --> 01:03:42,079
the you know with the liabilities have

1751
01:03:42,079 --> 01:03:46,480
gone down on the OPE so that's helped um

1752
01:03:46,480 --> 01:03:50,400
create that um positive net balance. Um

1753
01:03:50,400 --> 01:03:53,119
but yeah I mean that can be an you know

1754
01:03:53,119 --> 01:03:54,559
an option is

1755
01:03:54,559 --> 01:03:57,430
>> your knowledge of this and you is

1756
01:03:57,430 --> 01:03:57,440
» your knowledge of this and you is

1757
01:03:57,440 --> 01:04:00,160
amazing and the comfort it brings to me

1758
01:04:00,160 --> 01:04:02,559
is

1759
01:04:02,559 --> 01:04:03,270
>> chs.

1760
01:04:03,270 --> 01:04:03,280
» chs.

1761
01:04:03,280 --> 01:04:05,430
>> Thank you. That's not to me it's

1762
01:04:05,430 --> 01:04:05,440
» Thank you. That's not to me it's

1763
01:04:05,440 --> 01:04:07,990
>> historical knowledge and your ability to

1764
01:04:07,990 --> 01:04:08,000
» historical knowledge and your ability to

1765
01:04:08,000 --> 01:04:10,240
fluidly move around in these numbers is

1766
01:04:10,240 --> 01:04:11,839
pretty impressive.

1767
01:04:11,839 --> 01:04:14,390
>> Thank you. Well just you see it a lot

1768
01:04:14,390 --> 01:04:14,400
» Thank you. Well just you see it a lot

1769
01:04:14,400 --> 01:04:15,599
right and and

1770
01:04:15,599 --> 01:04:17,910
>> yeah don't discount yourself.

1771
01:04:17,910 --> 01:04:17,920
» yeah don't discount yourself.

1772
01:04:17,920 --> 01:04:19,430
>> Thank you. I appreciate it. appreciate

1773
01:04:19,430 --> 01:04:19,440
» Thank you. I appreciate it. appreciate

1774
01:04:19,440 --> 01:04:21,440
it. But I have a great team, you know,

1775
01:04:21,440 --> 01:04:24,400
we're great great um counterparts and

1776
01:04:24,400 --> 01:04:26,960
stuff. So that that assists us in in

1777
01:04:26,960 --> 01:04:29,839
just staying on top of it and uh you

1778
01:04:29,839 --> 01:04:31,359
know, making sure that we're we're doing

1779
01:04:31,359 --> 01:04:33,520
what we can and you know, the council's

1780
01:04:33,520 --> 01:04:34,640
director with let's pay down our

1781
01:04:34,640 --> 01:04:35,920
liabilities and that's what we've been

1782
01:04:35,920 --> 01:04:38,720
doing through the the retirey health and

1783
01:04:38,720 --> 01:04:42,079
and through pensions.

1784
01:04:42,079 --> 01:04:45,039
Thank you. Appreciate it.

1785
01:04:45,039 --> 01:04:48,549
>> Any further questions?

1786
01:04:48,549 --> 01:04:48,559
» Any further questions?

1787
01:04:48,559 --> 01:04:51,119
Thanks Jennifer and Andrew.

1788
01:04:51,119 --> 01:04:53,589
>> Thank you for coming personally.

1789
01:04:53,589 --> 01:04:53,599
» Thank you for coming personally.

1790
01:04:53,599 --> 01:04:58,950
>> We really appreciate it. We do

1791
01:04:58,960 --> 01:05:00,480
our

1792
01:05:00,480 --> 01:05:03,520
counterpart here and

1793
01:05:03,520 --> 01:05:06,880
you know it adds more value. I know we

1794
01:05:06,880 --> 01:05:10,880
do the Zooms and stuff.

1795
01:05:10,880 --> 01:05:14,079
Jennifer came up from LA. Andrew came

1796
01:05:14,079 --> 01:05:16,079
down from San Francisco. So

1797
01:05:16,079 --> 01:05:19,829
>> she might meet me home. like anyone.

1798
01:05:19,829 --> 01:05:19,839
» she might meet me home. like anyone.

1799
01:05:19,839 --> 01:05:22,549
>> Oh, sorry. That used Yeah. But we we

1800
01:05:22,549 --> 01:05:22,559
» Oh, sorry. That used Yeah. But we we

1801
01:05:22,559 --> 01:05:25,359
really really do appreciate

1802
01:05:25,359 --> 01:05:29,589
>> all you do for us, the partnerships.

1803
01:05:29,589 --> 01:05:29,599
» all you do for us, the partnerships.

1804
01:05:29,599 --> 01:05:31,990
>> We'll continue presenting this every

1805
01:05:31,990 --> 01:05:32,000
» We'll continue presenting this every

1806
01:05:32,000 --> 01:05:34,559
quarter and um continue to work, you

1807
01:05:34,559 --> 01:05:38,480
know, refine what we can.

1808
01:05:38,480 --> 01:05:39,029
>> Thank you.

1809
01:05:39,029 --> 01:05:39,039
» Thank you.

1810
01:05:39,039 --> 01:05:39,510
>> Thank you.

1811
01:05:39,510 --> 01:05:39,520
» Thank you.

1812
01:05:39,520 --> 01:05:44,069
>> Thanks. Thank you so much

1813
01:05:44,079 --> 01:05:46,480
» and happy new year.

1814
01:05:46,480 --> 01:05:48,799
12 days into it like you said 13 days

1815
01:05:48,799 --> 01:05:51,359
and going on.

1816
01:05:51,359 --> 01:05:59,510
>> Take care. Byebye.

1817
01:05:59,520 --> 01:06:01,680
» Okay.

1818
01:06:01,680 --> 01:06:05,039
And last topic is

1819
01:06:05,039 --> 01:06:06,640
Robert's going to go over the asset

1820
01:06:06,640 --> 01:06:10,240
liability management

1821
01:06:10,240 --> 01:06:12,160
process at Kalpers.

1822
01:06:12,160 --> 01:06:15,109
>> Oh yeah. But before that, there's item

1823
01:06:15,109 --> 01:06:15,119
» Oh yeah. But before that, there's item

1824
01:06:15,119 --> 01:06:16,079
number three.

1825
01:06:16,079 --> 01:06:19,270
>> I apologize. I was just I saw it as

1826
01:06:19,270 --> 01:06:19,280
» I apologize. I was just I saw it as

1827
01:06:19,280 --> 01:06:20,000
well.

1828
01:06:20,000 --> 01:06:23,829
>> Uh item three was the um brief review

1829
01:06:23,829 --> 01:06:23,839
» Uh item three was the um brief review

1830
01:06:23,839 --> 01:06:25,039
and update on

1831
01:06:25,039 --> 01:06:25,589
>> I'm sorry.

1832
01:06:25,589 --> 01:06:25,599
» I'm sorry.

1833
01:06:25,599 --> 01:06:27,349
>> No, you're you're you're fine.

1834
01:06:27,349 --> 01:06:27,359
» No, you're you're you're fine.

1835
01:06:27,359 --> 01:06:30,309
>> Um brief review and update on the AI

1836
01:06:30,309 --> 01:06:30,319
» Um brief review and update on the AI

1837
01:06:30,319 --> 01:06:32,000
applications in the town financial

1838
01:06:32,000 --> 01:06:34,799
software reporting um and transparency

1839
01:06:34,799 --> 01:06:36,960
metrics. Review and discuss AI

1840
01:06:36,960 --> 01:06:38,480
applications tailored for municipal

1841
01:06:38,480 --> 01:06:40,319
governments and financial reporting,

1842
01:06:40,319 --> 01:06:43,119
dashboards and automations. Um this this

1843
01:06:43,119 --> 01:06:45,200
came up as you know at our November

1844
01:06:45,200 --> 01:06:47,280
meeting committee there was a question

1845
01:06:47,280 --> 01:06:49,599
raised by uh uh members of the committee

1846
01:06:49,599 --> 01:06:51,760
about uh the town considering the use of

1847
01:06:51,760 --> 01:06:54,160
AI software or there's an existing

1848
01:06:54,160 --> 01:06:55,920
software vendor to develop financial

1849
01:06:55,920 --> 01:06:58,160
metrics dashboards um for the town

1850
01:06:58,160 --> 01:07:02,079
finances um as the case with emerging AI

1851
01:07:02,079 --> 01:07:04,559
there there are existing and developing

1852
01:07:04,559 --> 01:07:06,720
um AI applications for for some of our

1853
01:07:06,720 --> 01:07:08,400
software tool tools that are being

1854
01:07:08,400 --> 01:07:12,000
custom made uh for our local government

1855
01:07:12,000 --> 01:07:14,000
and not just local government at the

1856
01:07:14,000 --> 01:07:16,799
state level and at the federal level. Um

1857
01:07:16,799 --> 01:07:19,920
so uh again there's focus on helping

1858
01:07:19,920 --> 01:07:22,480
financial reporting metric dashboards

1859
01:07:22,480 --> 01:07:24,640
and some more transparency and automatic

1860
01:07:24,640 --> 01:07:27,920
automated processing um that are being

1861
01:07:27,920 --> 01:07:30,000
developed but developed for all our

1862
01:07:30,000 --> 01:07:33,039
enterprise resource planning um software

1863
01:07:33,039 --> 01:07:34,720
uh in the stock report I mentioned it

1864
01:07:34,720 --> 01:07:36,960
it's ERP so that a lot of these that's

1865
01:07:36,960 --> 01:07:39,599
what they call our financial softwares

1866
01:07:39,599 --> 01:07:43,839
and that we use so um other than chat

1867
01:07:43,839 --> 01:07:46,319
GPT is starting to become

1868
01:07:46,319 --> 01:07:49,440
used within the AI applications. Uh

1869
01:07:49,440 --> 01:07:52,640
there's uh also Excel, Chat, DPC, all

1870
01:07:52,640 --> 01:07:55,200
these things that are being um kind of

1871
01:07:55,200 --> 01:08:00,400
co- um created uh with uh open AI and

1872
01:08:00,400 --> 01:08:02,720
also all these various software

1873
01:08:02,720 --> 01:08:05,200
programs. So just you know in the stock

1874
01:08:05,200 --> 01:08:07,280
report want to bring bring out what the

1875
01:08:07,280 --> 01:08:11,200
town is doing. Um there's uh chatbot

1876
01:08:11,200 --> 01:08:14,319
applications that are are are occurring

1877
01:08:14,319 --> 01:08:16,400
uh taking place. There's some websites.

1878
01:08:16,400 --> 01:08:18,000
There's also chatbot applications that

1879
01:08:18,000 --> 01:08:19,839
are going to start be implemented in our

1880
01:08:19,839 --> 01:08:22,799
software. So I just wanted to let you

1881
01:08:22,799 --> 01:08:25,679
know and let the committee know that the

1882
01:08:25,679 --> 01:08:28,000
our current software springbook software

1883
01:08:28,000 --> 01:08:30,560
uh it has it's our handle financial

1884
01:08:30,560 --> 01:08:34,319
management our payroll our general edge

1885
01:08:34,319 --> 01:08:37,359
uh you know budgeting uh our accounts

1886
01:08:37,359 --> 01:08:39,600
payable it's all in one module all in

1887
01:08:39,600 --> 01:08:42,319
one software the modules are integrated

1888
01:08:42,319 --> 01:08:44,239
so uh we've been with springbook

1889
01:08:44,239 --> 01:08:47,199
software for 16 years there is over the

1890
01:08:47,199 --> 01:08:48,880
years they've innovated just like every

1891
01:08:48,880 --> 01:08:50,319
all these softwares

1892
01:08:50,319 --> 01:08:53,120
um around uh they specialize in local

1893
01:08:53,120 --> 01:08:54,960
small local governments and and they

1894
01:08:54,960 --> 01:08:59,199
have over uh 500 or so um agencies,

1895
01:08:59,199 --> 01:09:01,359
local agencies and then additional they

1896
01:09:01,359 --> 01:09:04,159
have some uh county agencies but um over

1897
01:09:04,159 --> 01:09:07,440
the years they've uh innovated and so

1898
01:09:07,440 --> 01:09:10,719
now there is a cloudbased uh portion of

1899
01:09:10,719 --> 01:09:14,640
that and so we're anticipating to u uh

1900
01:09:14,640 --> 01:09:16,719
upgrade to that and migrate to their

1901
01:09:16,719 --> 01:09:18,080
cloud-based. Right now we're not

1902
01:09:18,080 --> 01:09:21,040
cloud-based, we are um site based

1903
01:09:21,040 --> 01:09:22,719
application. So it's sitting in our

1904
01:09:22,719 --> 01:09:23,600
servers.

1905
01:09:23,600 --> 01:09:25,749
>> Uh but this cloud-based application is

1906
01:09:25,749 --> 01:09:25,759
» Uh but this cloud-based application is

1907
01:09:25,759 --> 01:09:30,159
more um integrated with uh Microsoft,

1908
01:09:30,159 --> 01:09:32,400
integrated with other software um

1909
01:09:32,400 --> 01:09:35,679
components that uh it's allowing us to

1910
01:09:35,679 --> 01:09:40,560
have that opportunity for um AI

1911
01:09:40,560 --> 01:09:42,799
interaction. Uh one of the things I

1912
01:09:42,799 --> 01:09:45,040
mentioned the stack report is within

1913
01:09:45,040 --> 01:09:50,239
this new uh um cloud-based they have an

1914
01:09:50,239 --> 01:09:52,640
upgraded portion on the expenditure

1915
01:09:52,640 --> 01:09:56,159
where there's an AI component docu AI

1916
01:09:56,159 --> 01:09:57,600
reader document

1917
01:09:57,600 --> 01:10:00,470
>> reader where invoices can be imported

1918
01:10:00,470 --> 01:10:00,480
» reader where invoices can be imported

1919
01:10:00,480 --> 01:10:02,719
they're read they're populated in your

1920
01:10:02,719 --> 01:10:06,080
system you can verify the amount you can

1921
01:10:06,080 --> 01:10:09,679
actually and it's more uh right now it's

1922
01:10:09,679 --> 01:10:11,920
manual intensive And with this AI

1923
01:10:11,920 --> 01:10:13,920
reading, it's going to be less. It's

1924
01:10:13,920 --> 01:10:16,800
more it'll make the document processing

1925
01:10:16,800 --> 01:10:19,360
easier, easier to identify invoices

1926
01:10:19,360 --> 01:10:22,560
being paid or not being paid on time or

1927
01:10:22,560 --> 01:10:24,560
just making sure the account numbers are

1928
01:10:24,560 --> 01:10:28,080
done. And then you can interact with um

1929
01:10:28,080 --> 01:10:29,840
your vendors as well through the

1930
01:10:29,840 --> 01:10:34,960
software like you can uh import uh an

1931
01:10:34,960 --> 01:10:37,600
invoice or you can take that and you can

1932
01:10:37,600 --> 01:10:41,280
uh export you know a report from there

1933
01:10:41,280 --> 01:10:43,120
uh to to the vendor. So it's very

1934
01:10:43,120 --> 01:10:45,440
interactive. So um we're excited about

1935
01:10:45,440 --> 01:10:47,520
that. That's one of the AI components

1936
01:10:47,520 --> 01:10:50,960
that is um being developed not just in

1937
01:10:50,960 --> 01:10:54,239
our software but other softwares to um

1938
01:10:54,239 --> 01:10:57,600
to to uh reduce the labor intensity on

1939
01:10:57,600 --> 01:10:57,920
the job.

1940
01:10:57,920 --> 01:11:00,390
>> So does it automatically match?

1941
01:11:00,390 --> 01:11:00,400
» So does it automatically match?

1942
01:11:00,400 --> 01:11:02,870
>> Yeah, automatically matches and pays uh

1943
01:11:02,870 --> 01:11:02,880
» Yeah, automatically matches and pays uh

1944
01:11:02,880 --> 01:11:04,880
you can update uh

1945
01:11:04,880 --> 01:11:05,910
>> without verification.

1946
01:11:05,910 --> 01:11:05,920
» without verification.

1947
01:11:05,920 --> 01:11:08,070
>> Right. Right. So it doesn't take away

1948
01:11:08,070 --> 01:11:08,080
» Right. Right. So it doesn't take away

1949
01:11:08,080 --> 01:11:09,440
it's not like you just throw it in there

1950
01:11:09,440 --> 01:11:11,040
and it just Right. You have to approve

1951
01:11:11,040 --> 01:11:13,840
it. You have to do the signing. I think

1952
01:11:13,840 --> 01:11:16,800
that that um that those processes will

1953
01:11:16,800 --> 01:11:18,880
still stay the same, but I think the um

1954
01:11:18,880 --> 01:11:21,280
you're able to also interact with

1955
01:11:21,280 --> 01:11:23,360
different departments, right? They can

1956
01:11:23,360 --> 01:11:26,000
they can send uh invoices through the

1957
01:11:26,000 --> 01:11:28,239
the software and they can it's more like

1958
01:11:28,239 --> 01:11:30,000
of an approval workflow, right? The

1959
01:11:30,000 --> 01:11:31,280
workflow here's this invoice we

1960
01:11:31,280 --> 01:11:33,360
received. Uh do you approve it? Is this

1961
01:11:33,360 --> 01:11:35,040
the right code? Put the code on there

1962
01:11:35,040 --> 01:11:37,360
and the document reads code numbers and

1963
01:11:37,360 --> 01:11:39,679
it assigns it. And it's again, you just

1964
01:11:39,679 --> 01:11:41,600
George mentioned you verify that

1965
01:11:41,600 --> 01:11:44,080
everything's in there. So it takes the

1966
01:11:44,080 --> 01:11:47,679
uh the actual manual step of taking the

1967
01:11:47,679 --> 01:11:49,600
invoice, reading it, reviewing it,

1968
01:11:49,600 --> 01:11:52,400
coding it more automated. So that'll

1969
01:11:52,400 --> 01:11:56,080
help us um um and just like they add,

1970
01:11:56,080 --> 01:11:58,159
right? It's supposed to minimize

1971
01:11:58,159 --> 01:11:59,920
transform

1972
01:11:59,920 --> 01:12:02,159
uh productivity, right? In a sense where

1973
01:12:02,159 --> 01:12:05,280
it makes everything more um the labor

1974
01:12:05,280 --> 01:12:06,800
intensive stuff, it gets shortened where

1975
01:12:06,800 --> 01:12:08,239
you can focus on other stuff, the

1976
01:12:08,239 --> 01:12:10,159
analysis part and all of that stuff. The

1977
01:12:10,159 --> 01:12:11,520
idea is to stay with who you have

1978
01:12:11,520 --> 01:12:12,719
because it's got all this historical

1979
01:12:12,719 --> 01:12:15,040
information and they've got a history,

1980
01:12:15,040 --> 01:12:17,040
you know, updating themselves and so

1981
01:12:17,040 --> 01:12:18,480
maybe there's another piece of software

1982
01:12:18,480 --> 01:12:20,400
that's just a little bit better, but the

1983
01:12:20,400 --> 01:12:22,000
conversion is just going to be crazy.

1984
01:12:22,000 --> 01:12:23,199
So, we're just going to stick with who

1985
01:12:23,199 --> 01:12:23,840
we have.

1986
01:12:23,840 --> 01:12:24,229
>> Yes.

1987
01:12:24,229 --> 01:12:24,239
» Yes.

1988
01:12:24,239 --> 01:12:25,430
>> Because I mean, this is all very

1989
01:12:25,430 --> 01:12:25,440
» Because I mean, this is all very

1990
01:12:25,440 --> 01:12:27,440
familiar stuff.

1991
01:12:27,440 --> 01:12:30,229
>> The area where I would encourage you,

1992
01:12:30,229 --> 01:12:30,239
» The area where I would encourage you,

1993
01:12:30,239 --> 01:12:32,719
you mentioned chat as an example. We're

1994
01:12:32,719 --> 01:12:34,719
all watching out for privacy issues

1995
01:12:34,719 --> 01:12:36,560
because when you let stuff out

1996
01:12:36,560 --> 01:12:38,790
>> into chat then the rest of the world

1997
01:12:38,790 --> 01:12:38,800
» into chat then the rest of the world

1998
01:12:38,800 --> 01:12:40,880
learns from the town of Alton and also

1999
01:12:40,880 --> 01:12:42,080
theoretically

2000
01:12:42,080 --> 01:12:42,709
>> right

2001
01:12:42,709 --> 01:12:42,719
» right

2002
01:12:42,719 --> 01:12:44,229
>> the area where I think it could be

2003
01:12:44,229 --> 01:12:44,239
» the area where I think it could be

2004
01:12:44,239 --> 01:12:45,520
really interesting for you as a

2005
01:12:45,520 --> 01:12:48,239
controller is if you take this document

2006
01:12:48,239 --> 01:12:49,760
and the other hundred that you've done

2007
01:12:49,760 --> 01:12:51,600
over the last however whatever period

2008
01:12:51,600 --> 01:12:54,080
you have and feed it into the engine,

2009
01:12:54,080 --> 01:12:56,149
>> right? that you could go back into it

2010
01:12:56,149 --> 01:12:56,159
» right? that you could go back into it

2011
01:12:56,159 --> 01:12:57,679
and all these questions that are coming

2012
01:12:57,679 --> 01:13:00,640
up can be digested and and answered for

2013
01:13:00,640 --> 01:13:02,400
you through an inquiry,

2014
01:13:02,400 --> 01:13:02,630
>> right?

2015
01:13:02,630 --> 01:13:02,640
» right?

2016
01:13:02,640 --> 01:13:04,870
>> And it'll be unique to the task

2017
01:13:04,870 --> 01:13:04,880
» And it'll be unique to the task

2018
01:13:04,880 --> 01:13:05,760
information,

2019
01:13:05,760 --> 01:13:06,229
>> right?

2020
01:13:06,229 --> 01:13:06,239
» right?

2021
01:13:06,239 --> 01:13:07,910
>> So when you ask, hey, how many people

2022
01:13:07,910 --> 01:13:07,920
» So when you ask, hey, how many people

2023
01:13:07,920 --> 01:13:09,679
are involved in there? You how many

2024
01:13:09,679 --> 01:13:11,360
people are involved? You do this while

2025
01:13:11,360 --> 01:13:13,600
you're, you know, watching Netflix, how

2026
01:13:13,600 --> 01:13:15,920
many people are involved in and then out

2027
01:13:15,920 --> 01:13:18,239
comes the answer. So I think I think

2028
01:13:18,239 --> 01:13:21,120
it's beyond the accounting. No,

2029
01:13:21,120 --> 01:13:24,390
>> it's going to be it's going to be a a

2030
01:13:24,390 --> 01:13:24,400
» it's going to be it's going to be a a

2031
01:13:24,400 --> 01:13:28,000
data lake of whatever you could p with

2032
01:13:28,000 --> 01:13:31,360
with privacy introduced to that system

2033
01:13:31,360 --> 01:13:34,080
and go I want you to learn from all this

2034
01:13:34,080 --> 01:13:35,840
but we're just so it's just it's still

2035
01:13:35,840 --> 01:13:38,159
far it's still far away. It's actually

2036
01:13:38,159 --> 01:13:41,440
not. There's a hat that uh the mayors

2037
01:13:41,440 --> 01:13:43,199
got that says, you know, I read the

2038
01:13:43,199 --> 01:13:47,920
packet. It was provided by prophecy.com,

2039
01:13:47,920 --> 01:13:49,679
which was at the last three managers

2040
01:13:49,679 --> 01:13:51,679
conference. Prophecy.com does exactly

2041
01:13:51,679 --> 01:13:54,320
what you're talking about. It mines the

2042
01:13:54,320 --> 01:13:57,520
Africanonly website for every single

2043
01:13:57,520 --> 01:13:59,199
document that's on there

2044
01:13:59,199 --> 01:14:01,430
>> and then creates it for staff to be able

2045
01:14:01,430 --> 01:14:01,440
» and then creates it for staff to be able

2046
01:14:01,440 --> 01:14:03,199
to write staff reports, replicate

2047
01:14:03,199 --> 01:14:05,040
information, and answer questions. Boy,

2048
01:14:05,040 --> 01:14:07,199
you gotta watch privacy,

2049
01:14:07,199 --> 01:14:08,229
>> right?

2050
01:14:08,229 --> 01:14:08,239
» right?

2051
01:14:08,239 --> 01:14:11,270
>> That stuff's got to be rock solid.

2052
01:14:11,270 --> 01:14:11,280
» That stuff's got to be rock solid.

2053
01:14:11,280 --> 01:14:12,630
>> Yeah. And

2054
01:14:12,630 --> 01:14:12,640
» Yeah. And

2055
01:14:12,640 --> 01:14:15,350
>> introduce documents to it. That

2056
01:14:15,350 --> 01:14:15,360
» introduce documents to it. That

2057
01:14:15,360 --> 01:14:18,070
>> and I think that's the the thing is and

2058
01:14:18,070 --> 01:14:18,080
» and I think that's the the thing is and

2059
01:14:18,080 --> 01:14:20,560
some of these some of these softwares

2060
01:14:20,560 --> 01:14:24,800
are working in with open AI, right? And

2061
01:14:24,800 --> 01:14:27,760
as you mentioned, right, you can get

2062
01:14:27,760 --> 01:14:29,600
they're showing open AI what they do

2063
01:14:29,600 --> 01:14:31,840
with their processes, right? They're

2064
01:14:31,840 --> 01:14:33,360
reading it. said what what what can

2065
01:14:33,360 --> 01:14:35,120
happen from that like whether

2066
01:14:35,120 --> 01:14:37,120
information gets

2067
01:14:37,120 --> 01:14:40,080
they get information on processes or or

2068
01:14:40,080 --> 01:14:42,400
what is it what's the word I'm looking

2069
01:14:42,400 --> 01:14:43,199
for um

2070
01:14:43,199 --> 01:14:44,950
>> example we have now is we'll take

2071
01:14:44,950 --> 01:14:44,960
» example we have now is we'll take

2072
01:14:44,960 --> 01:14:46,560
information we'll put it in the one

2073
01:14:46,560 --> 01:14:49,280
called claude claude then could actually

2074
01:14:49,280 --> 01:14:51,199
h have

2075
01:14:51,199 --> 01:14:52,960
a particular software can actually have

2076
01:14:52,960 --> 01:14:54,880
your name and your salary and your

2077
01:14:54,880 --> 01:14:57,520
whatever right a snapshot in time it

2078
01:14:57,520 --> 01:15:00,719
then it then this is theoretic removes

2079
01:15:00,719 --> 01:15:03,040
all that information right? Puts it out

2080
01:15:03,040 --> 01:15:04,800
to

2081
01:15:04,800 --> 01:15:07,120
the general like chat GPT to get his

2082
01:15:07,120 --> 01:15:08,719
question answered, pulls it back in and

2083
01:15:08,719 --> 01:15:11,280
then adds your name back on it again. I

2084
01:15:11,280 --> 01:15:12,560
still don't have confidence that that's

2085
01:15:12,560 --> 01:15:13,760
what's occurring, right?

2086
01:15:13,760 --> 01:15:15,030
>> That that

2087
01:15:15,030 --> 01:15:15,040
» That that

2088
01:15:15,040 --> 01:15:17,110
>> that can achieve.

2089
01:15:17,110 --> 01:15:17,120
» that can achieve.

2090
01:15:17,120 --> 01:15:19,189
>> No, some of the stuff that you want.

2091
01:15:19,189 --> 01:15:19,199
» No, some of the stuff that you want.

2092
01:15:19,199 --> 01:15:20,709
>> Yes. And and and

2093
01:15:20,709 --> 01:15:20,719
» Yes. And and and

2094
01:15:20,719 --> 01:15:21,430
>> it's coming.

2095
01:15:21,430 --> 01:15:21,440
» it's coming.

2096
01:15:21,440 --> 01:15:23,669
>> It it's coming and and there is there's

2097
01:15:23,669 --> 01:15:23,679
» It it's coming and and there is there's

2098
01:15:23,679 --> 01:15:26,880
some um like some of the transparency

2099
01:15:26,880 --> 01:15:29,600
stuff like Open Gov is is is creating

2100
01:15:29,600 --> 01:15:31,520
that. They have AI tools within there

2101
01:15:31,520 --> 01:15:34,640
where you can create a a procurement

2102
01:15:34,640 --> 01:15:38,400
where you can um take a document and and

2103
01:15:38,400 --> 01:15:41,440
and and throw it in the AI component and

2104
01:15:41,440 --> 01:15:43,600
then it creates a whole procurement.

2105
01:15:43,600 --> 01:15:45,510
>> Yeah, it's going to affect your staffing

2106
01:15:45,510 --> 01:15:45,520
» Yeah, it's going to affect your staffing

2107
01:15:45,520 --> 01:15:45,840
too.

2108
01:15:45,840 --> 01:15:46,229
>> Yeah.

2109
01:15:46,229 --> 01:15:46,239
» Yeah.

2110
01:15:46,239 --> 01:15:49,030
>> So the the difference between open

2111
01:15:49,030 --> 01:15:49,040
» So the the difference between open

2112
01:15:49,040 --> 01:15:53,280
government open gov and spring box

2113
01:15:53,280 --> 01:15:54,480
cirrus

2114
01:15:54,480 --> 01:15:55,510
>> they're two different

2115
01:15:55,510 --> 01:15:55,520
» they're two different

2116
01:15:55,520 --> 01:15:56,790
>> they they're two different things.

2117
01:15:56,790 --> 01:15:56,800
» they they're two different things.

2118
01:15:56,800 --> 01:15:59,600
OpenGV is uh the transparency tool that

2119
01:15:59,600 --> 01:16:02,400
that um we use to kind of we can show

2120
01:16:02,400 --> 01:16:04,960
our actual reunion date and our budget.

2121
01:16:04,960 --> 01:16:08,239
Um Springbook is our actual financial um

2122
01:16:08,239 --> 01:16:10,560
software that where we keep all our

2123
01:16:10,560 --> 01:16:11,920
financial data, our financial

2124
01:16:11,920 --> 01:16:15,199
management. Um the the good thing with

2125
01:16:15,199 --> 01:16:18,960
open gov is open gov reads springbrook

2126
01:16:18,960 --> 01:16:21,199
and it takes our information every night

2127
01:16:21,199 --> 01:16:23,520
and it it feeds it into open gov where

2128
01:16:23,520 --> 01:16:25,280
you can do the transparency portal where

2129
01:16:25,280 --> 01:16:28,480
you can create um graphs and charts and

2130
01:16:28,480 --> 01:16:31,040
stuff. So that we use it in tando

2131
01:16:31,040 --> 01:16:32,790
>> the transparency portal. Is that just

2132
01:16:32,790 --> 01:16:32,800
» the transparency portal. Is that just

2133
01:16:32,800 --> 01:16:34,560
the town's website?

2134
01:16:34,560 --> 01:16:37,350
>> That's it's open gov but it's it's on

2135
01:16:37,350 --> 01:16:37,360
» That's it's open gov but it's it's on

2136
01:16:37,360 --> 01:16:38,719
the town's notified.

2137
01:16:38,719 --> 01:16:42,070
>> Correct. Um but a lot of these agencies

2138
01:16:42,070 --> 01:16:42,080
» Correct. Um but a lot of these agencies

2139
01:16:42,080 --> 01:16:43,760
are working with each other like like

2140
01:16:43,760 --> 01:16:46,000
open gov's working with open AI right

2141
01:16:46,000 --> 01:16:47,760
and all they're they're creating all

2142
01:16:47,760 --> 01:16:52,400
these things but um it it's it's like

2143
01:16:52,400 --> 01:16:55,360
where's the control of someone some

2144
01:16:55,360 --> 01:16:57,280
company can decide oh this is how they

2145
01:16:57,280 --> 01:17:00,480
do it and we'll we can do it do it on

2146
01:17:00,480 --> 01:17:02,800
our own right and they create a product

2147
01:17:02,800 --> 01:17:04,880
that they beat the other person out on

2148
01:17:04,880 --> 01:17:06,080
the product right because they created

2149
01:17:06,080 --> 01:17:06,480
it

2150
01:17:06,480 --> 01:17:07,350
>> it's overlap for sure

2151
01:17:07,350 --> 01:17:07,360
» it's overlap for sure

2152
01:17:07,360 --> 01:17:09,510
>> right overlap and and And and case in

2153
01:17:09,510 --> 01:17:09,520
» right overlap and and And and case in

2154
01:17:09,520 --> 01:17:09,840
point,

2155
01:17:09,840 --> 01:17:10,950
>> it's a race to market.

2156
01:17:10,950 --> 01:17:10,960
» it's a race to market.

2157
01:17:10,960 --> 01:17:12,790
>> Open gov at the time was just a

2158
01:17:12,790 --> 01:17:12,800
» Open gov at the time was just a

2159
01:17:12,800 --> 01:17:14,560
transparency portal.

2160
01:17:14,560 --> 01:17:15,030
>> Yeah.

2161
01:17:15,030 --> 01:17:15,040
» Yeah.

2162
01:17:15,040 --> 01:17:16,709
>> Where we would take and upload our data

2163
01:17:16,709 --> 01:17:16,719
» Where we would take and upload our data

2164
01:17:16,719 --> 01:17:18,719
in there and it would spit out the

2165
01:17:18,719 --> 01:17:21,360
information. Well, in its infancy,

2166
01:17:21,360 --> 01:17:26,159
OpenGV was partnered with Springbrook on

2167
01:17:26,159 --> 01:17:29,600
reading the data and all that and so it

2168
01:17:29,600 --> 01:17:31,920
worked. Well, what does open gov have

2169
01:17:31,920 --> 01:17:33,520
now today? They have a financial

2170
01:17:33,520 --> 01:17:36,480
software tool that does spring book

2171
01:17:36,480 --> 01:17:40,320
does. So all this partnering and Eric

2172
01:17:40,320 --> 01:17:41,840
it's great

2173
01:17:41,840 --> 01:17:45,590
>> but at what cost right and so um as this

2174
01:17:45,590 --> 01:17:45,600
» but at what cost right and so um as this

2175
01:17:45,600 --> 01:17:50,480
AI component um kind of develops a lot

2176
01:17:50,480 --> 01:17:53,199
of it is because the chat GPT they've

2177
01:17:53,199 --> 01:17:54,880
been working with these softwares and

2178
01:17:54,880 --> 01:17:56,560
and this is George just brought it up.

2179
01:17:56,560 --> 01:17:58,239
So this stuff pulls in from our

2180
01:17:58,239 --> 01:18:00,640
financial software. It read it's a read

2181
01:18:00,640 --> 01:18:02,560
only to our financial software. It

2182
01:18:02,560 --> 01:18:04,880
doesn't it all it does is take the

2183
01:18:04,880 --> 01:18:07,920
information and then and and and we map

2184
01:18:07,920 --> 01:18:12,239
it. But OpenGV

2185
01:18:12,239 --> 01:18:14,640
has now not just this but it's a

2186
01:18:14,640 --> 01:18:17,120
financial software. They have permitting

2187
01:18:17,120 --> 01:18:18,960
and licensing

2188
01:18:18,960 --> 01:18:21,280
uh all these things where they worked

2189
01:18:21,280 --> 01:18:24,320
with other software developers like how

2190
01:18:24,320 --> 01:18:26,159
does this work? How does this and and

2191
01:18:26,159 --> 01:18:27,840
now they're they're competition for

2192
01:18:27,840 --> 01:18:30,719
them. Um but uh with Spring Brook,

2193
01:18:30,719 --> 01:18:32,800
Spring Brook also has I mentioned it,

2194
01:18:32,800 --> 01:18:35,920
there's a Tableau which is similar to

2195
01:18:35,920 --> 01:18:36,960
this

2196
01:18:36,960 --> 01:18:39,669
>> but it's great from Springbrook.

2197
01:18:39,669 --> 01:18:39,679
» but it's great from Springbrook.

2198
01:18:39,679 --> 01:18:42,870
>> So um and yeah, so there's Open AI stuff

2199
01:18:42,870 --> 01:18:42,880
» So um and yeah, so there's Open AI stuff

2200
01:18:42,880 --> 01:18:45,440
where see these filters and these views,

2201
01:18:45,440 --> 01:18:46,960
you can create them, right? Well, now

2202
01:18:46,960 --> 01:18:49,520
OpenAI can can say go in there and say,

2203
01:18:49,520 --> 01:18:51,120
"Okay, I want to know the property taxes

2204
01:18:51,120 --> 01:18:53,600
for the town for the last 10 years." And

2205
01:18:53,600 --> 01:18:56,880
it'll right. So the innovation's there

2206
01:18:56,880 --> 01:18:58,640
and it's happening quick, but at the

2207
01:18:58,640 --> 01:19:02,480
same time it's like we're um where

2208
01:19:02,480 --> 01:19:05,040
governments are still having to create

2209
01:19:05,040 --> 01:19:08,800
policies about the use of open AI

2210
01:19:08,800 --> 01:19:11,990
>> um because it's just exploding uh so

2211
01:19:11,990 --> 01:19:12,000
» um because it's just exploding uh so

2212
01:19:12,000 --> 01:19:14,239
fast and and another thing they were

2213
01:19:14,239 --> 01:19:17,280
talking about is open AI and these chat

2214
01:19:17,280 --> 01:19:19,840
GPT applications create hallucinations,

2215
01:19:19,840 --> 01:19:21,360
right? Where

2216
01:19:21,360 --> 01:19:23,270
>> makes it seem like this is real but it's

2217
01:19:23,270 --> 01:19:23,280
» makes it seem like this is real but it's

2218
01:19:23,280 --> 01:19:25,120
not. you know, because you're reading

2219
01:19:25,120 --> 01:19:26,800
it's taking data and it's just the

2220
01:19:26,800 --> 01:19:28,400
supercomputer

2221
01:19:28,400 --> 01:19:30,320
um and it could create um

2222
01:19:30,320 --> 01:19:32,239
hallucinations. So that's where the the

2223
01:19:32,239 --> 01:19:34,159
human element comes in. Oh,

2224
01:19:34,159 --> 01:19:35,350
>> it's good that you're open to the idea

2225
01:19:35,350 --> 01:19:35,360
» it's good that you're open to the idea

2226
01:19:35,360 --> 01:19:36,960
and it's good that good that you're

2227
01:19:36,960 --> 01:19:38,719
trying to control the idea because the

2228
01:19:38,719 --> 01:19:40,159
two got to coexist.

2229
01:19:40,159 --> 01:19:42,550
>> So So you're planning on converting to

2230
01:19:42,550 --> 01:19:42,560
» So So you're planning on converting to

2231
01:19:42,560 --> 01:19:43,760
the cloud based?

2232
01:19:43,760 --> 01:19:44,310
>> Yes.

2233
01:19:44,310 --> 01:19:44,320
» Yes.

2234
01:19:44,320 --> 01:19:48,229
>> And is that with the $75,000

2235
01:19:48,229 --> 01:19:48,239
» And is that with the $75,000

2236
01:19:48,239 --> 01:19:51,910
>> and then what's the $10,000? Oh, so the

2237
01:19:51,910 --> 01:19:51,920
» and then what's the $10,000? Oh, so the

2238
01:19:51,920 --> 01:19:54,880
10,000 is is we we reallocate that

2239
01:19:54,880 --> 01:19:56,880
amount every year from the finance

2240
01:19:56,880 --> 01:19:58,719
department to our equipment replacement

2241
01:19:58,719 --> 01:20:00,800
fund. So we we've done that the last

2242
01:20:00,800 --> 01:20:02,800
several years. So the amount that we've

2243
01:20:02,800 --> 01:20:03,360
contributed

2244
01:20:03,360 --> 01:20:04,390
>> that's just an annual,

2245
01:20:04,390 --> 01:20:04,400
» that's just an annual,

2246
01:20:04,400 --> 01:20:06,310
>> right? An annual allocation. So what

2247
01:20:06,310 --> 01:20:06,320
» right? An annual allocation. So what

2248
01:20:06,320 --> 01:20:08,480
we've contributed over the years pays

2249
01:20:08,480 --> 01:20:11,199
for that 75,000 migration. So we

2250
01:20:11,199 --> 01:20:12,870
>> So you don't spend that 10,000 every

2251
01:20:12,870 --> 01:20:12,880
» So you don't spend that 10,000 every

2252
01:20:12,880 --> 01:20:13,679
year.

2253
01:20:13,679 --> 01:20:15,590
>> We all No, we don't. We just allocate

2254
01:20:15,590 --> 01:20:15,600
» We all No, we don't. We just allocate

2255
01:20:15,600 --> 01:20:18,480
for Correct. We've been building it. And

2256
01:20:18,480 --> 01:20:22,239
so so there's $75,000 tagged. And then

2257
01:20:22,239 --> 01:20:24,719
does that include the training also?

2258
01:20:24,719 --> 01:20:27,270
>> Uh yes, this includes the training. Um

2259
01:20:27,270 --> 01:20:27,280
» Uh yes, this includes the training. Um

2260
01:20:27,280 --> 01:20:29,520
it could be it could be plus or minus,

2261
01:20:29,520 --> 01:20:31,840
but it includes having the on-site

2262
01:20:31,840 --> 01:20:33,520
training. And that's what I'm requiring

2263
01:20:33,520 --> 01:20:37,360
is not to I've been through some um

2264
01:20:37,360 --> 01:20:39,600
migrations into new software. Then the

2265
01:20:39,600 --> 01:20:41,840
training is like three days and then all

2266
01:20:41,840 --> 01:20:43,199
of a sudden you're on your own. So this

2267
01:20:43,199 --> 01:20:44,719
is going to be walk us through

2268
01:20:44,719 --> 01:20:47,120
everything. Um, and I meant I'm glad

2269
01:20:47,120 --> 01:20:48,400
that you mentioned this, Steve, because

2270
01:20:48,400 --> 01:20:50,239
changing from software, one software to

2271
01:20:50,239 --> 01:20:53,040
another is it's a nightmare. Um, but

2272
01:20:53,040 --> 01:20:53,840
Spring Brook is

2273
01:20:53,840 --> 01:20:55,189
>> she'll lose your historical data no

2274
01:20:55,189 --> 01:20:55,199
» she'll lose your historical data no

2275
01:20:55,199 --> 01:20:56,719
matter what to tell you. Correct.

2276
01:20:56,719 --> 01:20:58,709
>> Not if you But you can also do it to

2277
01:20:58,709 --> 01:20:58,719
» Not if you But you can also do it to

2278
01:20:58,719 --> 01:20:59,920
keep the historical.

2279
01:20:59,920 --> 01:21:01,030
>> Oh, good luck.

2280
01:21:01,030 --> 01:21:01,040
» Oh, good luck.

2281
01:21:01,040 --> 01:21:02,550
>> Well, I've done it. Um,

2282
01:21:02,550 --> 01:21:02,560
» Well, I've done it. Um,

2283
01:21:02,560 --> 01:21:04,870
>> yeah, I know. It's all these buckets and

2284
01:21:04,870 --> 01:21:04,880
» yeah, I know. It's all these buckets and

2285
01:21:04,880 --> 01:21:06,640
multiple

2286
01:21:06,640 --> 01:21:07,520
categories,

2287
01:21:07,520 --> 01:21:10,310
>> but but are is there going to be much of

2288
01:21:10,310 --> 01:21:10,320
» but but are is there going to be much of

2289
01:21:10,320 --> 01:21:11,760
a conversion when you go to the

2290
01:21:11,760 --> 01:21:14,239
cloud-based application? Um there there

2291
01:21:14,239 --> 01:21:16,560
will be conversion as far as the

2292
01:21:16,560 --> 01:21:20,320
interface um the way it looks like um

2293
01:21:20,320 --> 01:21:24,159
where you go uh and h in processing

2294
01:21:24,159 --> 01:21:26,560
things. Um right now it's more of a

2295
01:21:26,560 --> 01:21:28,149
>> is it using the same database?

2296
01:21:28,149 --> 01:21:28,159
» is it using the same database?

2297
01:21:28,159 --> 01:21:30,470
>> Yes, it's using the same we're not

2298
01:21:30,470 --> 01:21:30,480
» Yes, it's using the same we're not

2299
01:21:30,480 --> 01:21:31,600
cloud-based now.

2300
01:21:31,600 --> 01:21:32,229
>> No.

2301
01:21:32,229 --> 01:21:32,239
» No.

2302
01:21:32,239 --> 01:21:33,110
>> Uh

2303
01:21:33,110 --> 01:21:33,120
» Uh

2304
01:21:33,120 --> 01:21:33,510
>> no

2305
01:21:33,510 --> 01:21:33,520
» no

2306
01:21:33,520 --> 01:21:35,430
>> no. So there is going to have to be a

2307
01:21:35,430 --> 01:21:35,440
» no. So there is going to have to be a

2308
01:21:35,440 --> 01:21:36,480
conversion to the

2309
01:21:36,480 --> 01:21:39,350
>> but within the same software provider.

2310
01:21:39,350 --> 01:21:39,360
» but within the same software provider.

2311
01:21:39,360 --> 01:21:41,510
>> Yes. Yeah. Within

2312
01:21:41,510 --> 01:21:41,520
» Yes. Yeah. Within

2313
01:21:41,520 --> 01:21:44,229
>> that's okay. Yeah. And and and what the

2314
01:21:44,229 --> 01:21:44,239
» that's okay. Yeah. And and and what the

2315
01:21:44,239 --> 01:21:46,800
what the good thing about this the the

2316
01:21:46,800 --> 01:21:49,199
cloud cloud-based like any upgrades or

2317
01:21:49,199 --> 01:21:51,120
any like

2318
01:21:51,120 --> 01:21:52,870
>> it's automatic,

2319
01:21:52,870 --> 01:21:52,880
» it's automatic,

2320
01:21:52,880 --> 01:21:55,110
>> right? They'll do it and stuff but

2321
01:21:55,110 --> 01:21:55,120
» right? They'll do it and stuff but

2322
01:21:55,120 --> 01:21:57,270
>> and it's more it's more secure, right?

2323
01:21:57,270 --> 01:21:57,280
» and it's more it's more secure, right?

2324
01:21:57,280 --> 01:21:58,480
Um

2325
01:21:58,480 --> 01:22:01,669
>> and so it it's just a it's a different

2326
01:22:01,669 --> 01:22:01,679
» and so it it's just a it's a different

2327
01:22:01,679 --> 01:22:03,840
look on the interface and what's good is

2328
01:22:03,840 --> 01:22:06,480
they understand that. So you can when

2329
01:22:06,480 --> 01:22:08,719
you you can toggle between what you're

2330
01:22:08,719 --> 01:22:11,360
existing working for working in and the

2331
01:22:11,360 --> 01:22:13,600
new interface. So I have staff that

2332
01:22:13,600 --> 01:22:16,320
enjoy that is used to doing it this way

2333
01:22:16,320 --> 01:22:18,960
and and I can find here in this module.

2334
01:22:18,960 --> 01:22:20,550
>> So you can go back and forth. You're not

2335
01:22:20,550 --> 01:22:20,560
» So you can go back and forth. You're not

2336
01:22:20,560 --> 01:22:22,400
like it's not like okay once you're in

2337
01:22:22,400 --> 01:22:24,159
this new one you're just working in this

2338
01:22:24,159 --> 01:22:26,400
new one. So you can you can pivot

2339
01:22:26,400 --> 01:22:29,110
>> and so which is I think is is is

2340
01:22:29,110 --> 01:22:29,120
» and so which is I think is is is

2341
01:22:29,120 --> 01:22:30,320
beneficial.

2342
01:22:30,320 --> 01:22:33,430
>> One the information is already there. Uh

2343
01:22:33,430 --> 01:22:33,440
» One the information is already there. Uh

2344
01:22:33,440 --> 01:22:36,159
too, it also helps with the integration.

2345
01:22:36,159 --> 01:22:38,239
Another thing too we want to do, there's

2346
01:22:38,239 --> 01:22:41,920
um express bill pay uh so uh people can

2347
01:22:41,920 --> 01:22:43,920
pay online through credit cards.

2348
01:22:43,920 --> 01:22:45,990
>> Is that included in the budget? So

2349
01:22:45,990 --> 01:22:46,000
» Is that included in the budget? So

2350
01:22:46,000 --> 01:22:46,470
>> yes,

2351
01:22:46,470 --> 01:22:46,480
» yes,

2352
01:22:46,480 --> 01:22:48,550
>> and the AI portions of it

2353
01:22:48,550 --> 01:22:48,560
» and the AI portions of it

2354
01:22:48,560 --> 01:22:50,950
>> and the AI portion, right? Yeah. So

2355
01:22:50,950 --> 01:22:50,960
» and the AI portion, right? Yeah. So

2356
01:22:50,960 --> 01:22:54,400
that's another added benefit is it um

2357
01:22:54,400 --> 01:22:56,639
everything is integrated. So on the

2358
01:22:56,639 --> 01:22:59,280
payments right taking payments it'll be

2359
01:22:59,280 --> 01:23:01,760
um through the express bill pay is is

2360
01:23:01,760 --> 01:23:03,280
the payment

2361
01:23:03,280 --> 01:23:05,910
>> uh application for springbook. So it it

2362
01:23:05,910 --> 01:23:05,920
» uh application for springbook. So it it

2363
01:23:05,920 --> 01:23:07,840
it it

2364
01:23:07,840 --> 01:23:10,070
>> you pay and it it talks to your GL, it

2365
01:23:10,070 --> 01:23:10,080
» you pay and it it talks to your GL, it

2366
01:23:10,080 --> 01:23:11,920
talks to your cash receipts and and

2367
01:23:11,920 --> 01:23:14,000
everything's integrated. Right now when

2368
01:23:14,000 --> 01:23:16,000
we take credit card payments, we we take

2369
01:23:16,000 --> 01:23:18,320
it but it's manual entry,

2370
01:23:18,320 --> 01:23:21,990
>> right? This is seamless, right? So that

2371
01:23:21,990 --> 01:23:22,000
» right? This is seamless, right? So that

2372
01:23:22,000 --> 01:23:25,920
and it's it's a it's much needed and we

2373
01:23:25,920 --> 01:23:28,719
need to move more to that direction

2374
01:23:28,719 --> 01:23:29,669
>> and stuff. So

2375
01:23:29,669 --> 01:23:29,679
» and stuff. So

2376
01:23:29,679 --> 01:23:33,110
>> the budget also includes the AI modules.

2377
01:23:33,110 --> 01:23:33,120
» the budget also includes the AI modules.

2378
01:23:33,120 --> 01:23:34,320
for any other

2379
01:23:34,320 --> 01:23:36,790
>> or anything that for now. Yeah. Unless

2380
01:23:36,790 --> 01:23:36,800
» or anything that for now. Yeah. Unless

2381
01:23:36,800 --> 01:23:38,800
and then if I think if there's anything

2382
01:23:38,800 --> 01:23:40,880
that that gets created, there may be

2383
01:23:40,880 --> 01:23:42,960
like that's not already in there, they

2384
01:23:42,960 --> 01:23:45,360
may say, okay, um

2385
01:23:45,360 --> 01:23:47,910
>> like Yeah, correct. An add-on. So, when

2386
01:23:47,910 --> 01:23:47,920
» like Yeah, correct. An add-on. So, when

2387
01:23:47,920 --> 01:23:50,400
we do this, we'll verify, okay, what is

2388
01:23:50,400 --> 01:23:53,120
what is the future of this version of

2389
01:23:53,120 --> 01:23:55,520
the cloud? Is there anything that's

2390
01:23:55,520 --> 01:23:58,080
additional? Um

2391
01:23:58,080 --> 01:23:59,679
yes, if it is, okay, what are the

2392
01:23:59,679 --> 01:24:02,000
add-ons? And then going forward it's

2393
01:24:02,000 --> 01:24:04,800
just up upgrades right whatever refresh

2394
01:24:04,800 --> 01:24:08,320
upgrades were um you know if they find a

2395
01:24:08,320 --> 01:24:10,639
bug on something right it automatically

2396
01:24:10,639 --> 01:24:14,800
will update um the other thing is uh

2397
01:24:14,800 --> 01:24:19,920
what was the other mention on the

2398
01:24:19,920 --> 01:24:21,679
not the upgrades but um

2399
01:24:21,679 --> 01:24:24,629
>> does it change the licensing fees

2400
01:24:24,629 --> 01:24:24,639
» does it change the licensing fees

2401
01:24:24,639 --> 01:24:27,189
>> the the license fee should be it's about

2402
01:24:27,189 --> 01:24:27,199
» the the license fee should be it's about

2403
01:24:27,199 --> 01:24:29,840
should be about half of that a year

2404
01:24:29,840 --> 01:24:31,199
which means the license fee so it will

2405
01:24:31,199 --> 01:24:31,600
go down.

2406
01:24:31,600 --> 01:24:33,510
>> Yeah. The license fee fee would be about

2407
01:24:33,510 --> 01:24:33,520
» Yeah. The license fee fee would be about

2408
01:24:33,520 --> 01:24:36,880
34,000 which includes um customer

2409
01:24:36,880 --> 01:24:39,199
service, customer support. Um

2410
01:24:39,199 --> 01:24:41,189
>> so that's

2411
01:24:41,189 --> 01:24:41,199
» so that's

2412
01:24:41,199 --> 01:24:43,110
>> and we already pay that right now. We

2413
01:24:43,110 --> 01:24:43,120
» and we already pay that right now. We

2414
01:24:43,120 --> 01:24:43,679
pay that.

2415
01:24:43,679 --> 01:24:46,229
>> So the so in the budget

2416
01:24:46,229 --> 01:24:46,239
» So the so in the budget

2417
01:24:46,239 --> 01:24:48,709
>> our cost will go down.

2418
01:24:48,709 --> 01:24:48,719
» our cost will go down.

2419
01:24:48,719 --> 01:24:51,669
>> No no um this is the onetime cost,

2420
01:24:51,669 --> 01:24:51,679
» No no um this is the onetime cost,

2421
01:24:51,679 --> 01:24:52,149
>> right? That's

2422
01:24:52,149 --> 01:24:52,159
» right? That's

2423
01:24:52,159 --> 01:24:53,830
>> And then and then our maintenance cost

2424
01:24:53,830 --> 01:24:53,840
» And then and then our maintenance cost

2425
01:24:53,840 --> 01:24:56,000
is is already in the budget which is our

2426
01:24:56,000 --> 01:24:58,880
our customer support which is for all

2427
01:24:58,880 --> 01:25:01,440
the modules is sort of about 34,000 a

2428
01:25:01,440 --> 01:25:03,679
year the same stay the same

2429
01:25:03,679 --> 01:25:05,189
>> but the licensing you said so the

2430
01:25:05,189 --> 01:25:05,199
» but the licensing you said so the

2431
01:25:05,199 --> 01:25:05,600
licensing

2432
01:25:05,600 --> 01:25:07,669
>> that is the licensing 34,000

2433
01:25:07,669 --> 01:25:07,679
» that is the licensing 34,000

2434
01:25:07,679 --> 01:25:08,870
>> because at first I thought I heard you

2435
01:25:08,870 --> 01:25:08,880
» because at first I thought I heard you

2436
01:25:08,880 --> 01:25:10,639
say it would go down but it'll stay the

2437
01:25:10,639 --> 01:25:11,199
same.

2438
01:25:11,199 --> 01:25:13,350
>> Yes it'll stay the same.

2439
01:25:13,350 --> 01:25:13,360
» Yes it'll stay the same.

2440
01:25:13,360 --> 01:25:16,070
>> Yeah. This I meant the one time would go

2441
01:25:16,070 --> 01:25:16,080
» Yeah. This I meant the one time would go

2442
01:25:16,080 --> 01:25:16,719
down.

2443
01:25:16,719 --> 01:25:18,709
>> 75,000 one time

2444
01:25:18,709 --> 01:25:18,719
» 75,000 one time

2445
01:25:18,719 --> 01:25:22,550
>> and then the open gov work.

2446
01:25:22,550 --> 01:25:22,560
» and then the open gov work.

2447
01:25:22,560 --> 01:25:25,280
Does how much does that cost or is that

2448
01:25:25,280 --> 01:25:28,149
>> that's about 30

2449
01:25:28,149 --> 01:25:28,159
» that's about 30

2450
01:25:28,159 --> 01:25:29,679
32,000 or

2451
01:25:29,679 --> 01:25:31,510
>> that's not included in the 75.

2452
01:25:31,510 --> 01:25:31,520
» that's not included in the 75.

2453
01:25:31,520 --> 01:25:33,910
>> Correct. And we're that's already

2454
01:25:33,910 --> 01:25:33,920
» Correct. And we're that's already

2455
01:25:33,920 --> 01:25:37,440
budgeted in our on our um annual budget

2456
01:25:37,440 --> 01:25:40,000
that part through open gov. Um the same

2457
01:25:40,000 --> 01:25:41,520
thing for the spring book maintenance

2458
01:25:41,520 --> 01:25:43,199
that's already budgeted in our in our

2459
01:25:43,199 --> 01:25:45,520
operation budget. And another thing with

2460
01:25:45,520 --> 01:25:48,719
with um our spring broke is we have

2461
01:25:48,719 --> 01:25:50,800
customizations in there that are

2462
01:25:50,800 --> 01:25:55,520
specific to our agency um specifically

2463
01:25:55,520 --> 01:25:58,080
customizations for

2464
01:25:58,080 --> 01:26:00,719
this state our pension right. It's

2465
01:26:00,719 --> 01:26:03,760
customcreated portion in our software

2466
01:26:03,760 --> 01:26:06,960
that we can create reports run reports

2467
01:26:06,960 --> 01:26:10,000
um because we have to download every two

2468
01:26:10,000 --> 01:26:14,159
weeks we send the the pension uh data to

2469
01:26:14,159 --> 01:26:16,880
calc and so that's a customization like

2470
01:26:16,880 --> 01:26:18,560
there's a customization for the state of

2471
01:26:18,560 --> 01:26:19,920
warrior right they have to customize

2472
01:26:19,920 --> 01:26:22,480
their software for what what is required

2473
01:26:22,480 --> 01:26:25,120
there so we have some customizations too

2474
01:26:25,120 --> 01:26:26,960
in our software and that's what they're

2475
01:26:26,960 --> 01:26:29,280
aware of it so that I think staying with

2476
01:26:29,280 --> 01:26:34,080
them upgrading with them. Um it it it

2477
01:26:34,080 --> 01:26:35,760
the best thing and then the

2478
01:26:35,760 --> 01:26:40,950
customizations also are pretty

2479
01:26:40,960 --> 01:26:43,199
» do you know like initial uses like do

2480
01:26:43,199 --> 01:26:46,719
you have a list of initial uses of AI

2481
01:26:46,719 --> 01:26:51,270
>> other than right now uh it's the the um

2482
01:26:51,270 --> 01:26:51,280
» other than right now uh it's the the um

2483
01:26:51,280 --> 01:26:53,910
>> the bills the bills I think there's

2484
01:26:53,910 --> 01:26:53,920
» the bills the bills I think there's

2485
01:26:53,920 --> 01:26:55,760
going to be an AI component on the

2486
01:26:55,760 --> 01:26:58,080
reporting on the Tableau where you can

2487
01:26:58,080 --> 01:27:00,719
say tell me the last Mhm.

2488
01:27:00,719 --> 01:27:03,830
>> for property taxes and you enter the

2489
01:27:03,830 --> 01:27:03,840
» for property taxes and you enter the

2490
01:27:03,840 --> 01:27:05,760
account code and it should bring

2491
01:27:05,760 --> 01:27:08,239
everything up. Um but right now I think

2492
01:27:08,239 --> 01:27:10,480
the the biggest ones for us is the

2493
01:27:10,480 --> 01:27:12,800
expense the AP component accounts

2494
01:27:12,800 --> 01:27:16,159
payable and then the express bill pay to

2495
01:27:16,159 --> 01:27:20,080
take on um pay online um pay via credit

2496
01:27:20,080 --> 01:27:22,560
cards. When do you want to do it

2497
01:27:22,560 --> 01:27:24,390
>> this? I'm I'm I'm working with Spring

2498
01:27:24,390 --> 01:27:24,400
» this? I'm I'm I'm working with Spring

2499
01:27:24,400 --> 01:27:27,040
Brook and hopefully

2500
01:27:27,040 --> 01:27:29,360
not in the next two months or so.

2501
01:27:29,360 --> 01:27:30,400
Probably towards the end it's

2502
01:27:30,400 --> 01:27:33,840
summertime. Um right because my hiccup

2503
01:27:33,840 --> 01:27:36,159
is don't want to do it when you're in

2504
01:27:36,159 --> 01:27:37,760
the middle of budgeting.

2505
01:27:37,760 --> 01:27:38,070
>> Right.

2506
01:27:38,070 --> 01:27:38,080
» Right.

2507
01:27:38,080 --> 01:27:41,030
>> Yeah.

2508
01:27:41,030 --> 01:27:41,040
» Yeah.

2509
01:27:41,040 --> 01:27:43,510
>> Middle closing the fiscal year. So yeah.

2510
01:27:43,510 --> 01:27:43,520
» Middle closing the fiscal year. So yeah.

2511
01:27:43,520 --> 01:27:46,159
So and it's just also making sure that

2512
01:27:46,159 --> 01:27:48,320
it aligns with their time timeline with

2513
01:27:48,320 --> 01:27:50,159
their consultants, right? because

2514
01:27:50,159 --> 01:27:52,960
they're going to have to send them here

2515
01:27:52,960 --> 01:27:56,320
um the time for them to uh to do this

2516
01:27:56,320 --> 01:28:01,040
conversion switch over to the uh

2517
01:28:01,040 --> 01:28:03,520
cloud and then thank you the cloud and

2518
01:28:03,520 --> 01:28:06,239
then also the to organize the training

2519
01:28:06,239 --> 01:28:08,320
right and the training will be I'm

2520
01:28:08,320 --> 01:28:10,480
assuming two weeks but each module will

2521
01:28:10,480 --> 01:28:12,480
be two days two and a half days

2522
01:28:12,480 --> 01:28:14,229
>> do they also have to reintegrate it with

2523
01:28:14,229 --> 01:28:14,239
» do they also have to reintegrate it with

2524
01:28:14,239 --> 01:28:15,760
open gov

2525
01:28:15,760 --> 01:28:19,990
>> uh I don't I don't think so I think Um

2526
01:28:19,990 --> 01:28:20,000
» uh I don't I don't think so I think Um

2527
01:28:20,000 --> 01:28:22,239
I think it'll just be because open of is

2528
01:28:22,239 --> 01:28:24,719
an SQL reader I think or something like

2529
01:28:24,719 --> 01:28:26,239
that that it just reads. is just making

2530
01:28:26,239 --> 01:28:29,040
sure I I'll update making sure I'll

2531
01:28:29,040 --> 01:28:32,480
verify um on the on the reader, but uh

2532
01:28:32,480 --> 01:28:35,040
we had we didn't um only with Springbook

2533
01:28:35,040 --> 01:28:36,560
when we worked with Open Gov, we just

2534
01:28:36,560 --> 01:28:40,080
had to contact Springbook to have them

2535
01:28:40,080 --> 01:28:43,520
the ability to to tag and read it. But

2536
01:28:43,520 --> 01:28:45,679
other than that, it's shouldn't be so

2537
01:28:45,679 --> 01:28:46,320
much

2538
01:28:46,320 --> 01:28:48,229
>> if the database isn't changing.

2539
01:28:48,229 --> 01:28:48,239
» if the database isn't changing.

2540
01:28:48,239 --> 01:28:49,990
>> Correct. If the database isn't changing

2541
01:28:49,990 --> 01:28:50,000
» Correct. If the database isn't changing

2542
01:28:50,000 --> 01:28:52,400
shouldn't it shouldn't um be a big

2543
01:28:52,400 --> 01:28:54,400
change. But thank you. Those are one of

2544
01:28:54,400 --> 01:28:55,360
the things more asked.

2545
01:28:55,360 --> 01:28:56,790
>> Things are never as easy to

2546
01:28:56,790 --> 01:28:56,800
» Things are never as easy to

2547
01:28:56,800 --> 01:28:59,350
>> No. Yeah, I I hear you. Yeah, you're

2548
01:28:59,350 --> 01:28:59,360
» No. Yeah, I I hear you. Yeah, you're

2549
01:28:59,360 --> 01:28:59,760
right.

2550
01:28:59,760 --> 01:29:01,510
>> Does it increase your prospect pool for

2551
01:29:01,510 --> 01:29:01,520
» Does it increase your prospect pool for

2552
01:29:01,520 --> 01:29:02,880
employees because now you could have

2553
01:29:02,880 --> 01:29:04,480
more work at home or is that something

2554
01:29:04,480 --> 01:29:05,679
we don't do?

2555
01:29:05,679 --> 01:29:07,270
>> Um the work from home is something we

2556
01:29:07,270 --> 01:29:07,280
» Um the work from home is something we

2557
01:29:07,280 --> 01:29:09,440
don't do. Um

2558
01:29:09,440 --> 01:29:10,719
I think

2559
01:29:10,719 --> 01:29:13,669
>> because of a management be here do work

2560
01:29:13,669 --> 01:29:13,679
» because of a management be here do work

2561
01:29:13,679 --> 01:29:15,040
kind of

2562
01:29:15,040 --> 01:29:17,830
>> not so much that I think more we're

2563
01:29:17,830 --> 01:29:17,840
» not so much that I think more we're

2564
01:29:17,840 --> 01:29:20,239
we're a public servant. So how can we

2565
01:29:20,239 --> 01:29:23,040
serve the public? We're at home. um more

2566
01:29:23,040 --> 01:29:25,360
of that that approach but we we do I

2567
01:29:25,360 --> 01:29:27,280
mean some of the directors work from

2568
01:29:27,280 --> 01:29:31,920
home um but I think on the the the

2569
01:29:31,920 --> 01:29:33,430
>> so that software in particular won't

2570
01:29:33,430 --> 01:29:33,440
» so that software in particular won't

2571
01:29:33,440 --> 01:29:34,560
contribute to that you couldn't have an

2572
01:29:34,560 --> 01:29:36,560
AP person that's going to wants to work

2573
01:29:36,560 --> 01:29:38,960
Friday from home and

2574
01:29:38,960 --> 01:29:40,950
>> you can I mean

2575
01:29:40,950 --> 01:29:40,960
» you can I mean

2576
01:29:40,960 --> 01:29:41,669
>> where they go

2577
01:29:41,669 --> 01:29:41,679
» where they go

2578
01:29:41,679 --> 01:29:44,229
>> I mean the software will be available to

2579
01:29:44,229 --> 01:29:44,239
» I mean the software will be available to

2580
01:29:44,239 --> 01:29:47,040
log in right you can you can access it

2581
01:29:47,040 --> 01:29:49,040
anywhere like a

2582
01:29:49,040 --> 01:29:50,550
>> um a portal VPN

2583
01:29:50,550 --> 01:29:50,560
» um a portal VPN

2584
01:29:50,560 --> 01:29:53,189
>> yeah VPN portal Yeah,

2585
01:29:53,189 --> 01:29:53,199
» yeah VPN portal Yeah,

2586
01:29:53,199 --> 01:29:56,310
>> but I think it it just it'll help help I

2587
01:29:56,310 --> 01:29:56,320
» but I think it it just it'll help help I

2588
01:29:56,320 --> 01:29:58,800
guess streamline not just the workflow

2589
01:29:58,800 --> 01:30:03,679
flow but also um the analysis to

2590
01:30:03,679 --> 01:30:07,280
reporting um the cash module the bank

2591
01:30:07,280 --> 01:30:10,639
record module um a lot of it will be um

2592
01:30:10,639 --> 01:30:12,560
more

2593
01:30:12,560 --> 01:30:15,360
I think streamlined and easier all

2594
01:30:15,360 --> 01:30:17,840
windows based already but I think more

2595
01:30:17,840 --> 01:30:19,840
now with these applications for data

2596
01:30:19,840 --> 01:30:23,030
>> modern idea Yes. Yeah, they will. Yeah,

2597
01:30:23,030 --> 01:30:23,040
» modern idea Yes. Yeah, they will. Yeah,

2598
01:30:23,040 --> 01:30:24,639
I gave them a log. Here you go. Log in.

2599
01:30:24,639 --> 01:30:26,639
You can pull it up yourself. Pull up the

2600
01:30:26,639 --> 01:30:30,000
information. But yeah, but that that was

2601
01:30:30,000 --> 01:30:32,880
my update on that

2602
01:30:32,880 --> 01:30:34,400
just to let you know where we're at. And

2603
01:30:34,400 --> 01:30:36,719
and then the AI component. We're still

2604
01:30:36,719 --> 01:30:38,960
I'm still like evaluating it like with

2605
01:30:38,960 --> 01:30:40,719
the open gov. They they working with

2606
01:30:40,719 --> 01:30:44,400
chat gd. I'm creating the the components

2607
01:30:44,400 --> 01:30:47,600
within their software. So, um, and in

2608
01:30:47,600 --> 01:30:49,440
trying to see what other agencies are

2609
01:30:49,440 --> 01:30:51,199
are dealing with and making sure that

2610
01:30:51,199 --> 01:30:53,679
policies are set up, too, so it's not,

2611
01:30:53,679 --> 01:30:58,000
um, you know, we run them up, right?

2612
01:30:58,000 --> 01:31:00,800
But, um, that was for three. Any other

2613
01:31:00,800 --> 01:31:03,199
questions on that one?

2614
01:31:03,199 --> 01:31:05,189
>> Thank you.

2615
01:31:05,189 --> 01:31:05,199
» Thank you.

2616
01:31:05,199 --> 01:31:07,590
>> Yeah. And then on the ALM, I just want

2617
01:31:07,590 --> 01:31:07,600
» Yeah. And then on the ALM, I just want

2618
01:31:07,600 --> 01:31:09,840
to kind of highlight real quick just I I

2619
01:31:09,840 --> 01:31:12,800
I attended the webinar back in early

2620
01:31:12,800 --> 01:31:15,440
December and just and I I included in

2621
01:31:15,440 --> 01:31:19,520
your packet um the ALM review and again

2622
01:31:19,520 --> 01:31:21,199
this is a review that's every four years

2623
01:31:21,199 --> 01:31:24,400
that Calpers is doing. Uh at page nine

2624
01:31:24,400 --> 01:31:30,320
of the um packet is the kind of or the

2625
01:31:30,320 --> 01:31:34,080
main the main meat of it is the the

2626
01:31:34,080 --> 01:31:36,880
board adopted the total portfolio

2627
01:31:36,880 --> 01:31:40,000
approach. Um and this was um I kind of

2628
01:31:40,000 --> 01:31:42,159
briefly discussed about it this um at

2629
01:31:42,159 --> 01:31:45,360
our last meeting. It's the they're doing

2630
01:31:45,360 --> 01:31:47,520
the 7525

2631
01:31:47,520 --> 01:31:49,840
uh equity bonds reference portfolio and

2632
01:31:49,840 --> 01:31:51,920
then they're at they're allowing that

2633
01:31:51,920 --> 01:31:54,560
active risk limit of 400 basis points.

2634
01:31:54,560 --> 01:31:59,600
So 4% for within that portfolio risk um

2635
01:31:59,600 --> 01:32:02,639
adjustment and I think that's um Tom as

2636
01:32:02,639 --> 01:32:03,840
you mentioned hopefully the new

2637
01:32:03,840 --> 01:32:06,080
investment person has that edge so it's

2638
01:32:06,080 --> 01:32:09,280
extra tool so the the plans can move

2639
01:32:09,280 --> 01:32:12,320
within that 400 basis point for the risk

2640
01:32:12,320 --> 01:32:17,520
limit on the um the the actual portfolio

2641
01:32:17,520 --> 01:32:18,960
and then there's no change to the

2642
01:32:18,960 --> 01:32:21,040
current discount rate 6.8 A is going to

2643
01:32:21,040 --> 01:32:24,400
be the same. Uh and the just you know on

2644
01:32:24,400 --> 01:32:27,360
the adopting the portfolio approach

2645
01:32:27,360 --> 01:32:29,040
there's no no changes to the board's

2646
01:32:29,040 --> 01:32:31,360
authority. The ALM process is a four

2647
01:32:31,360 --> 01:32:34,320
year cycle midpoint on review uh you

2648
01:32:34,320 --> 01:32:37,920
know to verify that the the

2649
01:32:37,920 --> 01:32:39,440
capital market assumptions are being

2650
01:32:39,440 --> 01:32:41,040
met. If there's any if the expected

2651
01:32:41,040 --> 01:32:42,320
returns are being met if there's any

2652
01:32:42,320 --> 01:32:44,800
changes that need to be made. Um again

2653
01:32:44,800 --> 01:32:47,360
they review the whole actuarials uh on

2654
01:32:47,360 --> 01:32:49,440
the assumptions. Again, they just

2655
01:32:49,440 --> 01:32:51,280
there's a reference portfolio, there's

2656
01:32:51,280 --> 01:32:54,239
the active risk limit. Um, and this

2657
01:32:54,239 --> 01:32:57,040
replaces that adopted target strategic

2658
01:32:57,040 --> 01:32:59,679
asset allocation and ranges that they

2659
01:32:59,679 --> 01:33:04,000
were um they were using before. And

2660
01:33:04,000 --> 01:33:05,760
again, the the board will continue to

2661
01:33:05,760 --> 01:33:07,920
review this uh total portfolio fund

2662
01:33:07,920 --> 01:33:10,960
risk. Uh, and then that that's pretty

2663
01:33:10,960 --> 01:33:14,639
much it. Just kind of it evolves into um

2664
01:33:14,639 --> 01:33:17,360
you know, better outcomes. There's a

2665
01:33:17,360 --> 01:33:20,239
they kind of put like a matrix a metrics

2666
01:33:20,239 --> 01:33:23,920
of um improved internal governance

2667
01:33:23,920 --> 01:33:26,000
reference portfolios on page 11

2668
01:33:26,000 --> 01:33:28,400
simplicity better transparency greater

2669
01:33:28,400 --> 01:33:30,800
accountability investment decisions for

2670
01:33:30,800 --> 01:33:34,480
the whole and then um it kind of the

2671
01:33:34,480 --> 01:33:35,920
rest of the report it kind of goes

2672
01:33:35,920 --> 01:33:41,520
through uh what the process will be

2673
01:33:41,520 --> 01:33:47,669
but um age

2674
01:33:47,679 --> 01:33:51,360
19 and 20. Uh 18 through 20 kind of

2675
01:33:51,360 --> 01:33:54,800
discuss the actual assumptions. Uh you

2676
01:33:54,800 --> 01:33:56,320
know the economic assumptions obviously

2677
01:33:56,320 --> 01:33:57,840
the long-term investment return that

2678
01:33:57,840 --> 01:33:59,520
they're looking at. The discount rate is

2679
01:33:59,520 --> 01:34:02,159
is staying unchanged at 6.8. They're

2680
01:34:02,159 --> 01:34:03,920
verifying inflation. Inflation has gone

2681
01:34:03,920 --> 01:34:06,719
up the last um previous years. So they

2682
01:34:06,719 --> 01:34:08,960
they're factoring that in there. uh

2683
01:34:08,960 --> 01:34:10,960
other non-economic assumptions they're

2684
01:34:10,960 --> 01:34:14,159
factoring in on the uh going forward is

2685
01:34:14,159 --> 01:34:16,000
increase pay increases longevity

2686
01:34:16,000 --> 01:34:18,880
retirement termination disability all

2687
01:34:18,880 --> 01:34:21,040
these are getting factored in um in

2688
01:34:21,040 --> 01:34:24,960
these new uh assumptions for uh the ALM

2689
01:34:24,960 --> 01:34:26,560
process

2690
01:34:26,560 --> 01:34:30,080
and then demographic assumptions uh

2691
01:34:30,080 --> 01:34:33,360
shows on page 20 starts on page 20 on

2692
01:34:33,360 --> 01:34:35,920
what's changing

2693
01:34:35,920 --> 01:34:38,000
um retirement rates are staying the same

2694
01:34:38,000 --> 01:34:40,320
but Some are increasing by some while

2695
01:34:40,320 --> 01:34:43,360
some will also decrease. Uh mortality

2696
01:34:43,360 --> 01:34:45,520
rates is something that they looked at.

2697
01:34:45,520 --> 01:34:47,120
Uh there's a slight reduction in

2698
01:34:47,120 --> 01:34:50,560
mortality rates. Uh projected mality

2699
01:34:50,560 --> 01:34:53,440
rates slight reduction.

2700
01:34:53,440 --> 01:34:56,560
There is a minimum changes. There's

2701
01:34:56,560 --> 01:34:58,560
termination rates, minimum changes have

2702
01:34:58,560 --> 01:35:00,480
been adopted.

2703
01:35:00,480 --> 01:35:02,719
Um I think the biggest one is the

2704
01:35:02,719 --> 01:35:04,560
discount rate because if the discount

2705
01:35:04,560 --> 01:35:06,800
rate changed from 6.8 the whole asset

2706
01:35:06,800 --> 01:35:10,320
allocation would change, your um

2707
01:35:10,320 --> 01:35:13,600
investment opportunity um would change.

2708
01:35:13,600 --> 01:35:15,440
So, uh they're keeping it the same. I

2709
01:35:15,440 --> 01:35:17,120
don't think it's going to change um

2710
01:35:17,120 --> 01:35:19,760
until another four years. We still have

2711
01:35:19,760 --> 01:35:22,159
the funding risk mitigation policy that

2712
01:35:22,159 --> 01:35:25,920
takes effect, but last year of April of

2713
01:35:25,920 --> 01:35:29,760
24, it's no longer automatic. It was

2714
01:35:29,760 --> 01:35:32,560
automatic. Now if it gets triggered and

2715
01:35:32,560 --> 01:35:34,400
this is if the investment rate of

2716
01:35:34,400 --> 01:35:37,840
returns is 2% higher than the actual um

2717
01:35:37,840 --> 01:35:40,639
discount rate then that it creates a a

2718
01:35:40,639 --> 01:35:42,560
funding risk mitigation policy where it

2719
01:35:42,560 --> 01:35:46,719
reduces the rate of return by 05%.

2720
01:35:46,719 --> 01:35:48,719
That's not automatic. If it happens they

2721
01:35:48,719 --> 01:35:50,480
bring it to the board. Again that

2722
01:35:50,480 --> 01:35:52,159
happened this year. We had a positive

2723
01:35:52,159 --> 01:35:55,360
what 11% increase in

2724
01:35:55,360 --> 01:35:58,880
investment return. Um and so it it

2725
01:35:58,880 --> 01:36:00,400
created an investment risk risk

2726
01:36:00,400 --> 01:36:03,760
manuvation policy. The board uh

2727
01:36:03,760 --> 01:36:05,840
presented the board not to recommend a

2728
01:36:05,840 --> 01:36:08,080
reduction. So again discount rate be at

2729
01:36:08,080 --> 01:36:09,679
6.8%.

2730
01:36:09,679 --> 01:36:12,639
I think eventually over time it could go

2731
01:36:12,639 --> 01:36:16,560
from 6.8 to 6.5.

2732
01:36:16,560 --> 01:36:19,440
Most investment portfolios are at that

2733
01:36:19,440 --> 01:36:22,000
6.5%. Question.

2734
01:36:22,000 --> 01:36:23,669
>> Who's on the board? Are you on the

2735
01:36:23,669 --> 01:36:23,679
» Who's on the board? Are you on the

2736
01:36:23,679 --> 01:36:24,080
board?

2737
01:36:24,080 --> 01:36:24,790
>> Helpers board.

2738
01:36:24,790 --> 01:36:24,800
» Helpers board.

2739
01:36:24,800 --> 01:36:28,629
>> Yeah. Who are these people? I wish they

2740
01:36:28,629 --> 01:36:28,639
» Yeah. Who are these people? I wish they

2741
01:36:28,639 --> 01:36:30,159
state appointed. Yeah,

2742
01:36:30,159 --> 01:36:31,990
>> they're they're appointed by the state.

2743
01:36:31,990 --> 01:36:32,000
» they're they're appointed by the state.

2744
01:36:32,000 --> 01:36:35,030
>> They elected or I hope would hope not.

2745
01:36:35,030 --> 01:36:35,040
» They elected or I hope would hope not.

2746
01:36:35,040 --> 01:36:36,870
>> No,

2747
01:36:36,870 --> 01:36:36,880
» No,

2748
01:36:36,880 --> 01:36:41,270
>> there's um I think two

2749
01:36:41,270 --> 01:36:41,280
» there's um I think two

2750
01:36:41,280 --> 01:36:43,440
elected members, but that they're

2751
01:36:43,440 --> 01:36:48,719
elected by retirees or by by members

2752
01:36:48,719 --> 01:36:50,560
elect I think one or two members on the

2753
01:36:50,560 --> 01:36:53,360
board, but majority of them are fable.

2754
01:36:53,360 --> 01:36:55,199
Very smart.

2755
01:36:55,199 --> 01:36:55,910
>> Yes. Yes.

2756
01:36:55,910 --> 01:36:55,920
» Yes. Yes.

2757
01:36:55,920 --> 01:36:57,189
>> Very smart.

2758
01:36:57,189 --> 01:36:57,199
» Very smart.

2759
01:36:57,199 --> 01:36:59,430
>> These are the There you go.

2760
01:36:59,430 --> 01:36:59,440
» These are the There you go.

2761
01:36:59,440 --> 01:37:02,470
>> I know there there's at least one union

2762
01:37:02,470 --> 01:37:02,480
» I know there there's at least one union

2763
01:37:02,480 --> 01:37:03,199
representative.

2764
01:37:03,199 --> 01:37:03,990
>> Correct.

2765
01:37:03,990 --> 01:37:04,000
» Correct.

2766
01:37:04,000 --> 01:37:08,629
>> Yes. Union representatives. Um

2767
01:37:08,639 --> 01:37:11,199
they look intelligent, right?

2768
01:37:11,199 --> 01:37:13,590
>> Yeah. I I've I've watched a thing where,

2769
01:37:13,590 --> 01:37:13,600
» Yeah. I I've I've watched a thing where,

2770
01:37:13,600 --> 01:37:15,119
you know, they were in attendance and

2771
01:37:15,119 --> 01:37:16,719
they were asking questions and they all

2772
01:37:16,719 --> 01:37:21,520
seemed to be on top of things

2773
01:37:21,520 --> 01:37:23,109
>> and seem to be confident.

2774
01:37:23,109 --> 01:37:23,119
» and seem to be confident.

2775
01:37:23,119 --> 01:37:23,910
>> Yeah,

2776
01:37:23,910 --> 01:37:23,920
» Yeah,

2777
01:37:23,920 --> 01:37:25,030
>> Robert, I don't think that was the

2778
01:37:25,030 --> 01:37:25,040
» Robert, I don't think that was the

2779
01:37:25,040 --> 01:37:26,800
biggest change for me. The biggest

2780
01:37:26,800 --> 01:37:29,199
change was the postretirement mortality

2781
01:37:29,199 --> 01:37:31,840
for men, the slight reduction in the

2782
01:37:31,840 --> 01:37:33,760
projected mortality rate. I think that's

2783
01:37:33,760 --> 01:37:35,119
correct.

2784
01:37:35,119 --> 01:37:36,550
>> Is that assuming everyone's going to

2785
01:37:36,550 --> 01:37:36,560
» Is that assuming everyone's going to

2786
01:37:36,560 --> 01:37:38,320
live longer? So a reduction of a

2787
01:37:38,320 --> 01:37:42,639
mortality rate is a longer life.

2788
01:37:42,639 --> 01:37:43,430
>> Yeah.

2789
01:37:43,430 --> 01:37:43,440
» Yeah.

2790
01:37:43,440 --> 01:37:44,390
>> Plan accordingly.

2791
01:37:44,390 --> 01:37:44,400
» Plan accordingly.

2792
01:37:44,400 --> 01:37:46,390
>> Yeah. Exactly. Oh, and then I just want

2793
01:37:46,390 --> 01:37:46,400
» Yeah. Exactly. Oh, and then I just want

2794
01:37:46,400 --> 01:37:47,840
to point out

2795
01:37:47,840 --> 01:37:57,030
>> Yeah. Live longer.

2796
01:37:57,040 --> 01:37:59,119
» Thanks for bringing it up. I was I was

2797
01:37:59,119 --> 01:38:02,159
but page 25 of the report, it kind of

2798
01:38:02,159 --> 01:38:05,600
shows the the the funded ratio. So last

2799
01:38:05,600 --> 01:38:08,239
year of 24 that you can see the funding

2800
01:38:08,239 --> 01:38:11,760
ratio was um 74.4%

2801
01:38:11,760 --> 01:38:14,159
and um current assumptions are in blue

2802
01:38:14,159 --> 01:38:16,880
proposed assumptions are in green. So in

2803
01:38:16,880 --> 01:38:20,719
25 the funding ratio increased to 79% on

2804
01:38:20,719 --> 01:38:22,639
the current assumption and then proposal

2805
01:38:22,639 --> 01:38:25,760
assumptions it reduced by.

2806
01:38:25,760 --> 01:38:31,350
>> So this is a key thing to me that 63025

2807
01:38:31,350 --> 01:38:31,360
» So this is a key thing to me that 63025

2808
01:38:31,360 --> 01:38:33,600
hasn't happened in terms of the

2809
01:38:33,600 --> 01:38:37,840
allocations to U that's so when they say

2810
01:38:37,840 --> 01:38:42,320
it's going to go down four.4% 4%. I

2811
01:38:42,320 --> 01:38:44,159
think for sure what they're saying is

2812
01:38:44,159 --> 01:38:48,560
there's going to be a UL layer added for

2813
01:38:48,560 --> 01:38:50,639
assumption changes.

2814
01:38:50,639 --> 01:38:54,000
And I think on the next page they they

2815
01:38:54,000 --> 01:38:57,040
imply at least that depending on your

2816
01:38:57,040 --> 01:38:59,199
plan things could be different. But if

2817
01:38:59,199 --> 01:39:01,360
if that was just the average if we were

2818
01:39:01,360 --> 01:39:03,600
at the average

2819
01:39:03,600 --> 01:39:07,270
>> I've calculated it's going to be a added

2820
01:39:07,270 --> 01:39:07,280
» I've calculated it's going to be a added

2821
01:39:07,280 --> 01:39:10,239
layer of 300 to 350,000

2822
01:39:10,239 --> 01:39:14,400
for all plans total bathroom plans

2823
01:39:14,400 --> 01:39:15,510
>> on the UAO.

2824
01:39:15,510 --> 01:39:15,520
» on the UAO.

2825
01:39:15,520 --> 01:39:17,030
>> Yeah. It's going to add to that. It's

2826
01:39:17,030 --> 01:39:17,040
» Yeah. It's going to add to that. It's

2827
01:39:17,040 --> 01:39:18,000
going to be

2828
01:39:18,000 --> 01:39:21,109
>> have to advertise advertised. Yeah.

2829
01:39:21,109 --> 01:39:21,119
» have to advertise advertised. Yeah.

2830
01:39:21,119 --> 01:39:21,590
>> Yeah.

2831
01:39:21,590 --> 01:39:21,600
» Yeah.

2832
01:39:21,600 --> 01:39:22,390
>> Right.

2833
01:39:22,390 --> 01:39:22,400
» Right.

2834
01:39:22,400 --> 01:39:26,310
>> Yeah. But also we know for 63025

2835
01:39:26,310 --> 01:39:26,320
» Yeah. But also we know for 63025

2836
01:39:26,320 --> 01:39:28,560
there's a huge investment gain that's

2837
01:39:28,560 --> 01:39:31,199
going to go the other way. So

2838
01:39:31,199 --> 01:39:34,229
>> uh in net I would think

2839
01:39:34,229 --> 01:39:34,239
» uh in net I would think

2840
01:39:34,239 --> 01:39:36,229
>> we're we're going to end up better than

2841
01:39:36,229 --> 01:39:36,239
» we're we're going to end up better than

2842
01:39:36,239 --> 01:39:38,159
we are right now.

2843
01:39:38,159 --> 01:39:40,310
>> Correct. And then you got to factor into

2844
01:39:40,310 --> 01:39:40,320
» Correct. And then you got to factor into

2845
01:39:40,320 --> 01:39:43,360
the we we just made the 3 million ADP.

2846
01:39:43,360 --> 01:39:43,910
>> Yeah.

2847
01:39:43,910 --> 01:39:43,920
» Yeah.

2848
01:39:43,920 --> 01:39:46,149
>> Oh and I didn't calculate that in what I

2849
01:39:46,149 --> 01:39:46,159
» Oh and I didn't calculate that in what I

2850
01:39:46,159 --> 01:39:48,480
came up with is 300,000.

2851
01:39:48,480 --> 01:39:50,070
>> Yeah. So that that's going to be

2852
01:39:50,070 --> 01:39:50,080
» Yeah. So that that's going to be

2853
01:39:50,080 --> 01:39:52,800
benefit. Yeah. um we made it after the

2854
01:39:52,800 --> 01:39:57,600
April deadline, so it didn't um it was

2855
01:39:57,600 --> 01:40:00,480
it's not factored into the actual report

2856
01:40:00,480 --> 01:40:02,400
we received, but it'll be in the next

2857
01:40:02,400 --> 01:40:05,520
one at the end of of of 25. And then

2858
01:40:05,520 --> 01:40:08,719
yeah, it just mentions that you know the

2859
01:40:08,719 --> 01:40:10,239
there's new assumptions that'll be used

2860
01:40:10,239 --> 01:40:12,000
for the June 30 to 25 actual

2861
01:40:12,000 --> 01:40:15,760
evaluations. These um the changes will

2862
01:40:15,760 --> 01:40:17,760
update our public agencies. they will

2863
01:40:17,760 --> 01:40:19,920
affect our contribution rates in fiscal

2864
01:40:19,920 --> 01:40:23,199
year 2728. So um two fiscal years from

2865
01:40:23,199 --> 01:40:26,159
now um these changes in the ALM will

2866
01:40:26,159 --> 01:40:30,800
take effect and then it'll be uh the ALM

2867
01:40:30,800 --> 01:40:38,629
will be effective July 1st 2012

2868
01:40:38,639 --> 01:40:41,280
» I mean 26 sorry

2869
01:40:41,280 --> 01:40:42,960
that they they're they're voting right

2870
01:40:42,960 --> 01:40:45,760
now and then in July 1. Thank you. I'm

2871
01:40:45,760 --> 01:40:48,639
still in 25

2872
01:40:48,639 --> 01:40:51,280
only 13 days in the new year. Okay. But

2873
01:40:51,280 --> 01:40:54,719
yeah, so July 1st of 26, um these new

2874
01:40:54,719 --> 01:40:56,960
ALM rates and assumption changes will

2875
01:40:56,960 --> 01:40:58,960
take place. And that's why the it won't

2876
01:40:58,960 --> 01:41:02,320
affect our our rates until the 27 28

2877
01:41:02,320 --> 01:41:06,229
year.

2878
01:41:06,239 --> 01:41:09,360
» That's all I should talk about agendas

2879
01:41:09,360 --> 01:41:11,199
coming up.

2880
01:41:11,199 --> 01:41:12,000
Uh

2881
01:41:12,000 --> 01:41:12,950
>> sure. Um

2882
01:41:12,950 --> 01:41:12,960
» sure. Um

2883
01:41:12,960 --> 01:41:17,910
>> I have one question and that is uh

2884
01:41:17,910 --> 01:41:17,920
» I have one question and that is uh

2885
01:41:17,920 --> 01:41:20,000
the audited financials.

2886
01:41:20,000 --> 01:41:21,270
>> Yeah, I'm working on those.

2887
01:41:21,270 --> 01:41:21,280
» Yeah, I'm working on those.

2888
01:41:21,280 --> 01:41:22,550
>> We have that for next.

2889
01:41:22,550 --> 01:41:22,560
» We have that for next.

2890
01:41:22,560 --> 01:41:24,470
>> Yes, we will have it next meeting in

2891
01:41:24,470 --> 01:41:24,480
» Yes, we will have it next meeting in

2892
01:41:24,480 --> 01:41:26,960
March. And then um the the other one I

2893
01:41:26,960 --> 01:41:29,760
wanted to bring out was the uh Victoria

2894
01:41:29,760 --> 01:41:32,080
talking about Kalpers is working on

2895
01:41:32,080 --> 01:41:36,000
bringing um Julian and um the investment

2896
01:41:36,000 --> 01:41:38,880
team out and they they couldn't come out

2897
01:41:38,880 --> 01:41:41,840
this month um but u I'm hoping that

2898
01:41:41,840 --> 01:41:43,760
maybe they come out in March

2899
01:41:43,760 --> 01:41:45,510
>> as well.

2900
01:41:45,510 --> 01:41:45,520
» as well.

2901
01:41:45,520 --> 01:41:52,149
Anybody else have agenda items?

2902
01:41:52,159 --> 01:41:55,679
So, are we ready to adjourn?

2903
01:41:55,679 --> 01:41:56,560
Let's do it.

2904
01:41:56,560 --> 01:41:59,109
>> Yeah. Will we adjourn?

2905
01:41:59,109 --> 01:41:59,119
» Yeah. Will we adjourn?

2906
01:41:59,119 --> 01:42:01,600
>> Okay.