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GOVERNMENT EMPLOYEES’ RETIREMENT SYSTEM OF THE VIRGIN ISLANDS REGULAR MEETING OF THE BOARD OF TRUSTEES St. Thomas/St. Croix Thursday, September 26, 2024 9:30 am ** AGENDA ** I. Call to Order II. Roll Call III. Comments and Suggestions from Retirees IV. Comments and Suggestions from Active Members V. Secretary’s Minutes (Regular: 8/8/2024) VI. Communications and Correspondences VII. Chairperson’s Report VIII. Administrator’s Report IX. Committee Reports X. Treasurer’s Report XI. Investment Officer’s Report XII. REGULAR SESSION A. New Business (i). Bill No. 35-0307 (ii). Approval of FY 2025 Budgets (iii). Administrator’s Recommendation to Increase Employer Contribution to 26.5% XIII. Privileges of the Floor XIV. Adjournment GOVERNMENT EMPLOYEES’ RETIREMENT SYSTEM MINUTES BOARD OF TRUSTEES REGULAR MEETING The Regular Meeting of the Board of Trustees for Thursday, September 26, 2024, was called to order at 10:17a.m. At roll call, Trustees present were Nellon Bowry, Andre’ T. Dorsey, Ronald E. Russell, Loena E. Smith, and Dwane Callwood. The meeting was held both in-person and via Zoom. Absent at roll call was Trustee Vincent G. Liger. A quorum was established with 5 voting Trustees present. Staff in attendance included: Angel E. Dawson, Jr., Administrator/CEO; Ishmael A. Meyers, Jr., General Counsel; Asiah Clendinen Gumbs, Sr. Deputy Administrator/COO; Michele Nico, Deputy Administrator; Denise Jeremiah, Chief Financial Officer; Glenville Henderson, Investment Analyst; Dannica Thomas, Dir. Communications; Jahmed Mills, Director of Retail, Dining, and Entertainment/Property Manager—Havensight; Roy Moorehead, Asst. Prop. Mgr./Chief of Security-Havensight; Ucilla Austrie, Accounting Coordinator; Trenette Donovan, Financial Admin. Specialist; LeSean Moses, Computer and Benefits Systems Tech — IT; Nikia Coley, Admin Assistant to the Board; Jerain Fleming, Executive Assistant to the Administrator. Also present at the meeting were Pedro K. Williams, Esq., Board Counsel, and Florine Hassel, Asst. Director - Division of Personnel. Ms. Desiree Hill, the stenographer, was not present but will transcribe the minutes using the Zoom recording. Comments and Suggestions from Retirees None Comments and Suggestions from Active Members None Secretary’s Minutes (Regular August 8, 2024) No edits or corrections were made. A motion was made by Trustee Dorsey and seconded by Trustee Smith, to accept the minutes of August 8, 2024. The motion passed with 5 Yes (Bowry, Dorsey, Russell, Smith, and Callwood), and 1 absent (Liger). Communication and Correspondences None Chairman’s Report None GOVERNMENT EMPLOYEES’ RETIREMENT SYSTEM MINUTES BOARD OF TRUSTEES REGULAR MEETING Administrator’s Report Meetings, Presentations and Appearances July 18 Havensight Greenspace/Visitor Center Kick-Off Meeting July 23 thru July 26 Board Retreat August 1 Meeting with Atty. Carol Rich re. Havensight Leases St. Thomas Source Interview August 8 Board Meeting August 12 - August 29 Vacation September 4 Annual Overview of Operations Legislative Hearing September 11 Meeting with Union September 12 Budget Committee Meeting: September 13 All Staff Meeting and Employee Recognition September 18 Interview with WTJX September 19 Meeting with U.S. Government Accountability Office Meeting with Acting Atty. General Rhea re. DOJ Lease GOVERNMENT EMPLOYEES’ RETIREMENT SYSTEM MINUTES BOARD OF TRUSTEES REGULAR MEETING Member Services Retirement Applications - as of September 15, 2024 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 Total STX ia7-. i. 180 a7 88 114-165 142 +136 = 105 1 STT 447 164 dal 224 1/2 126 6178 184 _158 124 _0O Total 294 275 245 401 315 240 343 326 294 “229 1 Processed 293 275 245 401 315 240 343 324 =_281 81 —_0 Remaining _i _0O0 _ 0 QO _0 Oo 86_O 2 a3 148 1 165* % Completed 99% 100% 100% 100% 100% 100% 100% 99% 96% 35% 0% Contributions Processing-Refunds and Death Benefits October 1, 2023 — August 31, 2024 Refunds No. of Cases Completed TotalAmount # Cases Pending — Aug. Regular 387 $6,355,752.19 32 Erroneous” .- 19 . 19,721.59 0 Employer Share 17 118,155.15 0 Overpayment 249 647,393.42 0 Total 672 $7,141,022.35 32 Death Benefits No. of Cases Completed Total Amount # Cases Pending — Aug. Active 36 S 1,807,925.00 40 Retired 7 267,206.96 25 Total 43 $ 2,075,131.96 65 GOVERNMENT EMPLOYEES’ RETIREMENT SYSTEM MINUTES BOARD OF TRUSTEES REGULAR MEETING Accounting Department Annuity Payments _ No. of retirees as of September 13, 2024, payroll: 8782 Cumulative dollar paid out from October 1, 2023 — September 13, 2024 700 | Pensioners $0.00 702 Service Retirement Annuities 252,088,286.09 703 | Survivors' Annuities 1,612,861.22 704 | Duty-Connected Death Annuities 2,456.63 705 | Duty-Connected Disability 3,015,566.45 Annuities 706 | Non-Duty Disability Annuities 1,521,894.45 Totals 258,241,064.84 Number of retirees added to payroll from October 1, 2023 — September 13, 2024. 312 Number of retirees added to the payroll for the September 13, 2024, pay date. 16 Number of retirees expected to be placed on payroll for September 30, 2024, pay date: 7 Number of retirees deleted from payroll from October 1, 2023, through September 13, 2024: 290 Note: As of 9/13/24 payroll, the Gross Retiree Payroll has arrived at $ 11,281,166.23 Disbursement by Location as of 9/13/2024 Total Total Total Location Count Checks ACH Puerto Rico & Other islands 68 8 60 United States 1683 27 ~=1656 International 6 3 3 1757 38 1719 St. Thomas 4094 73. 4021 St. Croix 3506 50 3456 St. John 227 7 220 7827 130 7697 Total disb. 9584 168 9416 GOVERNMENT EMPLOYEES’ RETIREMENT SYSTEM MINUTES BOARD OF TRUSTEES REGULAR MEETING GOVERNMENT EMPLOYEES' RETIREMENT SYSTEM LOAN PORTFOLIO UNITS 8/31/2024 STT/STJ STX 2205 1097 1108 Active Personal Loans Retiree Personal Loans 295 165 130 Total Active Loans 2500 1262 1238 Construction/Home Improvement 19 ad, Land 23 20 Purchase/Refinance 2]. 20 Totals 69 51 18 TOTAL LOANS & MORTGAGES 2,569 1,313 1,256 TOTAL OUTSTANDING August 2024 Been ok ued ae oo Active PL $20,071,902.54 $10,017,441.85 $10,054,460.69 Retiree PL 1,022,165.86 559,708.81 462,457.05 Purchase/Refi - 1,163,205.52 838,426.84 324,778.68 Construction - 1,580,684.56 921,469.84 659,214.72 Land Loans 341,821.70 325,750.61 16,071.09 GRAND TOTAL $24,179,780.18 $12,662,797.95 $11,516,982.23 GOVERNMENT EMPLOYEES’ RETIREMENT SYSTEM MINUTES BOARD OF TRUSTEES REGULAR MEETING Operations StL CHGIN 0 FCI COIR Ease ree EATS G? SRSA ER ORAL | BUILDING: CASINO COMMISSION CONTROL BUILDING: Roof Repairs, sealing, and painting are 100 % completed. PLESSEN OPHTHALMOLOGY BUILDING: Roof Repairs, sealing, and Paint are 100 % completed. MAINTENANCE: HVAC SYSTEMS: RTU #4 will be replaced. Unit Housing maintenance to be completed by Bengoa StaThomas.Officg Complexes nano LER RRA RRNA BUILDING: e Southern Flat Roof renovation began. All materials required to complete the first phase were placed on the roof by a Crane e Semuntcy to remove saNRenns in the pullalag ee ee Hotel Development e The hotel project is 63% complete Ss ae. ~ 7% ‘DP commmnten tb? eras af ae —_— GOVERNMENT EMPLOYEES’ RETIREMENT SYSTEM MINUTES BOARD OF TRUSTEES REGULAR MEETING GENERATORS Update- IMPORT SUPPLY e Demo existing concrete pad where new transformer pad will go (Work is 100% Complete) e Angled trench from generator backend heading in the direction of the transformer slab (Work is 100% Complete) e Build a new Concrete pad and enclosure (Work is 80% Complete) Office Buildings Rental and Electricity Collections — Exhibit A (below) August 2024 Total FYTD Arrearages Rental $54,165.48 $857,113.58 $185,315.00 Electric $227.61 $349,515.88 $174,740.22 Total $54,393.09 $1,206,629.46 $360,055.22 No Updates. August 2024 Collection Rental __ | Rental Year-To- Electrical Year-To-| Total Collection! cn Date Collection for| DateCollection | oe — Late Charge | C™Meeton | ey 2093 for FY 2023 | = ene oil fos oe Mar., Apr. Department of Justice $ $ $ 291,284001$ 228,38668;5 $ 185,315.00 | $ 146,624.27 Ave.Mayun MayJune,Juy Dison of Personnel 36,528.16 294240.00] 11345260) 407,602.6 28,115.95 ny FirstBank 290.20 22761 3,192.20 136614) \ "alan ioea 6,365.40 70,019.40 Plessen Eye, LLC_ADMIN 4,009.28 45,064.30 Plessen Eye, LLC_ADMIN STORAGE 580.00 6,519.20 Plessen Eye, LLC_ASC 4392.44 49 371.04 Equus Workforce Solution 18,037.30 6310.46 116 ViCasino 79,386.14 1,386.14 : : Total income Received $ 64,165.48 227.61 857,113.58 } 185,315.00} 174,740.22 GOVERNMENT EMPLOYEES’ RETIREMENT SYSTEM MINUTES BOARD OF TRUSTEES REGULAR MEETING Cual VEEN TOS ONE OSE CENTER SRN Below is the total no. of employees per Agency for August 2024. EEMS, FHC and VIHFA have made outstanding contributions. The total number of employees is declining. This happens as members meet the employee contribution obligations for the year based on their salary. Total no. of Agency Date Employees 6,103 EDA 8/22/2024 EEMC 5/16/2024 12 106 8/22/2024 IP JFLHMC 8/8/2024 LOTTERY 8/22/2024 PFA 7/25/2024 575 4/18/2024 RLSH - Physicians 7/1/2024 UVIBW 108 8/1/2024 UVIM 15 7/22024 VIHA 168 8/1/2024 VIHFA 5/30/2024 VIPA 8/22/2024 VIWMA 176 8/22/2024 VIWAPA 500 8/15/2024 Total &,788 PRO El isi oie ee a ers NTE DELINQUENCY LOANS RESEARCH (Project is ongoing) GOVERNMENT EMPLOYEES’ RETIREMENT SYSTEM MINUTES BOARD OF TRUSTEES REGULAR MEETING Questions for Administrator Dawson: Trustee Bowry inquired about the $360,000 in arrears for electricity, and whether it was a part of the discussion during Administrator Dawson’s meeting with the Dept. of Justice (DOJ). Trustee Bowry asked the Administrator to share what came out of the conversation. Administrator Dawson noted that during the meeting, the DOJ assured GERS that they are working with the Dep. of Finance (DOF) to get their payments for GERS processed. Administrator Dawson mentioned that DOF has sent information indicating the payments are being processed, and GERS anticipates that the rent should be paid in short order. There is no dispute from DOJ that the rent is owed. Administrator Dawson said the bulk of the arrearages belongs to DOJ, with a small balance owed by the Division of Personnel - $28,000. When payment is received from DOF, there will no longer be any arrearages. This late payment may also be attributed to it being the end of the fiscal year. Trustee Dorsey inquired about the July 18" meeting regarding the Visitor’s Center. Administrator Dawson indicated that the meeting included the plans for the Visitor’s Center as well as the greenspace. Trustee Dorsey asked about the meeting with U.S. Gov’t Accountability Office (USGAO), to which Administrator Dawson noted that the meeting was held at the request of USGAO - under the PROMESA Legislation, GAO and DOI are required to meet with the GERS, as well as other agencies of the GVI. Trustee Dorsey raised concerns about the security of GERS’ buildings, drawing reference to a recent incident in the national news. He suggested security may need to be looked at in both districts to ensure the safety of the employees. Administrator Dawson ensured that security is something GERS is always aware of, and it can always be assessed. GERS can look further into it with professionals to see if anything additional needs to be put in place. Trustee Smith inquired whether GERS is still looking into solar installation for the buildings. Administrator Dawson noted that the focus had been on ensuring the generators are working as needed, but solar could definitely be looked into as supplemental power production. Trustee Bowry asked if the hotel would have solar energy capabilities. Administrator Dawson noted that the Hampton by Hilton Hotel will be completely off grid, due to a micro grid that will be built to power the hotel. GOVERNMENT EMPLOYEES’ RETIREMENT SYSTEM MINUTES BOARD OF TRUSTEES REGULAR MEETING Committee Reports: Chairman Callwood stated the Budget Committee met on September 12, 2024, to review both GERS Main and Havensight Budgets. All Trustees were invited to participate and give their inputs on the budget. Treasurer’s Report: Denise Jeremiah, CFO read the Treasurer's Report for the System and Havensight Mall for the month ending August 31, 2024. GERS’ Schedule of Receipts and Disbursements: - Total Collections for August 2024 is $12.7M, and FYTD is $277.9M. - Total Disbursements for August 2024 is $26.7M, and FYTD is $294.3M. - This represents a Net Cash Deficit of $14M for the month of August, and a Net Cash Deficit of $16.4M FYTD. Havensight Mall’s Schedule of Receipts and Disbursements: - Total Collections for August 2024 is $373.4K, and FYTD is $4.9M. - Total Disbursements for August 2024-is $616K and FYTD is $5.3. . - This represents a Net Cash Deficit of $242K for the month of August, and a Net Cash Deficit of $404K FYTD. Trustee Bowry noted that he has raised the question several times concerning whether Havensight Mall should contribute to the operating expenses of the system, perhaps charging some type of management fee. He requested a report/analysis of whether this charge would be appropriate and how much would be practical. Trustee Bowry also mentioned that the Havensight Mall is listed as an investment on the System’s books, and asked what return is the System earning on this investment and how is it determined? While Administrator Dawson did not disagree with Trustee Bowry about the charge of a management fee, he noted however, that a full time Manager has been hired at Havensight (budgeted under Havensight), and the services and administrative effort that were previously on GERS Main, have been substantially transferred to Havensight. Mr. Dawson noted that an analysis can be done to determine how much of the administrative cost can be attributed to Havensight and bill them accordingly. A motion was made by Trustee Dorsey and seconded by Trustee Bowry to accept the Treasurer’s Report for August 31, 2024. The motion passed with 4 Yes (Bowry, Dorsey, Smith and Callwood) and 2 Absent (Liger and Russell). GOVERNMENT EMPLOYEES’ RETIREMENT SYSTEM MINUTES BOARD OF TRUSTEES REGULAR MEETING Investment Officer’s Report: Glenville Henderson gave an update of the Investment Portfolio as of August 31, 2024. Total Plan returned 1.6% for the month - 20.1% FYTD Total Domestic Equity returned 2.2% - 3.1% FYTD Total International Equity returned 2.5% - up 22.7% FYTD - Developed Market Equity returned 3.2% - Emerging Market Equity returned 0.7% Total Domestic Fixed Income returned 1.3% - up 11% FYTD - Investment Grade Bonds returned 1.5% - TIPS returned 0.8% - High Yield Bonds returned 1.6% - Cash returned 0.5% Total Alternatives returned -0.3% (excludes Member Loan Programs as well as St. Thomas and St. Croix Facilities) Monthly Cash Flow Update: Funds raised in the month of August 2024 totaled $14M. The month ended at approximately $488.8M. A motion was made by Trustee Smith and seconded by Trustee Dorsey to accept the Investment Officer’s Report for August 31, 2024. The motion passed with 4 Yes (Bowry, Dorsey, Smith and Callwood), and 2 Absent (Liger and Russell). Bill No 35-0307: sponsored by Senator Milton Potter: Seeks to allow all active government employees to directly elect their representatives to the GERS Board, and it establishes a mandate that all seven members of the Board of Trustees meet the same requirements in respect to education and experience. Trustee Bowry inquired about the current Board’s seats occupied by the Central Labor Council Representatives. Chairman Callwood indicated that this measure would eliminate the provision for the Central Labor Council representatives. He noted that Trustee Liger’s term has expired, and this measure would not affect Trustee Dorsey’s current term on the Board. Trustee Bowry said he would not have a problem with this measure, as it would allow the active members to have representation just as the retirees already have representation. Chairman Callwood said the measure would bring parity to active members, allowing them the opportunity to elect representatives to the board. GOVERNMENT EMPLOYEES’ RETIREMENT SYSTEM MINUTES BOARD OF TRUSTEES REGULAR MEETING Trustee Dorsey indicated he is not in favor of the measure and suggested it go to the Policy Committee to allow the Central Labor Council an opportunity to weigh in. He suggested adding additional seats to the Board for those active government employees who are unclassified. Chairman Callwood noted that a measure as this is sent to the Board to get the Board’s opinion of whether or not they are in favor. Trustees get to have the discussion, and each puts their position on the record. The Board then provides its position. A motion was made by Trustee Smith and seconded by Trustee Bowry indicating the GERS Board is in favor of Bill 435-0307. The motion passed with 3 Yes (Bowry, Smith and Callwood), 1 No (Dorsey) and 2 absent (Liger and Russell). FY2025 Budget: Administrator Dawson presented a synopsis of the FY2025 Budget: - FY2025 proposed budget, which includes Operations, Capital and Board of Trustees, is $22.7M ($16.8M-Operations and $5.9 Capital). This is a reduction of $132,319. © Operations ($207K increase over 2024): " Board of Trustees — $752K (S9K increase) # Administration — $11.3M ($1.8M less than FY2024) * Facilities, Operations & Control — $4.7M (increase of $2M) — Offset from Administration’s reduction, due to reorganization o Capital (Reduction of $339K) =® Administration e Benefits Admin System — Increase of $SOK e Computer Hardware — Increase of $57K e Furniture minor repairs — Increase of $13K = Facilities Mgmt., Operations, Control Capital e Repairs and renovations - Reduction of $320K e Vehicles (supplement fleet by 1 per district) — Increase of $55K e Machinery and Equipment — Reduction of $200K e Furniture — Increase of $5K - Havensight FY 2025 Budget — reduction of $1,617,821 o Operations: = Personnel services — Increase $31,362 « Fringe Benefits — Increase of $114,917 = Supplies — Reduction of $255,900 =" Services — Reduction of $23,200 = Utilities - Remained the same o Capital Outlay — Reduction of $1.485M GOVERNMENT EMPLOYEES’ RETIREMENT SYSTEM MINUTES BOARD OF TRUSTEES REGULAR MEETING A motion was made by Trustee Dorsey and seconded by Trustee Smith to accept the Budget Committee’s recommendation for the FY2025 Budget. The motion passed with 4 Yes (Bowry, Dorsey, Smith and Callwood), and 2 absent (Liger and Russell). Resolution No. 6-2024 - Administrator’s recommendation to increase Employer Contribution Rate an additional 3% effective January 1, 2025, to 26.5%. Trustee Bowry indicated that while he is in favor of the increase, the Resolution, as written, needs to be more robust in terms of justification, to include the history behind the reason for the increase: He noted the increase will equate to approximately $13M increase to the Central Government’s budget, so the background information as justification is needed. Chairman Callwood indicated that the final Resolution will be drafted after the vote is taken, so the suggestions of Trustee Bowry will be noted for inclusion in the final draft. A motion was made by Trustee Dorsey and seconded by Trustee Smith to accept the 3% Increase for Employer Contributions. The motion passed with 4 Yes (Bowry, Dorsey, Smith and Callwood), and 2 absent (Liger and Russell). Administrator Dawson requested of Chairman Callwood, that the Board direct the Administrator - to proceed with the increase, as intended, in January of 2025. Privileges of the Floor None Adjournment The Board of Trustees Meeting was adjourned at 12:10pm. The minutes, for the Regular Meeting of the Board of Trustees, were transcribed from the meeting and the Zoom recording by Jerain Fleming, Executive Assistant to the Administrator, and reviewed and edit by Angel E. Dawson, Jr., Administrator and CEO. wr Sf Angel E. Dawson Jr. Administrator/CEO Secretary, GERS Board of Trustees