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GOVERNMENT EMPLOYEES’ RETIREMENT SYSTEM OF THE VIRGIN ISLANDS REGULAR MEETING OF THE BOARD OF TRUSTEES St. Thomas/St. Croix via Zoom Thursday, January 27, 2022 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: 12/1/21; Regular: 12/16/21; Special: 1/7/22) 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. Unfinished Business (i). Discussion on Bill #BR21-0685 B. New Business (i). Meketa Contract Extension XIII. EXECUTIVE SESSION This portion of the meeting will be closed to the public for matters pertaining to trade secrets / or financial or commercial information/ or personal/ or legal matters; or matters whose premature disclosure will frustrate the implementation of the proposed agency action. A. New Business (i). Havensight Mall B. Unfinished Business (i). JLL Update (ii). CEO Selection Process XIV. Privileges of the Floor XV. Adjournment GOVERNMENT EMPLOYEES’ RETIREMENT SYSTEM MINUTES BOARD OF TRUSTEES REGULAR MEETING January 27, 2022 1 The Regular Meeting of the Board of Trustees for January 27, 2022 was called to order at 9:32 am. The meeting was held via Zoom. At roll call, Trustees present were Trustee Callwood, Liger, Russell, and Bowry. Trustees not present during the roll call were Dorsey, Smith, and McDonald. A quorum was established with 4 voting trustees present and 3 absent (Dorsey, Smith, and McDonald). After the roll call Dorsey, Ex-officio member Cindy Richardson, and Smith joined the meeting. Staff in attendance: Austin Nibbs, Administrator, Cathy Smith, General Counsel, Ishmael Meyers, Deputy General Counsel, Denise Jeremiah, CFO, Asiah Clendinen Gumbs, COO, Glenville Henderson, Investment Analyst, Roy Moorehead Jr., Chief of Security-Havensight Mall, Sakeeda Figueroa, Communication Specialist, LeSean Moses, IT, Zaida Castro, Executive Assistant to the Administrator, Ucila Austrie, Accounting Coordinator, and Nikia Coley, Administrative Assistant to the Board of Trustees. Also, present in the meeting were Pedro K. Williams, Board Counsel and Kelsha Williams (Associate Pedro Williams Law Offices) and Stenographer, Desiree Hill. In attendance were several retirees and active members. Press in attendance: Sara Kirkpatrick (VI Daily News) and Don Buchanan (V.I. Source). Comments and Suggestions from Retirees and Active Members There were no comments or suggestions from retirees or active members. Secretary’s Minutes A motion was made by Trustee Callwood and seconded by Trustee Russell to approve the Board meeting minutes for December 1, 2021 Regular Board meeting. The motion passed with 4 yes (Callwood, Liger, Russell, Bowry); and 3 absent (Dorsey, Smith, McDonald). A motion was made by Trustee Callwood and seconded by Trustee Russell to approve the meeting minutes for December 16, 2021 Regular Board meeting. The motion passed with 4 yes (Callwood, Liger, Russell, Bowry); and 3 absent (Dorsey, Smith, McDonald). A motion was made by Trustee Callwood and seconded by Trustee Russell to approve the meeting minutes for January 7, 2022 Special Board meeting. The motion passed with 5 yes (Callwood, Dorsey, Liger, Russell, Bowry); and 2 absent (Smith, McDonald). Type text here GOVERNMENT EMPLOYEES’ RETIREMENT SYSTEM MINUTES BOARD OF TRUSTEES REGULAR MEETING January 27, 2022 2 Communications and Correspondences On January 25th, correspondence was sent to Commissioner of VI Police Department, Ray Martinez, as a formal request to provide the necessary training for the Havensight Mall Security Staff. On January 26th, received correspondence from the 34th Legislature – Committee of the Whole, to testify on Bill B21-0685 – “An Act repealing and amending Act No. 8329 and 8330 and amending Title 29 VI Code. The Hearing is scheduled for Monday, January 31st at 10:00 a.m. in the Earl B. Ottley Legislature Hall and via TEAMS. On January 26th, received correspondence from the 34th Legislature – Committee of Finance, to testify on February 1, 2022, regarding Bill No. 34-0171, “An Act amending VI Code title 3, chapter 27, section 706 and chapter 28a, relating to the service retirement annuity to allow retirees to re-enter government service and retain their annuity while paying a contribution to the Retirement System and for other related purposes”. Senator Milton Potter is the sponsor of this bill. A motion was made by Trustee Russell and seconded by Smith for the Board to hold a Special Board meeting for January 28th to discuss Bill No. 21-0685 at 11:00 a.m. The motion passed with 5 yes (Callwood, Liger, Russell, Smith, Bowry); and 2 absent (Dorsey, McDonald). Chairman Bowry granted permission to amend the roll call on the motion to hold a Special Board meeting on January 28th because Trustee Dorsey appeared after roll call. The motion passed with 6 yes (Callwood, Dorsey, Liger, Russell, Smith, Bowry); and 1 absent (McDonald). A press release will be sent out to the public announcing the Special Board Meeting scheduled for January 28th at 11:00a.m. Chairman’s Report No Report Administrator’s Report Meetings, Presentations, and Appearances December 20th – Attended the Havensight Mall Oversight Committee Meeting. 21st - Invited and attended working session with Senator Potter and other stakeholders Re: Bill No. 34-0171 (Return to Work). 30th - Attended GERS Policy Committee Meeting. GOVERNMENT EMPLOYEES’ RETIREMENT SYSTEM MINUTES BOARD OF TRUSTEES REGULAR MEETING January 27, 2022 3 January 7th - Attended GERS Special Board Meeting. 8th - Attended meeting with JLL consultants. 11th - Presented at DPNR Rezoning Hearing Re Rezoning of Parcel Nos. 2 and 4 the Havensight Mall. 14th Meeting with JLL Re: Ground Lease at Havensight Mall. 19th Meeting with Governor and Team Re: SPV legislation. 20th - Meeting with JLL re: Ground lease at Havensight Mall. Attended the Havensight Mall Oversight Committee Meeting. 24th - Meeting with WAPA Re: Availability of infrastructure Funds (Grant) to replace HM water distribution system. Meeting with JLL re: Ground lease at Havensight Mall. 26th - Testified as a witness at member’s case. Attended Vitech’s (V3 software provider) presentation. GOVERNMENT EMPLOYEES’ RETIREMENT SYSTEM MINUTES BOARD OF TRUSTEES REGULAR MEETING January 27, 2022 4 Member Services Retirement Applications – as of January 31, 2022 2015 2016 2017 2018 2019 2020 2021 2022 Total STX 147 111 118 178 143 114 145 4 STT 147 164 127 224 172 123 161 4 Total 294 275 245 402 315 237 306 8 Processed 293 275 245 401 315 227 150 0 Remaining 1 0 0 1 0 10 156 8 176* 99% 100% 100% 99% 100% 96% 49% 0% Disability Life Certificates / Disability Cases – As of January 7, 2022 2020 Duty/Non-Duty Disability Life Certificate Distribution 71 – U.S. Mainland 160 – Virgin Islands 231 (Initial letters were dated 2/20/2020 with 3/20/2020 response deadline.) Benefits Suspended = Address is changed to GERS and annuity checks are held by GERS until either a validated Life Certificate or a Death Certificate is received. A Duty/Non-Duty Disability Life Certificate Distribution will be conducted in February 2022. DISABILITY CASES There are a total of thirteen (13) disability cases pending a determination. Clarifications were asked by various trustees on the disability cases and the return-to-work cases. This information will be provided at the next regular Board meeting in February. 200 0 3 Benefits Suspended Deceased 28 Receipt of Life Certificate Pending 231 GOVERNMENT EMPLOYEES’ RETIREMENT SYSTEM MINUTES BOARD OF TRUSTEES REGULAR MEETING January 27, 2022 5 Compliance and Control - Contribution Processing October 1, 2021 – December 31, 2021 Death Benefits No. Completed Amount No. of Cases Types 10/1/21-12/31/2021 10/1/21-12/31/2021 Pending Active 6 $239,791.59 47 Retired 5 73,922.77 12 Total 11 $ 313,714.36 59 Accounting Refunds No. Cases Completed Total Amount No. Cases Pending Regular 95 $1,700,996.76 31 Erroneous 6 79,029.29 18 Employer Share 0 0.00 9 Overpayment 58 83,937.75 0 Total 159 $1,863,963.80 58 GOVERNMENT EMPLOYEES’ RETIREMENT SYSTEM MINUTES BOARD OF TRUSTEES REGULAR MEETING January 27, 2022 6 Annuity Payments No. of retirees as of January 14, 2022, payroll: 8,700 Cumulative dollar paid out from October 15, 2021 – January 14, 2022 700 Pensioners $0.00 702 Service Retirement Annuities 72,105,331.87 703 Survivors' Annuities 506,503.97 704 Duty-Connected Death Annuities 747.67 705 Duty-Connected Disability Annuities 897,220.17 706 Non-Duty Disability Annuities 441,069.81 Totals $75,950,873.49 Number of retirees added to payroll from October 1, 2021 – January 14, 2022. 102 Number of retirees added to the payroll for the January 14, 2021, pay date. 7 Number of retirees expected to be placed on payroll for the January 31, 2021, pay date: 5 Number of retirees deleted from payroll from October 1, 2021, through January 14, 2022: 82 Note: The Gross Retiree Payroll was $ 10,876,848.51 for the 1/14/22 payroll. GOVERNMENT EMPLOYEES’ RETIREMENT SYSTEM MINUTES BOARD OF TRUSTEES REGULAR MEETING January 27, 2022 7 Refund for Overpayments December 31, 2021 No. of Units Total 22 $18,563.35 At the end of the calendar year 2021 approximately 534 loans are schedule to mature. PERSONAL LOANS 12/31/2021 STT/STJ STX Active Personal Loans 1132 606 526 Retiree Personal Loans 686 403 283 Auto Loans 1 0 0 1,819 1,009 809 MORTGAGES Construction/Home Improvement 21 11 10 Land 27 23 4 Purchase/Refinance 33 23 10 Totals 81 57 24 TOTAL LOANS & MORTGAGES 1,900 1,066 833 TOTAL OUTSTANDING December 2021 Total STT/STJ STX Active PL - 9,589,172.97 $ 5,532,451.42 $ 4,056,721.55 $ Retiree PL - 7,167,912.86 4,209,299.85 2,958,613.01 Auto PL - - - Purchase/Refi - 1,755,437.25 1,188,596.92 566,840.33 Construction - 1,945,452.91 1,114,066.74 831,386.17 Land Loans - 560,532.96 508,239.68 52,293.28 GRAND TOTAL 21,018,508.95 $ 12,552,654.61 $ 8,465,854.34 $ DATE GOVERNMENT EMPLOYEES’ RETIREMENT SYSTEM MINUTES BOARD OF TRUSTEES REGULAR MEETING January 27, 2022 8 Operations St. Croix Office Complex Maintenance • No major issue to report. St. Thomas Office Complex Hip Roof Replacement • Manufacturer drawings approved by Jaredian Design. Work schedule to commenced on Monday, January 17, 2022 Air Conditioner Project New air handlers are installed on both floors. Next Steps in Air Conditioner Project Anticipated project completion date – 2nd Quarter FY 2022 OTHER ONGOING CAPITAL PROJECTS. • Sneeze Guard Installation began on January 11, 2022, on workstations. • Transformer Replacements –Two (2) leaking transformers were replaced last week. • Fencing Repair and Construction at GERS Main • Fabrication of fence and installed for chillers/compressors, Arches, and construction of masonry wall completed. • Painted and perimeter fence repairs are 95% completed. • Air quality testing completed on St. Thomas and St. Croix. Several areas are of high concern. Two (2) quotes were received. Selection of a contractor for mold remediation is in progress. Target completion date is in February. • Generator – The generator is currently not operable. The fuel injection pump needs to be replaced or rebuilt. The rebuilt part will take 3-4 weeks and the new part will take 3-4 months. We selected to rebuild the part with the knowledge that the generator will not be operable until it is rebuilt. Havensight Mall Warehouse Demolition On hold for further Environmental & Hazardous Protection and State Historic and Preservation Office Review. EHP (FEMA) conducted an on-site assessment visit at the Havensight Mall Warehouses on December 10, 2021. GOVERNMENT EMPLOYEES’ RETIREMENT SYSTEM MINUTES BOARD OF TRUSTEES REGULAR MEETING January 27, 2022 9 Warehouse J Received final drawings and collected documents needed for DPNR Permit Application submission. Finalizing RFP for HMOC Review. January 2022 – February 2022 – RFP and Selection of Contractor. Met with Architect on January 18, 2022, to finalize all paperwork and documentation. White House Annex (Havensight Mall) Obtained quotes for shredding of mold-infested documents – approximately 600 boxes on both floors. Reviewing for final selection. Rental and Electricity Collections – Exhibit A December 2021 Total FYTD Arrearages Rental $62,337.84 $96,930.20 $150,757.32 Electric 3,824.90 10,292.22 156,389.42 Total $66,162.74 $107,222.42 $307,146.74 LEASES Division of Personnel - DOP ‘s Lease is being finalized through the Government’s Procurement Process. Signatures pending from DPP and DOP. Department of Justice – Lease was transmitted from Property and Procurement to the GERS for Signature. The signed lease was forwarded to the Department of Justice. Awaiting the Attorney General’s signature. FEMA/INSURANCE On December 10, 2021, conducted walk through and inspection with the Environmental Hazard Protection Unit within FEMA in anticipation of the demolition of the warehouse and redesign/restoration of Warehouse J. EHP representatives submitted a document for clarifying questions. GERS responded. No feedback received from EHP. Continue to work with Witt O’Brien on new cost estimates to support letter to FEMA to revise the reimbursable amount for the Retail Roofs at Havensight Mall. A meeting was held with FEMA on Monday, January 10, 2022. GERS to revise the scope of work with architectural and design details of Warehouse J. GOVERNMENT EMPLOYEES’ RETIREMENT SYSTEM MINUTES BOARD OF TRUSTEES REGULAR MEETING January 27, 2022 10 GOVERNMENT EMPLOYEES’ RETIREMENT SYSTEM MINUTES BOARD OF TRUSTEES REGULAR MEETING January 27, 2022 11 Questions and Comments of Administrator’s Report Member Services Disability Cases - There are 13 disability cases pending determination because they are awaiting appeal and obtaining medical examinations from the physicians or waiting on documentation to support their application. Specifically, five out of thirteen were approved, two of the thirteen were disapproved, two of the thirteen were appealed and disapproved on the appeal, two are awaiting medical examinations. The Board of Trustees will have a Special Board meeting to discuss the Disability cases within the next two weeks. FEMA - GERS applied for FEMA funding in 2017 because of damages to GERS properties due to Hurricanes Irma and Maria. In order to qualify for the FEMA Funding, GERS wrote 13 project worksheets for grants in which two are pending. Rentals – Operations received a payment for Division of Personnel as well as supporting document from ERP Program, the Central Government payment system, showing payments are n process. Property and Procurement have given the Department of Justice CFO permission to process the outstanding payment to make GERS whole. Water and Power Authority Outstanding Contributions - WAPA has not paid the outstanding employer or employee contributions. Currently, attempts are being made to schedule a meeting with WAPA’s new Chief Executive Officer to negotiate a payment plan before taking legal action. The Board emphasized that the Administration looks into the situation expeditiously because the 60 days have expired. Committee Reports a). Investment Committee - No Report. (b). Development Committee – No Report. (c). Medical Committee Report - No Report. (d). Budget Committee Report – No Report. (e). Policy Committee Report – No Report. GOVERNMENT EMPLOYEES’ RETIREMENT SYSTEM MINUTES BOARD OF TRUSTEES REGULAR MEETING January 27, 2022 12 Treasurer’s Report Ms. Denise Jeremiah read the Treasurer’s Report for the System for December 31, 2021, into the record. Total Collections for December 31, 2021 is $14M and FYTD is $39.4M and Total Disbursements for December 31, 2021 is $24.1M and FYTD is $73.2M; Net Cash Deficits for December 31, 2021 is $10.1M and $33.8M FYTD. Ms. Denise Jeremiah, read the Financial Report for the Havensight Mall for Havensight Mall into the record. Total Collections for December 31, 2021 is $185.4K and FYTD $614.4K; Total Disbursements for December 31, 2021; $286.5K and FYTD is $623K and a Net Cash Deficits of $101.2K and $8.7K FYTD. A narrative was included on both reports explaining the cashflow of the System. A motion was made by Trustee Smith and seconded by Trustee Dorsey to accept the Treasurer’s Report for December 31, 2021. The motion passed with 6 yes (Callwood, Dorsey, Liger, Russell, Smith, and Bowry), 1 absent (McDonald). Investment Officer’s Report Glenville Henderson, Investment Analyst reported: Total Plan Return is 0.1% for the month of December 31, 2021; Total Fixed Income Portfolio is - 0.3% and in line with its benchmark; Total Alternatives Return is 1.5% and underperformed its benchmark by 3.3%. Pugh Capital Return is -0.3% and underperformed its benchmark by 0.4%, and Blackrock US Debt return -0.3%; Mesirow PE funds returned 6.5% The monthly cashflow update ended width $407.8M (excludes Members Loans Program and St. Thomas/St. Croix office complexes); No funds raised for the month of December; Beginning Market Value is $407.5M; Net Cash Flow is $0.00, Income is $388K; Loss $152K; Ending Market Value of $407.7M. Investment Management/Custodian/Consulting Fees for the month of December 31, 2021, is $0, $640K YTD (Investment Management Fees of $470K and investment consultant fees of $125K and $45K for custodian bank services) FYTD is $102K Investment Management (Investment Management Fees of $71K and Investment Consultant $31K) Security Lending – MTD collected $300; YTD collected $10.8K and FYTD collected $1500K. GOVERNMENT EMPLOYEES’ RETIREMENT SYSTEM MINUTES BOARD OF TRUSTEES REGULAR MEETING January 27, 2022 13 A motion was made by Trustee Callwood and seconded by Trustee Dorsey to accept the Investment Officer Report. The motion passed with 6 yes (Callwood, Dorsey, Liger, Russell, Smith, and Bowry), 1 absent (McDonald). Regular Session A. Unfinished Business i. Maketa Contract Extension Meketa's contract expires on February 1st. The Administrator is seeking the Board's approval to extend their contract at the same rate as the previous year for one year (2023) because of the uncertainty of the System's insolvency. A motion was made by Trustee Callwood and seconded by Trustee Smith to approve the Administrator's recommendation to extend Meketa's contract until 2023. The motion passed with 6 yes (Callwood, Dorsey, Liger, Russell, Smith, and Bowry) 1 absent (McDonald). A motion was made by Trustee Smith and seconded by Trustee Callwood to go into Executive Session. The motion passed with 5 yes (Callwood, Liger, Russell, Smith, and Bowry) 2 absent (Dorsey, McDonald). This portion of the meeting will be closed to the public for matters pertaining to trade secrets or financial or commercial information or personal or legal matters; or matters whose premature disclosure will frustrate the implementation of the proposed agency action. Executive Session A motion was made by Trustee Smith and seconded by Trustee Callwood to come out of Executive Session. The motion passed 4 yes (Callwood, Russell, Smith, and Bowry) and 3 abstain (Dorsey, Liger, and McDonald). Regular Session A summary of three decisions made during Executive Session were reported out. As follows: 1). The Board had a discussion with JLL representatives regarding the hotel development proposal and gave guidance to JLL on the term sheet and ground lease provisions. 2). The Board adopted the recommendation of the Administrator relative abatements to the Havensight Mall tenants. GOVERNMENT EMPLOYEES’ RETIREMENT SYSTEM MINUTES BOARD OF TRUSTEES REGULAR MEETING January 27, 2022 14 3). The Board voted to engage ESL for the Executive search of a new Administrator/CEO., and to proceed with the recommendations outline by the Chairman in his memorandum to the Trustees. A motion was made by Trustee Callwood and seconded by Trustee Russell to adjourn the meeting. The motion passed 5 yes ( Callwood, Dorsey, Russell, Smith, and Bowry) and 2 absent (Liger and McDonald). The meeting adjourned at approximately 2:35pm. ___________________________ Austin L. Nibbs, CPA, CGMA Administrator/CEO Secretary, GERS Board of Trustees