USVI Public Records

Document text

GOVERNMENT EMPLOYEES’ RETIREMENT SYSTEM OF THE VIRGIN ISLANDS REGULAR MEETING OF THE BOARD OF TRUSTEES St. Thomas/St. Croix via Zoom Thursday, February 23, 2023 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: 1/26/23) 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). Approval of Petty Cash Fund for Havensight Mall B. Unfinished Business (i). Administrator Search 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). Legal Matters XIV. Privileges of the Floor XV. Adjournment GOVERNMENT EMPLOYEES’ RETIREMENT SYSTEM MINUTES BOARD OF TRUSTEES REGULAR MEETING February 23, 2023 1 The Regular Meeting of the Board of Trustees for February 23, 2023 was called to order at 9:30am. The meeting was held via Zoom. At roll call, Trustees present were Bowry, Dorsey, Russell, and Callwood. Trustees not present were Trustee Liger as excused, Trustees McDonald, and Smith were absent. A quorum was established with 4 voting Trustees present. Ex-Officio member Cindy Richardson arrived after the roll call. Staff in attendance: Austin Nibbs, Administrator, Cathy Smith, General Counsel, Ishmael Meyers, Deputy General Counsel, Denise Jeremiah, Chief Financial Officer, Asiah Clendinen Gumbs, COO, Glenville Henderson, Investment Analyst, Sakeeda Figueroa, Communication and Member Education Specialist, LeSean Moses, IT, Zaida Castro, Executive Assistant to the Administrator, Nikia Coley, Administrative Assistant to the Board of Trustees, and Roy Moorehead, Chief Security Officer-Havensight Mall. Also, present in the meeting were Kelsha Williams, Williams and Williams Law Firm and Pedro K. Williams, Board Counsel. Comments and Suggestions from Retirees No Comments from Retirees Comments and Suggestions from Active Members No Comments from Active Members Secretary’s Minutes A motion was made by Trustee Smith and seconded by Trustee Bowry to approve the January 26, 2023, Regular Board meeting minutes. Trustee Russell objected to adopting the Board of Trustees Regular Board minutes for January 26th minutes due to the letter read by Mary Moorehead, member of St. Croix Government Retirees Inc, and believed it should be stricken from the minutes because board members were not notified timely about the correspondence. Trustee Russell confirmed that he did not receive the letter ahead of the Board meeting to respond to it properly. Administrator Nibbs reminded the board that the official minutes for the GERS Board of Trustees are the transcripts by the stenographer and asked if the subject matter should be stricken also be stricken from the transcripts. Trustee Russell responded yes. GOVERNMENT EMPLOYEES’ RETIREMENT SYSTEM MINUTES BOARD OF TRUSTEES REGULAR MEETING February 23, 2023 2 Chairman Callwood recommended to Trustee Russell to have the Board make a motion about whether the topic should be stricken or not to consider each Trustees’ perspective about the matter. Chairman Callwood recapped that part of the order of business for the Board of Trustee Regular meeting agenda includes comments from Retirees and Active members, and a point of personal privilege was granted to Trustee Russell, as requested, after the Administrator’s Report was read into the record. Trustee Dorsey requested to know from Board Counsel if the letter should have gone under another order of business, such as Executive Session/Personnel Matters, first before reading the letter in public. Trustee Dorsey also confirmed not to have received a copy of the letter. According to Trustee Dorsey, a letter intended to attack a Trustee should have been kept private, discussed in Executive Session first, and a meeting of the minds between the Chairman and the Administrator should have happened. Kelsha Williams, Esq. representing the Board Counsel (Pedro K. Williams), will look into the matter to determine best practices by looking into the statutes to determine whether or not comments made in executive sessions and transcripts can be stricken from the record as well as comments made public in the regular session. Administrator Nibbs clarified that the letter was received by him to be read into the record and it was sent to all Trustees. Trustee Russell concluded by withdrawing his motion and Chairman Callwood requested again for a motion to approve the January 26, 2023 meeting minutes. A motion was made by Trustee Bowry and seconded by Trustee Smith to approve the January 26, 2023, Regular Board meeting minutes. The motion passed with Yes 3 (Bowry, Smith, Callwood), 1 No (Russell) 1 Not Voting (Dorsey) and 2 Absent (McDonald and Liger). Communications and Correspondences None Chairman’s Report Chairman Callwood appeared before St. Croix Government Retirees Inc. on February 7th and also participated in the NCPERS 2023 Public Retirement Study Trends on Fiscal and Operational and Business Practices Webinar and attended the IFEBP Advance Trustee Institute from February 11th – February 15th. GOVERNMENT EMPLOYEES’ RETIREMENT SYSTEM MINUTES BOARD OF TRUSTEES REGULAR MEETING February 23, 2023 3 Administrator’s Report Meetings, Presentations, and Appearances February 2 Site Visit with Board at Havensight Mall. 9 Meeting with E-Finity re: Microturbine grid at Havensight Mall. 10 Meeting with attorneys re: Outstanding WICO issues. 15 Havensight Mall Oversight Committee meeting. 16 Meeting with RLSH CEO Re: Outstanding deductions/contributions. 17 Attended 35th Legislature Orientation. 21 Attended Investment Committee Meeting. 23 To attend the CZM Hearing Re: Haven Development LLC Member Services Retirement Applications - as of February 15, 2023 2015 2016 2017 2018 2019 2020 2021 2022 2023 Total STX 147 111 118 177 143 114 164 142 19 STT 147 164 127 224 172 126 179 178 9 Total 294 275 245 401 315 240 343 320 28 Processed 293 275 245 401 315 238 339 192 0 Remaining 1 0 0 0 0 2 4 128 28 163* 99% 100% 100% 100% 100% 99% 99% 60% 0% GOVERNMENT EMPLOYEES’ RETIREMENT SYSTEM MINUTES BOARD OF TRUSTEES REGULAR MEETING February 23, 2023 4 Life Certificates Disability Cases – As of February 7, 2023 A total of 263 letters were mailed. 86 Disability Annuitants living in the US 177 Disability Annuitants residing in the Virgin Islands 263 To date, a total of 259 have been returned to the office. Four (4) members were suspended from the Retirees’ Payroll due to non-compliance with the completed Life Certificates. There are six (6) disability cases pending. REASONS PENDING In Person Medical Exams 2 Disapproved by GERS Physicians 0 Internal Legal 4 Total Pending Disablities 6 Non-Disability Cases Life certificates were mailed out in December 2022. None were returned as yet. However, in the previous batch of life certificates, a total of 78 were mailed. 75 were returned and we suspended 3 annuities for retirees that did not respond and who were not known to be deceased. We are revisiting the suspension of annuities because the suspension affects the retiree health insurance. So as not to hurt the retiree health insurance status, the recommendation of the Chief, Compliance and Control is to have Payroll hold the checks, until we can communicate further with the retiree or determine the status of the retiree. GOVERNMENT EMPLOYEES’ RETIREMENT SYSTEM MINUTES BOARD OF TRUSTEES REGULAR MEETING February 23, 2023 5 Compliance and Control – Contribution Processing October 1, 2022 – January 31, 2023 Refunds No. Cases Total No. of Cases Completed Amount Pending Regular 47 $3,.492,031.76 0 Erroneous 2 5,764.56 15 Employer Share 0 21,693.66 5 Overpayment 23 348,380.50 0 Total 72 $ 3,867,870.48 20 Death Benefits No. Completed Amount No. of Cases Types 10/1/22-01/31/2023 10/1/22-01/31/2023 Pending Active 5 $ 489,071.39 25 Retired 1 300,879.52 4 Total 6 $ 789,950.91 29 GOVERNMENT EMPLOYEES’ RETIREMENT SYSTEM MINUTES BOARD OF TRUSTEES REGULAR MEETING February 23, 2023 6 Accounting Department Annuity Payments No. of retirees as of February 15, 2023, payroll: 8,737 Cumulative dollar paid out from October 1, 2022 – February 15, 2023 - $98,841,196.60. Number of retirees added to the payroll from October 1, 2022 – February 15, 2023. 135 Number of retirees added to the payroll for the February 15, 2023, pay date. 14 Number of retirees expected to be placed on payroll for February 28, 2023 pay date: 19 Number of retirees deleted from the payroll from October 1, 2022, through February 15, 2023: 131 Note: The Gross Retiree Payroll for 2/15/23 was $ 11,015,512.83. GOVERNMENT EMPLOYEES’ RETIREMENT SYSTEM MINUTES BOARD OF TRUSTEES REGULAR MEETING February 23, 2023 7 LOANS PORTFOLIO FOR THE MONTH ENDING JANUARY 2023 Total 1/31/2022 STT/STJ STX Active Personal Loans 513 295 218 Retiree Personal Loans 492 276 216 1,005 571 434 MORTGAGES Construction/Home Improvement 18 10 8 Land 16 14 2 Purchase/Refinance 22 17 5 Totals 56 41 15 TOTAL LOANS & MORTGAGES 1,061 612 449 TOTAL OUTSTANDING January 2023 Total STT/STJ STX Active PL - $ 4,261,521.65 $ 2,667,806.51 $ 1,593,715.14 Retiree PL - 3,971,126.80 2,204,333.58 1,766,793.22 Purchase/Refi - 1,353,943.53 992,259.93 361,683.60 Construction - 1,859,652.99 1,135,215.04 724,437.95 Land Loans - 319,232.63 284,355.39 34,877.24 GRAND TOTAL $ 11,765,477.60 $ 7,283,970.45 $ 4,481,507.15 Refund for Overpayments January 31, 2023 No. of Units Total 11 $7,779.77 The chart below shows total loans projected to mature in calendar years 2023 and 2024. All personal loans are expected to mature by December 31, 2025, except one loan because of the date of issuance. GOVERNMENT EMPLOYEES’ RETIREMENT SYSTEM MINUTES BOARD OF TRUSTEES REGULAR MEETING February 23, 2023 8 Projected Loan Maturity by Calendar Year By Loan Type Loan Type Total Loans Projected to Mature as of December 2023 Total Loans Projected to Mature as of December 2024 Active Personal Loan 129 155 Retiree Personal Loan 147 188 Mortgage Construction 0 0 Purchase Refinance 2 2 Land 2 0 Total Loans Maturing 280 345 Operations St. Croix Office Complex PROJECTS PENDING: Repaving of the rear parking lot at the Casino Control Commission was completed. Installation of a roof with guttering over the maintenance shed is in progress. St. Thomas Office Complex No major issues to report. GOVERNMENT EMPLOYEES’ RETIREMENT SYSTEM MINUTES BOARD OF TRUSTEES REGULAR MEETING February 23, 2023 9 Havensight Mall Warehouse Demolition Work continues Warehouse 4. Worked resumed on Warehouse J with the arrival of the exterior and roof panels. Completion date expected in June 2023. Once construction is completed on Warehouse J. Warehouses 4a, 5 and the Welcome Center will be demolished. Hotel Development Haven Development received notification from DPNR that their CZM permit was complete, and a Public Hearing was scheduled for Thursday February 23, 2023. Generator The GERS through their contractor, Import Supply, was able to source a brand new 2022/2023 CAT 2- megawatt generator from RIMCO (official CAT dealer/rep) through Islands Generators in PR. Unit is scheduled to be on island in approximately 80-90 days. Awaiting one additional quote for the removal and cleaning of the generator yard. Items needed for arrival: Concrete pad, generator housing, switch gears/transfer switch. Electrical engineers that installed the current generators will be called in to consult. CAT officials will be onsite at start up to ensure operations, commission, and warranty. Project anticipated to be completed by August of 2023 (barring any unforeseen obstacles). Parking Lot Department of Public Works (DPW) has agreed to patch the potholes around the property with asphalt purchased by GERS. Work to begin based on non-ship days and availability of DPW. Office Buildings Rental and Electricity Collections – Exhibit A Jan 2023 Total FYTD Arrearages Rental $78,010.95 $279,725.16 $92,089.43 Electric 31,259.25 157,074.20 71,597.45 Total $109,270.20 $436,799.36 $163,686.88 GOVERNMENT EMPLOYEES’ RETIREMENT SYSTEM MINUTES BOARD OF TRUSTEES REGULAR MEETING February 23, 2023 10 LEASES ResCare (Job Corps) New Entity took over Job Corps which is now call Equus Workforce Solutions. Paperwork was forwarded to legal to draft a new 5-year lease agreement. Division of Personnel (DOP) DOP responded on January 14, 2023, with a minor revision to which GERS agreed with. GERS sent final lease for signatures on February 1, 2023. GERS is awaiting Attorney Baker – Office of the Governor Acting Chief Legal Counsel, suggested language. Department of Justice (DOJ) Lease was resigned by Attorney Jacobs and Mr. Nibbs. DOJ will forward to Property and Procurement for additional review and signatures. FEMA/INSURANCE: Extension letter (Until March 2024) to VITEMA and Director Williams Octalien at the Office of Disaster Recovery will be sent by February 15, 2023. Project at Havensight Mall Demolition, Warehouse J, Parking lot and green space slated, as per the FEMA award, to be completed by March 2023. GOVERNMENT EMPLOYEES’ RETIREMENT SYSTEM MINUTES BOARD OF TRUSTEES REGULAR MEETING February 23, 2023 11 RENTAL – EXHIBIT A GOVERNMENT EMPLOYEES’ RETIREMENT SYSTEM MINUTES BOARD OF TRUSTEES REGULAR MEETING February 23, 2023 12 Questions and Comments from Board of Trustees to Administrator Nibbs Trustee Dorsey inquired about challenges for GERS receiving the $60K in electrical arrearages from the Department of Justice. Administrator Nibbs requested Chief Operating Officer, Clendinen Gumbs to answer. Ms. Clendinen Gumbs responded that DOJ sent a report confirming the balance is being processed. Trustee Russell asked Administrator Nibbs to summarize the intent for meeting with WICO. In summary, a letter was sent to Chairman Joseph Boschulte on February 2nd for both Boards to meet to discuss outstanding issues such as the easement agreement, a central topic of concern, and other issues. GERS has yet received a response from Chairman Boschulte. Trustee Russell recommended that the GERS Board have a preliminary meeting to discuss consensus expectations before meeting with the WICO Board members. Trustee Callwood responded that this intent was established at a prior Executive Session and the Board is awaiting WICO’s Chairman’s response. Committee Reports. (a) Investment Committee – Chairman Callwood reported that the Investment Committee met on Tuesday, February 21st to discuss the GERS portfolio and held preliminary discussions about a plan of action concerning the agency’s non-performing real estate assets and the Loan Program. Trustee Russell commented that since the Board Committee’s assignments have changed the impact creates an overlap between the Investment and Development Committees and can be merged in certain areas. Therefore, Trustee Russell requested clarity on the role of each committee. Trustee Bowry reiterated that the Investment Committee comprises of all members of the Board while incorporating all members of the Development Committee. (b) Development Committee – Trustee Russell – No Report. (c) Budget/Audit Committee Report – Chairman Callwood - No Report. (d) Policy Committee Report – Trustee Bowry. No Report. Treasurer’s Report Denise Jeremiah, CFO, read the Treasurer’s Report for the System and Havensight Mall for the month ending January 31, 2023, into the record. Total Collections for January 31, 2023, is $13.6M and FYTD is $210.5M. Total Disbursements for January 31, 2023 is $24.6M and FYTD is $105.8M; Net Cash Deficit for January 31, 2023 is $11.1M and a Net Cash Surplus of $104.7M FYTD. GOVERNMENT EMPLOYEES’ RETIREMENT SYSTEM MINUTES BOARD OF TRUSTEES REGULAR MEETING February 23, 2023 13 Havensight Mall Total Collections for January 2023 was $455.5K and FYTD $1.9M; Total Disbursements for January 2023 was $236.4K and FYTD is $1.2K and a Net Cash Surplus of $219.2K and Net Cash Surplus of $759.2K FYTD. A motion was made by Trustee Smith and seconded by Trustee Bowry to accept the Treasurer’s for January 31, 2023. The motion failed due to lack of a quorum with 3 Yes (Bowry, Smith, and Callwood), and 4 Absent (Dorsey, Liger, McDonald, and Russell). Attempts were made to reach Trustee Russell and Trustee Dorsey to re-establish a quorum but efforts were unsuccessful. Therefore, Chairman Callwood ended the Board of Trustees Regular Board meeting of February 23, 2023 at 10:43am. The minutes for the Regular Session were transcribed from the zoom recording by Zaida Castro, Executive Assistant to the Administrator and reviewed and edited by the Secretary of the Board. Austin L. Nibbs, CPA, CGMA Administrator/CEO Secretary, GERS Board of Trustees GOVERNMENT EMPLOYEES’ RETIREMENT SYSTEM MINUTES BOARD OF TRUSTEES SPECIAL MEETING March 2, 2023 1 A Special Meeting of the Board of Trustees was held on March 2, 2023, and was called to order at 9:33am. The meeting was held via Zoom. At roll call, Trustees present were Bowry, Liger, Russell, and Callwood. Trustees not present during the roll call were Dorsey, McDonald, and Smith. A quorum was established with 4 voting Trustees present. Ex-Officio Cindy Richardson was present. Trustee Smith arrived after the roll call. The staff in attendance was Austin Nibbs, Administrator, Cathy Smith, General Counsel, Ishmael Meyers, Deputy General Counsel, Denise Jeremiah, Chief Financial Officer, Asiah Clendinen Gumbs, Chief Operating Officer, Glenville Henderson, Investment Analyst, Sakeeda Freeman, Communication and Member Education Specialist, Nikia Coley, Administrative Assistant to the Board, Zaida Castro, Executive Assistant to the Administrator, LeSean Moses, IT, Roy Moorehead, Chief Security Officer-Havensight Mall, Otis Smith, Operations Manager, Havensight Mall, Abena McClean Smith, Benefit Analyst, and Je’Nelle Forbes, Records Management. Also, present in the meeting were Pedro K. Williams, Board Counsel. Trustee Russell announced that he will be unavailable after 10:30am due to a prior scheduled meeting and also recommended to Chairman Callwood to extend an apology to Trustee Dorsey for comments made in the last regular board meeting. Treasurer’s Report Denise Jeremiah, CFO, read the Treasurer’s Report for the System and Havensight Mall for the month ending January 31, 2023, into the record. Total Collections for January 31, 2023, is $13.6M and FYTD is $210.5M. Total Disbursements for January 31, 2023 is $24.7M and FYTD is $105.8M; Net Cash Deficit for January 31, 2023 is $11.1M and a Net Cash Surplus of $104.7M FYTD. Havensight Mall Total Collections for January 2023 was $455.5K and FYTD $1.9M; Total Disbursements for January 2023 was $236.4K and FYTD is $1.2K and a Net Cash Surplus of $219.2K and Net Cash Surplus of $759.2K FYTD. Trustee Russell asked why the contributions for 2023 are lower than 2022. CFO Jeremiah responded that employees may have left the system and some government agencies have outstanding contribution payments owed to the System. Trustee Russell asked why the annuity payments are high in 2023. CFO Jeremiah responded that most people that are retiring are making more money than before and the System’s annuity payout is increasing. GOVERNMENT EMPLOYEES’ RETIREMENT SYSTEM MINUTES BOARD OF TRUSTEES SPECIAL MEETING March 2, 2023 2 Trustee Russell compared the Administrative Cost amounts between Fiscal Year 2023 and 2022 and asked the Administrator if it is recommended to request from the Legislature a lower amount to cover what was initially asked for ($15.6M). Administrator Nibbs does not recommend asking for less because the administrative costs involve funding for capital projects and upgrading the Pension System Software. Administrator Nibbs reminded the Board that the System had to limit its operating expenses. However, although manpower is steady, personnel costs and fringe benefits have increased because the System has obligations with the unions. A motion was made by Trustee Smith and seconded by Trustee Russell to accept the Treasurer’s for January 31, 2023. The motion passed with Yes 5 (Bowry, Liger, Russell, Smith, and Callwood), 2 Absent (Dorsey, McDonald). Investment Officer’s Report Mr. Glenville Henderson, Investment Analysts, read the investment report for the month ending January 31, 2023, into the record. The Total Plan returned 4.9 % for the month of January 2023; Total Domestic Equity returned 6.9% and was in lined with its benchmark. Total International Equity returned 8.3% and outperformed its benchmark by 0.2%. Total Fixed Income returned 2.9% and underperformed its benchmark by -0.2%. Notable Fund Performance: Russell 3000 index returned 6.9% MSCI Emerging MKTS Index returned 8.4% US AGG Bond Index returned 3.3%. US High YLD Bond Index Return 4.0%. Cash Flow Activity: Month ended with $492.7M; Raised $14M in the month of January; LiquidatedPugh Capital Management to reallocate to new policy targets. Began the month with $489.5M; Net Cash Flow of $-20.1M; Income $477K, Gain of $22.8M; Ending Market Value $492.7M. Custodial/Consulting/Management Fees: $97K Calendar MTD; $97K Calendar YTD; $205K Fiscal YTD. Trustee Smith asked Mr. Henderson when the System can return to stocks and bonds status. According to Mr. Henderson, the system is currently back to the stocks and bonds status due to the reallocation of investment policy. GOVERNMENT EMPLOYEES’ RETIREMENT SYSTEM MINUTES BOARD OF TRUSTEES SPECIAL MEETING March 2, 2023 3 A motion was made by Trustee Smith and seconded by Trustee Bowry to accept the Investment Officer’s Report for January 31, 2023. The motion passed with 4 Yes (Bowry, Liger, Smith, and Callwood) and 3 Absent (Dorsey, McDonald, and Russell). Regular Session A. New Business (i) Approval of Petty Cash Fund for Havensight Mall Havensight Mall is experiencing a significant amount of small emergencies purchases. Therefore, for efficiency and timely operations of the Havensight Mall office, Administrator Nibbs requested the Board’s approval to assign a Petty Cash fund of $1,500.00 to the Havensight Mall. Adequate control will require two signatories on all checks and all requests will be initialed by the requested manager and approved by Administrator Nibbs or a designated Senior Manager before issuing a petty cash check. Monthly reconciliations of the account will be submitted to the Office of the Administrator and or designated Senior Management. The bank requires a Resolution from the Board in order to set up the account. A motion was made by Trustee Smith and seconded by Trustee Bowry to approve establishing a petty cash fund for Havensight Mall in the amount of $1,500.00. The motion passed with 4Yes (Bowry, Liger, Smith, and Callwood) and 3 Absent (Dorsey, McDonald, and Russell). B. Unfinished Business (i) Administrator Search The Chairman stated that the Board reposted the position on March 1st for a period of three weeks (3/21) based on local interest that was expressed in the position. Therefore, the Board will not be searching for qualified candidates outside of the territory. Executive Session A motion was made by Trustee Smith and seconded by Trustee Liger to go into 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. The motion passed with 4 Yes (Bowry, Liger, Smith, Callwood), and 3 Absent, (Dorsey, McDonald, and Russell). A motion was made by Trustee Smith and seconded by Trustee Bowry to come out of Executive Session. The motion passed 4 Yes (Bowry, Liger, Smith, and Callwood) and 3 Absent (Dorsey, McDonald, and Russell). GOVERNMENT EMPLOYEES’ RETIREMENT SYSTEM MINUTES BOARD OF TRUSTEES SPECIAL MEETING March 2, 2023 4 Regular Session Trustee Callwood reported that the Board discussed legal matters regarding Havensight Mall property and West Indian Company Inc. Privileges of the Floor None Adjournment A motion was made by Trustee Smith and seconded by Trustee Liger to adjourn the meeting. The motion passed with 4 Yes (Bowry, Liger, Smith, and Callwood), and 3 Absent, (Dorsey, McDonald, and Russell,). The meeting adjourned at approximately 10:55am. The minutes for the Regular Session were transcribed from the zoom recording by Zaida Castro, Executive Assistant to the Administrator and reviewed and edited by the Secretary of the Board. Austin L. Nibbs, CPA, CGMA Administrator/CEO Secretary, GERS Board of Trustees