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GOVERNMENT EMPLOYEES’ RETIREMENT SYSTEM OF THE VIRGIN ISLANDS REGULAR MEETING OF THE BOARD OF TRUSTEES St. Thomas/St. Croix Thursday, January 25, 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: 12/19/23) 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). Personal Loan Program Restart 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). Medical Review Committee Recommendations XIV. Privileges of the Floor XV. Adjournment GOVERNMENT EMPLOYEES’ RETIREMENT SYSTEM MINUTES BOARD OF TRUSTEES REGULAR MEETING January 25, 2024 1 The Regular Meeting of the Board of Trustees for January 25, 2024, was called to order at 9:38 a.m. At roll call, Trustees present were Bowry, Dorsey, Smith, and Callwood. The meeting was held via Zoom. Trustees not present during roll call were Liger, Russell, and Director Richardson (ex-officio). A quorum was established with 4 voting Trustees present. Trustee Russell joined the meeting after roll call. Staff in attendance: Angel E. Dawson, Administrator/CEO, Acting General Counsel, Ishmael Meyers, Denise Jeremiah, Chief Financial Officer, Asiah Clendinen Gumbs, COO, Ms. Shoran D. C. Sasso, Director of Member Services, Glenville Henderson, Investment Analysts, LeSean Moses, IT, Zaida Castro, Executive Assistant to the Administrator, Nikia Coley, Administrative Assistant to the Board Also, present in the meeting were Pedro K. Williams, Board Counsel, and Ms. Mary L. Moorehead who joined remotely. The zoom recording will be provided to Ms. Desiree Hill, Stenographer, who was not present at the meeting. Comments and Suggestions from Retirees Ms. Mary Moorehead was acknowledged and she requested that her E-Mail sent on Tuesday, January 23rd be read into the record in anticipation of the board meeting. Administrator Dawson read into the record Ms. Mary L. Moorehead’s email. In summary, the e- mail asked the following questions: (1) Have the trustees agreed on a limit to be offered for the Loan program? Will drawdown from investments be controlled not to affect the rate of return from investments? (2) Have Trustees increased the percentage of the loan program and how much? Ms. Annette Phillips (Sergeant – Retired) requested assistance regarding a payroll non-deducted insurance matter. Chairman Callwood requested Sergeant Phillips to submit the correspondence to Administrator Dawson. Comments and Suggestions from Active Members None GOVERNMENT EMPLOYEES’ RETIREMENT SYSTEM MINUTES BOARD OF TRUSTEES REGULAR MEETING January 25, 2024 2 Secretary’s Minutes (Regular Board Meeting): 12/19/2023) A motion was made by Trustee Smith to accept the minutes of December 19, 2023, and seconded by Trustee Bowry. The motion passed with 3 Yes (Bowry, Smith, and Callwood), 2 Absent (Liger and Russell), and 1 not-voting (Dorsey) Communication and Correspondences None Chairman’s Report On January 10th a meeting was held with Governor Bryan and discussed the rum cover over revenues and the restart of the loan program. Meetings, Presentations, and Appearances December 18 Havensight Mall Christmas Tree Lighting December 19 GERS Board of Trustees Regular and Executive Meetings December 20 IDEAS Meeting and Presentation January 3 Meeting with Segal January 9 Meeting with Loans Team January 10 Meeting with Governor Bryan January 11 Meeting with Havensight Mall Team January 18 GAO Exit Conference Meeting with Havensight Mall Team January 22 Attend State of the Territory Address January 23 Direct Reports Meeting January 23 Meeting re. Greenspace at Havensight Mall January 24 Meeting with Quantum Technology Group GOVERNMENT EMPLOYEES’ RETIREMENT SYSTEM MINUTES BOARD OF TRUSTEES REGULAR MEETING January 25, 2024 3 Member Services Retirement Applications - as of December 15, 2023 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Total STX 147 111 118 177 143 114 165 141 130 20 STT 147 164 127 224 172 126 178 184 149 7 Total 294 275 245 401 315 240 343 325 279 27 Processed 293 275 245 401 315 240 342 320 177 0 Remaining 1 0 0 0 0 0 1 5 102 27 136* % Completed 99% 100% 100% 100% 100% 100% 99% 98% 63% 0% Compliance and Control - Contribution Processing October 1, 2023 – December 31, 2023 Refunds No. Cases Total No. of Cases Completed Amount Pending Regular 105 $1,986,396.04 35 Erroneous 1 1,269.24 9 Employer Share 0 0.00 3 Overpayment 87 $ 177,996.80 2 Total 193 $2,165,662.08 49 Death Benefits No. Completed Amount No. of Cases Types 10/1/23-12/31/2023 10/1/23-12/31/2023 Pending Active 11 $ 824,480.09 37 Retired 3 130,910.77 4 Total 14 $ 955,390.86 41 GOVERNMENT EMPLOYEES’ RETIREMENT SYSTEM MINUTES BOARD OF TRUSTEES REGULAR MEETING January 25, 2024 4 Accounting Department Annuity Payments No. of retirees as of January 12, 2024, payroll: 8792 Cumulative dollar paid out from October 1, 2023 – January 12, 2024 700 Pensioners $0.00 702 Service Retirement Annuities 76,385,357.60 703 Survivors' Annuities 482,226.98 704 Duty-Connected Death Annuities 747.67 705 Duty-Connected Disability Annuities 915,802.91 706 Non-Duty Disability Annuities 453,143.27 Totals 78,237,278.43 Number of retirees added to payroll from October 1, 2023 – January 12, 2024. 108 Number of retirees added to the payroll for the January 12, 2024, pay date. 12 Number of retirees expected to be placed on payroll for January 31, 2024, pay date: 8 Number of retirees deleted from payroll from October 1, 2023, through January 12, 2024: 76 Note: As of 1/12/24 payroll, the Gross Retiree Payroll has arrived at $ 11,214,734.79 GOVERNMENT EMPLOYEES’ RETIREMENT SYSTEM MINUTES BOARD OF TRUSTEES REGULAR MEETING January 25, 2024 5 GOVERNMENT EMPLOYEES’ RETIREMENT SYSTEM MINUTES BOARD OF TRUSTEES REGULAR MEETING January 25, 2024 6 Operations St. Croix Office Complex No major issues other than ongoing maintenance. St. Thomas Office Complex BUILDING: Air Conditioner Project Central Air has provided warranty agreement and completed AC project. PROJECTS PENDING: • In-Process: Complete the sanding and spraying of the window trims on the west side first floor. • In-Process: Strip the excess wax on lobby floors and corridors. • In-Process: Power wash covered parking ceiling. • In-Process: Adcon Environmental cleaning, disinfecting, and sanitizing all GERS occupied spaces after results from mold testing. UPCOMING: • Fill potholes in covered parking areas. • Touch up paint on the exterior. OTHER ONGOING PROJECTS New GERS Main Generator • Build a foundation and extend the room. (Work in progress) Warehouse J Warehouse J completed. DPNR approved occupancy. Awaiting meters from WAPA. Hotel Development Major plumbing and electrical groundwork started and vertical work to begin. GOVERNMENT EMPLOYEES’ RETIREMENT SYSTEM MINUTES BOARD OF TRUSTEES REGULAR MEETING January 25, 2024 7 GENERATORS Update- Harlon Hibbert of DPNR – CZM Division visited Havensight Mall Generator Yard on January 22, 2024, for the inspection in anticipation of CZM minor permit approval by February 9th. A Portion of Overhang (cantilever) collapsed at Havensight Mall Delly Deck GERS to contact contractors for invitation to bid. IFB finalization in progress. Havensight Mall Strategic and Infrastructure Plan - RFP IDEAS submitted a preliminary plan and engaged the HMOC. The team identified “Low hanging fruits” and the work continues to complete the project. Next step is the market analysis and survey. Havensight Mall Waterline Replacement and Rehabilitation – Engineering Design Services – RFQ Update – An extension document drafted as the underground GPR company from Florida has been delayed in completion. The company is scheduled to be on the island on January 22, 2024. Office Buildings Rental and Electricity Collections – Exhibit A December 2023 Total FYTD Arrearages Rental $38,442.55 $299,689.33 $154,252.71 Electric $795.82 $118,280.59 $152,889.78 Total $39,238.37 $417,969.92 $307,142.49 LEASES Casino Control Commission - Lease Negotiations continue. Sent updated version on January 19, 2024. Department of Justice – Property and Procurement is still awaiting fiscal information for DOJ to process the additional Purchase orders required to execute the lease. GOVERNMENT EMPLOYEES’ RETIREMENT SYSTEM MINUTES BOARD OF TRUSTEES REGULAR MEETING January 25, 2024 8 Questions from Trustees to Administrator Angel E. Dawson Jr. Trustee Dorsey asked if GERS has in place an account where monies can be drawn down when tenants face a challenge with timely payment. Permission was granted to Senior Deputy Administrator Clendinen Gumbs to respond. She explained that Property and Procurement required from government agencies purchase orders with their leases as proof that funding exists to draw down payment. The agencies have complied. Committee Reports. (a) Investment Committee – Chairman Callwood – Met on Tuesday to discuss financial reports with consultants and restart of the personal loan program. The committee agreed on a consensus of the loan program and the Resolution will be shared at today’s meeting. (b) Development Committee – Trustee Russell – No Report (c) Budget/Audit Committee Report – Chairman Callwood – No Report (d) Policy Committee Report – No Report Treasurer’s Report Denise Jeremiah, CFO read the Treasurer’s Report for the System and Havensight Mall for the month ending of December 31, 2023 Total Collections for December 31, 2023, is $9M and FYTD is $159M. Total Disbursements for December 31, 2023, is $25M and FYTD is $75M; Net Cash Deficit is $16M a Net Cash Surplus for FYTD of $84M Havensight Mall. Total Collections for December 31, 2023, was $448K and FYTD $1M; Total Disbursements for was $349K and FYTD is $1M and a Net Cash Surplus of $98K and Net Cash deficit of $70K FYTD. Trustee Dorsey and Administrator Dawson concurred that the CFO did a good job in assembling the report. Administrator Dawson added that the Department of Justice has paid off their rent and utilities and they are no longer delinquent. A motion was made by Trustee Smith and seconded by Trustee Dorsey to accept the Treasurer’s Report for December 31, 2023. The motion passed with 5 Yes (Bowry, Dorsey, Smith, Russell and Callwood), and 1 Absent (Liger) GOVERNMENT EMPLOYEES’ RETIREMENT SYSTEM MINUTES BOARD OF TRUSTEES REGULAR MEETING January 25, 2024 9 Investment Officer’s Report The Investment Report for December 31, 2023, submitted to the board and read into the record by Glenville Henderson, Investment Analyst shows: Market Value - $546.7M · Total Plan returned 3.9% for the month (includes local investments and not Loans and St. Thomas and St. Croix facilities). For FYT the Total Plan return is up 8.6%. Total Domestic Equity returned 5.4% for the month and FYTD is 12.5% · Total International Equity returned 4.9% for the month and FYTD is 10.4% o Develop Market Equity returned is 5.4% o Emerging Market Equity returned 3.8% Total Domestic Fix Income Return 3.2% and FYTD is 6.2% o Investment Grade Bonds returned 3.8% o TIPS returned 2.6% o High Yield Bonds returned 3.8% · Funds of $19.3M raised in the month of December 2023 · Total Alternatives returned -0.5% for the month A motion was made by Trustee Smith and seconded by Trustee Dorsey to accept the Investment Officer’s Report for December 31, 2023. The motion passed with 5 Yes (Bowry, Dorsey, Russell, Smith, and Callwood), and 1 Absent (Liger). Trustee Bowry asked whether the local government will be able to make up for the shortfall of the funding note. According to Administrator Dawson, there is no indication that the government will be making up for the shortfall from its own resources. However, there has been extensive press coverage over the subject matter. Regular Session A. New Business I. Personal Loan Program Restart GOVERNMENT EMPLOYEES’ RETIREMENT SYSTEM MINUTES BOARD OF TRUSTEES REGULAR MEETING January 25, 2024 10 Chairman Callwood proceeded to answer Ms. Moorehead questions. (1) Have the trustees agreed on a limit for the Loan program? As per the VI code, the agency will allocate $20M towards the loan program and it will be divided by both districts. (2) Have Trustees increased the percentage of the loan program? The loan interest rates are set for five years at an 8% interest rate. The Board will authorize the agency to offer the loan program from April 30th until December 31, 2024, and it will be evaluated on an annual basis to determine if it is viable for the loan program to continue for each following calendar year. Trustee Bowry asked is there any basis under which the Board may not implement the Loan Program as outlined. According to Board Counsel Williams, due to the Board’s fiduciary duties, it is up to the Board’s discretion to start or stop the Loan Program at any time. As a result of the proceeds from the Special Purpose Vehicle, and the investment portfolio’s performance, actuary consultants have determined that the system’s financial state has improved. Therefore, the Board has given the agency the authority to restart the loan program. Trustee Smith asked due to the expiration of the program of December 31, 2024, if the balance of the restart of the loan Program will be carried forward in CY 2025 in which Chairman Callwood response was no. Trustee Russell recommended making a motion to modify the resolution requesting to include retirees that have sufficient security and collateral be eligible to apply for the personal loan program and in turn the Board present a proposal to the legislative body to amend the law. Board Counsel Williams responded that the law was written not authorizing the system to make personal loans to retirees. If the Trustees modify and pass the resolution it will contradict the existing law. A motion was made by Trustee Smith and seconded by Trustee Dorsey to restart the personal loan program subject to the following conditions: (1) This shall be a limited loan program for which it will expire December 31, 2024, (2) $20M shall be allocated and disbursed during the authorized period. The amount of $20M will be evenly divided between St. Thomas/St. John and St. Croix district, (3) the maximum allowable for any applicant shall be the lesser of $10K or 75% of applicant contribution credit in the System, the maximum allowed for any applicant is reduced by any loan, principle or balance outstanding which shall not be eligible for refinancing; the interest rate is 8% (4) the repayment period of the loan shall not exceed five years, (5) only actives who have contributed for at least two years are eligible to apply, (6), the limited personal loan program shall begin no later than April 30, 2024. The motion passed with 5 Yes GOVERNMENT EMPLOYEES’ RETIREMENT SYSTEM MINUTES BOARD OF TRUSTEES REGULAR MEETING January 25, 2024 11 (Bowry, Dorsey, Russell, Smith, and Callwood), and 1 Absent (Liger). A motion was made by Trustee Russell and seconded by Trustee Dorsey for the Board to present to the Legislature a proposal to modify the resolution requesting to include the retirees that have sufficient security and collateral to be eligible to apply for the personal loan program. Roll call was taken. The votes were 2 Yes (Dorsey and Russell), 3 No (Bowry, Smith, and Callwood), and 1 Absent (Liger). The motion failed. A motion was made by Trustee Smith and seconded by Trustee Dorsey 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, Dorsey, Smith, and Callwood), and 2 Absent (Liger and Russell). Executive Session A motion was made by Trustee Smith and seconded by Trustee Dorsey to come out of Executive Session. The motion passed with four in favor (Bowry, Dorsey, Smith, and Callwood), one not voting (Russell) and one absent (Liger). Regular Session The Chairman reported out of Executive Session that the Board discussed pending legal matters, medical review committee pending cases, and a possible change to its policy. Privileges on the Floor None A motion was made by Trustee Smith and seconded by Trustee Bowry to adjourn the meeting. The motion passed with 5 Yes (Bowry, Dorsey, Russell, Smith, and Callwood), and 1 Absent (Liger). The meeting ended at approximately 11:45a.m. GOVERNMENT EMPLOYEES’ RETIREMENT SYSTEM MINUTES BOARD OF TRUSTEES REGULAR MEETING January 25, 2024 12 The minutes for the Regular Session were transcribed from the zoom recording by Zaida Castro, Executive Assistant to the Administrator and reviewed and edit by Angel E. Dawson Jr. Administrator and CEO. Angel E. Dawson Jr. Administrator/CEO Secretary, GERS Board of Trustees