001[Music] [Applause] [Music] no [Music] hello [Music] so [Music] [Applause] [Music] [Applause] [Music] so [Music] so [Music] so [Music] three two one july 15th board of trustees meeting will come to order at 3 33. the following members are present anne-marie randall trejo brian o'neill catherine smith and myself anna piercy staff has requested the following amendments to the agenda pregnant is that right for the workshop they do that for agenda okay okay uh replace page 5 of the agenda to add updated language for item 11.3 replace exhibit c to include to include the updated requirements of ab130 and signed by the governor on july 9th of 2021 page 28 of the agenda poll item 12.35 28. 12.35 and then exhibit triple a replace page two to correct courtney white's step placement from three to one okay do
002i have a motion to adopt the amended agenda so i moved and the second all right all in favor aye aye opposed okay now we will move to the study session dr nian perfect thank you so much president piercy members of the board superintendent mizuta and guest this afternoon we'll be presenting the section 115 trust solutions for our district and i do have here um gail beal from kenan which will also be co-presenting as well as carrie ellison from morgan stanley as well so um section 115 of the irs rules allows public agencies to invest public funds to assist with the following two liabilities so the first one is the other post employment benefits which we also call it opeb the second one is the employer pension contributions and that's regarding the increases in stores
003and pers so currently we have our money deposited with the county treasury and as you know so those are the investment options that we we do and the money sitting in there as you know as we presented to the board with our adopt the budget the current estimate for the interest is about 0.9 and so um and care can talk a little bit about that some of them he was saying that the interest rates are looking to be going down even further obviously as you know the um in terms of the mortgage risk things are going down so we're looking at even something going down to a point two percent kerry yeah these these are these are pools of money i used to work for the state treasurer's office with late so i'm kind of
004a geek with this stuff sorry but so late is is a big pool that has a duration or sort of average maturity of about six months the county is typically you know one and a half to two and a half years so as those longer the higher paying coupon bonds mature they're being replaced by bombs that are you know foreign super low rates right now so nancy told me that the county is paying about 90 basis points and and lake i believe is in the upper 20s or low 30 basis points but it's it's going down as the older bonds are maturing and being replaced by the newer bonds so it's possible that you know the what we're looking at looking at is only going to be even lower down the row and so then
005um so that's compared that and that's why we're looking at the section 115 to look at two possible options for investment and so the two products we're looking at right now uh the first one is the um op solutions that's for obviously for the retiree medical portions of it and the second one is the pension solutions so that's called the pension stabilization trust and the way that how is done and so legally that you have to do it this way so you have the um the the kenan team which is the they provide the overall program coordinator administrator that's what um gail's here and you have um a trustee is um that's contracted through benefit trust and um the person is actually scott from kansas so that's the secondary piece of it and then the
006last piece is um um carrie from morgan stanley which they are the registered investment advisor so you do need to have these pieces as part of the uh trust plans when we were to invest these type of vehicles and now gail will be talking about on the two different products here thank you so much we appreciate the opportunity to be here this afternoon so basically looking at the two different pieces we're going to look at your opeb liability and then your pension liability so your opeb liability right now as of 2020 june 30th 2020 is a little over 114 million dollars um so when you look at that how does that really affect you in terms of going out for bonds or your credit rating so your current pay as you go is almost two
007million dollars and the discount rate is four percent so they're really two ways to reduce that large number that liability the first one is increasing that discount rate and the way you do that is investing money number one or two if you put it into a section 115 trust where the rate of return is higher your actuary is going to give you credit for that so your liability will go down so there are two ways to measure that so looking at the product itself futurist is a section 115 trust it is in compliance with gatsby 74 and and it helps public agencies school districts cities counties community colleges manage their opeb obligation so again your actuarial study is very important that's something that most actuaries will work in conjunction with your business office to come
008up with based on accounting what that discount rate should be and then looking at cost reduction strategy strategy certainly isn't is an important piece of it as well uh when you establish an irrevocable trust your actuary will actually give you credit for that that amount of money that goes into an irrevocable trust whereas money at the county does not count they won't give you credit monetary credit for that so setting up an irrevocable trust is very important with futurist you have a discretionary feature through trust services which really takes a lot of the liability off you as a board and the district in particular in terms of choosing investments and investment return so in this particular case the discretionary trustee chooses the actual investments within the portfolios with the assistance of kerry and he can
009talk a little bit more about that and it's a customized solution so that you as a district have your own trust the money's not commingled with any other and again as i mentioned it really does help your your bond rating and in the case of community college's accreditation and many times there's a joint labor and management program involved where obviously unions are very involved and they understand the program we want to make sure that all the constituencies understand so once you know what that actuarial evaluation is going to be and that's typically done every couple years you establish the irrevocable trust so that means the money can only be used to pay retiree medical benefits the great advantages however and we have several clients who have contributed and earned enough money where they're actually reimbursing
010themselves for past contributions so it's it's not just strictly current contributions you can use that money for past contributions as well once you develop a funding strategy certainly identify what is available in terms of funding and then develop that investment strategy which is done primarily through meetings we would have with representatives from the district and obviously the discretionary advisory services which we talked about and then making sure that you're in compliance with gasby 74 and 75 so in this particular case this is a single employer trust very important investments and administrative economies of scale are available to you so when you look at this you want to make sure you're controlling your own trust there's no risk sharing in the very first meeting of the board of authority kerry takes that board through a pretty
011extensive compliance risk tolerance questionnaire i kind of refer to it as a bad psych test because it asks the same question in many different ways and what that's doing is really trying to understand how each member of that board feels about investing not just their funds obviously but public funds the other thing we provide you and keenan does this is the comprehensive compliance plan that includes the substantive plan so that's all your historical data not only with the trust but with your retiree medical so 30 years from now someone could walk in and say oh this is how we got where we are today so very important the futurist board of authority typically this is a group that will represent the district it's your own board you as a board of trustees would designate the
012members of the board by title they certainly have an oversight of the program even though the district would decide primarily on the amount of contributions and when and then typically this group is three to five members it can be more we have retirement boards where a member of the board of trustees is on the board sometimes labor is represented but that's something that you as a board can decide as far as fees because this is a little bit different in terms of the services you you get and it's a single employer trust the total basis points at 10 million dollars invested is almost 50 basis points so i think what's important to remember here is not just what the fees are but what your net rate of return is and that's always important and something
013that we report out with every meeting of that retirement board and typically they meet quarterly to start out with it can go less frequently as as individuals understand how the plan works and start to feel comfortable the pension program is called the pension stabilization trust um and i'm sure you all know that pension costs are going up uh for the employer dramatically so if you're looking at 25.99 million dollar spend with stirs almost 12 and a half with with purrs in 2021 you can see that bottom box which i think is is very telling you can see how much per year those contributions are going to go up generally speaking so in 2022 you're looking at a total of almost five and a half million dollars increase so how do you how how can we
014help with that how do you offset that so the trust is really a way to pre-fund those pension costs it reduces your your liability for gatsby 68 and it's important too that you can kind of manage that long-term pension liability and how it occurs again you leverage the discretionary advisory feature of the discretionary trustee as well as cary and it's designed specifically for california public agencies it's designed again to offset those increases it's designed to allow you to earn a better interest rate than you would otherwise and certainly the money is liquid so in this particular case the district again would invest in an irrevocable trust tyra typically this is something that you could use your reserves on or one-time funding secondly once your fund your funding you're again going to identify that risk tolerance
015or investment risk and again you're allowing the discretionary trustee to manage those individual investments and taking that liability off you as a district money can be withdrawn at any time to pay for these liabilities can actually you can do that without any fees so there's there's not any type of withdrawal fee for for either of these programs whoops did i do something there we go so this is a little bit different than the opeb trust this is a multiple employer trust however there's no risk sharing you as a district would still have your own account within the multiple employer trust there would be six choices of portfolio options and instead of having your own board here there is already established a pension stabilization trust board of authority where it's made up of all member agencies
016in the program and typically there's one member per agency you don't have to have any one representative representing but every district or agency that we have certainly has elected to do that and then you elect an alternate as well and so a little bit different again this is multiple employer trust versus the single employer trust because it is a multiple employer trust don't meet as often meet only annually and they're not all the services that go along with it such as your substantive plan comprehensive compliance plan so in this case the total cost is 30 basis points it's a little bit less expensive than the single employer trust but again because of the differences in what you're trying to accomplish single employer trust is better for opeb multiple employer trust is better for for the
017pst i'm going to turn it over to kerry to continue thank you gail and thank you all for giving me an opportunity to wear a tie for the first time in about 18 months i wasn't sure if i could actually tie it but uh turned out to be second nature i guess so i i work in the uh the governmental institutional side of morgan stanley we're the registered investment advisor to the trustee which is benefit trust company out of kansas we make recommendations to their trust committee only after their trust committee approves them do they enter the portfolios so the portfolios have effectively been vetted by both morgan stanley and benefit trust company which goes to the fiduciary liability minimization that gail was speaking about the portfolios that are available are d6 right here the
018top or all bonds are fixed income progressively more stocks as you move throughout to the most aggressive one which is about three quarters in stocks one quarter in bonds if you're in one of them let's say for instance you're in the moderate growth portfolio that has 45 percent in stocks and 55 percent in bonds and you log on to your account one day you're not going to notice suddenly that it has 60 in stocks for 30 percent it's going to stay right around that 45 and it may vary a few percentage points here and there depending on market moves but these are meant to give you a these are our target asset allocations for these portfolios turning to the next page this is not meant for you to look at every single line or number
019but these are the components of the portfolio what morgan stanley does what benefit trust asks of us are basically two things come up with the mixes of the portfolios the percentage of stocks versus bonds and then secondly answer the question who are some of the best money managers in the world we don't use morgan stanley products we don't use benefit trust products we just say who are some of the best managers in the world and we do the due diligence on that side of doing that analysis a lot of numbers over there but for example on the fixed income side down below we work with some of your neighbors around here western asset management is in pasadena great bond shop guggenheim's in santa monica blackrock p gym out of newark so those are some of
020the companies that we use third-party companies and morgan stanley does all the due diligence and all of those occasionally we make changes to this list depending on market conditions and in other factors the next page this is as of june 30th these are some these are the returns for the composite portfolios over the last quarter year three years five years and 10 years and and if you maybe just take some time to ponder those obviously the more stocks you have the higher your rate of returns longer term wasn't always the case when if you would have started in 08 or 07 that wouldn't have necessarily been the case but over longer periods of time that tends to be the trend there if you look to the next page though which i think is a page
021we like to spend a fair amount of time ah sorry about that we like to spend a fair amount of time on we've got the portfolio track records back to and let me back up the combination morgan stanley and keenan and benefit trust have been working together in these programs for what 13 15 years somewhere around there basically back to the inception what we've done is we've tracked all of the portfolios back to the beginning of o8 and and we've looked at um well of all these different portfolios what was the worst one year period the portfolio ever had as an example or what's the best one-year period they ever had and what's the average one-year return so for example on the moderate growth portfolio the worst one-year period back to the beginning of 08
022was minus 21.83 the best was 36.6 but on average they've done 7.21 per year over all the different one-year periods and but then you say okay well what about a three year period or a five year period and this is this is where i think it's interesting because the risk of owning stocks kind of goes down a little bit over time risk of owning bonds tends to go up a little bit so if you look down at for example the moderate growth and the five-year rolling period you know the worst five-year return was 301 the best was 1663 and on average is 7.69 obviously conditions going forward are going to be a little different because we're in a very low interest rate environment but this statistical section helps our clients to get a sense of
023risk a variability you know if you hold it for a year or two or three or five you what types of ranges of returns have happened in the past again no guarantee for the future but you you you get a sense of of um of volatility in portfolios let's see and so we look at all those different factors um you know a lot of our the districts in our surrounding area they are starting to do some of these type of investments so obviously um you know orange unified was one of the ones that really did it really early on um and then also also right right here you know right here next to us is the nlc rop they just also started doing these kind of um products recently and so um so how we
024kind of determine how much money do we think you know we want to at least start considering to to look at right and so in terms of opacity how the way that we came up with number was uh we need about two million dollars a year to pay for our retiree benefits and um so based on a return of about 6.5 return that was the number that we said okay think given where the current condition in the market right so about 6.5 return well how much would it need to kind of get us to the 2 million dollars and then the number was about 30 million dollars and so for the opec that would be kind of if we were to kind of get the two million dollars a year so um for the return
025so basically once we have the money there you will basically pay for all the entire benefits moving forward so that would be something at least it's kind of start a starting point to think about with regard to pension um you know the increase is actually quite more significant five million dollars a year right um so then even with the same kind of rate of return on 6.5 percent it would take about 80 million dollars to return that five uh million dollar return for the pension and obviously 80 million dollars is a lot of money and so it's like well so what would be a a number just at least thinking about what you know what we could possibly um you know do possibly and so um so i think you know if we just look
026at let's say we just look at you know we like to maybe at least have the third of the the two million dollar return a year that's you know i think something that um that could be considered would be let's say we would have put the one option is to have a 15 million dollars in the um op solutions and another um you know um 50 so it's about 15 a million dollars into the pension and so with that return of 6.5 percent we could possibly looking at about 2 million return um for the entire program so that's if we were to do it that way um and so this is a sample just to when i'm not saying to do this um right away but if we were to look at you can make
027a different deposit you can deposit let's say you know one month and then the following time and you can do like a four time deposit what a lot of districts do is okay once we know what the dollar value you can say i'm going to start doing it this year and then make sure i will put some deposit so there's different ways but this is just a sample of what it could look like option number two is um to kind of maximize the pension investment since pension investment the uh cost is a lot lower it's the point three percent uh the 0.3 uh the 30 versus point versus the 0.49 with the other one so we would just say during investment of 10 million dollars into the op and then the rest of 20 million
028dollars in the uh pension so the net return is the same is that the fee structure is a little bit different but one of the things that we thought about is our our district is very collaborative with different um players and we thought so um you know some so so the idea is with the opab then there is a internal there's a trust um within so there's a group and that may be helpful for for kind of having that conversations but put a little bit less money into that that pool uh 10 million versus the 15. and so this will be the um the kind of the you know different type of investment so the the the kind of ship will be a little different so but the contribution schedule is once we determine how
029much we like to put it in there and then we can determine what the schedule could look like obviously working with carrie and with the team and so okay what happened to the so that's um the presentation and we are here to answer um any questions that you may have i'm sure there's this is something um you know very um different and so we're here to answer any questions you may have i have questions oh perfect okay anne marie the light bulb just came on for me i i didn't understand at the beginning that we're trying to offset off the cost of both our medical benefits and our pension there's there's two options we can possibly do yes okay so we're trying to be really aggressive in stabilizing you could do one yes so i
030think at nlc rlp are they doing just the pension correct because yeah so they don't they don't um they don't have as many staff as well so their liability for the opec is not as big as ours ours is pretty significant what does opeb stand for other post employment benefits so that's the retiree benefits medical benefits okay that's what i that was what was throwing me off because i understood i understand the pension stabilization yes that's the one that you have on the an ocrop yes because i was trying to figure out why would you have to give employees a questionnaire so that that's what was throwing me off so um i understand um and um i don't have any questions now thank you is there a maximum that a school district or entity municipality
031can withhold from utilizing on a daily basis and invest could we put uh 500 million dollars into this or are or are are we guided where we can only invest so much because it's not our money it is the it's the public's money yes definitely so it's a great question so i think you look at how much your liability is and then kind of you know to see and that's why we kind of came up with those numbers so our total liability is 114 million now some districts for example they have fully uh vested they basically have deposited quite i mean you know maybe here you can talk about that too but some of them they do have put quite a bit of money in there already um but i would say you look at
032your cash flow how much cash flow you we have and then that's that will determine that we wouldn't be able to put 500 million dollars in our district because we don't have that kind of cash flow and that's and that was another question how is our taking money our cash and investing it affect our district's daily cash flow not knowing what's going to happen tomorrow uh in this it's a great question so one of the things i really love about this product is if you were to do the pension since we have so much liability our liability each year is you know going to be 40 plus million dollars a year so i wouldn't recommend us to have more than that because the idea is if you need the cash back we can submit the
033invoice right away and the cash is within a couple days i believe so we have enough of a liability to submit for the invoices and with this product you can always go back you don't only do for current year we can even go back three years so for example if we do very well um let's say on the opeb site you know instead of you know some of the returns this last year that we have seen um some of them were over 30 so they actually some districts are like well i can actually submit three years of invoices now to have that so you can actually go back there's no um timeline just you can't even go back let's say to 1980 if you have the you know data so that was one of the
034things that to me is very important to be very liquid with these products because of the cash flow from the state and so once we um you know this will be anything that above what we need for our operations it was something that we needed we shouldn't do it but obviously we monitor a cash flow then we would know oh you know what if i need this and some people you can take a look at this as a kind of investment vehicle if i need the cash i can submit the submit the invoice for it and then once um the state replenish our cash then we can go back and go ahead and submit back so there's different ways we can do that there's no cost for doing that no you can submit any time
035i mean you have to pay for the you know the uh the fees that stay but there's no cost in terms of getting the money back okay these target rates are six and a half percent is that before or after our basis is taken out so kerry d that's if we're to be in charge of 3.3 basis points uh for twenty million that's six six hundred thousand dollars a year so is that six hundred thousand uh after or before the investment return oh i was gonna i was to go to the rate of return slide or just put us somewhere in the presentational perfect i can take it from there thank you these are the rates of return for the portfolios for the last ask you what page are you on oh yes that is
036page it's it's about 28 pages from the back captain 21 was there a page number one oh so it is yeah 21. and we we've actually got some returns back to about 13 and a half years which gives you a little bit more data and um the reason for the six and a half percent number in the presentation obviously you can make that number kind of whatever you want to make it in theory but there i think nancy was trying to give you a sense of how the math works effectively she was really targeting the moderate growth portfolio which was 45 roughly our 50 50 portfolio 45.55 and the 10-year return on that portfolio 7.15 okay now that's before so the pst money the pension you'd have to deduct 30 basis points for that right
037and then the open you'd have to deduct the 49.7 from that okay and and i do want to make one clarification the reason we can invest and i know you probably all know this but just to make sure this is covered the reason we can invest and earn more money than the county or lake is because technically these are retirement systems in a retirement system you can invest well when it's idle cash like life and the county treasury you've got the california government code 53601 restrictions you know what you can invest in five-year maximum government bonds 30 a-rated corporate bonds well those yields are super low right now but they have to invest in that in a retirement system those rules go away instead they're replaced by a prudent man rule where you want to
038make sure you're investing appropriately for your time frame but there are no restrictions on maturity or credit ratings like that that's why your bond managers are allowed to do more things you can get higher returns like that you go going back to you know asb page with my glasses it's page 10 and talking about the board of authority and you said there'd be an oversight board that is not uh it is a a five or seven member that that we choose and what kind of responsibility or what kind of life ability do they have to do what are they what are they there for yeah great question so basically this board of authority that is put into place as an oversight board of the trust so what that would entail is let's just say quarterly
039meetings carrie scott keenan come in and we there's performance reports that are given to to the group to discuss this group typically will decide on bylaws of the board of authority those meetings are brown act meetings so they're open obviously to the public but it's generally an oversight board and it's it's really important we feel because we want to make sure that you're being represented and that there's a clear understanding also typically the chair of that board along with our team will come in at least annually and present to you as a board an annual report so you can see and understand what has happened during the past year and we want to make sure that there's an abundance of transparency not only within that group but within the district and and your board here
040so the oversight board is not a decision-making board they're simply receiving information from you your group and and presenting it or giving us as a board what is going on and making sure that what is going on is as being reported to us so they they there are some decisions they would make such as once that risk tolerance questionnaire is gone through and kerry guides the group through that it's determining a portfolio if you will for the investment so let's just assume it's moderate growth and then with that there's an investment policy statement that they would vote upon to put into place so they would make those decisions however as far as the amount of money that goes into either trust that is a district decision i'd like to ask you who and how comprises
041that oversight board good question so that is something that you as a as a board would discuss and approve that's done by board resolution typically it's by position so as an example we have districts where it's it's all district staff might be the superintendent cbo hr or risk management person we have districts where actually there's a member of the board of trustees that is on that board and then we have some where there are our bargaining unit individuals on that as well that is your decision and we do it by position in the event that perhaps someone leaves and goes to another district doesn't have to come back to the board because it was a name retires yeah we don't put specific names it's just identified by title i find it very distressing that the
042information that we're inputting and that you're giving is very difficult for me to take in with these masks on it makes it beyond difficult and i feel so such a responsibility to be able to understand and take this and i just don't understand why we can't make some adjustment if you stand apart why can't they not speak from the diocese with separation i i just find this the timing of having to wear this and take this information is very very upsetting question also was liquid i'm all fogged up too so my glasses so i have to agree a little bit it's unacceptable just please make sure you speak into the microphone and slowly thank you i clearly do not get your words clearly okay just the worst my other concern is the same as mr
043o'brien or o'neill i've done that forever everybody's used to it about liquidity and who determines that the liquidity so that would be determined by your district staff so let's say that your costs for the pension trust or your pension costs for that year are let's just say two million dollars what then staff would do would be to send in a request for reimbursement and that goes into benefit trust company and then they wire the the funds directly to the district and there's no cost to do that would the oversight board be bonded um we have some board members who have taken out a liability policy which is really inexpensive to do and we can certainly help them with that if that's something they would like to do carrie had something i believe yeah regarding the
044withdrawals for the trust it's it's really simple scott rankin who's the trust attorney for benefit trust if he were here what he would effectively say is they're not that these trusts can you can withdraw money to reimburse yourself for expenses current your expenses are past expenses whether they be pension expenses from the pst or or health care retiree health care expenses from the opec trust benefit trust is not going to audit that you've really made those re made those payments they're jus you're just going to fill out a form that says hey i want to withdraw 5 million to reimburse ourselves for as an example for either pension or opeb expenses that we've already paid for in the prior year so because you can go back multiple years there's a tremendous amount of liquidity in
045these say you put 20 million in the pension stabilization trust nancy i think you said your yearly uh pension costs are 40 million so effectively you could pull all the money out if you wanted to because you're reimbursing yourself for expenses the reason i think um these one of the major reasons and i think effectively the main reason for these trusts is to be able to earn more interest than the county treasury or life because if you could get four or five six seven percent return over time then they'll start to become interesting numbers that help with all the budgetary issues that nancy was speaking about and i think so that was primarily my question is you know the timing of us being able to withdraw and i believe you had mentioned that it's 24
046hours to 48 hours turn around yeah it's very very quick and um for example we wouldn't do anything obviously you know what what um you know i did this um you know um investment from my prior district and actually every month i you know update the board so that you know the we have to update the board where we're at how much it is what was our initial investment what is our return it's cause they give us a data you know i can actually i look at almost on a daily basis you know where everything is at and obviously we will kind of um before we do anything we'll be coming to the board and say okay well this is how much how much investment returned and then looking over our budget how much do
047we actually need for that year or we can say just we don't need the cash we just leave it there to let it kind of invest longer and then when we actually need it then we can withdraw so you don't really need we don't need to immediately withdraw unless we need it and so the idea is the board will be updated monthly i mean or any given time but it's the idea is you know we would i'll be making sure monitoring um these type of investments to me it's very important that we know what whatever where everything is at right in any given day and uh market has done extremely well for a lot of districts but it's obviously we're looking at it long term and so i think um it's a it's a good
048investment i mean the there's two options right so really is the pension one is a little cheaper there's no you know more authority and that's the one that nocrp has done because it's a little cheaper there's less you know um things involved a little bit and so that would be something that's you know cheaper and we have a lot of liabilities so that's one option i was going to ask that question regarding what rop did versus what we are proposing here so the rop was the pension stabilization uh program and there was no trust involved it's also a trust but it's it's a trust but maybe because of the size of the district that they don't have their own trust is that so the pension one does not have like a board yes so no
049so that one is it's still considered a trust but there's no board only only the opab has the board and most districts if um because ours our district is big enough we could look into that but one option the for example on my last district we did the same thing we just did the pension because the fees were slower and it's you know we're part of this group and that's what we did and so um you know we could even start with one thing you don't have to do both we can just even do one now is there a reason or i guess i'll ask the question is i know with the makeup of the board does it prohibit us from appointing a member of the public or is it necessary or why was not
050a member of public considered and only district employees um to date we don't have anyone that's a member of the public it's someone that typically the boards were set up to represent if you will the district so you would want someone that maybe had hands-on type of responsibility um and as far as just adding to what nancy said about the trusts the only difference between a multiple and a single employer trust is is structure so single employer trust this is your trust at anaheim union high multiple employer trust is made up of several different agencies school districts so still a trust still a section 115 trust it's just that it's multiple employers rather than a single employer and then moving back to the rate of return what do we earn right now [Music] and i'll
051project it is about six and a half percent right well yeah based on and that's on the yes what what would be the most conservative that we could so the most conservative one is um two point something right yeah three point which still beat the county treasury so we'll still beat it yes it will still beat it and so but uh most districts for example um yeah okay i'm gonna talk about that so yeah so the fixed income uh for example the um 10 year return is about 4.3 percent and um and so a lot of districts are the ones i know of they're doing either moderate or moderate growth and a lot of um districts are now moving to the moderate growth of the 7.15 return and obviously last year was a really good
052year so a lot of districts earn much more than the the 7 obviously so some of them was up to about 30 so on the last quarter so the idea is just really kind of the the difference right yeah yeah i know it's not like uh something but what i'm trying to make the point is that we'll be earning more than what we have right now in terms of you know where we're setting our money with the county and i think that's the key i know initially i had a lot of questions when rop was doing it by doing some research with uh you know obviously from your district previous district and there are a couple other districts which are doing it i know that it's it's been good for those districts in terms of
053maintaining the cost right sometimes we may not exceed it but at least it's actually getting us closer to the goal post of making sure that we're not we're not uh burdened with all that uh cost so i i'm i'm supportive of it but you know obviously we have other board members so leave it at that and if i could add some numbers to your comment if you look on page 22 this was the statistical section for example look at the moderate growth column look down below and again this this looks at the performance of the portfolio back to the beginning of 08 okay so it includes some pretty tough years and some good years well looking at the moderate growth and the rolling five-year periods meaning lots of different five-year periods the worst five-year period
054was up 3.01 percent per year the best was up 16.6 and on average at 7.69 right obviously bond yields are lower now so projected returns on bonds are probably lower but should we beat the county treasury over time we better that's kind of what we're supposed to do but yes okay any other comments questions okay just uh just one thing uh when rop first started we we put in a very conservative amount and then uh we got great returns and we put more in this year right okay well now this is a presentation so we're not really doing any action but it is information and my only comment it's sort of like the difference between a bank and a credit union as far as interest you know you you take the one that gives the
055better interest um okay now is there well thank you for coming here we appreciate you giving us some more information yep that's very good so if so if we can get an investment that equals 0.9 plus our basis points that we're paying we're at least even steven anything above that we're gravy gravy or with mashed potatoes yeah okay okay thank you both very much thank you nice meeting you okay okay now um so we will public comments for a quote session okay okay let me go to that here so that was our study session and now we will go to public comments closed session items this is the opportunity for community members to address the board of trustees on a closed session item only do we have any requests to speak okay having none we
056will then move to closed session at 4 25. okay