Financial Advisory Board — Naperville, IL
Date: 2024-01-29

400 S. Eagle Street
 City of Naperville Naperville, IL 60540



 Meeting Agenda

 Financial Advisory Board

Monday, January 29, 2024 6:00 PM NEU




A. CALL TO ORDER:

B. ROLL CALL:

C. PUBLIC FORUM:

D. REPORTS:
 24-0109 Receive the 2023 4th quarter investment report

 24-0111 Discuss the investment benchmarks for the City’s fixed-income money
 managers

 24-0110 Receive the preliminary 2023 year-end budget report


E. NEW BUSINESS:
 24-0078 Approve the minutes of the October 30, 2023 meeting


F. OLD BUSINESS:

G. ADJOURNMENT:
 Any individual with a disability requesting a reasonable accommodation in order to
 participate in a public meeting should contact the Communications Department at least
 48 hours in advance of the scheduled meeting. The Communications Department can
 be reached in person at 400 S. Eagle Street, Naperville, IL., via telephone at
 630-420-6707 or 630-305-5205 (TDD) or via e-mail at info@naperville.il.us. Every effort
 will be made to allow for meeting participation.




City of Naperville Page 1 Printed on 1/25/2024

400 S. Eagle Street
 City of Naperville Naperville, IL 60540



 Meeting Minutes - Final

 Financial Advisory Board


Monday, January 29, 2024 6:00 PM NEU


A. CALL TO ORDER:

 Chairperson Harvey called the meeting to order at 6:00 p.m.

B. ROLL CALL:

 Also Present: Raymond Munch, Deputy FInance Director; Melanie Smith,
 Accountant; Mike Piotrowski, Marquette Associates; Avyay Parmeswaran,
 Student Representative; Soohyun Cho, Student Representative.
 Present 6- Thomas Gavin, Gautan Grover, Edward Harvey, Josh McBroom, Jignesh Patel, and
 Curtis Williams
 Excused 1- Jeff Walker

 Absent 1- Mark Gizzo


C. PUBLIC FORUM:

 None

D. REPORTS:

 Receive the 2023 4th quarter investment report

 Mr. Piotrowski, Marquette Associates, presented the 2023 fourth quarter
 investment report. Piotrowski provided a brief overview of the current
 investment market and economic factors impacting performance of the
 fixed-income portfolio. As of Dec. 31, the total balance of cash and investments
 was $209,396,795. Total returns in the fixed-income portfolio were positive at
 4.9%, which beat the benchmark by 0.1%. On an individual basis, PFM
 performed better than Loop Capital with returns of 5.3% and 4.5%, respectively.
 As of Jan.1, the Loop Capital portion of the NAperville portfolio has successfully
 transitioned to Mesirow Financial. Both money managers will be invited to the
 April meeting to present an update on their portfolio positions and market
 oulook.

 Discuss the investment benchmarks for the City’s fixed-income money managers

 Mr. Piotrowski introduced the discussion on appropriately benchmarking the
 fixed-income portfolio. At present, the benchmark is the Bloomberg Intermediate
 US Government Index. Investment policy changes in 2018 allowed the money
 managers to invest in up to 30% in investment grade corporate bonds. Both
 money managers have made significant allocations to corporate bonds in

City of Naperville Page 1 Printed on 5/29/2024
Financial Advisory Board Meeting Minutes - Final January 29, 2024

 alignment with that change. Mr. Piotrowski offered the Bloomberg Intermediate
 US Government/Credit Index as an alternative benchmark that aligns with the
 current portfolio allocations.

 Board Members discussed the two benchmark options, including the possibility
 of assigning different benchmarks to each of the money managers.
 Chairperson Harvey noted that the recent money manager selection process
 focused on the strengths of each manger and how they compliment each other.
 Mesirow has a significant experience in credit research, so a higher corporate
 bond allocation may be appropriate. While PFM has proven to be strong in the
 government fixed-income space.

 The Board directed staff to research possible revisions to the Investment Policy
 and schedule a special meeting to consider changes, if needed. Mr. Piotrowski
 will work with staff to evaluate the current policy statements.

 Receive the preliminary 2023 year-end budget report

 Deputy Director Munch reviewed preliminary year-end budget report with the
 Board, focusing on the three major budget funds: the General Fund, Electric
 Fund and Water/Wastewater Fund. Munch noted that revenues were higher
 than expected in the General Fund due to outperformance in sales and income
 taxes. General Fund expenditures were slightly under budget. This will result in
 another significant increase to the General Fund cash balance.The Electric
 Fund is suffering from much lower than expected revenue as a result of energy
 conservation efforts. While there is some offset from savings on purchased
 power, the Electric Utility expenses still exceeded revenues by approximately
 $10 million, resulting in a reduction in cash balance. The Water/Wastewater
 Utility saw revenue in line with expectations, and expenditures slightly below
 budget. The Water Capital Fund expenditures were higher than expected, but
 well below budget. Staff is coordinating a bond issuance for Q1 to reimburse
 some of the capital costs.

E. NEW BUSINESS:

 Approve the minutes of the October 30, 2023 meeting

 Chairperson Harvey made a motion to approve the minutes, seconded by
 Grover. Motion approved by voice vote.
 The minutes were approved.

F. OLD BUSINESS:

G. ADJOURNMENT:

 Chairperson Harvey motioned to adjourn the meeting at 7:15 p.m., seconded by
 Williams. Motion approved by voice vote and meeting adjourned.




City of Naperville Page 2 Printed on 5/29/2024