Financial Advisory Board — Naperville, IL
Date: 2024-04-29

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



 Meeting Agenda

 Financial Advisory Board

Monday, April 29, 2024 6:00 PM NEU




A. CALL TO ORDER:

B. ROLL CALL:

C. PUBLIC FORUM:

D. APPROVAL OF MINUTES:
 24-0497 Approve the minutes of the January 29, 2024 meeting


E. REPORTS:
 24-0494 Receive the 2024 1st quarter investment report and the annual update
 from Mesirow Financial and PFM Asset Management

 24-0500 Receive the 2024 year-to-date budget report through March 31, 2024


F. NEW BUSINESS:

G. OLD BUSINESS:
 24-0111B Discuss the investment benchmarks for the City’s fixed-income money
 managers and related changes to the Investment and Cash
 Management Policy

H. 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 4/24/2024

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



 Meeting Minutes - Final

 Financial Advisory Board


Monday, April 29, 2024 6:00 PM NEU


A. CALL TO ORDER:

 Chairman Harvey called the meeting to order at 6:02 p.m.

B. ROLL CALL:

 Also Present: Soohyun Cho, Student Representative; Mike Piotrowski,
 Marquette Associates; Michelle Binns, PFM; Jeff Schroeder, PFM; Chris Harris,
 PFM; Dave Nirtaut, Mesirow; Jim DeZellar, Mesirow; Melanie Smith, Accountant;
 Raymond Munch; Deputy Finance Director.
 Present 6- Mark Gizzo, Gautan Grover, Edward Harvey, Michael Soenke, Curtis Williams, and
 Jeff Walker
 Absent 3- Thomas Gavin, Josh McBroom, and Jignesh Patel


C. PUBLIC FORUM:

 None.

D. APPROVAL OF MINUTES:

 Approve the minutes of the January 29, 2024 meeting

 Board Member Grover made a motion, seconded by Board Member Walker.
 The motion was approved by unanimous voice vote.
 The minutes were approved.

E. REPORTS:

 Receive the 2024 1st quarter investment report and the annual update from Mesirow
 Financial and PFM Asset Management
 The 2024 Q1 Investment Report included presentations by each of the City's
 money managers. Chris Harris from PFM presented first. Mr. Harris provided an
 overview of current economic and market conditions. He then spoke specifically
 about the City's portfolio at PFM, its performance, and how PFM is positioning
 the portfolio in the current market environment. As of March 31, 2024, the
 market value of the PFM portfolio is $98.2 million. The portfolio had a Q1 return
 of -0.03% compared to the benchmark return of -0.35%. The PFM team
 extended the offer to discuss the portfolio benchmark in advance of the next
 agenda item. PFM offered that they would prefer to be measured against the
 Intermediate US Government Index as that aligns with their strength in US

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Financial Advisory Board Meeting Minutes - Final April 29, 2024

 government fixed-income assets.

 Next, the Board heard from Dave Nirtaut from Mesirow. This was Mesirow's first
 official introduction to the Board after being selected as the new money
 manager. Mr. Nirtaut discussed the transition from Loop Capital to Mesirow in
 January. Nirtaut noted that Mesirow assumed all of Loop's holdings but have
 traded out of most of them because the investments did not align with their
 philosophy or they saw better opportunities. As of March 31, 2024, the market
 value of the Mesirow portfolio is $83.6 million. The portfolio had a Q1 return of
 0.48% compared to the benchmark of -0.35%. Nirtaut spoke about the firms
 expertise in corporate credit research and investment. Chairman Harvey asked
 Nirtaut what benchmark Mesirow believes it should be measured against.
 Nirtaut replied that the Intermediate US Government/Credit Index would align
 more closely with their investment philosophy.
 The report was received.


 Receive the 2024 year-to-date budget report through March 31, 2024

 Deputy Finance Director Munch provided an overview of the budget through
 March 31, 2024. Mr. Munch spoke generally on revenues and expenses in the
 major operating funds. Munch informed the Board that the State of Illinois'
 budget proposal included the elimination of the 1% sales tax on groceries,
 which could result in a $5 million loss in General Fund revenue next year. For
 now, staff is taking a wait and see approach.
 The report was received.

F. NEW BUSINESS:

 None.

G. OLD BUSINESS:

 Discuss the investment benchmarks for the City’s fixed-income money managers and
 related changes to the Investment and Cash Management Policy
 Mike Piotrowski continued the discussion on appropriate benchmarks for the
 two money managers. Mr. Piotrowski consulted with Deputy Director Munch on
 recommended changes to the Investment and Cash Management Policy.
 Piotrowski advised the changes allow for separate benchmarks for each
 manager that would allow each to leverage their investment style and risk
 tolerance. The policy change would allow a manager to invest up to 50% in
 investment grade corporate bonds and be benchmarked to the Intermediate US
 Government/Credit Index, or invest up to 25% in corporate bonds and be
 benchmarked to the Intermediate US Government Index. Given the current
 money manager relationships, Mesirow would receive the government/credit
 benchmark and PFM would receive the government-only benchmark.

 Board Member Gizzo made a motion to approve a recommendation to amend
 the Investment and Cash Management Policy as presented, seconded by Board
 Member Grover. The motion was approved by unanimous voice vote.


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Financial Advisory Board Meeting Minutes - Final April 29, 2024



 The recommendation was approved.

H. ADJOURNMENT:

 Chairman Harvey made a motion to adjourn the meeting at 8:00 p.m., seconded
 by Board Member Grover. Meeting adjourned by unanimous voice vote.
 This was to adjourn the Meeting of.




City of Naperville Page 3 Printed on 12/13/2024