FCPS OPEB committee reviews March investment performance; county executive proposes $1 million deposit

The Frederick County Public Schools OPEB Committee reviewed investment results through March 31 and received a budget update noting a proposed $1,000,000 county deposit to the district’s OPEB trust, committee members said.

Tanya (staff member, presenter) reported that the fund’s assets were down about 1% for the quarter and that fiscal‑year‑to‑date returns through March were 3.9%, about $6.7 million above the starting position. "Not a not a terrible quarter for for the fund, I would say," Tanya said. She told the committee the fixed‑income allocation—which the group increased from 30% to 40% at the end of 2024—helped cushion the quarter because bond returns were positive, while U.S. equities were down roughly 5% for the quarter.

Tanya said international equity managers outperformed U.S. equities, with developed international markets up about 6.9% and emerging markets up about 2.3% for the quarter. She named American Funds as trailing its benchmark (American Funds +2.6% vs. benchmark +5.2% for the quarter) but said its year‑to‑date performance had improved and that she and staff were not recommending placing that manager on a watch list: "no recommendation to put that fund on watch list at this time." She also noted a recent private‑credit commitment to Hamilton Lane (private credit) that has not yet generated capital calls and that staff expects a call later in the second quarter or in the third quarter.

Heather (presiding officer) provided the committee’s budget update, saying the board has been working to balance the operating budget and that, "we have to, by law, have our budget balanced by June 30." Heather said the county executive’s proposed budget, announced in April, includes a one‑time $1,000,000 direct deposit into the OPEB trust as part of a supplemental appropriation. She noted the county executive’s budget must be approved by the county council by May 31 and said the deposit was expected to remain in the executive’s proposal but was not yet final.

Heather reviewed recent local decisions on the OPEB operating contribution: the board originally proposed a $1,600,000 contribution, later reduced to $600,000 before submission to the county executive, on the understanding that the county executive’s $1,000,000 deposit would together reach the original $1,600,000 aspiration if both amounts were preserved in the final county budget. Heather said there remains approximately a $6.7 million gap to close in the plan’s overall funding and that an actuarial study is scheduled for the coming fiscal year.

Committee logistics and membership were also discussed. Members confirmed a meeting schedule that includes a December 5 in‑person meeting, and the committee chair thanked Missy for her service as FCTA president; the committee noted Missy will conclude her tenure on June 30 and that Justin Hyde will succeed her as FCTA president and join the committee. Catherine Rich posted recruitment information to fill a community member seat left by Brian’s departure.

The committee took one formal action at the start of the meeting: it approved the Feb. 21, 2025 OPEB meeting minutes after a motion and second. No investment manager watch placements or formal funding changes were approved at the meeting. The committee will continue monitoring markets and the county budget process; any county deposit remains contingent on county council approval by May 31.