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El Paso City pension board hears investment and budget update; mailroom, leases and refunds flagged for review
Summary
Staff told the El Paso City Pension Board its target return is 7.5% and reported a recent performance improvement; board members asked staff to check unused mailroom funds, over-budget leases and training reimbursements while staff warned refunds may rise.
At a meeting of the El Paso City Pension Board, staff reported the fund—s target return is 7.5% and said the most recent monthly return moved from negative 2.6% to negative 0.59%, a marked improvement; staff also flagged several budget items for review, including a $21,000 mailroom line that has not been spent and building lease costs running at about 200% of budget.
The update focused on investment performance and near-term budget monitoring. "Strategy standpoint, our our target rate is 7 and a half percent. We're at point 59% negative right now. That sounds not too good, but last month, we were at a negative 2.6. So we got a 2 full percentage point benefit this last month," a staff presenter said. He added that "that negative 0.59 should be about 3.75% right now." The presenter told the board overall expenses are about 39.7% after six months, compared with an expected rate near 50% at this point in the fiscal year.
Board members pressed staff on several line items. A board member noted the budget shows $11,000 for board training with no expenditures recorded and asked whether TechSpurs trustee training earlier in the year had been paid from the prior fiscal year. Staff said reimbursements and prior-year timing could explain the apparent discrepancy and that they would check the record. Another line the board discussed was a $21,000 mailroom charge that has not been used and could be reallocated or reappropriated.
Staff warned the board to watch refund and administrative fee trends. Using the board—s tracking metrics, staff said a 50% rate would equate to roughly $3,500,000 in refunds and about $1.72 million in administrative fees in the year; staff said those numbers fluctuate month to month and are driven by participant behavior. "We budget an amount, basically, that's about 10% over the prior year, to be cautious but we'll keep an eye on that number too," one presenter said, adding the plan cannot influence the timing of participant refunds.
On leases, staff explained the board did not budget lease payments because the office move did not occur before the fiscal year began; one speaker said the prior office move occurred in October and lease payments were therefore not included in the earlier budget, leaving the leases over budget.
The update also covered employee benefits: staff said the tuition reimbursement benefit remains unused this year; the program pays $2,000 a year and may cover up to two classes per semester, according to the presentation. Staff asked the board whether they had further questions and said they would follow up on reimbursement and training-line clarifications.
Board members requested follow-up items including staff—s check on whether prior training costs were charged to the previous fiscal year and possible reallocation of the unused mailroom funds. Staff said they would monitor refund trends and lease costs closely going forward.
