MINUTES OF THE CITY OF SARASOTA POLICE OFFICERS' PENSION PLAN BOARD OF TRUSTEES REGULAR MEETING MAY 28, 2021 Present: Chair Demetri Konstantopoulos, Vice Chair Johnathan Todd, Secretary/Treasurer: Shayla Griggs, and Trustee Ronnie K. Baty. Others: Attorney Scott Christiansen, Pension Plans Administrator Debra Martin, and Pension Specialist Peter Gottlieb. Absent: Trustee Joseph Jody" Hudgins. 1. CALL MEETING TO ORDER: Presenter(s): Chair Konstantopoulos. Chair Konstantopoulos called the meeting to order at 8:15 a.m. 2. PLEDGE OF CIVILITY: Presenter(s): Chair Konstantopoulos. Chair Konstantopoulos stated for the record, "We may disagree, but we will be respectful of one another. We will direct all comments to issues. We will not engage in personal attacks.' 3. ROLL CALL: Presenter: Debra Martin, Pension Plans Administrator. Pension Plans Administrator Martin called roll; she noted Trustee Hudgins was absent and will request an excused absence at the next meeting. Secretary/Treasurer Griggs requested an excused absence from the April 23, 2021 meeting; Vice Chair Todd made a motion to excuse the absence. Trustee Baty seconded the motion. The motion carried unanimously (4-0). 4. PUBLIC INPUT: None. 5. APPROVAL OF MINUTES: 5.1. Approval Re: Minutes of the Police Officers' Pension Plan Board of Trustees Regular Meeting of April 23, 2021. Presenter(s): Chair Konstantopoulos. Vice Chair Todd made a motion to accept the minutes of the April 23, 2021 meeting. Trustee Baty seconded the motion. The motion carried unanimously (4-0). Book 1 Page 226 05-28-2021 8:15 a.m. Book 1 Page 227 05-28-2021 8:15 a.m. 6. RETIREMENT REQUESTS: None. 7. INVESTMENT PERFORMANCE REVIEW: 7.1. Presentation and Discussion Re: Frontier Capital, Investment Performance Summary as of March 31, 2021. Presenter(s): Leigh Anne Yoo, Director of Sales and Marketing, Frontier Capital. Leigh Anne Yoo of Frontier Capital appeared before the Board telephonically and introduced herself, as well as William Teichner, CFA, Portfolio Manager, Rushan (Greg) Jiang, CFA, Portfolio Manager, and their presentation. Ms. Yoo stated there have been no changes in the investment team, that Mr. Jiang and Mr. Teichner are employee/owners of the firm who are both personally invested in the portfolio and are involved in all trading decisions, and they have no portfolio management responsibilities outside of this strategy. She reviewed the investment team structure, noting two additional analysts will join the team at the end of the summer. Both individuals worked with Frontier Capital as interns during 2020. Frontier invests in small- and mid-cap value domestic stocks. She reviewed the Portfolio Performance page of the materials. Mr. Teichner discussed the last 12 months as being a difficult period for the portfolio, however it outperformed the benchmark as detailed on the Equity Attribution - Trailing 12 Months slide. He stated the reason the market and the portfolio has performed well has been due to a COVID-19 vaccine and society has begun to normalize. Further, banks were initially hit hard by the pandemic due to expectations of loan defaults and the Federal Reserve lowering interest rates to 0%; banks have since rebounded considerably which has aided the portfolio's performance. Industrialized companies fared similarly in that they were impacted severely by the pandemic and have recently begun a robust return. He discussed the International Seaways holding, which is one of the Bottom Five Detractors, as finding better performance; he noted the top five contributors added more to the portfolio's performance than the bottom five detracted from it. Mr. Jiang discussed the Portfolio Activity = 1Q 2021, providing details and rationale for its additions and reductions in holdings. The Board thanked Frontier Capital for their presentation. 7.2. Presentation and Discussion Re: Burgess Chambers & Associates, Investment Performance Summary for Period Ending March 31, 2021. Presenter(s): Lary Cole, Executive Vice President, Burgess Chambers & Associates. Larry Cole of Burgess Chambers appeared before the Board telephonically and introduced himself. Mr. Cole pointed out that his materials included a discussion of why crypto-Currencies and non-fungible tokens are not prudent investments for municipal pension funds at this time. He reviewed the Quarterly Market Summary for US Market Indices, US Market Sector Performance, and Fixed Income Markets, the Investment Policy Compliance Review, Investment Performance Net, noting that as of today the portfolio is up 2-3% above what is stated in the materials, the Actual VS. Target Asset Allocation, Asset Allocation & Performance - Gross noting the numbers in parentheses are the percentile rankings of public pension funds across the country, the market's rotation from having favored growth to now favoring value, and that he is receiving positive news regarding the real estate sector regarding transactions picking up, suggesting valuations may hold; the sector expects to have 5-7% returns in 2021. Mr. Cole advised the Board to not focus too intently on the rankings assigned to the bond managers, noting that even the benchmark was in the 100th, 1 meaning worst ranked, percentile. He provided a brief overview as to why this occurred, noting it appears to be an aberration and he has no concern for the sector. Mr. Cole reviewed the Fiscal Year Returns, noting they are marked against the assumed rate of return which should be 6.75% and the Total Fund slide. He stated he had no concerns regarding any of the fund managers, and that it is an overall positive report. 8. UNFINISHED BUSINESS: None. 9. NEW BUSINESS: 9.1. Presentation and Discussion Re: Large Cap Growth Manager Search. Presenter(s): Lary Cole, Executive Vice President, Burgess Chambers & Associates. Mr. Cole explained that the Plan has approximately $23 million in the Fidelity Large Cap Growth Index fund, which is a low-cost fund, however he believes active management tends to protect more in down markets, although they may struggle to keep up with their benchmarks in up markets. He sought a manager which would complement Wells Fargo to smooth any volatility. He reviewed the firms presented on the Investment Summary and noted SMA/MF stands for "separately managed accounts/mutual fund." Mr. Cole stated that he believed Edgewood Management LLC's fee of 1% for its mutual fund was entirely too high and he recommended excluding them for that reason alone. Between Baron Capital and Granite Investment Partners, there was more overlap in holdings and sector weighting between Granite Investment Partners and Wells Fargo Asset Management, thus giving an edge to Baron Capital. Secretary/Treasurer Griggs left the meeting at 8:58:22 a.m. and returned at 9:01:28 a.m. Mr. Cole reviewed the Total Risk to Reward slides in bear and bull markets. He recommended, should the Board wish to pursue an active manager for this space, the Board delay a decision until all trustees were present as well as to have the prospective managers present to the Board in person. Mr. Cole noted he did not believe there to be any significant urgency to this decision. The Board noted the June meeting already has 3 presenters and asked Mr. Cole to invite Baron Capital and Granite Investment Partners to present in person at its July 23, 2021 meeting, in addition to the scheduled presenters, Franklin Templeton and JP Morgan. 9.2. Presentation and Discussion Re: BNY Mellon transfer to Newton Investment Management North America, LLC. Presenter(s): Larry Cole, Executive Vice President, Burgess Chambers & Associates. Mr. Cole explained BNY Mellon Corp is one of the Plan's large cap value managers; the equity staff at Mellon Investment Advisors are being transferred to Newton Investment Management which is also a subsidiary of BNY Mellon Corp. The investment team, decision-making processes, and investment strategies will remain unchanged. Attorney Christiansen recommended the Board acknowledge the change for the record. Trustee Baty made a motion to approve the change from BNY Mellon to Newton Investment Management; Vice Chair Todd seconded the motion. Book 1 Page 228 05-28-2021 8:15 a.m. Book 1 Page 229 05-28-2021 8:15 a.m. The motion carried unanimously (4-0). 9.3. Presentation and Discussion Re: Ownership Change of Wells Fargo Asset Management Holdings, LLC, Parent of Wells Capital Management Incorporated. Presenter(s): Larry Cole, Executive Vice President, Burgess Chambers & Associates. Mr. Cole explained Wells Fargo Asset Management is being sold to 2 private equity firms; he explained he has spoken several times with Dann Smith of Wells Fargo Capital Management, who has assured him that there should be no changes in the investment teams or client services staff. He will continue to monitor the transition for updates. Because Wells Fargo Capital Management requests a signed acknowledgement, the Board is required to vote on the matter. Vice Chair Todd made a motion to consent to the change in ownership of Wells Fargo Asset Management. Trustee Baty seconded the motion. The motion carried unanimously (4-0). The Board thanked Mr. Cole for his presentations. 10. ATTORNEY MATTERS: Attorney Christiansen noted that financial disclosure forms will be due July 1, and there can be personal fines for untimely filing. He reminded the Board that officers must be selected in the July meeting, and requested those be added to that agenda. The Board recently approved a request to change the City Ordinances regarding IRS code changes. The first reading of the proposed ordinance change is scheduled to come before the City Commission at its June 8 meeting, and Mr. Christiansen stated he would attend. In the' Van Gostein matter, Attorney Christiansen informed that he and opposing counsel have requested a status conference with the judge to be held on July 7. Mr. Christiansen added that these type of delays are atypical, but could be related to the COVID-19 pandemic. 11. OTHER MATTERS: 11.1. Presentation and Discussion Re: Administrative Expense Budget. Presenter(s): Debra Martin, Pension Plans Administrator. Pension Plans Administrator Martin explained this is presented for the Board's information. She noted the accounting and auditing expense, as well as software expense have been paid for the year. 11.2. Presentation and Discussion Re: Pension Fund Check Register January 1, 2021 to March 31, 2021. Presenter(s): Debra Martin, Pension Plans Administrator. Pension Plans Administrator Martin explained this is presented because Pension Administration uses ACH to remit payment. There are some larger payments because there have been refunded contributions as well as DROP payouts. Pension Plans Administrator Martin noted that the payment to the Sarasota Firefighters Pension Plan was reimbursement for the Police Officers' Plan's portion of accounting software that had been purchased and used by each of the Sarasota defined benefit pension plans. 12. ADJORN. Chair Konstantopoulos adjourned the meeting at 9:15 a.m. Chair Demetri Konstantopoulos Sécretary reasurer Griggs Book 1 Page 230 05-28-2021 8:15 a.m.