Book 1 Page 164 10-23-2019 9:00 a.m. MINUTES OF THE CITY OF SARASOTA FIREFIGHTERS PENSION PLAN BOARD OF TRUSTEES REGULAR MEETING OF OCTOBER 23, 2019 Present: Vice Chair Shelia Roberson, Secretary/Treasurer Shayla Griggs, Trustee Charles Joseph, and Trustee Scott Snow Others: Attorney Pedro Herrera, Pension Plans Administrator Debra Martin, and Senior Pension Analyst Anthony Ferrer Absent: Chair Michael Hartley 1. CALL THE MEETING TO ORDER: Vice Chair Roberson called the meeting to order at 9:00 a.m. 2. PLEDGE OF CIVILITY: Trustee Snow read into the record a memorandum from Mayor Willie Charles Shaw, dated February 13, 2015, entitled "City Commission and Advisory Board Meeting Protocols and Pledge of Civility." 3. PUBLICINPUT: None 4. APPROVAL OF MINUTES: 4.1. Approval Re: Minutes of the Firefighters Pension Plan Board of Trustees Regular Meeting of September 25, 2019. AI motion was made by Trustee Joseph and seconded by Trustee Snow to approve the Minutes of the Firefighters' Pension Plan Board of Trustees Regular Meeting of September 25, 2019. Motion carried unanimously (4-0). 5. INVESTMENT PERFORMANCE REVIEW: 5.1. Presentation and Discussion Re: Sawgrass Asset Management, Performance Review as of September 30, 2019 Presenter(s): Anthony Brooks, Senior Equity Portfolio Analyst, Sawgrass Asset Management Mr. Brooks came before the Board and introduced himself. Mr. Brooks reviewed the Sawgrass Growth Equity Alpha Thesis. Mr. Brooks provided a summary of the portfolio performance over the last year as of September 30, 2019; beginning balance of $19,216,285.00 with a small number of outflows, made an investment gain of $1,547,867.00 to end at $20,686,300.00; since inception in 2004, started at $9,368,718.00 with an investment gain of $26,571,341.00 and an ending market value of $20,686,300.00 on September 30, 2019. Attorney Herrera entered Chambers at 9:06 a.m. Mr. Brooks stated quarter to date the Fund is up at 1.87% net of fees, outperforming the Russell 1000 Growth index. Mr. Brooks reviewed the top 10 and bottom 10 contributors to the portfolio and provided a brief overview of the market outlook going forward. Trustee Snow asked for an opinion on a pullback in the market, Mr. Brooks stated the market can continue to go up with 20% declines; and added that a 30% downturn can be a leading indicator of a pending recession. Vice Chair Roberson posed a question to Mr. Brooks and asked Mr. Owens to contribute, regarding page 5 of the Plan's Historical Summary, from inception noting the market value at $12.5 million, while on page 14 of the presentation iti is stated that there was $9.3 beginning market value. Discussion ensued. Mr. Owens noted he will review the data. The Board thanked Mr. Brooks for his presentation. 5.2. Presentation and Discussion Re: Graystone Consulting, Performance Review as of September 30, 2019 Presenter(s): Scott Owens, Institutional Consultant, and Andy Mcilvaine Institutional Consultant, Graystone Consulting Mr. Owens and Mr. Mcilvaine came before the Board and introduced themselves. Mr. Mcilvaine provided an overview of the market and the economy; there is an expectation of volatility moving forward; manufacturing data is slowing; economic fundamentals are relatively decent; unemployment is historically low. Mr. Owens provided a performance review as of September 30, 2019; a portfolio value of $155,352,269.00 representing a gain, net of fees and transactions costs, of $683,398.00 for the quarter. Vice Chair Roberson requested a total column be added to the Cash Flow Analysis Statement. Mr. Owens gave a brief overview of the portfolio performance with a breakdown of returns. Mr. Owens added the compliance checklist is within the boundaries of the investment policy statement. The Board thanked Mr. Owens and Mr. Mcilvaine for their presentation. 6. UNFINISHED BUSINESS: None 7. NEW BUSINESS: 7.1. Presentation and Discussion Re: Expected Rate of Return and potential study to be performed by GRS Presenter(s): Scott Owens, Institutional Consultant, and Any Mcilvaine Institutional Consultant, Graystone Consulting Book 1 Page 165 10-23-2019 9:00 a.m. Book 1 Page 166 10-23-2019 9:00 a.m. Mr. Owens and Mr. Mcilvaine came before the Board and introduced themselves. Mr. Owens provided a handout to the Board. Mr. Owens discussed keeping the allocation the same and stated that the probability of achieving the assumed rate of retum goes up; noted to consider the impact of smoothing. Detailed discussion ensued. Trustee Snow noted the end of fiscal year report prepared by GRS includes the City contribution percentages, which then is used by the Board to avoid funding cost increases to the City and County; amount moved to is driven by not increasing the City or County contributions. Consensus to direct the Plan's actuary, Brad Armstrong at Gabriel, Roeder, Smith and Company to prepare an impact statement as to what the financial costs would be to lower the investment assumption from the current 6.85% gross to 6.7% gross, as well as the impact from 6.85% gross to 6.5% gross. Mr. Owens noted he will prepare a report containing the impact of a potential shift in investment policy percentages; column one rate of 6.7%; column two with a rate of 6.5% allocations and probability, if the probability is the same, how will it make the portfolio more conservative in asset allocations; upon compilation and review of the data, a recommendation will be made to the Board. Consensus to review the data at the December meeting with an invitation extended to the City and County representatives for further discussion. The Board thanked Mr. Owens and Mr. Mcilvaine for their presentation. 7.2. Presentation and Discussion Re: Review of Infrastructure Managers Presenter(s): Scott Owens, Institutional Consultant, and Any Mcilvaine Institutional Consultant, Graystone Consulting Mr. Owens and Mr. Mcilvaine came before the Board and introduced themselves. Mr. Owens noted examples of Infrastructure hard assets are your power plants, toll roads, ports, communication towers water treatment facilities, and airports as well as the companies that support these facilities such as airport maintenance and food services. Mr. Owens provided a detailed review of the five different infrastructure managers performance, operational differences and the impact of their decisions. Discussion ensued. Consensus for Mr. Owens to arrange for Infrastructure managers from, Lazard, Nuveen, and with Cohen and Steers to present to the Board at the December 2019 Meeting; with 20 minutes allotted for presentation with 10 minutes for Q&A. Mr. Owens handed out to the Board research materials on HGK and Renaissance and discussed pertormance; recommendation is to continue to watch and review on a quarterly basis. Trustee Snow left Chambers at 11:11 a.m. and returned at 11:13 a.m. Discussion ensued regarding the recently updated Investment Policy Statement, a misstatement in the document regarding the assumed rate of return. Mr. Owens acknowledged the misstatement as a typo and ensured that this would be corrected. The Board thanked Mr. Owens and Mr. Mcilvaine for their presentation. 8. ATTORNEY MATTERS: Attorney Herrera noted no new matters to present adding there is an upcoming educational opportunity in Orlando with the Division of Retirement from October 26, 2019 to October 29, 2019. 9. OTHER MATTERS: 9.1. Presentation and Discussion Re: Draft Updates to Trustees Education and Travel expenses Policy Statement Presenter: Debra Martin, Pension Plans Administrator Ms. Martin discussed lodging expenses on page 2 and 3 on the presentation materials. Discussion ensued. Mr. Mcilvaine left Chambers at 11:15 a.m. and returned at 11:16 a.m. Attorney Herrera noted any official event, program or activity that is part of the conference is within the travel policy, therefore, day before and day after travel can be considered; the attendance policy will be reviewed for clarity and presented at the next meeting. Ms. Martin presented GSA per diem rates for meal reimbursements. Consensus to accept the GSA per diem rate. Vice Chair Roberson added there are often mandatory hotel add on fees; to please add language in the document, coverage of other expenses and hotel fees that are required. 10. ADJOURN: Vice Chair Shelia Roberson adjourned the Firefighters' Pension Plan Board of Trustees Regular Meeting at 11:31 a.m. e um Suls Vice Chair Shelia Roberson/ Secrelary/Treasurer Shayla Griggs Book 1 Page 167 10-23-2019 9:00 a.m.