MINUTES OF THE CITY OF SARASOTA POLICE OFFICERS' PENSION PLAN BOARD OF TRUSTEES REGULAR MEETING OF JANUARY 24, 2020 Present: Chair Ron Baty, Vice Chair Demetri Konstantopoulos, Secretary/Treasurer: Shayla Griggs, and Trustee Jody Hudgins. Others: Attorney Scott Christiansen, Pension Plans Administrator Debra Martin, and Senior Pension Analyst Anthony Ferrer. Absent: Trustee Johnathan Todd. 1. CALL MEETING TO ORDER: Chair Baty call the meeting to order at 8:15 a.m. 2. PLEDGE OF CIVILITY: Chair Baty read into the record a memorandum from Former Mayor Willie Charles Shaw, dated February 13, 2015, entitled "City Commission and Advisory Boards Meeting Protocols and Pledge of Civility." 3. PUBLIC INPUT: None 4. APPROVAL OF THE MINUTES: 4.1. Approval Re: Minutes of the Police Officers' Pension Plan Board of Trustees Regular Meeting of October 25, 2019. A motion was made by Vice Chair Konstantopoulos and seconded by Trustee Hudgins to approve the Minutes of the Police Officers' Pension Plan Board of Trustees Regular Meeting of October 25, 2019. Motion carries unanimously (3-0). 4.2. Approval Re: Minutes of the Police Officers' Pension Plan Board of Trustees Regular Meeting of December 6, 2019. A motion was made by Vice Chair Konstantopoulos and seconded by Trustee Hudgins to approve the Minutes of the Police Officers' Pension Plan Board of Trustees Regular meeting of December 6, 2019. Motion carries unanimously (3-0). 5. APPROVAL OF RETIREMENT REQUESTIS): 5.1. Approval Re: Deferred Retirement Option Plan (DROP) Request of Anthony DeFrancisco. Presenter(s): Debra Martin, Pension Plans Administrator. Ms. Martin presented the Deferred Retirement Option Plan (DROP) request of Anthony DeFrancisco; that he started employment on September 25, 1996; that Mr. DeFrancisco is entering the DROP program as of January 1, 2020; that Mr. DeFrancisco has over a little over 24 years of service; that his calculation looks a little different as he was the one police officer who was eligible for normal retirement as of September 30, 2012, before the ordinance changed the Plan sO the old rules apply to his calculation; that Mr. DeFrancisco has elected the 100 percent to joint annuitant benefit. Book 1 Page 166 01-24-2020 8:15 a.m. Book 1 Page 167 01-24-2020 8:15 a.m. A motion was made by Trustee Hudgins and seconded by' Vice Chair Konstantopoulos to approve the retirement request of Anthony DeFrancisco. Motion carries unanimously (3-0). 6. BOARD APPOINTMENT 6.1. Appointment Re: Nomination for Seat Number 4 on Pension Board Presenter(s): Secretary/reasurer Griggs Attorney Christiansen noted nomination is not required; that this seat is elected by active members, Trustee Konstantopoulos was the only person who submitted a completed nomination form; no election was necessary; that Demetri Konstantopoulos retains Seat Number 41 for another four years. 7. INVESTMENT PERFORMANCE REVIEW: None 8. UNFINISHED BUSINESS: None 9. NEW BUSINESS: 9.1. Presentation and Discussion Re: National Investment Services Request for Consent to Assignment of Investment Advisory Agreement. Presenter(s): Attorney Scott Christiansen, Esq., Christiansen and Dehner, P.A. Attorney Christiansen advised this is a merger and the assignment of the Plan's contract presented to the Board on December 6, 2019 was not voted on due to lack of quorum; that the existing contract would be dissolved on December 31, 2019; that the contract has been completed after review with Larry Cole, Consultant, Burgess Chambers & Associates. Discussion ensued with consensus to do due diligence; that Mr. Cole should provide an analysis of Resolute Investment Managers, Inc., to the Board at the February 28, 2020 meeting for discussion. A motion was made by Trustee Hudgins and seconded by Vice Chair Konstantopoulos to approve the temporary assignment with Resolute Investment Managers, Inc. Motion carries unanimously (3-0). 9.2. Presentation and Discussion Re: GASB No. 67 Plan Reporting and Accounting Schedules for Fiscal Year Ended September 30, 2019. Presenter(s): Peter Strong, FSA, EA, MAAA, FCA, Senior Consultant and Actuary, Gabriel, Roeder, Smith & Company Mr. Strong came before the Board and introduced himself. Mr. Strong noted as of 2014, GASB No. 67 requires annual reporting of the assets and liabilities; that ita also requires reporting sensitivity analysis and what the net pension liability would look like with +1% or -1%; that there is now six years showing; that GASB requires a total of ten years of running history to be shown. Mr. Strong presented the GASB No. 67 Plan reporting and accounting schedules for fiscal year ended September 30, 2019, and stated that this is for informational purposes only, no formal Board action is required. The Board thanked Mr. Strong for his presentation. 9.3. Presentation and Discussion Re: Actuarial Valuation Report for Fiscal Year Ended September 30, 2019. Presenter(s): Peter Strong, FSA, EA, MAAA, FCA, Senior Consultant and Actuary, Gabriel, Roeder, Smith & Company. Mr. Strong came before the Board and introduced himself. Mr. Strong stated the results of the Fiscal Year 2019 Actuarial Valuation. As a result of this valuation, the City's contribution rate for the fiscal year ending September 30, 2021 is 48.03% of payroll, which is down from 50.92% of payroll for the fiscal year ending September 30, 2020. Mr. Strong continued by stating that the Plan's funded ratio, at September 30, 2019, is 86.2% compared to 85.1% the previous fiscal year. That the total contributions were down slightly at $8.9 million versus $9.2 million the prior year; that investment income was a 2.5% net return versus last year at 10.7%; that total outflow was down slightly mainly because of a decrease in DROP distributions at $14.6 million this year versus $14 million the prior year; that the total market value of assets is $247.38 million versus $246 million the prior year; that the total market return last year was $23,791,936.00. versus this year at $6,165,197.00; that the expected return by applying the 7% assumption would have been $16 million, this creates a shortfall of almost $10 million that is being smoothed over five years; that there is a slightly positive actuarial return for the year of +7.2% because of smoothing. Mr. Strong added the long-term investment rate of retum forecasts are still in the 6 %% - 7% range for the next twenty to thirty years; that 7% is in the range of reasonability. Mr. Strong concluded with a brief review of the executive summary. Discussion ensued regarding the assumed rate of retum. Consensus that the Board consider for discussion, 6.85% at the next meeting with Larry Cole, Consultant, Burgess Chambers & Associates, in attendance Trustee Hudgins added he will be in Orlando and could participate via teleconference. Mr. Strong will prepare an analysis on the assumption rate of 6.85% along with a one- and two-year projection; that the report should be available for the March 27, 2020 meeting. A motion was made by Trustee Hudgins and seconded by Vice Chair Konstantopoulos to approve the Actuarial Valuation Report for fiscal year ended September 30, 2019. Motion carries unanimously (3-0). The Board thanked Mr. Strong for his presentation. Trustee Hudgins posed the question of your clients which minutes could be read that does well managing there pension, Mr. Strong replied the town of Palm Beach has made many recent changes. 10. ATTORNEY MATTERS: Attomey Christiansen reminded staff to place an Agenda Item for the February 28, 2020 meeting for the Board to declare the expected rate of retum. Book 1 Page 168 01-24-2020 8:15 a.m. Book 1 Page 169 01-24-2020 8:15 a.m. Attorney Christiansen gave a brief update of the David Van Gostein disability case; still waiting for a response from the Judge on the Writ of Certiorari that was filed by the plaintiff's attorney; that an informal inquiry has been made to thej judge's office; that if the litigation is unsuccessful than back monies may be owed as the monthly benefit for inline of duty disability is greater than not inline of duty. 11. OTHER MATTERS: None 12. ADJOURN. Chair Baty adjourned the meeting at 9:20 a.m. Çhair Ronnie K. Baty Vice Chair DeméirKonsientopouos