MINUTES OF THE APRIL 18, 2016 CITY OF SARASOTA GENERAL EMPLOYEES PENSION PLAN BOARD OF TRUSTEES REGULAR MEETING Present: Chair Gretchen Schneider, Vice Chair Barry Keeler, Secretary Pamela Nadalini, Treasurer John Lege III, and Trustees Ryan Chapdelain, Bonnie Wagner, and Kari McVaugh Others: Attorney Scott Christiansen, Pension Plans Administrator Harry Ramphal, Senior Pension Analyst Anthony Ferrer, and Pension Specialist Chinyere Deehan Absent: None 1. CALL THE MEETING TO ORDER: Chair Gretchen Schneider called the meeting to order at 8:31 a.m. 2. PLEDGE OF CIMILITY: Chair Schneider 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. PUBLIC INPUT: None 4. APPROVAL OF MINUTES: 4.1. Approval Re: Minutes of the January 22, 2016, Sarasota General Employees' Pension Board Regular Meeting Trustee Chapdelain stated that the minutes of the January 22, 2016, City of Sarasota General Employees' Pension Plan Board of Trustees Regular Meeting should be corrected to reflect that the motion to maintain the Plan's Assumed Rate of Return at 7%, carried with a 5-1 vote. Secretary Nadalini stated that the minutes of January 22, 2016, City of Sarasota General Employees' Pension Plan Board of Trustees Regular Meeting would be reviewed and corrected if necessary. A motion was made by Vice Chair Keeler, seconded by Trustee Chapdelain to approve the January 22, 2016, City of Sarasota General Employees' Pension Plan Board of Trustees Regular Meeting minutes with the noted correction. Motion carried unanimously (7-0). 4.2. Approval Re: Minutes of the March 21, 2016, Sarasota General Employees' Pension Board Membership Meeting A motion was made by Vice Chair Keeler, seconded by Trustee McVaugh to approve the mlnutes of the March 21, 2016, Sarasota General Employees' Pension Board Membership Meeting. Motion carried unanimously (7-0). Book 1 Page 14 04/18/16 8:30 A.M. Book 1 Page 15 04/18/16 8:30 A.M. 5. APPROVAL OF RETIREMENT REQUEST/S): 5.1. Approval Re: Retirement Request of Richard Meier Pension Plans Administrator Ramphal stated that Richard Meier requested retirement as of April 7, 2016; that Mr. Meier is 63 years of age, has 21.56 years of service, and elected the 50% Joint Annuitant with the Pop Up Option. A motion was made by Secretary Nadalini, seconded by Trustee Chapdelain, to approve the Retirement Request of Richard Meier. Motion carried unanimously (7-0) 5.2. Approval Re: DROP Retirement Request of Kenneth Sosville Pension Plans Administrator Ramphal stated that Kenneth Sosville requested to enter the DROP effective April 1, 2016; that Mr. Sosville is 63 years of age and has 31.66 years of service, and has elected the 50% Joint Annuitant with the Pop Up Option. A motion was made by Secretary Nadalini, seconded by Trustee Chapdelain to approve the DROP Retirement Request of Kenneth Sosville. Motion carried unanimously (7-0) 6. INVESTMENT REVIEW: 6.1. Presentation and Discussion Re: Investment Performance as of March 31, 2016 Don Graham, Director, Franklin Templeton Investments and Calvin Roseberry, SMA Advisor Consultant, Franklin Templeton Investments came before the Board to present the Templeton International Equity Separately Managed Accounts portfolio as of March 31, 2016. Mr. Roseberry provided details of the fiscal and calendar year market value of the Plan's investments, and stated that the value of the Plan's portfolio through the year-end quarter was $9.24 million, that the portfolio realized a loss of 2.86% over the quarter before fees while the benchmark MSCI EAFE Index lost 3.01% over this period; that the Plan's portfolio lost 10.31% over the last 12 months before fees and the benchmark MSCI EAFE Index loss of 8.27%. Mr. Graham gave a brief overview of the market's performance and discussed the geographic and sector weightings within the portfolio, and stated that in 2015, the market was down due to conçerns regarding economic growth; however there have been several years of strong performance within the market, and the economy is now starting to recover from the recent downturn; that looking at the Plan's portfolio over 2015, the key positives were a strong performance out of European financials, construction, and materials sectors. Discussion ensued regarding the Franklin Templeton's quarterly reports. 7. UNFINISHED BUSINESS: None 8. NEW BUSINESS: 8.1. Presentation and Discussion Re: Independent Auditor's Report for the Fiscal Year Ending September 30, 2015 Alison Wester, CPA Partner, Mauldin & Jenkins, LLC came before the Board to present the final Auditor's Report for the fiscal year (FY) ending September 30, 2015, gave an overview of the financial summary, and stated that the Plan's financial statements fairly represents the Plan's financial position and that no material weaknesses in internal control were found; that she appreciated the opportunity to be of service to the Plan, and Secretary Nadalini stated that it was a pleasure working with Ms. Wester and her team and expressed appreciation for the thorough audit received. A motion was made by Trustee McVaugh, seconded by Vice Chair Keeler to accept the Independent Auditor's Report for the fiscal year (FY) ending September 30, 2015. Motion carried unanimously (7-0) 8.2. Presentation and Discussion Re: Proposed Annual Budget for Fiscal Year 2016 - 17 Pension Plans Administrator Ramphal presented before the Board the proposed Annual Budget for fiscal year (FY) 2016/17, and stated that the total Pension Administration budget is split among the City's other three other pension funds In response to a question from Trustee Chapdelain regarding Cost Center details, Secretary Nadalini stated that Pension Administration has worked with the Financial Administration Department regarding system issues; the reports will be restated once these issues are resolved sO that the Cost Center details can be presented to the Board. Pension Plans Administrator Ramphal stated that the Pension Administration Division requests approval to hire a Senior Pension Analyst. In response to a question from Treasurer Lege asking for justification for hiring a new staff member, Secretary Nadalini stated that the workload in the Pension Administration has significantly increased in the last year; that duties that were required of previous staff is not comparable to the increased duties required of current staff; that much of the increase in workload is due to audit, investment reconciliation, new regulations, and payroll duties for the City's four pension plans; that the Pension staff has been working long hours and weekends to complete these tasks and is concerned the Pension Administration may lose staff because of this burden; that an additional staff member would alleviate this excessive workload placed on the current three staff members. Discussion ensued regarding the hiring of an additional Senior Pension Analyst in the Pension Administration Division. Trustee Chapdelain requested the discussion regarding hiring a new Senior Pension Analyst in the Pension Administration Division be Tabled until the next meeting; that he would like to see a breakdown of the change in workload from last year to this year. A motion was made by Trustee Chapdelain, seconded by Treasurer Lege to Table the approval of the proposed Annual Budget for fiscal year (FY) 2016/17 until additional information is received regarding hiring of an additional Senior Pension Analyst in the Pension Administration Division. Motion carried with a (6-1), with Secretary Nadalini voting no. 8.3. Presentation and Discussion Re: Addendum to the Operating Rules and Procedures - Rule 2.1, Attendance at Board Meetings Attomey Christiansen presented the Addendum to Operating Rules and Procedures = Rule 2.1, Attendance at Board Meetings, and stated that the Addendum was written to be more consistent with the City Code provision, and Secretary Nadalini stated that she will work to ensure that members are aware of any attendance issues. In response to a question from Chair Schneider regarding taking a Roll Call in the Board meetings, Secretary Nadalini stated that absences are noted in the minutes; that it is a requirement of each member to advise the Board of their anticipated absence so that the Board can excuse this absence. Book 1 Page 16 04/18/16 8:30 A.M. Book 1 Page 17 04/18/16 8:30 A.M. Attorney Christiansen stated that it is the Board's decision to determine if a members' absence is excused or not excused; that Pension Staff should add a Roll Call to the Agenda in order for the Board to vote on members' absences, and Secretary Nadalini stated that members can email Pension Plans Administrator Ramphal if they will be absent for any upcoming meetings. A motion was made by' Vice Chair Keeler, seconded by Trustee Chapdelain to approve the Addendum to the Operating Rules and Procedures-Rule 2.1, Attendance at Board Meetings. Motion carried unanimously (7-0) 9. ATTORNEY MATTERS: 9.1. Discussion Re: City Code, Section 24-105(b) - Termination of Benefits Attorney Christiansen discussed the City Code, Section 24-105(b) - Termination of Benefits, and stated that upon termination of employment, a member can receive their accumulated contributions and a lump sum; that the lump sum is determined by calculating the annuity to which the member is entitled based upon their service time; that the date of termination is treated as though it were the date of retirement for the employee. Discussion ensued regarding calculating the annuity for terminated employees. Attomey Christiansen stated that he is working on clarifying the language in the Code to make it consistent with what has been done in the past. In response to a question from Secretary Nadalini asking if previous calculations were done in accordance with the current Code, Attomey Christiansen stated that the calculations were done in accordance with the Code because the language in the Code states that the date of termination of employment is treated as the date of normal retirement for the employee; however the language needs to be clarified going forward. Attorney Christiansen stated that new State Legislation requires that if someone makes a request for public information held by a third-party vendor; that information has to be made public by the vendor; that going forward, a clause will be put into the all Plan contracts that states that an outside vendor must agree to release these public records as they are requested. 10. OTHER MATTERS: Vice Chair Keeler stated that recertification is coming up for the Florida Public Pension Trustees Association (FPPTA) and asked if Pension Administration would assist the Trustees with this process. Discussion ensued regarding the FPPTA certification. 11. ADJOURN. Chair Schneider adjourned the General Employees' Pensions Board of Trustees Regular meeting at 10:22 a.m. A D Noog Amalnea Chair Gretchen M. Schneider Secretary Pamela M. Nadalini