MINUTES OF THE CITY OF SARASOTA POLICE OFFICERS' PENSION PLAN BOARD OF TRUSTEES REGULAR MEETING JUNE 17, 2022 Present: Chair Demetri Konstantopoulos, Secretary/Treasurer: Shayla Griggs, and Trustee Ronnie K. Baty appeared in person. Trustee Joseph "Jody" Hudgins appeared telephonically. Others: Attorney Scott Christiansen, Pension Plans Administrator Debra Martin, and Pension Specialist Peter Gottlieb. Absent: Vice Chair Johnathan Todd. 1. CALL MEETING TO ORDER: Presenter(s): Chair Konstantopoulos. Chair Konstantopoulos called the regular meeting of the Police Officers' Pension Plan (Plan) Board of Trustees to order at 8:15 a.m. 2. PLEDGE OF ALLEGIANCE: Presenter(s): Secretary/reasurer Griggs. Secretary/Treasurer Griggs led the Board and those in attendance in the Pledge of Allegiance. 3. 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." 4. ROLL CALL: Presenter: Debra Martin, Pension Plans Administrator. Pension Plans Administrator Martin called roll. Vice Chair Todd was not present. Trustee Hudgins appeared elepnonically; Attorney Christiansen noted that, by participating telephonically, Trustee Hudgins may participate in discussions but is not eligible to vote on any matter. 5. PUBLIC INPUT: None. 6. APPROVAL OF MINUTES: 6.1. Approval Re: Minutes of the Police Officers' Pension Plan Board of Trustees Regular Meeting of May 27, 2022. Presenter(s): Chair Konstantopoulos. Trustee Baty made a motion to approve the minutes of the Regular Meeting of May 27, 2022; Secretary/Treasurer Griggs seconded the motion. The motion carried unanimously (3-0). Book 1 Page 285 06-17-2022 8:15 a.m. Book 1 Page 286 06-17-2022 8:15 a.m. 7. RETIREMENT REQUEST(S): None. 8. INVESTMENT PERFORMANCE REVIEW: 8.1. Presentation and Discussion Re: Capital Group/American Funds, Investment Performance Summary for Period Ending March 31, 2022. Presenter(s): Ronan Burke, Business Development Manager; Emily Liao, Equity Investment Director, Capital Group/American Funds. Ronan Burke and Emily Liao of Capital GrouplAmerican Funds appeared before the Board telephonically and introduced themselves and their presentation. Ms. Liao discussed the Strategy in focus slide in its presentation materials, and noted it has the flexibility to invest in emerging markets and seeks fast-growing companies in innovative sectors as well as less traditional growth companies. She discussed the Markets overview: The world at a glance, noting that, similar to domestic markets, international markets were difficult during the first quarter of 2022, and the global impact of the war in Ukraine and China's attempts to contain COVID-19 have compounded concerns of a recession. She explained that Energy and Materials are the only sectors which had positive performance during the first quarter of 2022. She pointed out, regarding the Markets overview page of the materials, there were numerous drawdowns in the Information Technology, Communication Services, and Consumer Discretionary sectors. Ms. Liao stated that performance in second quarter of 2022 to date has been weaker than the first quarter, and the portfolio is currently down an additional 13.6%. She reviewed Investment results, noting that, despite its poor performance over the last year, she believes the portfolio is now well positioned for excess returns going forward. She reviewed the Attribution summary, noting selloffs of technology companies in both the US and overseas markets. She discussed factors which contributed to and hindered the portfolio's pertormance. Ms. Liao concluded her remarks with a discussion of thet factors which will affect the markets in the near future, and American Funds' focus on endurance and consumption as indicators of a company's likelihood of robust performance going forward. The Board thanked Mr. Burke and Ms. Liao for their presentation. 8.2. Presentation and Discussion Re: Cohen & Steers, Investment Performance Summary for Period Ending April 30, 2022. Presenter(s): Brian Casey Vice President; Evan Serton, Senior Vice President, Portfolio Specialist; Cohen & Steers. Brian Casey and Evan Serton of Cohen & Steers appeared before the Board and introduced themselves. Mr. Casey explained why the current market environment is favorable to Cohen & Steers' strategy as many of the companies it holds have built-in inflation protection. He noted the fund is up 3.5% for the first quarter of 2022 while the MSCI World index was down 5.2%. While Cohen & Steers will not perform as well in more positive markets, as it is a defensive holding, he discussed how pending infrastructure federal legislation, market pressures towards green energy, e-commerce, and developing technology will favor the strategy. Mr. Serton discussed the types of companies Cohen & Steers invests in, which are utilities, transportation, communication, and mid-stream energy companies which transport energy from extraction points refinery or distribution points. He discussed Global Listed Infrastructure Performance, Global Listed Infrastructure Performance Attribution, and Global Listed Infrastructure Portfolio Weights. Mr. Serton explained its underweight in electric utilities and freight rails, as well as overweight in communications. The Board thanked Mr. Serton and Mr. Casey for their presentation. 8.3. Presentation and Discussion Re: Lazard Asset Management, Investment Performance Summary for Period Ending March 31, 2022. Presenter(s): Frank Sposato, Director, Lazard Asset Management. Frank Sposato of Lazard Asset Management appeared before the Board and introduced himself. Mr. Sposato discussed Lazard's strategy of investing in publicly traded, private infrastructure companies, as well as its narrow definition of "preferred infrastructure," which attempts to remove variables like commodity prices and cyclical demand from its investments. He noted Lazard's portfolio currently has 26 stocks but can go as high as 50; its performance objective is to return the rate of inflation plus 5%. Mr. Sposato explained that many of the companies in which Lazard invests, such as bridges, toll roads, and airports, can be monopolistic as their competitions have significant barriers to entry. Further, those companies tend to have long-term contracts which grant them the authority to price their products sO that if their costs increase, they may also increase their prices, which is built-in inflation protection. While infrastructure stocks fluctuate with equities markets, infrastructure stocks fluctuate less. Mr. Sposato reviewed the Performance Summary, noting that month-to-date, the portfolio is down approximately 5% and the index is down 9%; quarter-to-date, the portfolio is down 3% and the index is down 9%; and year-to-date the portfolio is down 2% and the MSCI World index is down 20%. He discussed the Portfolio By Country and Sector page of the presentation materials, as well as Holdings By Infrastructure Country, noting that it is currently finding more value investments outside the US than domestically, and that many of the domestic infrastructure stocks are priced such that they are projected to generate negative returns, and Lazard prefers to hold cash than investments with negative returns. The Board thanked Mr. Sposato for his presentation. Chair Konstantopoulos asked Pension Plans Administrator Martin to ask Larry Cole of Burgess Chambers & Associates for his opinion on reallocating funds to infrastructure and alternative investments and away from equities and bonds to make the portfolio more defensive in the current environment. 9. UNFINISHED BUSINESS: None. 10. NEW BUSINESS: None. 11. ATTORNEY MATTERS: Attorney Christiansen reminded staff that the Board must elect its officers at its next meeting. He also reminded the Trustees that Florida Commission on Ethics Form 1 is due by June 30, 2022. Each trustee confirmed they each submitted the form already. To Attorney Christiansen's request, Pension Plans Book 1 Page 287 06-17-2022 8:15 a.m. Book 1 Page 288 06-17-2022 8:15 a.m. Administrator Martin confirmed that the Board approved its 2022-2023 administrative budget at the March 2022 Membership meeting. Attorney Christiansen reminded the Board that, in the matter of Officer BobbieSue Patrick's request for disability benefits, the Board had additional questions for the Independent Medical Examination (IME) physician, who in turn, had additional questions for Officer Patrick. Attorney Christiansen is waiting for Officer Patrick's response to the IME physician's interrogatories. Because the initial hearing has already begun, there is no concern regarding a deadline by which the initial hearing must conclude. 11.1. Presentation and Discussion Re: Christiansen & Dehner, Letter from IUPA. Presenter(s): Scott Christiansen, Christiansen & Dehner. Attorney Christiansen explained that the Florida Retirement System (FRS) allows law enforcement officers to remain in the Deferred Retirement Option Program (DROP) for an additional 3 years, for a total of 8 years; this authority expires in June 2028. The IUPA submitted a letter to Pension Administration requesting members of the Plan be allowed a similar time period for its DROP. The City Manager's office responded to the IUPA and advised this would need to be negotiated with the City when the appropriate contract is negotiated. Attomey Christiansen noted the Board does not have the authority to approve changes to the DROP, but it may provide a recommendation to the City Commission to positively consider changing the DROP provisions. The City Commission has not asked for the Board's opinion regarding an 8 year DROP. 12. OTHER MATTERS: 12.1. Presentation and Discussion Re: Asset Allocation as of June 9, 2022. Presenter(s): Debra Martin, Pension Plans Administrator. Pension Plans Administrator Martin noted the Asset Allocation is provided for the Board's information. Trustee Hudgins apologized for being unable to attend the initial hearing of Officer Patrick's request for disability benefits and noted that his personal schedule has unexpectedly precluded his attendance at several meetings; he asked the Board to discuss and consider his resignation to allow a new candidate to be appointed by the City Commission, although he expressed interest in continuing to serve if the Board remained amenable. Trustee Hudgins also asked Attorney Christiansen to discuss attending and participating in Board meetings telephonically. Attorney Christiansen explained that he had discussed the question with City Attorney Robert Fornier, who agreed with his understanding of the controlling state laws. Attorney Christiansen noted that, during the COVID-19 pandemic, the Governor of Florida had suspended the state laws requiring in-person quorums at public meetings; that suspension has expired, and advisory boards must currently have in-person quorums. For a trustee to participate remotely, a board would need to, first, have an in-person quorum, and second, find, "extraordinary circumstances" exist for the trustee who wished to participate remotely. He noted that the example provided was that al board could find extraordinary circumstances existed if a trustee who had been in an automobile accident was receiving treatment at a hospital and wished to participate in a public meeting; however, a personal or professional calendar conflict would not meet that standard. Chair Konstantopoulos asked if there was an attendance requirement in the controlling provisions. Secretary/reasurer Griggs advised that there is, but that a board must notify the City Commission when a trustee had failed to meet that requirement. In that context, the Board must determine when absenteeism becomes problematic. Trustee Baty noted that Trustee Hudgins provides valued input regarding financial investments, which complements the remaining trustees' expertise in pension administration and City procedures. He suggested items which require decisive votes could be scheduled at times when 3 or 5 trustees were physically present, or those items be tabled for future meetings. Trustee Baty noted that Trustee Hudgins could still provide telephonic input which would effectively provide his expertise to the other trustees. Secretary/Treasurer Griggs also expressed appreciation for Trustee Hudgins' contributions to the Board and noted that currently, finding any individual willing to serve as a trustee on a public board is currently difficult. The Board took no action on the matter. 13. ADJORN. Chair Konstantopoulos adjourned the meeting at 9:12 a.m. Ea bank Chair Démetri Konstantopoulos Secrelany/yéasurer Shayla Ghggs Book 1 Page 289 06-17-2022 8:15 a.m.