Book 1 Page 68 5/26/17 8:15 a.m. MINUTES OF THE CITY OF SARASOTA POLICE OFFICERS' PENSION PLAN BOARD OF TRUSTEES REGULAR MEETING OF MAY 26, 2017 Present: Vice Chair Ron Baty, Secretary/Treasurer Pamela Nadalini, and Trustee Duncan Miller Others: Senior Pension Accountant Cynthia Akersloot and Pension Specialist Lois Belle Absent: Attorney Lee Dehner and Senior Pension Analyst Anthony Ferrer 1. CALL MEETING TO ORDER: Vice Chair Baty called the meeting to order at 8:20 a.m. 2. PLEDGE OF CIVILITY: Vice Chair Baty read into the record a memorandum from Mayor Willie Charles Shaw, dated February 13, 2015, entitled "City Commission and Advisory Boards Meeting Protocols and Pledge of Civility." 3. PUBLIC INPUT: No one signed up to speak. 4. APPROVAL OF THE MINUTES: 4.1. Approval Re: Minutes of the Police Officers' Pension Plan Board of Trustees Regular Meeting of April 28, 2017 A motion was made by Trustee Miller and seconded by Secretary/Treasurer Nadalini to approve the Minutes of the Police Officers' Pension Plan Board of Trustees Regular Meeting of April 28, 2017. Motion carried unanimously (3-0). 5. BOARD APPOINTMENTS: 5.1. Approval Re: Chair Selection Presenter(s): Secretary/Treasurer Nadalini Secretary/Treasurer: Nadalini opened the floor for the selection of the Chair and Trustee Miller nominated Vice Chair Baty, Secretary/Treasurer Nadalini concurred with Trustee Miller's nomination and by consensus Vice Chair Baty is the new Chair. 5.2. Approval Re: Vice Chair Selection Presenter(s): Secretary/Treasurer Nadalini Secretary/Treasurer Nadalini opened the floor for the selection of the Vice Chair and Chair Baty nominated" Trustee Miller. Secretary/Treasurer: Nadalini concurred with Trustee Miller's nomination and by consensus Trustee Miller is the new Vice Chair. 5.3. Appointment Re: Nomination to the Police Officers' Pension Plan Board - Seat PP1 Presenter(s): Secretary/Treasurer Nadalini Secretaly/Treasurer Nadalini presented application submitted by Johnathan Todd applying for Seat PP1 which the Board approved by consensus; Secretary/Treasurer stated that her office will send correspondence notifying Mr. Todd. 5.4. Appointment Re: Nomination to the Police Officers' Pension Plan Board = Seat PP4 Presenter(s): Secretary/reasurer Nadalini Secretary/Treasurer: Nadalini presented application submitted by Demetri Konstantopoulos applying for Seat PP4 which the Board approved by consensus; Secretary/Treasurer: stated that her office will send correspondence to Mr. Konstantopoulos as well; that Mr. Konstantopoulos was in attendance. 6. APPROVAL OF RETIREMENT REQUESTIS): 6.1. Approval Re: Deferred Retirement Option Plan (DROP) Request of Darrell Nixon Presenter(s): Senior Pension Accountant Akersloot Senior Pension Accountant Akersloot stated the DROP request presented is for Darrell Nixon; that he is 49 years old with 25.05 years of service and elected a 50% Joint and Survivor Annuity option. Secretary/Treasurer: Nadalini stated on the record that it's been a priviledge and an honor serving with Detective Nixon; that he has been very balanced and very focused and really cares about our Police officers, active and retired; that it is important that everyone knows his commitment and we wish him the best. A motion was made by Secretary/Treasurer: Nadalini and seconded by Trustee Miller to approve the DROP request of Darrell Nixon. Motion carried unanimously (3-0). 7. INVESTMENT PERFORMANCE REVIEW: 7.1. Presentation and Discussion Re: The Boston Company Investment Performance as of March 31, 2017 Presenter(s): Jerry Navarrete, Director and Head Relationship Manager, The Boston Company, and Chuck Cook, Portfolio Strategist, The Boston Company Jerry Navarrete, Director and Head Relationship Manager, and Chuck Cook, Portfolio Strategist, The Boston Company came before the Board. Mr. Navarrete stated that he would provide a brief overview of the Company and that Chuck would discuss strategy and what worked or not, as well as the landscape of the economy. Mr. Navarrete stated that the current CEO of The Boston Company is staying on in an advisory role untill the end of June; that the COO is operating in an interim CEO capacity until further decision is made; that there is no top-heavy news at the firm, very stable right now. Mr. Cook briefly discussed the firm's strategy for investment; that they look for strong fundaments, a catalyst for business improvement and an attractive valuation; that this strategy generates consistency over time; that Fund portfolio shows a very strong first quarter In response to a question from Secretary/Treasurer: Nadalini asking if The Boston Company could show performance as of September 30th in comparison to the quarter and year end, Mr. Cook stated that he could do that and send to Staff to distribute to Board members. Mr. Cook provided an overview of the first quarter performance; what were the positives and negatives and positioning going forward. Book 1 Page 69 5/26/17 8:15 a.m. Book 1 Page 70 5/26/17 8:15 a.m. In response to a question from Secretary/Treasurer Nadalini asking to elaborate Real Estate underweight, Mr. Cook stated that Real Estate is overvalued in their opinion; that the valuations have been artificially driven up. 7.2. Presentation and Discussion Re: Westwood Investment Performance as of March 31, 2017 Presenter(s): Kim Calhoun, Senior Vice President, Westwood Kim Calhoun, Senior Vice President, Westwood, came before the Board. Ms. Calhoun provided an overview of Westwood and stated that it's business as usual at Westwood; that the team that manages the Plan's assets is the U.S. Value Team based in the Dallas Headquarters location. Ms. Calhoun provided an executive summary of the fund's performance; that the strategy is high- conviction and outcome-oriented solutions; that as of March 31, 2017 the MLP Infrastructure Renewal Fund since inception annualized gross return is down 8.62%; that the negative spread is closing. In response to a question from Chair Baty asking what contributed to the loss, Ms. Calhoun stated that loss is due to timing of investment that in November 2015 OPEC continued to oversupply market with oil which drove prices down. Ms. Calhoun stated that Westwood's investment strategy is compliant and within fund guidelines; that the investment philosophy is to look for high quality companies without a lot of debt that have cashflow; that the MLP investment landscape looks very attractive from commodity prices to policy. Ms. Calhoun stated that Q1, 2017 portfolio returns, gross ofi fees where 4.28% beating benchmark; that MLPs are tax advantaged and very capital intensive; that interest rates are still very attractive. The Chair thanked Ms. Calhoun for her presentation. 7.3. Presentation and Discussion Re: Burgess Chambers Investment Performance as of March 31, 2017 Presenter(s): Larry Cole, Senior Consultant, Burgess Chambers and Associates Larry Cole, Senior Consultant, Burgess Chambers and Associates came before the Board. Mr. Cole provided an overview of the market; that Q1 was a good quarter, up 4.5% net of management investment fees; that he there is a risk of being overweight in equities due to anticipation of rise in interest rates. Mr. Cole provided an overview of investment manager performances for Q1, 2017 and year to date. Mr. Cole stated that regarding the MLP discussion, there are no compliance issues; that he recommends a rebalancing adjustment to take $1 million out of domestic equity and rebalance as follows: $500,000 from Wells large cap growth and $500,000 from the index large cap growth and put $250,000 to SSI Investments and $250,000 to Advent convertibles and split $500,000 for MLPs in Salient and Westwood. Secretary/Treasurer stated that she would like to defer decision to rebalance till new members come on board. Mr. Cole stated he would send introductory packages for discussion at the Police Officers' Pension Plan Board of Trustee meeting of July 28, 2017. The Board thanked Mr. Cole for his presentation. 8. UNFINISHED BUSINESS: In response to a question from Trustee Miller asking about the status of changing DROP payment cycle not to coincide with the payroll cycle, Secretary/Treasurer: Nadalini stated that Attorney Dehner advised the Pension Plans Administration Division not to change current process until he has had an opportunity to research and respond. In response to a question from Trustee Miller asking regarding the additional cost of audit is there anything in the contract, Secretary/Treasurer: Nadalini stated that there is a provision in the contract that references coming before the Board if any additional fees incurred prior; that the Board must approve the invoice for payment. 9. NEW BUSINESS: None 10. ATTORNEY MATTERS: Secretary/Treasurer Nadalini stated that Attorney Dehner requested Board direction to draft an addendum to Fifth Third Bank to acknowledge that if the Police Officers' Pension Plan require Fifth Third to pay pensioners in the future that there would be an additional fee. By consensus the Board decided to defer the matter until Attorney Dehner's return. 11. OTHER MATTERS: Secretary/Treasurer: Nadalini reminded the Board that Financial Disclosure Statements are coming due and reminded everyone to retain a receipt of submission. 12. ADJOURN. Chair Baty adjourned the Police Officers' Pension Board of Trustees Regular meeting at 9:53 a.m. d Chair Ron Baty - Secretary/Treasurer: Pamela Nadalini Book 1 Page 71 5/26/17 8:15 a.m.