MINUTES OF THE CITY OF SARASOTA GENERAL EMPLOYEES' PENSION PLAN BOARD OF TRUSTEES REGULAR MEETING OF SEPTEMBER 24, 2021 Present: Chair Ryan Chapdelain, Treasurer Kelly Strickland, Secretary Shayla Griggs, Trustee Kari McVaugh, and Trustee Robert Reardon. Others: Attorney Scott Christiansen, Pension Plans Administrator Debra Martin, and Pension Specialist Peter Gottlieb. Absent: Vice Chair Nicholas. 1. CALL MEETING TO ORDER: Chair Chapdelain called the General Employees Pension Plan (Plan) Board of Trustees regular meeting to order at 8:30 a.m. 2. PLEDGE OF CIVILITY: Chair Chapdelain stated for the record, "We may disagree, but we will always be respectful to one another. We will direct all comments to issues, and we will not engage in personal attacks. n 3. ROLL CALL: Pension Plans Administrator Debra Martin called roll and noted that Vice Chair Nicholas was absent. Pension Plans Administrator Martin advised that Trustee Vincent submitted a letter of resignation to the Board effective September 22, 2021 and stated that Pension Administration is drafting nomination petitions which are expected be mailed to eligible members and retirees in the following week. She anticipates, if multiple nominations are received, an election could be held in time for results to be tallied at the December meeting. 4. PUBLIC INPUT: None. 5. APPROVAL OF MINUTES: 5.1. Approval Re: Minutes of the General Employees Pension Plan Board of Trustees Regular Meeting of August 9, 2021. Presenter(s): Chair Chapdelain. Trustee McVaugh made a motion to approve the minutes of the Regular meeting of August 9, 2021; Secretary Griggs seconded the motion. The motion carried unanimously (5-0). 5.2. Approval Re: Minutes of the General Employees' Pension Plan Board of Trustees Special Meeting of August 9, 2021. Presenter(s): Chair Chapdelain. Trustee McVaugh made a motion to approve the minutes of the Special meeting of August 9, 2021; Secretary Book 1 Page 271 09-24-2021 2:00 p.m. Book 1 Page 272 09-24-2021 2:00 p.m. Griggs seconded the motion. The motion carried unanimously (5-0). 5.3. Approval Re: Minutes of the General Employees' Pension Plan Board of Trustees Special Meeting of August 23, 2021. Presenter(s): Chair Chapdelain. Trustee McVaugh made a motion to approve the minutes of the Special meeting of August 23, 2021; Treasurer Strickland seconded the motion. The motion carried unanimously (5-0). 6. APPROVAL OF RETIREMENT REQUEST/S): 6.1. Presentation and Discussion Re: Disability Retirement Request of Kandy Lee. Presenter(s): Debra Martin, Pension Plans Administrator. Pension Plans Administrator Martin stated that Ms. Lee's disability was granted by the Board on August 9, 2021. She has 16.11 years of Plan service, is 53 years of age, and selected the 100% to joint annuitant option. Trustee McVaugh made a motion to accept Ms. Lee's request for disability benefits. Treasurer Strickland seconded the motion. The motion carried unanimously (5-0). 6.2. Presentation and Discussion Re: Disability Retirement Request of John Trumpet. Presenter(s): Debra Martin, Pension Plans Administrator. Pension Plans Administrator Martin stated that Mr. Trumpet's disability was granted by the Board on August 23, 2021. He is 50 years old, has 16.71 years of Plan service, and selected the Lifetime only option. Treasurer Strickland made a motion to açccept Mr. Trumpet's request for disability benefits. Trustee McVaugh seconded the motion. The motion carried unanimously (5-0). 6.3. Presentation and Discussion Re: DROP Retirement Request of Jan Wiercinski. Presenter(s): Debra Martin, Pension Plans Administrator. Pension Plans Administrator stated that Mr. Wiercinski is 65 years old, has 17.93 years of service, and requests to enter the DROP as of September 1, 2021. He has selected the 100% to joint annuitant with Pop-Up Option. Trustee McVaugh made a motion to accept Mr. Wiercinski's request to enter the DROP effective September 1, 2021. Secretary Griggs seconded the motion. The motion carried unanimously (5-0). 6.4. Presentation and Discussion Re: Early Retirement Request of Thomas Maticka. Presenter(s): Debra Martin, Pension Plans Administrator. Pension Plans Administrator Martin stated Mr. Maticka requests an early retirement effective September 15, 2021, after 14.74 years of service at age 56. He elected the 100% to joint annuitant with Pop Up Option. Trustee McVaugh made a motion to accept Mr. Maticka's request for early retirement effective September 15, 2021; Treasurer Strickland seconded the motion. The motion carried unanimously (5-0). 7. INVESTMENT PERFORMANCE REVIEW: 7.1. Presentation and Discussion Re: Lazard Asset Management, Performance Review as of June 30, 2021. Presenter(s): Edward P. Keating, Client Portfolio Manager; Frank Sposato, Director, Institutional Marketing; Steven R. Keeler, Senior Vice President, Lazard Asset Management. Steven Keeler, Edward Keating, and Frank Sposato appeared before the Board telephonically and introduced themselves. Mr. Keeler noted he and Mr. Sposato will be at the FPPTA Fall Trustee School in case any of the trustees were able to attend in person. He gave an overview of their presentation, stated that there have been no changes in the investment team since inception, and discussed Lazard's investment strategy and performance objectives. He explained why infrastructure is a long-term, defensive investments with low-volatility returns even in inflationary environments with a risk level somewhere between stocks and US Treasury bonds; he pointed out Lazard invests in preferred infrastructure, and explained they are monopolistic-like assets with high visibility and transparency into their operations which provides smoother patterns of performance and more consistent returns. Mr. Keating gave a market overview, noting companies in some infrastructure sectors, such as those providing utility and satellite services, have continued to operate through the COVID-19 pandemic as essential services, and investments in those companies have continued to provide stable returns. Although other infrastructure sectors, such as airports, toll-roads, and commercial railroads, have been more significantly impacted, investments in these sectors were not as impacted over the long-term as they frequently operate under 50 to 90- year contraçts. Lazard has used this as a buying opportunity in some of those sectors which were more adversely affected by overreactions in the markets. In those contexts, Mr. Keating explained infrastructure investments are comparable to lower-risk equity or, in some cases, a higher risk bond, which are appropriate to for surety of capital, defensive returns, inflation protection, and similar aspects. Referring to the Value Rank by Sector, Value Ranked by Country, and Value Ranked by Region slides of the presentation materials, Mr. Keating explained how Lazard choses its investments. He compared these slides to the Portfolio By Country and Sector charts and noted that while the portfolio seems concentrated at 25 companies over 11 sectors, most of the companies in which Lazard invests have more than 1 underlying infrastructure asset, giving it broader diversity. Mr. Keating reviewed the Returns for the Period Ending June 30, 2021, noting its portfolio has performed with significantly less risk and volatility than equity stocks while producing a reliable return over the long term. Lazard's return objective is inflation plus 5% while remaining defensive, providing surety of capital, and maintaining diversification. He discussed highlights of the Top Contributors and Detractors, noting some mergers and acquisitions and other activity. Mr. Keating discussed Lazard's outlook and explained how domestic infrastructure companies were not as attractive as some European companies. Chair Chapdelain asked Mr. Keating to discuss the Global Listed Infrastructure Index and MCSI World Index and how they compare to Lazard's portfolio as noted on the Sustainable Yield Premium Lazard GLI slide. Mr. Keating stated the slide highlights one of the attractive qualities of infrastructure investment: a dividend or yield. He noted that the Global Listed Infrastructure, which is an MSCI World Core Infrastructure Index, was provided to allow comparison to another premium yield investment, and the MSCI World Index is a general equity fund also provided for comparison. Book 1 Page 273 09-24-2021 2:00 p.m. Book 1 Page 274 09-24-2021 2:00 p.m. Mr. Keating and Chair Chapdelain discussed year-to-date performance. Mr. Keating stated that year-to-date through September 23, 2021, the portfolio is up 11.4% and the indexi is up 11.6%, although MSCI Global Equities, as a proxy for equities in general, is up nearly 17%. This is consistent with Lazard's overall philosophy in that during the Q1 2020 market selloff, Lazard's portfolio held up very well; conversely, when the market improves, defensive assets tend to underperform. Chair Chapdelain thanked Lazard for its presentation. 8. UNFINISHED BUSINESS: None. 9. NEW BUSINESS: 9.1. Presentation and Discussion: Proposal to Provide Professional Auditing Services. Presenter(s): Alison Wester, CPA, Partner, Mauldin & Jenkins. Alison Wester of Mauldin & Jenkins appeared before the Board telephonically and introduced herself. Ms. Wester reviewed Mauldin & Jenkins' proposal documents which included general information about the firm, licensures, firm qualifications and experience, and staffing. She noted that shortly after preparing the materials, Jennifer Cook left Mauldin & Jenkins to pursue other opportunities; Jennifer Trotter, who has worked with Pension Administration in previous audits, and Daniel Anderson would assist in this year's upcoming audit. She discussed references, the audit process, and pricing which would be the same amounts for 2021 and 2022 and a slight increase in 2023. Attorney Christiansen asked if the 1-yaer engagement letter was intentional. Ms. Wester explained that the firm typically creates single year engagement letters and bring a renewal or affirmation letters for execution in subsequent years. Ms. Wester noted that there will be changes in audit standards in fiscal year 2022, and the engagement letter would need to be updated. Attorney Christiansen stated he's reviewed the letter and approves it. Chair Chapdelain asked if there would be any changes from previous audits. Ms. Wester stated there are no substantive changes from auditing or GASB standpoints. Treasurer Strickland asked Ms. Wester for her estimated audit completion date. Ms. Wester stated audits are done by the end of February 2022, however the last few years' audits have been finalized by the February meeting. Chair Chapdelain noted the February 2022 proposed meeting date is February 14, 2022. Ms. Wester believed the audit could be completed in time for that meeting. Treasurer Strickland made a motion to approve engagement with Mauldin & Jenkins; Trustee McVaugh seconded the motion. The motion carried unanimously (5-0). 10. ATTORNEY MATTERS: Attorney Christiansen asked for the status of the FRS ordinance; Pension Plans Administrator stated that it is in the process of being signed; the unsigned copy and no-impact letter have been sent to the State of Florida. Chair Chapdelain asked when employee election forms to remain in the Plan or opt into the FRS plan would be available. Pension Plans Administrator Martin stated that Human Resources is preparing the forms and managing the process, but she believed they would be distributed by mid-October. Attorney Christiansen stated that he and his firm is downsizing clients, but will retain the Plan as his client. He is also relocating his office to the adjacent unit from Suite 107 to 106. His telephone numbers and e-mail addresses remain the same. 11. OTHER MATTERS: 11.1. Presentation and Discussion Re: Administrative Budget Expense Report, April 1, 2021, through June 30, 2021. Presenter(s): Debra Martin, Pension Plans Administrator. Pension Plans Administrator Martin explained this is presented quarterly. She advised the Plan has exceeded the annual budget amount for legal and judicial fees this fiscal year due to having 2 disability cases which have unpredictable costs. As of August 31, 2021, the total expenditure for the legal and judicial fees was almost $43,000, and the annual budgeted amount was only $30,000. Pension Plans Administrator Martin requests a budget adjustment for that line item in the amount of $20,000. A brief discussion ensued. Attorney Christiansen noted some of the legal expenses included physicians' fees, and that he does not recall ever having 2 disability cases in a single year. The Board agreed that increasing its budget was within its purview and this item in the budget reflected monies spent. Trustee Reardon made a motion to increase the legal and judicial line item in the 2020/2021 budget by $20,000. Trustee McVaugh seconded the motion. The motion carried unanimously (5-0). The Board had no questions regarding the remaining items. 11.2. Presentation and Discussion Re: Check Register. Presenter(s): Debra Martin, Pension Plans Administrator. Pension Plans Administrator Martin explained this is presented quarterly as it makes invoice payments by ACH. She noted there were two DROP payments and two manual payments to retirees whose bank accounts had been closed without notifying Pension Administration. There was also reimbursement to the Police Officers' Pension Plan was for Secretary Griggs and Pension Plans Administrator Martin to attend an FTTPA conference. 11.3. Presentation and discussion Re: 2022 Meeting Calendar. Presenter(s): Debra Martin, Pension Plans Administrator. Pension Plans Administrator Martin noted several meeting dates were rescheduled to accommodate City Commission meetings which will be held on Mondays; the proposed calendar was made in consultation with Attorney Christiansen's office sO that he will be available to attend. Treasurer Strickland made a motion to approve the proposed 2022 calendar; Trustee McVaugh seconded the motion. Chair Chapdelain noted there will be conflict on Wednesday, October 19, 2022, as the City's Development Review Committee will have a meeting at that time in City Chambers, although this DRC meeting could be moved to the SRQ Studios. The motion carried unanimously (5-0). Book 1 Page 275 09-24-2021 2:00 p.m. Book 1 Page 276 09-24-2021 2:00 p.m. Chair Chapdelain asked about the status of an asset allocation study to find a mid-cap value or a mid-cap growth manager. Pension Plans Administrator Martin stated that she was unaware of the status, but Graystone Consultants is scheduled to present at the December meeting. 12. ADJOURN. Chair Chapdelain adjourned the General Employees' Pension Plan Board of Trustees regular meeting at 11:54 a.m. Sbs h Chair Ryan Chapdelain Secretary Shayla Griggs